Missouri Gov. Mike Parson on Wednesday signed legislation that modifies how plaintiffs are awarded punitive damages.
The measure requires plaintiffs to prove that the defendant intentionally harmed them or acted in a deliberately flagrant manner to collect.
In a press release, Parson said he was "proud" to sign the bill into law because it will "stop the unfair and unreasonable litigation" Missouri businesses face. "This bill shows that Missouri is open for business and strikes a fair balance between protecting Missouri employers and employees from frivolous claims while ensuring the ability of those harmed to seek relief in court,” he said.
Original story published on May 12, 2020
Missouri lawmakers agreed to a measure on Tuesday that would make it more difficult for plaintiffs to receive punitive damages.
State Rep. Bruce DeGroot, R-Chesterfield, who sponsored the legislation in the House, said courts have eroded the concept of punitive damages.
The bill “brings back some common sense” to the court system, he said.
“In essence what it does is it raises the standards for punitive damages back to what they were originally intended to do,” DeGroot said. “Punitive damages should be awarded to punish wrongdoers, not to punish people who just make a mistake.”
If Gov. Mike Parson signs the measure, it will require plaintiffs to prove that the defendant intentionally harmed them or acted in a deliberately flagrant manner.
DeGroot said the proposal is a “jobs bill.” He said because Missouri is “lagging behind,” small businesses are enticed to go to other states like South Dakota and Tennessee.
DeGroot said both plaintiffs and attorneys are cashing in on these massive judgments.
“Those people all just hit the lottery every time they get one of these $100,000 judgments, but it hurts everybody else,” DeGroot said. “All of our insurance premiums go up.”
State Rep. Gina Mitten, D-St. Louis, who spoke in opposition of the bill, had a brief exchange after DeGroot’s opening remarks where she asked him to be more specific.
Mitten: “Could you tell me what businesses have not come to Missouri because of our laws?”
DeGroot: “Lots.”
Mitten: “Tell me one.”
DeGroot: “I can’t.”
State Rep. Rudy Viet, R-Wardsville, said this proposal is a balancing act of individual rights versus corporations and doing business in Missouri.
He said the Attorney General’s Office still has the ability to seek these claims, but individual Missourians would not.
Mitten, using the example of the state purchasing masks that weren’t sufficient, pointed out that the state is seeking financial reimbursement for a bad product. She also said former Gov. Eric Greitens ran into the same problem with masks he purchased, but this change in law would not allow him to seek reimbursement.
“The state ordered masks that turned out to be bad and former Gov. Greitens ordered masks that turned out to be bad,” she said. “It’s no secret that I’m not a fan of the former governor but the bottom line is, he’s still a Missouri resident and he’s still entitled to sue for getting bogus product.”
State Rep. Deb Lavender, D-Kirkwood, said the measure protects “large banks and bad business.”
Associated Industries of Missouri, a business advocacy association, praised passage of the bill.
“We applaud the work of the Missouri legislature in passing SB 591,” said Chairman Jerry Hunter in a statement. “The threat of punitive damages, when such damages have no merit, often drives up the cost of cases without any benefit to the community at large, which is supposed to be the reason for such damages.”
State Sen. Bill White, R-Joplin, who sponsored the proposal in the Senate, said it will ensure that claims for punitive damages are “grounded in facts.”
The measure now heads to Parson.
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