Senate Bill No. 571
(By Senators Caruth, Jenkins and Guills)
____________
[Introduced March 12, 2009; referred to the Committee on the
Judiciary.]
____________
A BILL to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new article, designated §55-7E-1, §55-7E-2,
§55-7E-3, §55-7E-4, §55-7E-5, §55-7E-6, §55-7E-7, §55-7E-8,
§55-7E-9 and §55-7E-10, all relating to establishing the
Punitive Damages Standards Act; legislative findings; defining
terms; punitive damage pleading requirements; procedure for
award of punitive damages; proof required for punitive
damages; punitive damage limitations; and effective date.
Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended
by adding thereto a new article, designated §55-7E-1, §55-7E-2,
§55-7E-3, §55-7E-4, §55-7E-5, §55-7E-6, §55-7E-7, §55-7E-8, §55-7E-
9 and §55-7E-10, all to read as follows:
ARTICLE 7E. PUNITIVE DAMAGES STANDARDS ACT.
§55-7E-1. Short title.
This article is known and may be cited as the Punitive Damages
Standards Act.
§55-7E-2. Legislative findings.
The Legislature finds and declares that:
(a) The specter of unlimited punitive damages encourages
plaintiffs and defendants to try cases needlessly and frustrates
early settlement, thereby delaying justice and impeding the swift
award of compensatory damages to victims:
(b) Reasonable and fair standards will promote predictability
in the award of punitive damages in a manner fully consistent with
the objective of deterrence;
(c) Private enterprise has been hampered unduly by the threat
of unreasonable punitive damages awards, with the consumer paying
the ultimate costs in higher prices and insurance costs;
(d) Punitive damages are private punishments in the nature of
fines awarded in civil cases;
(e) When warranted in egregious cases, punitive damages can
provide an appropriate expression of public disapproval for conduct
that is truly shocking;
(f) Current procedures for the award of punitive damages do
not properly protect those accused of serious wrongdoing nor
provide sufficient guidance for the imposition of these penalties;
and
(g) It is in the public interest to strike a balance between deterring egregious misconduct and encouraging reasonable activity.
§55-7E-3. Definitions.
For the purposes of this article, the meaning of the terms
specified shall be as follows:
(a)
"Clear and convincing evidence." -- Means evidence which
leaves no serious or substantial doubt about the correctness of the
conclusions drawn from the evidence. It is more than a
preponderance of evidence, but less than beyond a reasonable doubt.
(b)
"Compensatory damages." -- Means damages intended to make
good the loss of an injured party and no more. The term includes
general and special damages and does not include nominal, exemplary
or punitive damages.
(c)
"Defendant." -- Means any party against whom punitive
damages are sought.
(d)
"Malice." -- Means either conduct which is specifically
intended by the defendant to cause tangible or intangible serious
injury to the plaintiff or conduct that is carried out by the
defendant both with a flagrant indifference to the rights of the
plaintiff and with a subjective awareness that such conduct will
result in tangible serious injury.
(e)
"Nominal damages." -- Are damages that are not designed to
compensate a plaintiff and are less than $500.
(f)
"Plaintiff." -- Means any plaintiff claiming punitive
damages.
(g)
"Punitive Damages." -- Includes exemplary or vindictive
damages and means damages awarded against a party in a civil action
because of aggravating circumstances in order to penalize and to
provide additional deterrence against a defendant to discourage
similar conduct in the future. Punitive damages do not include
compensatory damages or nominal damages.
§55-7E-4. Pleading punitive damages; presuit notification.
(a) An award of punitive damages must be specifically prayed
for in the complaint.
(b) The plaintiff must specifically plead either:
(1) That at least thirty days in advance of filing the
complaint, that the plaintiff has given notice of seeking damages
pursuant to this article and that in good faith a reasonable
settlement could not be reached; or
(2) That such thirty days notice under this section could not
be given because of exigent circumstances.
(c) The plaintiff shall not specifically plead an amount of
punitive damages, only that such damages are sought in the action.
(d) The prayer for punitive damages shall be stricken prior to
trial by the court, unless the plaintiff presents prima facie
evidence sufficient to sustain an award of punitive damages under
this article to the court at least thirty days prior to trial.
§55-7E-5. Procedure for award of punitive damages.
(a) All actions tried before a jury involving punitive damages shall, if requested by any defendant, be conducted in a bifurcated
trial before the same jury.
(b) In the first stage of a bifurcated trial, the jury shall
determine liability for compensatory damages and the amount of
compensatory damages or nominal damages. Evidence relevant only to
the issues of punitive damages is not admissible in this stage.
(c) Punitive damages may be awarded only if compensatory
damages have been awarded in the first stage of the trial. An
award of nominal damages cannot support an award of punitive
damages.
(d) In the second stage of a bifurcated trial, the jury shall
determine if a defendant is liable for punitive damages.
(e) Evidence of a defendant's financial condition or net worth
is not admissible is the proceedings on punitive damages.
(f) In determining the amount of punitive damages, the trier
of fact shall consider all relevant evidence, including:
(1) The severity of the harm caused by the defendant;
(2) The extent to which the plaintiff's own conduct
contributed to the harm;
(3) The duration of the conduct, the defendant's awareness,
and any concealment by the defendant;
(4) The profitability of the conduct to the defendant;
(5) Awards of compensatory and punitive damages to persons
similarly situated to the plaintiff;
(6) Prospective awards of compensatory damages to persons
similarly situated to the plaintiff;
(7) Any criminal penalties imposed on the defendant as a
result of the conduct complained of by the plaintiff; and
(8) The amount of any civil fines assessed against the
defendant as a result of the conduct complained of by the
plaintiff.
(g) In determining the amount of punitive damages, the trier
of fact shall not consider the wealth or financial condition of the
defendant, but such evidence may be considered by the trial and
appellate courts in determining whether the award is excessive.
(h) If a verdict is rendered awarding punitive damages, the
trial court shall carefully review the decision of the trier of
fact, considering all relevant evidence, including the factors
identified in subsection (f), to ensure that the award does not
exceed an amount necessary for the sake of example and to punish
the defendant. Trial courts are to reflect in the record their
reasons for interfering with a jury verdict, or refusing to do so,
on grounds of excessiveness of damages.
(9) The amount of punitive damages shall be reduced pursuant
to the contributory or comparative fault principles of the law of
this state. In any action in which there are two or more
defendants an award of punitive damages must be specific as to each
defendant, and each defendant is liable only for the amount of the award made against that defendant.
§55-7E-6. Proof required for award of punitive damages.
Punitive damages may only be awarded if the plaintiff proves
by clear and convincing evidence that his or her harm was the
result of actual malice. This burden of proof may mot be satisfied
by proof of any degree of negligence including gross negligence.
(a) Punitive damages may not be awarded if a drug or device or
combination device or food or food additive which caused the
claimant's harm:
(1) Was subject to premarket approval or licensure by the
Federal Food and Drug Administration under the "Federal Food, Drug,
and Cosmetic Act," 52 Stat. 1040, 21 U.S.C. Sec. 301 et. seq. or
the "Public Health Service Act," 58 Stat. 682, 42 U.S.C. Sec. 201
et seq. and was approved or licensed; or
(2) Is generally recognized as safe and effective pursuant to
conditions established by the Federal Food and Drug Administration
and applicable regulations, including packaging and labeling
regulations.
(b) This exception does not apply where the plaintiff proves
by clear and convincing evidence that the product manufacturer:
(1) Knowingly and in violation of applicable agency
regulations withheld or misrepresented information required to be
submitted to the agency, which information was material and
relevant to the harm in question; or
(2) Made an illegal payment to an official of the Federal Food
and Drug Administration for the purpose of securing approval of the
product.
§55-7E-7. Punitive damage limitation.
An award of punitive damages may not exceed three times the
amount of the plaintiff's compensatory damages award.
§55-7E-8. Severability clause.
If any provision of this article or the application thereof to
any person or circumstance is held unconstitutional or invalid,
such unconstitutionality or invalidity does not affect, impair or
invalidate other provisions or applications of the article, and to
this end the provisions of this article are declared to be
severable.
§55-7E-9. Repeal of inconsistent provisions; prior law not
revived.
The provisions of all articles or parts of articles, or of
this code, which are inconsistent with the provisions of this
article are hereby repealed to the extent of such inconsistency.
Repeal by this article of any provision of any article or parts of
articles or of this code does not have the effect of reviving any
prior law theretofore repealed or superseded by such repealed
provision.
§55-7E-10. Effective date.
This article becomes effective as to any civil suit for damages commenced on or after the date of enactment of this article
regardless of whether the claim arose prior to the date of
enactment.
NOTE: The purpose of this bill is to establish the "Punitive
Damages Standards Act"; legislative findings; defining terms;
punitive damage pleading requirements; procedure for award of
punitive damages; proof required for punitive damages; punitive
damage limitations; and effective date.
This article is new; therefore, strike-throughs and
underscoring have been omitted.