Is the Cap on Punitive Damages Real Tort Reform?

West Virginia is routinely labeled a “Judicial Hellhole.” However, over the past two years, West Virginia has been removed from the “Judicial Hellhole” list and downgraded to the “watch list,” meaning there has been improvement, mainly stemming from the recent tort reform occurring through the West Virginia legislature.

One of the recent pieces of legislation that the West Virginia legislature has enacted is a cap on punitive damages, which went into effect on June 8, 2015. Highlights of the reform include: a standard of evidence demonstrating that a defendant acted with actual malice toward the plaintiff or a conscious, reckless and outrageous indifference to the health, safety and welfare; thata jury only consider awarding punitive damages in a bifurcated process, first determining the appropriate compensatory awards and then only if a judge rules there is competent evidence can a judge then submit the question of punitive damages to a jury; and the first ever cap placed on punitive damages in West Virginia (cannot exceed the greater of four times the amount of compensatory damages or $500,000, whichever is greater).

These changes have been touted as a “tort reform” measure. It is without a doubt that since 2015, the West Virginia legislature has created legislation in an effort for tort reform. However, the punitive damages cap appears to be less like tort reform than other recent measures taken by the West Virginia legislature. Instead, the statutory cap appears to be a measure taken in an effort to codify over a century worth of case law, with the exception of the new burden of proof, on punitive damages by defining what punitive damages are and the amount that is allowable by law. Thus, the statute is an attempt to normalize the award of punitive damages, and also an attempt to make the award of punitive damages somewhat predictable and more uniform on a case-by-case basis.

However, by keeping the low-bar of reckless conduct in order to establish a claim for punitive damages, the West Virginia legislature appears to have balanced the low-bar with a higher standard of proof, shifting from a more-likely-than-not standard to a firm-belief in that the conduct of the defendant warrants an award of punitive damages. Thus, the West Virginia legislature has evened the playing field of the low-bar “recklessness” conduct requirement by requiring a higher standard of proving such conduct.

It is apparent that the West Virginia legislature is in a current groove of enacting more favorable defending against claims in West Virginia. The statute now gives clear direction to lower courts and litigants regarding the conduct needed to be proven for an award of punitive damages and the amount of punitive damages that can be expected when there has been an award of compensatory damages and conduct that meets the standard for punitive damages.

For more information on this article, contact Landon Moyer at lmoyer@fandpnet.com.