State Supreme Court Finds Cap On Damages Unconstitutional

Tort reform is just a political catch phrase used to engender public enthusiasm for the idea of limiting a plaintiff’s damages at trial. We at Heimanson & Wolf see, first-hand, the impact of tort reform on everyday people. For example, tort reform limited the damages of a foreign corporation that employed the engineer who caused the terrible collision of the Metrolink train crash. See Details

However, recently the Arkansas Supreme Court dealt a blow to tort reform. In 2003, the state legislature in that state passed the Civil Justice Reform Act which limited the punitive damages a plaintiff may receive to three times the amount of compensatory damages with a maximum amount of $1 million. Punitive damages are those damages which are designed to punish a corporation for its conduct that caused an injury to others. The state Supreme Court held that the legislature did not have authority under the state Constitution to place limits on punitive damages.
In that case, a lower court included $42 million award in punitive damages against a German corporation. The German entity’s genetically altered rice tainted the crop of rice farmers in Arkansans. The Supreme Court upheld the judgment of the lower court. The business community in Arkansas has condemned the decision.