Healthcare providers have seen an increase in nontraditional claims as plaintiff’s lawyers try to increase the value of medical malpractice lawsuits. Increasingly, plaintiffs have been bringing claims for punitive damages in “routine” medical malpractice cases. Plaintiffs are also bringing claims against health care providers under consumer protection statutes to expand the damages recoverable in medical malpractice lawsuits.
The Missouri Legislature has responded by enacting a new round of tort reform measures. Senate Bill 591 limits punitive damages in medical malpractice cases to intentional or malicious acts, proven by clear and convincing evidence. SB 591 also precludes Merchandising Practices Act claims against health care providers for personal injuries or death.
As the name suggests, punitive damages are intended for cases where the egregious conduct of the defendant requires a form of punishment beyond compensatory damages. Current law allows claims for punitive damages against health care providers to punish or deter “willful, wanton or malicious misconduct.” Increasingly, plaintiffs’ lawyers in routine medical malpractice cases have attempted to bring claims for punitive damages based on what they describe as the “reckless” behavior by the defendant. The inclusion of punitive damages claims can increase the risk for a defendant significantly. Inclusion of punitive damages claims can also create insurance coverage issues.
SB 591 changes the punitive damages standard in malpractice cases from “willful, wanton or malicious misconduct” to “malicious misconduct or conduct that intentionally caused damage to the plaintiff.” Punitive damages must be proven by “clear and convincing evidence,” as opposed to the “preponderance of the evidence” standard for actual damages.
Significantly, SB 591 expressly states a claim for punitive damages cannot be based on negligent conduct alone. Section 538.210.8 is amended to state “[e]vidence of negligence including, but not limited to, indifference to or conscious disregard for the safety of others shall not constitute intentional conduct or malicious conduct.”
Of note, SB 591 does not automatically change Missouri’s approved jury instructions for punitive damages. Until Missouri updates the approved jury instructions, trial courts may wrestle with an “approved” jury instruction that does not reflect current law.
In addition to requiring evidence of malicious or intentional conduct, SB 591 also limits the circumstances when an employer can be liable for punitive damages based on the actions of an employee. An employer can only be liable for punitive damages for an employee (or agent) when the following occurs: (1) the employer authorized “the doing and the manner of the act”; (2) the agent was unfit and the employer/principal was “reckless” in employing or retaining him or her; (3) the agent was a manager acting within the scope of employment; or (4) the employer/principal ratified or approved the act.
Under SB 591, a claim for punitive damages cannot be included in an initial petition. The plaintiff can only bring a claim for punitive damages after obtaining leave from the court to amend the petition. A plaintiff must bring a motion seeking leave to add punitive damages at least 120 days prior to the pretrial conference. If no pretrial conference is scheduled, the motion must be brought within 120 days of trial. The trial court must rule on the motion within 45 days of the hearing or, if no hearing is held, after the opposing party responds to the motion.
Merchandising Practices Act Claims
In addition to more frequent punitive damages claims, plaintiffs have also sought to expand the scope of Missouri’s Merchandising Practices Act (“MMPA”) to include medical malpractice claims. The MMPA is a consumer protection statute intended to protect consumers against unsavory retailers. Plaintiffs have increasingly included MMPA claims in medical malpractice cases — in no small part because the MMPA allows an award of attorney’s fees to the prevailing party. The recovery of damages under the MMPA (in non-medical malpractice cases) has often been interpreted broadly to protect consumers. Missouri appellate courts have yet to address the recovery of damages for personal injuries under the MMPA.
SB 591 amends the MMPA to prohibit claims for personal injury or death when that claim can also be brought as a medical malpractice claim. SB 591 amends the MMPA to state “[n]o action may be brought under this section to recover damages for personal injury or death in which a claim can be made under chapter 538.” Although SB 591 does not prohibit MMPA claims against health care providers, it does prohibit personal injury claims under the MMPA.
SB 591 states the changes apply to any lawsuits filed on or after August 28, 2020. With the August 28, 2020 effective date, we can expect two things. First, plaintiffs will rush to file any lawsuits that might include either punitive damages or MMPA claims before August 28, 2020. Second, for lawsuits filed after August 28, 2020, the parties will likely argue over whether SB 591 applies when the underlying negligence occurred prior to the effective date.
Regardless of the effective date of the statute, Missouri courts have repeatedly held “substantive” changes to the law cannot apply retroactively to causes of action that “accrued” prior to the effective date. A cause of action normally “accrues” when the alleged negligence occurs, even though the lawsuit may not be filed until years later. As a result, substantive changes to the law may not apply to lawsuits filed after a statute’s effective date because the alleged negligence occurred (and the right to sue arose) before the law changed. We anticipate plaintiffs will argue the changes to the MMPA are “substantive,” and they should only apply when the cause of action accrued after August 28, 2020.
Conversely, Missouri courts have held punitive damages are “remedial,” and they are not a matter of right. As such, Missouri courts have held the law governing punitive damages at the time of trial governs, even when the cause of action accrued prior to a change in the law. Defendants will have a strong argument that the changes to punitive damages should apply to all cases filed on or after August 28, 2020, regardless of when the cause of action accrued.