MISSOURI: An Introduction to Litigation: Mainly Plaintiffs

Introduction 

A new piece of legislation could have a significant impact on Missouri law. The Missouri Legislature recently passed a new bill, Senate Bill 591, on May 12, 2020. Missouri Governor Mike Parsons is expected to sign the Bill soon. If signed into law, the Bill will apply to cases filed on or after August 28, 2020. The Bill will provide substantive and procedural changes to Missouri law. First, the Bill includes procedural changes to the requirements for pleading punitive damages, as well as the standard of proof for awarding punitive damages. Second, the Bill includes substantive changes to the Missouri Merchandising Practices Act (“MMPA”). All practitioners filing or defending new actions in Missouri, or actions applying Missouri law, should be aware of these changes.

Punitive damages – standard of proof 

The changes in the Bill to pleading and proving punitive damages may heighten the requirement for plaintiffs seeking punitive damages. The Bill establishes a “clear and convincing” standard for proving punitive damages, stating: “punitive damages shall not be awarded unless the claimant proves by clear and convincing evidence that the defendant intentionally harmed the plaintiff without just cause or acted with a deliberate and flagrant disregard for the safety of others.” Previously, the requirement for punitive damages was whether the defendant “knew or should have known that the negligent conduct created an unreasonable risk of injury, showing complete indifference or conscious disregard for the safety of others.” See Coon v. American Compressed Steel, Inc., 207 S.W.3d 629 (Mo. Ct. App. 2006).

The new standard mirrors the language in Restatement (Second) of Torts, § 908(2) (1979), which Missouri courts have described as requiring that the defendant have some “evil motive or reckless indifference to the rights of others.” Bare v. Carroll Elec. Coop. Corp., 558 S.W.3d 35, 49 (Mo. Ct. App. 2018), reh’g and/or transfer denied (Apr. 4, 2018), transfer denied (July 3, 2018) (quoting Burnett v. Griffith, 769 S.W.2d 780, 789 (Mo. Banc 1989)). Plaintiffs previously could establish a punitive damage theory by showing that the defendant ignored the risk of harm and acted with indifference, which defendants are likely to argue was a lower standard than establishing a defendant’s “evil motive.”

Punitive damages – procedural requirements 

The Bill also changes the procedural requirements for punitive damages claims. After the Bill goes into effect, plaintiffs may no longer allege punitive damages in an initial pleading. Instead, they must seek leave of the court before they can bring their claims for punitive damages. Under the Bill, a plaintiff may file a pleading containing a request for punitive damages “only on written motion by the claimant, filed no later than one hundred twenty days prior to the final pretrial conference in the case or, if there is no scheduled pretrial conference, one hundred twenty days prior to the date set for trial.” The motion must be “supported by affidavits, exhibits, or discovery materials establishing a reasonable basis for recovery of punitive damages.” And, as discussed above, that reasonable basis is now measured against a “clear and convincing” standard. Any opponent to a punitive damages allegation may oppose the motion with its own evidence. A more onerous procedural process was proposed but withdrawn during Senate negotiations. That proposal would have required a bifurcated trial where, without discussion of punitive damages, a jury must determine whether compensatory damages should be awarded and, if so, in what amount. If compensatory damages were awarded, a hearing would be commenced for the court to determine whether the jury may also consider punitive damages. Only upon that determination could the issue of punitive damages be presented to the jury. That version of the bill was withdrawn, with the final Bill requiring instead the separate motion for punitive damages.

The Bill also adds statutory protections for an “employer or other principal” that may have otherwise been liable for punitive damages based on the actions of an employee or agent under traditional notions of vicarious liability. The Bill allows punitive damages only where (1) the principal authorized the unlawful act, (2) the principal was reckless in employing an unfit agent, (3) the agent was a manager acting in the scope of the agency, or (4) the principal or managerial agent thereof approved or ratified the unlawful act.

MMPA 

The Bill also includes substantive changes to the MMPA. Most significantly, the Bill provides that a plaintiff bringing a claim under the MMPA must prove that the plaintiff acted as a reasonable consumer and that the unlawful act at issue would cause a reasonable person to enter into the transaction that resulted in damages. Furthermore, plaintiffs must submit “definitive and objective” evidence sufficient to establish actual damages to a “reasonable degree of certainty.” Although debatable, critics of the MMPA have argued that a lack of reliance and actual damages requirements had resulted in the MMPA being a catch-call cause of action in Missouri that has far exceeded its intended purpose. Whether the amendments to the MMPA impact the frequency of MMPA claims will be an issue to watch.

Conclusion 

With Senate Bill 591 likely to be passed into law very soon, all Missouri litigators, especially plaintiffs’ counsel, should closely monitor the situation to ensure that new actions are properly pled under the new procedural and substantive standards. The next few years will be important as courts begin to interpret these new standards for punitive damages and the MMPA. These amendments should not curtail the ability of plaintiffs to avail themselves of Missouri laws that have consistently struck the right balance of protecting against anti-competitive or unscrupulous business practices while at the same time allowing legitimate businesses to thrive in Missouri.