"Show Me the Malice!": Eighth Circuit Reverses $30 Million Punitive Damages Award

In Missouri, like many other jurisdictions, punitive damages are awarded to punish wrongdoing and deter others from engaging in similar conduct.  While case law in Missouri pervasively categorizes the award of punitive damages in negligence actions as an “extraordinary and harsh remedy” that should be awarded sparingly, in civil jury trials across the state juries are asked to determine awards for pain and suffering or punitive damages in negligence cases.  These damage awards are notoriously unpredictable and, as the United States Court of Appeals for the Eighth Circuit in Scott et al. v. Dyno Nobel, Inc. recognized, often run afoul of the limited situations which warrant their imposition.  In its recent reversal of a jury’s award of $30 million in punitive damages on a man’s negligence claim, the Eighth Circuit Court of Appeals highlighted the high evidentiary bar a plaintiff must meet to make a submissible case for punitive damages under Missouri law. 

In Scott et al. v. Dyno Nobel, Inc., Teddy and Melanie Scott alleged the defendant's negligence during a routine startup procedure at its plant resulted in the release of a toxic gas cloud, which caused Teddy Scott’s injuries.  On appeal, the issue was whether the evidence the Scotts submitted at trial was sufficient to support an award of punitive damages in a negligence case.  Specifically, whether the evidence demonstrated and amounted to an intentional or reckless disregard for the probable harm to others. 

The Court of Appeals, though recognizing the question was close given the hazardous nature of the gas emissions and considering expert testimony that the defendant did not follow industry-standard risk management procedures, concluded the evidence submitted by the Scotts failed to meet this high standard.  In doing so, the Court identified and relied on three factors that weighed against awarding punitive damages: (1) the absence of prior emission incidents at the plant; (2) the fact that the defendant had an EPA permit that allowed such emissions; and (3) the lack of regulatory or statutory violations by the defendants.  These factors, in turn, formed the basis for the court’s $30 million decision, finding that the Scotts failed to show that the defendant acted with the requisite recklessness or malice to support an award of punitive damages.

Implications

This decision provides guidance to Missouri lawyers and courts, as the often-unbridled discretion of juries and their award of punitive damages in negligence cases ignores the primary objective of the latter – to punish and deter intentional wrongdoing.  For this reason, the onus is on practitioners to urge courts to consider punitive damages early and to highlight not only the evidence supporting or negating them but also their limited and sparing application to negligence actions.  In doing so, Missouri practitioners can mitigate the unnecessary and unpredictable risks associated with submitting the issue of punitive damages to the jury.