Oklahoma Supreme Court Finds Non-Economic Damages Cap Unconstitutional
April 26, 2019
In a long-awaited opinion by both sides of the bar, this week the Oklahoma Supreme Court declared the so-called “non-economic damages cap” of $350,000 in personal injury cases where the plaintiff survived the harm-causing incident an unconstitutional special law in violation of the Oklahoma Constitution. See Beason v. I.E. Miller Services, Inc., 2019 OK 28. The statute containing the cap, 23 O.S. § 61.2, is unconstitutional in its entirety and no longer applies.
Article 5, Section 46 of the Oklahoma Constitution provides that “the Legislature shall not, except as otherwise provided in this Constitution, pass any local or special law… [r]egulating the practice or jurisdiction of, or changing the rules of evidence in judicial proceedings or inquiry before the courts, justices of the peace, sheriffs, commissioners, arbitrators, or other tribunals, or providing or changing the methods for the collection of debts, or the enforcement of judgments or prescribing the effect of judicial sales of real estate.”
23 O.S. § 61.2(B), passed in 2011, provides in relevant part that “in any civil action arising from a claimed bodily injury, the amount of compensation which a trier of fact may award a plaintiff for noneconomic loss shall not exceed Three Hundred Fifty Thousand Dollars ($350,000.00), regardless of the number of parties against whom the action is brought or the number of actions brought.” The “non-economic damages cap” could be lifted on a showing, by clear and convincing evidence, that the defendant engaged in fraud, gross negligence, or intentional or malicious behavior. It also required the jury to explain what portion of an award was non-economic damages, but prevented the jury from knowing about the cap before releasing their award. It also expressly did not apply to wrongful death claims.
In 2012, an employee of I.E. Miller Services was attempting to move a 41-ton pump with a single crane and no assistance of additional machinery. Part of the crane broke, causing the crane’s boom to fall on worker James Todd Beason. Beason suffered extensive injuries and required two amputations on his arm. He and his wife sued I.E. Miller Services in Oklahoma County District Court. Following a trial in 2015, a jury awarded Mr. Beason and Mrs. Beason $6,000,000 in non-economic damages. The trial court applied the non-economic damages cap to reduce the jury’s non-economic damages award from $6,000,000 to $700,000 ($350,000 for Mr. Beason and $350,000 for Mrs. Beason).
The Beasons appealed in 2015, arguing—in part—that 23 O.S. § 61.2 was a special law in violation of the Oklahoma Constitution, Article 5, Section 46. They claimed that though the cap “ostensibly applies to ‘all plaintiffs with bodily injury,’” it treated living personal-injury plaintiffs who receive greater than $350,000 in noneconomic damages differently from dead personal-injury plaintiffs (whose damage claims are uncapped) or living personal-injury plaintiffs with less than $350,000 in noneconomic damages (whose damage claims are not reduced). The Beasons also argued that if Court found any provision of the cap statute unconstitutional (such as the bar on jury knowledge, which they also challenged), it could not sever the malcontent provision from the statute as a whole, necessitating a ruling that the entire cap statute was unconstitutional.
In response, I.E. Miller argued that the question was not whether the statute, as applied, created separate classes amongst a similarly situated group, but whether the statute facially created separate classes before application. Section 61.2, the company said, applied uniformly to all plaintiffs with bodily injuries; thus, it did not create suspect classifications at the outset, and therefore was not an unconstitutional special law. The company also argued that even if the statute, as created or as applied, impacted differently portions of a similarly situated group (or, in other words, created classifications amongst a group), it could constitutionally do so because any difference in application bore a “rational relationship to some legitimate legislative objective.”
On April 23, 2019, over three-and-a-half years after retaining the appeal, the Oklahoma Supreme Court released its opinion. The Court declared the so-called “non-economic damages cap” an unconstitutional special law in violation of Art. 5, § 46. See Beason, 2019 OK 28, ¶ 7. The majority defined the class of persons at issue as all those who sue to recover for bodily injury, then reasoned that because the non-economic damages cap only applied to living personal injury plaintiffs, not those bringing wrongful death claims, the cap targeted less than the entire class of personal-injury plaintiffs for different treatment. As the Court explained: “The failing of the statute is that it purports to limit recovery for pain and suffering in cases where the plaintiff survives the injury-causing event, while persons who die from the injury-causing even face no such limitation.” Id. The majority reasoned that among personal-injury plaintiffs, the dead and the living stand on “identical footing.” Id. In other words, the wrongful death statute permits the dead to recover “pain and suffering” in the manner as the living. Id. Thus, the majority concluded, “no good reason exists to treat a person who survives the harm-causing event differently with respect to recovery for the very same detriment.” Id. As such, plaintiffs with any sort of personal-injury tort claim, living or dead, can recover an unlimited amount in non-economic damages.
Additionally, the Court also concluded in one sentence that 12 O.S. § 3009.1 (the statute which limits the amount of medical bills a plaintiff can introduce into evidence to amounts paid, as opposed to amounts charged) does not apply to future medical expenses not yet incurred. I.E. Miller had argued on cross-appeal that § 3009.1 should apply to future expenses in the same way it applies to past expenses, and the Court rejected this argument with no discussion. The most reasonable explanation, which the Beasons argued, is that the plain text of § 3009.1 is in past-tense, suggesting it only applies to past expenses. Unlike the non-economic damages cap, the Legislature could likely make a simple amendment to § 3009.1 to make it apply to future medical expenses.
Of much greater concern is the loss of the non-economic damages cap, the central feature of Beason. Any individuals or companies that operate in industries which frequently encounter personal injury claims, such as insurance coverage, transportation, or healthcare, should be aware of this case. It greatly elevates the exposure companies and individuals could face in personal injury cases where the plaintiff survived the harm-causing incident. Unfortunately, when faced with non-economic damages claims like pain and suffering, it can be very difficult to anticipate how a jury will respond to plaintiffs. The cap provided some comfort to defendants who could know that, if anything, non-economic claims would be limited to $350,000.00 or less. No longer. Entities or individuals in these fields, as well as any field in which personal injuries could arise, should take care to train and supervise their operations with great detail, as the potential for significant damage verdicts on claims where no malicious or grossly negligent behavior is at issue has increased dramatically.
Our experienced attorneys in any of the aforementioned practice fields can help you navigate the complicated issues raised by Beason and other areas of law. Please do not hesitate to give us a call.