2002 Regular Session

To: Judiciary A

By: Representative Smith (39th), Moore (60th), Cameron, Eakes, Rotenberry, Jennings, Chism, Nicholson, Lott, Davis, Formby, Robinson (84th), Robertson, Guice, Wells-Smith

House Bill 1492



     SECTION 1.  Section 11-1-65, Mississippi Code of 1972, is amended as follows:

     11-1-65.  (1)  For the purposes of this section, the following words and phrases shall have the meanings ascribed herein unless the context clearly requires otherwise:

          (a)  "Clear and convincing evidence" is evidence that leaves no serious or substantial doubt about the correctness of the conclusions drawn from the evidence.  It is more than a preponderance of evidence, but is less than evidence beyond a reasonable doubt.

          (b)  "Compensatory damages" are damages intended to make an injured party whole and no more.  Compensatory damages include general and special damages, but do not include nominal damages.

          (c)  "Malice" is either conduct that is specifically intended to cause tangible or intangible serious injury to a plaintiff or conduct that is carried out by the defendant with a flagrant indifference to the rights of the plaintiff and with a subjective awareness that such conduct will result in tangible serious injury.

          (d)  "Nominal damages" are damages that are not designed to compensate a plaintiff and are less than Five Hundred Dollars ($500.00).

          (e)  "Punitive damages" are exemplary or vindicating damages that are awarded against a party in a civil action to penalize that party and to deter others from similar conduct in the future.  Punitive damages do not include compensatory damages or nominal damages.

     (2)  The following general provisions apply to any award of punitive damages in the State of Mississippi:

          (a)  An award of punitive damages must be specifically requested in the complaint.

          (b)  Punitive damages may not be awarded if the claimant does not prove by clear and convincing evidence that the defendant against whom punitive damages are sought acted with actual malice or gross negligence that evidences a willful, wanton or reckless disregard for the safety of others, or committed actual fraud.

          (c)  In any action in which the claimant seeks an award of punitive damages, the trier of fact shall first determine whether compensatory damages are to be awarded and in what amount, before addressing any issues related to punitive damages.

          (d)  If, but only if, an award of compensatory damages has been made against a party, and the court finds that there is sufficient evidence to proceed, then the court may promptly commence an evidentiary hearing before the same trier of fact to determine whether punitive damages may be considered.

          (e)  After hearing any additional evidence that may support an award of punitive damages, the court shall then again determine whether the issue of punitive damages may be submitted to the trier of fact; and, if so, the trier of fact shall determine whether to award punitive damages and in what amount.

          (f)  In all cases involving an award of punitive damages, no evidence of or relating to the financial condition or size of the defendant shall be admissible before the trier of fact unless and until the defendant elects to offer evidence on these issues in mitigation of the size of any punitive damages award.

          (g)  In all cases involving an award of punitive damages, the fact finder, in determining the amount of punitive damages, may consider, to the extent relevant, the following:

              (i) * * *  The nature and reprehensibility of the defendant's wrongdoing at the time and under the circumstances when it was committed, for example, the impact of the defendant's conduct on the plaintiff, or the relationship of the defendant to the plaintiff; the defendant's awareness of the amount of harm being caused and the defendant's motivation in causing such harm; the duration of the defendant's misconduct and whether the defendant attempted to conceal such misconduct;

              (ii)  Whether the defendant's conduct was found to have caused harm to the plaintiff is at present continuing with respect to the plaintiff or other individuals;

              (iii)   The severity of the harm caused by the defendant;

              (iv)  The extent to which the plaintiff’s own conduct contributed to the harm;

              (v)  The profitability of the conduct to the defendant;

              (vi)  Prior awards of compensatory and punitive damages to persons similarly situated to the plaintiff; and

              (vii) * * *  Any other circumstances shown by the evidence that bear on determining a proper amount of punitive damages.

          (h)  The trier of fact shall be instructed that the sole purpose of punitive damages is to punish the wrongdoer and to deter possible similar misconduct in the future by the defendant and no amount should be awarded to compensate the plaintiff * * *.

          (i)  If a verdict is rendered awarding punitive damages, the trial court shall ascertain whether the award is reasonable in its amount and rationally related to any harm actually caused, and the purpose to punish what occurred giving rise to the award and to deter its repetition by the defendant and others, and then enter judgment, reduce the award, or set the award aside, as appropriate.

          (j)  In determining whether the award is appropriate, the court shall take into consideration the * * * factors set forth in subsection (g) above in addition to the financial condition and net worth of the defendant, even if not admitted before the trier of fact.

 * * *

          (k)  The seller of a product other than the manufacturer shall not be liable for punitive damages unless the seller exercised substantial control over that aspect of the design, testing, manufacture, packaging or labeling of the product that caused the harm for which recovery of damages is sought; the seller altered or modified the product, and the alteration or modification was a substantial factor in causing the harm for which recovery of damages is sought; the seller had actual knowledge of the defective condition of the product at the time he supplied same; or the seller made an express factual representation about the aspect of the product which caused the harm for which recovery of damages is sought.

 * * *

          (l)  Punitive damages shall not exceed the greater of three (3) times the amount of the total compensatory damages awarded to the plaintiff or Five Hundred Thousand Dollars ($500,000.00), whichever is greater; and, if the defendant is an individual or a business with less than fifty (50) full-time employees, no award of punitive damages shall exceed three (3) times the amount of the plaintiff’s compensatory damages or Five Hundred Thousand Dollars ($500,000.00), whichever is less, unless the finder of fact and court find by clear and convincing evidence that the defendant acted with criminal intent to cause serious physical bodily injury.  This restriction shall not be disclosed to the trier of fact but shall be applied by the court to any punitive damages awarded.

          (m)  Only one (1) award for punitive damages may be made against a defendant for the same act, decision, omission or course of conduct.  Punitive damages may not be awarded against a defendant if punitive damages have been awarded in any prior action against that defendant for the same act, decision, omission, or course of conduct.  For purposes of this section, identical defects in individual units of a manufacturer's products shall be deemed to be the same act, decision, omission or course of conduct.

          (n)  Punitive damages shall not be awarded against a defendant for any activity that is subject to regulation by any agency of the United States or the State of Mississippi, if the regulated activity was in compliance with applicable regulations of the United States and this state.

          (o)   Punitive damages shall not be awarded against a manufacturer or product seller if the aspect of the product's manufacture, design, formulation, inspection, testing, packaging, labeling or warning which caused the claimant's harm complied with:

              (i)   Any federal statute in effect at the time the product was produced;

              (ii)  Any administrative regulation in effect at the time the product was produced that was promulgated by an agency of the federal government which had responsibility to regulate the safety of the product or to establish safety standards for the product pursuant to a federal statute;

              (iii)  Any approval or certification made by an agency of the federal government before the product was marketed; or

              (iv)  Any state or local statute, ordinance, agency regulation, agency certification applicable to the place where the harm to the plaintiff allegedly occurred.

          (p)  Punitive damages shall not be awarded if a drug, device, food, food additive or a combination of these items caused the claimant’s harm if:

              (i)  The item was subject to premarket approval or licensure by the Federal Food and Drug Administration under the "Federal Food, Drug, and Cosmetic Act," 21 USCS Section 301, et seq.,or the "Public Health Service Act," 42 USCS Section 201, et seq., and was approved or licensed; or

              (ii)  Is generally recognized as safe and effective pursuant to conditions established by the Federal Food and Drug Administration and applicable regulation, including packaging and labeling regulations.

          (q)  The prohibition against awarding punitive damages in the circumstances described in paragraph (o) of this subsection shall not apply when the plaintiff proves by clear and convincing evidence that the defendant:

              (i)  Knowingly and in violation of applicable state or federal agency regulations withheld or misrepresented information required to be submitted to the agency, which information was material and relevant to the harm in question; or

              (ii)  Made an illegal payment to an official of the federal agency for the purpose of securing approval of the activity or product as described in paragraph (l)(iii).

     (3)  If the application of this section, or of any portion of it, to any person or circumstance is held invalid, the invalidity shall not affect the application of this section to other persons or circumstances which can be given effect without the invalid provision or application.

     (4)  This section shall apply to any civil action pending or filed on or after July 1, 2002.

     SECTION 2.  This act shall take effect and be in force from and after July 1, 2002.