Are Punitive Damage Caps Constitutional?

By Peter DePaolis

Justice statuePunitive damages refers to financial compensation awarded to an injured party that goes beyond mere compensation for losses. A damages cap is a law that limits the amount that can be awarded regardless of the facts of the individual case.

Punitive damages are intended as a punishment for outrageous misconduct and to keep others from performing similar actions in the future. The nature of this kind of wrongdoing—in which one party acts maliciously, intentionally or with complete disregard for the rights of another party—means that punitive damages can, and should, change from case to case.

An Excelsior Springs woman was defrauded by car dealer Chad Franklin in 2012 when she purchased a used vehicle after being told her monthly payments would be just $49. After several months, however, she was informed the monthly payments were jumping to $387.

A jury ordered Franklin to pay $1 million in punitive damages to the woman, but the fine was cut in half by the judge, who cited a state law capping certain punitive damage awards at $500,000.

The Missouri Supreme Court disagreed and said that punitive damages limits do not apply in this case.

The Court pointed out that the plaintiff filed her claim as a case of common law fraud, which has existed in Missouri as far back as 1820, when the state’s first constitution was created. Because of this, the Court unanimously agreed that the legislature cannot limit punitive damage amounts.

Although the punitive damages are being handled by his insurance company, the car salesman, Chad Franklin, is no longer is in business. This fact, alongside the new ruling, is reassuring.

Washington, D.C., Maryland and Virginia Lawyers Who Handle Fraud Cases

Punitive damages are sometimes the only effective method of enforcing the law. Cases of fraud can be extremely complex and are best handled by an experienced litigation attorney. For over 25 years, our Washington, D.C., Maryland and Virginia lawyers have protected the rights of those hurt by fraudulent business claims. If you would like to discuss a possible fraud claim, please contact us to discuss your case

Did You Know? There is no maximum dollar amount of punitive damages that a defendant can be ordered to pay.

Koonz, McKenney, Johnson & DePaolis L.L.P.

Maryland, Washington, D.C. and Virginia Injury Attorneys


About the Author
Peter DePaolis joined the firm in 1980 and has since represented a large number of individuals involved in automobile collisions, truck accidents, bus crashes, defective products, and medical malpractice cases. A significant portion of Mr. DePaolis’ practice is devoted to working on behalf of people suffering from asbestosis, mesothelioma, and other asbestos-related cancers. He has led his firm’s fight against the asbestos industry and has recovered over $30 million in damages for asbestos victims and their families.