Sunday, March 6, 2016

New Legislation Aimed at Punishing Drunk Drivers with Punitive Damages May Miss the Mark

Maryland Senator Jamin B. (“Jamie”) Raskin introduced Senate Bill 302 (House Bill 864 in the House of Delegates sponsored by Delegate William C. Smith Jr., a Democrat from Montgomery County) which would make repeat drunken drivers who injure or kill others liable for punitive damages in some cases. Senate Bill 302 provides that a driver with a blood alcohol level of more than .08 percent who kills or injures another person, and has been convicted, pleaded no contest, or received probation before judgment for drunken driving charges in the last five years, would be liable for punitive damages if a finding for compensatory damages has first been made.  See Caldor v. Bowden, 330 Md. 632, 625 A.2d 959 (1993) (noting that the requirement of a compensatory damages foundation protects defendants from being punished for acts that the trial court determines the defendant did not commit). The bill, if enacted, would exempt drunk driving from the legal restriction Maryland law ordinarily places on punitive damage awards in personal injury cases, restricting them to cases in which the defendant is guilty of actual malice:  an action motivated by a wrongful or evil motive, intent to injure, ill will or fraud. See Tierco Maryland, Inc. v. Williams, 381 Md. 378, 849 A.2d 504 (2004); Garcia v. Foulger Pratt, 155 Md. App. 634, 845 A.2d 16 (2003)). 

Senate Bill 302 has major repercussions for the insurance industry, including to those employers that may ultimately be held responsible for paying a jury’s award.  Of concern is the fact that Maryland does not have a cap on punitive damages, and with no discernible limit on case value, insurance companies would realistically be forced to settle these claims, likely for full policy limits, in order to protect their insureds from excess exposure. In that scenario, the drunk driver who the bill seeks to punish would never actually stand trial in the civil context. 

This begs the question: what safeguards are in place to control punitive damage verdicts? Proponents of the bill point out that while compensatory damages would be measured under the civil “more likely than not” standard, punitive damages would be measured by the heightened “clear and convincing evidence” standard. See Owens-Illinois v. Zenobia, 325 Md. 420, 601 A.2d 633 (1992); see also Garcia v. Foulger Pratt,155 Md. App. 634, 845 A.2d 16 (2003). In addition, proponents argue that judges may still review and reduce a jury’s award for punitive damages if it is “disproportionate” to the award of compensatory damages or disproportionate to the driver’s conduct, taking into account the gravity and continuing nature of the conduct. See Philip Morris, Inc. v. Angeletti, 358 Md. 689, 752 A.2d 200 (2000).

Alternatively, representatives from the Maryland Chamber of Commerce, the Maryland Motor Truck Association, and various insurance companies argue that it is the criminal justice system which should punish drunk drivers. Senator H. Wayne Norman Jr., a Republican from Harford County and Cecil County, reminded the legislature that civil legislation is intended to compensate victims, not punish wrongdoers or exact society’s retribution, which is the role of criminal law.

In response to the opposition, Senator Raskin raised the concern that drunk drivers are “notoriously being let off with very light sentences.” While this fear may certainly be founded, it seems the appropriate legislation should be aimed at imposing harsher criminal sentences on the drunk driver rather than passing the cost of their egregious conduct to the insurance and labor and employment industries.

As of the date of publication, the Maryland Senate has passed S.B. 302. Given the major implications this legislation may have on the insurance industry, RSRM is monitoring H.B. 864 as it makes its way through committee and ultimately to the Governor’s desk. Please stay tuned for further updates.