West Virginia Establishes Punitive Damages Cap and Abolishes Joint and Several Liability

Posted on June 30th, 2015 by sutteroconnell

This year West Virginia has passed two important pieces of legislation. The first relates to the treatment of punitive damages, setting limitations on the award of punitive damages, and allowing for bifurcated trials. Second, West Virginia established a modified comparative fault standard and abolished joint and several liability in most situations.

Senate Bill 421, codified at West Virginia Statute §55-7-27, was passed March 10, 2015 and governs punitive damages in civil actions.  Punitive damages may only be awarded after the plaintiff establishes by clear and convincing evidence that the defendant acted with actual malice or a “conscious, reckless, and outrageous indifference to the health, safety and welfare of others.” If a plaintiff seeks punitive damages in a civil action, the trial must be bifurcated at the request of any defendant. During the first stage of trial, the jury determines liability with regard to compensatory damages and the amount to be awarded, if any. If the defendant is liable for compensatory damages, then the court determines whether sufficient evidence was presented to proceed with the second stage of trial to award punitive damages. If sufficient evidence was presented, the same jury will determine whether the defendant is liable for punitive damages and determine the amount. The amount of punitive damages that may be awarded may not exceed the greater of four times the amount of compensatory damages or $500,000. Any amount of punitive damages that exceeds the cap will be reduced by the court. Once the damages have been reduced, if necessary, one third of the punitive damages award is paid to the Revenue Shortfall Reserve Fund.

House Bill 2002, codified at West Virginia Statute §55-7-13a-d, repealed §55-7-24, the state’s joint and several liability doctrine. Under the old doctrine, defendants were both jointly and severally liable, and any defendant that was found to be at least 30% at fault could be held collectible to pay an entire damages award if other defendants did not pay their share. If the plaintiff could not collect from a defendant six months after the judgment, the plaintiff could petition the court for a defendant that was only found to be at least 10% liable to pay the entire damages award.

Under the new doctrine, liability is only several. If the plaintiff is found to be more at fault than the combined fault of the defendants, the plaintiff is barred from recovery. Any award the plaintiff must be reduced by his degree of fault. Factfinders are now permitted to allocate fault to the plaintiff, any parties that settled with the plaintiff, and any parties identified by the defendant who may be at fault. If the plaintiff is unable to collect damages from a defendant within one year of the judgment, the plaintiff can petition the court for reallocation. However, the court cannot reallocate against a defendant whose percentage of fault is equal to or less than the plaintiff’s percentage of fault. The new statute does not change vicarious liability and a defendant may still be liable for fault of an employee or agent. Similarly, joint and several liability remains for defendants who were driving under the influence, whose criminal conduct is a proximate cause of the plaintiff’s damages, or whose conduct involves illegal disposal of hazardous waste.

These two new pieces of legislation are critical to litigating cases in West Virginia. The new punitive damages statute will end the chances of runaway punitive damage awards because application of the new strict standard should eliminate punitive claims in many more cases. With the new modified comparative fault standard defendants will only be liable for their share of any damages award in most civil actions.