June 2, 1999
Ala. Lawmakers OK Limits on Damages
This same article appeared:
June 1, 1999 -- The Legal Intelligencer
May 29, The Chattanooga Times / Free Press
By Bill Poovey
The Associated Press
MONTGOMERY, Ala. -- Alabama lawmakers have approved limits on damage awards in lawsuits, citing complaints that sky-high verdicts jeopardized the state's ability to keep and recruit businesses.
Alabama has earned a reputation as a state where juries give extremely generous awards to victorious plaintiffs in lawsuits.
Just last month, a jury in Hale County returned a $581 million verdict in a family's claim it was overcharged $1,200 for two satellite dishes.
''There is no doubt that verdict helped push it over the edge,'' said University of Alabama law professor Gene Marsh.
The state House on Tuesday unanimously passed a measure, already approved by the Senate, to cap punitive damage awards the portion of a verdict aimed at punishing a defendant for misconduct.
No caps were adopted for compensatory damages the portion of a verdict that typically covers a plaintiff's out-of-pocket financial losses and pain and suffering.
In personal injury cases, punitives will be limited to three times the amount awarded in compensatory damages, or $1.5 million, whichever is greater.
In non-injury cases against large businesses, punitive damages will be limited to three times the compensatory damages, or $500,000, whichever is greater. The new cap would have held the Hale County award to $3.9 million.
A spokeswoman for Gov. Don Siegelman said he would sign the legislation. He already signed measures intended to stop plaintiffs' lawyers from shopping for friendly juries and judges, and made it tougher to get lawsuits certified as class actions.
Plaintiffs' lawyers say Alabama's consumer protection laws are so weak that big verdicts have been the only protection for residents against being cheated.
Greg Breedlove, president of the Alabama Trial Lawyers Association, said business executives have created the perception of a problem.
''The reality is we don't need wholesale changes to our tort law, '' Breedlove said. Instead, he said, the changes ''address the perception of that problem.''
But Bill O'Connor, president of the Business Council of Alabama, said the large awards have hurt economic development, though the state has landed marquee companies such as Mercedes- Benz, Boeing and Honda.
''We don't know how many site selection lists we have been excluded from in the past, where we don't even make the cut to compete,'' O'Connor said. ''We do know that has been a problem.''