A year ago, my colleagues Andy Frey and Rory Schneider wrote this post about a case in which the Montana Supreme Court had been asked to review, among other things, the trial court's holding that the state's cap on punitive damages is unconstitutional. On July 1, the Montana Supreme Court decided the case—Masters Group International, Inc. v. Comerica Bank—on grounds that mooted the issue of the constitutionality of the cap.
To make a long story short, the court held that (i) the trial court erroneously failed to give effect to the provision in the parties' agreement that required application of Michigan law; (ii) under Michigan law, the tort claims (and hence the punitive damages) were unsustainable; and (iii) an evidentiary error necessitated a new trial on the breach-of-contract claim. Congratulations to our friend Jim Goetz on this excellent outcome for his client, Comerica.
As Andy Frey and I noted in a more recent post, the Montana Supreme Court may have another opportunity to address the constitutionality of the cap in Kelly Logging, Inc. v. First Interstate Bank, in which the trial court held the cap unconstitutional in the course of upholding a $16,760,000 punitive award. The docket in that case reflects that no briefs have yet been filed and that the case is subject to mediation—so it is possible that a final determination of the constitutionality of the cap may be deferred still further.
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