In 2015, West Virginia enacted a statute that caps punitive damages at the greater of $500,000 or four times the compensatory damages. We blogged about the statute here, explaining that the West Virginia legislature was seeking to reform the state's image as a "judicial hellhole" that is hostile to defendants.
The Supreme Court of Appeals of West Virginia has now held, in Martinez v. Asplundh Tree Expert Co., that the cap applies in cases tried after the statute's effective date—regardless of when the conduct occurred or when the complaint was filed. The court decided the issue in response to a certified question from a federal district court. The majority reasoned that the provision "is a remedial statute that does not impact a vested or substantive right." As the majority opinion pointed out, "[a] plaintiff has no right, much less a vested right, to an award of punitive damages before trial." Thus, the court determined, the statute "is not subject to a retroactivity analysis," and is "applicable irrespective of when the cause of action accrued or when the claim or suit is filed."
Two justices wrote separately to note their view that the plainly expressed intent of the legislature also supported applying the provision to pending claims. As they saw it, in setting limits on "[t]he amount of punitive damages that may be awarded in a civil action," the West Virginia legislature "could use no plainer language to convey to the public, litigants, and the courts that West Virginia's outlier status with regard to unrestrained damages is ... harmful to the state ... and that it intends to foreclose such awards immediately." Two justices dissented, calling the ruling a "result-oriented decision" that is "shamefully inconsistent" with "established precedent."
The decision is very good news for defendants currently litigating claims brought under West Virginia law. Had the dissent's view prevailed, punitive damages would remain unlimited for all claims accruing before June 8, 2015.
Originally published June 30, 2017
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