Colorado Civil Justice League
INITIATIVES

 A shift in timing
for the pleading of punitive damages. Oftentimes, punitive damages are used only for negotiating leverage, without a factual basis. This would require litigants to delay requesting punitive damages until they have gathered the necessary facts and shown there is at least a reasonable basis for asserting damages.
[Full Discussion]
[Bill Fact Sheet]


The ability to seek
immediate appeal of class certification in class action lawsuits. Class certification is often the major decision in any class action lawsuit, defining the size of the case and the recovery. This reform merely mimics federal law and gives appellate courts an opportunity -- but does not require them -- to immediately review this make-or-break ruling.
[Full Discussion]
[Bill Fact Sheet]


The elimination of
two separate non-economic damage caps due to the overlap of state and federal law. Because of the overlap between state tort law and federal employment law in the civil rights arena, employers are liable for non-economic damages not only under state law, but also federal law, even though there is only one case. This reform prevents double-recovery.
[Full Discussion]
[Bill Fact Sheet]


It's been widely
reported that the cost of health care coverage for the average Coloradoan is a growing problem, especially in rural areas. Reforms are needed to address this problem, and the first logical place for reform is in Colorado's tort reform arena. One of the key factors in rising health care costs is the high cost of medical malpractice coverage, which is contributing to a shortage of providers in rural Colorado. These rising costs are ultimately paid by employers, employees and their dependent family members.
[Full Discussion]
[Bill Fact Sheet]


PUNITIVE DAMAGES
ISSUE

How to ensure that litigants do not make frivolous punitive damage claims solely for the purpose of obtaining negotiating leverage.

BACKGROUND

Punitive damages in Colorado are governed by statute. The key features are:

  •    Punitive damages may be awarded only upon a showing of "fraud, malice, or willful and wanton conduct." The statute defines willful and wanton conduct to mean "conduct purposefully committed, which the actor much have realized as dangerous, done heedlessly and recklessly, without regard to consequences, or of the rights and safety of others, particularly the plaintiff." CRS 13-21-102(1)(a) & (b).

  •    Punitive damages may be awarded only when the plaintiff proves beyond a reasonable doubt that the defendant has acted in a manner sufficient to give rise to punitive damages, CRS 13-25-127(2).

    • Certain trends have emerged with respect to punitive damages claims in Colorado. Increasingly plaintiffs' lawyers will insert a punitive damages claim into any personal injury or property damages claim asserted against a corporation known to have large cash reserves or sizeable liability insurance coverage. Such claims are raised even though at the time of filing the plaintiffs' lawyer knows of no evidence demonstrating fraud, malice, or willful and wanton conduct. The plaintiff's attorney asserts the punitive damages claim in order to increase the overall settlement value of the case and to create an incentive for the defendant to settle the case. Punitive damage claims usually are not covered by insurance. One abuse of punitive damage claims occurs when the claim is added to cause an insured to pressure the carrier to settle earlier, and possibly for more money, in order to eliminate the insured’s personal risk.

    PROPOSED SOLUTION

    Prohibiting plaintiffs’ attorneys from asserting claims for punitive damages until they can present actual evidence sufficient to meet Colorado’s high standard prevents the assertion of such claims solely for the threat value. Experience shows that adding this extra step in the pleading process significantly reduces the frequency with which punitive damages claims are asserted.

  •    Colorado currently employs this pleading process in connection with medical malpractice lawsuits. The introduction of this requirement has eliminated punitive damages claims in cases where they are not warranted.

  •    Florida adopted the two-step pleading process several years ago. Since then, punitive damages claims have been greatly reduced in product liability and professional negligence lawsuits.

    The solution to the existing problem in Colorado simply applies Colorado’s present medical malpractice standards to all cases. To this end, the following language should be added to C.R.S. § 13-21-102(1) as paragraph (c):

    In any civil action or arbitration proceeding, exemplary damages may not be included in any initial claim for relief. A claim for such exemplary damages may be asserted by amendment to the pleadings only after the substantial completion of discovery and only after the plaintiff establishes, with admissible evidence, prima facie proof of a triable issue. If the court or arbitrator allows such an amendment to the complaint under this paragraph (c), it may also, in its discretion, permit additional discovery on the question of exemplary damages.

    This language is essentially identical to current language in Colorado’s medical malpractice liability statute, C.R.S. § 13-64-302.5.








    Civil Justice Fact Sheet

    House Bill 1103
    Assertion of Exemplary Damages
    Rep. Shawn Mitchell
    Support HB 1103


    House Bill 1103 extends the procedures already in place for wrongful death claims to all litigation involving exemplary (punitive) damages. It seeks to prevent all litigants from making frivolous punitive damage claims solely for the purpose of harassing opponents or obtaining negotiating leverage. Presently, lawyers often assert punitive damage claims against an individual without any evidence to support such a claim. Because insurance policies do not cover fraudulent, malicious, willful and wanton conduct, the defendant must hire his or her own attorneys to litigate the punitive damages claims, resulting in attorney fees and emotional stress for the individual defendant.

    House Bill 1103 would require litigants to wait to claim punitive damages until: (1) they have had 60 days to review information disclosed in the case and (2) they can make a showing that admissible evidence exists to prove the exemplary damage claims. It does not change the standard for bringing claims, it does not remove or reduce plaintiff’s rights, it does not result in trial delays, and it does not protect guilty defendants. Rather, it reduces the ability to make unsubstantiated, premature accusations of fraud, malice or willful and wanton conduct.

    Defendants faced with exemplary damage claims are placed in a difficult situation. First, insurance companies will not defend against exemplary damages, so the individual must hire his or her own attorney. Further, only the richest individuals can afford to pay claims for exemplary damages; others must contend with the possibility of financial ruin. These costs and pressures hang over an individual’s head for months and years for even the most unsubstantiated claims, because of court delays and an unwillingness to impose sanctions. There is no harm to a plaintiff (other than the elimination of unfair leverage) by requiring the plaintiff to wait before adding a punitive damages claim.

    HB 1103:
  • Prevents unsubstantiated claims of punitive damages.
  • Requires litigants to complete substantial discovery before making claims for exemplary damages
  • Requires litigants to make a showing of admissible evidence before making exemplary damage claims.
  • Allows plaintiffs to conduct additional discovery into the issue of exemplary damages once the claims has been brought.
  • Does NOT change punitive damage standards, does NOT protect guilty defendants, and does NOT delay trials.

    VOTE ‘YES’ ON HB 1103. THIS PROCEDURE ALREADY WORKS WELL IN THE AREA OF HEALTH CARE AND SHOULD BE EXTENDED TO ALL LITIGATION.







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