More than six years ago, the Ohio legislature enacted widespread tort reform. One of the key components of the tort reform was the limitation placed upon punitive damage awards. Pursuant to the tort reform statute, in most cases, punitive damages in “a civil action for injury or loss to person or property” are limited to two times the amount of compensatory damages. In the event the defendant is an individual or a “small employer” -- less than 100 employees, punitive damages are capped at two times the amount of compensatory damages or ten percent of the employer’s or individual’s net worth up to a maximum of $350,000.
In addition to limiting punitive damages, the tort reform statute also limited noneconomic loss -- damages for pain and suffering, consortium, counsel, mental anguish and all other intangible loss -- to an amount not to exceed the greater of $250,000 or three times the economic loss (tangible loss, including compensation, out-of-pocket expenditures, etc.) up to a maximum of $350,000.
In order to prevent prejudice to defendants, the statute also required that the trial be bifurcated with the issue of compensatory damages presented to the trier of fact and if there is a determination that the plaintiff is entitled to compensatory damages, the issue of punitive damages would then be presented. In the stage of the trial on liability and compensatory damages, the tort reform statute precludes plaintiffs from presenting any evidence solely relating to punitive damages, i.e. the defendant’s wealth or financial resources.
In Luri v. Republic Servs., Inc., 2011-Ohio-2389, the Ohio Eighth District Court of appeals was presented with an issue of first impression -- whether Ohio’s tort reform legislation applies to employment discrimination and/or retaliation claims. Relying on the language of the statute specifically identifying those types of claims that are not subject to tort reform, the Eighth District pointed out that employment discrimination and retaliation claims are not excluded from the statute’s coverage. The court, therefore, found that the tort reform legislation is applicable to discrimination and retaliation claims. Thus, the court held that punitive and noneconomic damages awarded in employment discrimination and retaliation claims are limited by the mandates of the tort reform legislation.
The Eighth District Court, however, found that the statute’s requirement that the issue of compensatory damages and punitive damages be bifurcated was invalid. The court indicated that bifurcation is a procedural issue and, thus, within the purview of the court’s power rather than that of the legislature. Thus, despite the mandatory nature of the statute’s language on bifurcation, the court found that the trial court enjoys discretion in determining whether to bifurcate the issue of damages.1
The Eighth District Court’s decision clearly indicates that the applicability of the tort reform statutes is going to be interpreted broadly to be more inclusive rather than less inclusive. The tort reform statutes, therefore, likely will be applied to all tort claims “for injury or loss to persons or property” other than those specifically excluded by the statute itself, i.e. “a civil action upon a medical claim, dental claim, optometric claim, or chiropractic claim or a civil action for damages for a breach of contract or another agreement between persons.” Considering the significant limitations and restrictions contained within the tort reform legislation, this will have a major effect on claims asserted against employers, including discrimination and retaliation claims, and the damages available to plaintiffs.
If you would like a copy of the full opinion or if you have any other questions regarding Employment Practices Liability, feel free to contact one of our practice area attorneys.