Initially Pleading the Claim for Punitive Damages is Not Permitted in Original Complaint
Punitive damages are permitted in Oregon in product liability actions. Under Oregon law, at the time of filing a pleading with the court, the pleading may not contain a request for an award of punitive damages. ORS 31.725. At any time after the pleading is filed, a party may move the court to allow the party to amend the pleading to assert a claim for punitive damages. The party making the motion may submit affidavits and documents in support of the claim and the party opposing may do the same. Punitive damages in Oregon are an element of damages, and do not constitute a separate claim for relief. Under Oregon law, insurance coverage for punitive damages is permitted.
The Standard for Pleading Punitive Damages
Oregon has a relatively low bar for the inclusion of a claim for punitive damages. Plaintiffs need only present “some evidence” of the conduct that may give rise to punitive damages. ORS 31.725(3)(a). The showing necessary for the amendment is equivalent to a prima facie case that would merely need to withstand a motion for directed verdict at the time the amendment is sought. We emphasize that this showing of “some evidence” is a low bar, particularly in Multnomah County Circuit Court. In most cases, when plaintiffs intend add a claim for punitive damages, they will expressly state in the initial complaint an intent to move to amend to do so.
In most counties in Oregon, punitive damages are generally not allowed in simple negligence cases. However, in Multnomah County Circuit Court, we have seen simple negligence cases where judges have allowed punitive damages to go to the jury.
The Clear and Convincing Standard and Evidence of Conduct Required at Trial
In order to actually obtain an award of punitive damages from the jury, as opposed to merely obtaining permission from the judge to request punitive damages in an amended complaint, Oregon law requires imposition of a clear and convincing standard. Punitive damages are not available unless the plaintiff proves by clear and convincing evidence that the party against whom punitive damages are sought has acted with malice or has shown a reckless and outrageous indifference to a highly unreasonable risk of harm and has acted with a conscious indifference to the health, safety and welfare of others. ORS 31.730.
If a jury awards punitive damages, the court is required to review the award to determine whether the award is within the range of damages that a rational juror would be entitled to award based on the record as a whole, as well as statutory and common law factors. ORS 31.725 et. seq.
Statutory Allocation of Awards of Punitive Damages
With respect to the distribution of punitive damages, the percentages of the total award are all prescribed by statute. ORS 31.735. Under the statute, the State of Oregon takes 60% of every punitive damage award away from the plaintiff and puts it in the state crime victim’s fund. Then, plaintiff receives 30% and the attorney is paid an amount out of this 30%, but in no event more than 20% of the total punitive damages awarded. Finally, 10% is payable to the Oregon Attorney General for deposit in the State Court Facilities and Security Account. Plaintiff’s lawyers know this, so they often try to push harder to get the jury to award noneconomic damages. They may even decide to forego a punitive damages claim to avoid the risk of having a lower noneconomic damages award and a high punitive damages award that will go mostly to the state of Oregon. In cases with exposure to significant punitive damages, the Oregon Justice Department will often file a peremptory lien against the punitive damages to ensure proper distribution.
There are no relevant damages caps on personal injury actions, as opposed to wrongful death actions. While Oregon case law has upheld a cap of $500,000 in noneconomic damages in wrongful death cases, the Oregon Supreme Court has declined to impose such a cap on noneconomic damages in personal injury cases on the basis that a personal injury cause of action was recognized at common law at the time of the adoption of the Oregon Constitution. In contrast, the Oregon Supreme Court upheld the statutory cap on noneconomic damages because the wrongful death action is a creature of statute, and a cause of action that did not exist at the time of the ratification of the Oregon Constitution.
One important note about the noneconomic damages cap of $500,000: While the cap has now been upheld by the Oregon Supreme Court in an en banc decision, this does not prevent the plaintiffs from pleading any amount they want to in the complaint. Under the statute, the jury is never told of the cap, and if the verdict for noneconomic damages exceeds the cap, it is the judge, not the jury, who reduces the verdict to $500,000 before entering the judgment. The judgment, rather than the verdict, is technically the document that has legal force. The entry of the judgment either starts the 30-day period in which to file a notice of appeal, or allows the plaintiff to execute on the judgment (collect either through voluntary payment or seizure of assets).
For example, let’s consider a hypothetical aviation crash. Suppose wife/mother is injured and her husband and son are killed. She could theoretically file a lawsuit demanding $50,000,000.00 in noneconomic damages for both her deceased son and husband. If the case went to trial under that scenario, and that amount was awarded, the judge, unbeknownst to the jury, and after the jury is excused from service, would reduce the verdicts in the two wrongful death cases to $500,000 each in noneconomic damages before entering the judgment.