Punitive damage cap law would be tough to change

Friday, Aug. 23, 2002 | 3:29 a.m.

WEEKEND EDITION: August 25, 2002

While questions linger about the legality of capping damages for pain and suffering in medical malpractice cases, the state has had a punitive damages cap since 1989.

That cap has to do with monetary damages intended to punish defendants who are found guilty of "oppression, fraud or malice, express or implied."

It's easy to confuse punitive damages with money that is awarded to victims for pain and suffering. Both types of damages have nothing to do with compensating victims for medical bills or lost or future wages.

But unlike damages for pain and suffering that are intended to make victims "whole" by providing compensation for the inconveniences that go with severe injuries, punitive damages are designed to punish defendants for their deliberate acts.

Punitive damages can be awarded in addition to payment for both economic damages and those involving pain and suffering. Another distinction is that damages for medical bills, lost and future wages and pain and suffering are all covered by insurance. Punitive damages are not, meaning the defendants could lose their homes, cars and other assets.

The fact that punitive damages are not covered by insurance, coupled with the scarcity of such cases, are two reasons why there have been no attempts to eliminate Nevada's punitive damages caps, Las Vegas malpractice attorney Gerald Gillock said.

"It would be a long shot to get that law challenged," Gillock said. "It's a pretty liveable cap."

Critics of caps on medical malpractice damages say they infringe on the right to a jury trial, as granted under English common law, which serves as a foundation for this nation's legal system, and therefore should not be enacted by state legislatures.

But Las Vegas lawyer John Cotton said it would be difficult to challenge legislators for placing restrictions on punitive damages.

"It's really comparing apples to oranges," Cotton said. "There are no rights to punitive damages in common law. Because they were created by statute they can be changed by the Legislature up or down."

Nevada's punitive cap is three times the damages awarded for medical bills, lost and future wages and pain and suffering in cases where those damages exceed $100,000. Punitive damages are capped at $300,000 in cases where the other damages are less than $100,000.

But there are five exceptions to the caps. The caps do not apply to cases involving:

The fight for punitive damage caps was led by the Nevada Resort Association and a coalition of businesses that was seeking more affordable insurance.

The resorts were prompted to fight for the caps because of at least two cases in the 1980s. One involved a man who was awarded $4 million in punitive damages by a jury after he was assaulted in an elevator in the Circus Circus parking garage in Reno. The trial judge reduced the punitive damages to $1 million but that amount was later eliminated by the Nevada Supreme Court, which ruled that there was no evidence that the resort sought to deliberately harm its patrons.

The other case involved an award of $30 million in punitive damages to 37 fired male dealers from the Las Vegas Hilton who alleged that they were victims of age and sex discrimination when they were replaced by younger females. The damages were awarded by a federal jury, which determined that the resort deserved to be punished for discriminating against the dealers.

But a federal appellate court eliminated the punitive damages award on grounds that the lower court did not account for a Nevada law that allows employers to hire and fire workers at will. The court reduced the total damages from $46 million to $4.6 million, a decision that was made final in 1992 when the U.S. Supreme Court refused to hear an appeal from the fired employees.

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