Florida Tort Reform–1999
In early June, Governor Jeb Bush signed House Bill 775 into law, which significantly overhauled Florida tort law. These changes affect 1) products liability; 2) punitive damages; 3) apportionment; 4) negligent hiring; 5) premises liability; and 6) dangerous instrumentalities. There are numerous other legislative “tweaks” to current law affecting mediation,1 frivolous pleadings,2 taxable costs and expedited trials,3 itemized verdicts,4 and mediation of nursing home cases.5 The purpose of this article is to familiarize practitioners with the main substantive categories of the legislation, which will apply to causes of action arising after October 1, 1999. All changes appear to be in accordance with the notion of making Florida a more business-friendly state.
The greatest change to the litigation of product liability claims is a shortening of the statute of repose. F.S. §95.031 (1999) essentially cuts off liability claims 12 years after a product is put into service by creating a conclusive presumption that all products have a useful life of 10 years. An exception is carved out for aircraft, railroad equipment, large vessels, and improvements to real property, where the repose period is extended to 20 years. A longer period of repose will apply to those products specifically warranted to have a useful life longer than 10 years. This statute of repose may only be avoided where there is “substantial and factual support” for a claim of concealment. Any claim that is now viable will remain so if brought by July 1, 2003.
Certain product liability defenses were broadened and codified. For example, §768.1257 codifies the “state-of-the-art” defense to product liability claims, allowing a factfinder to consider what the state of the art was at the time of manufacture, rather than at the time of the loss or injury. A “government rules” defense in §768.1256 creates a rebuttable presumption that a product is not unreasonably dangerous if, at the time the specific unit of the product was delivered, the manufacturer complied with all relevant federal or state statutes or regulations then in effect. This statute is evenhanded in its application. If there is noncompliance with the relevant statute or regulation, there is a rebuttable presumption that the product is defective or unreasonably defective. The only exception is for drugs removed from the market by the FDA.
The evidence rule requiring exclusion of evidence of a subsequent remedial measures, §90.407, has been broadened to conform more closely with its federal counterpart, as well as to clarify the point in time that a measure becomes “subsequent.” Currently, measures taken anytime after a product is created, but before an injury to a plaintiff is sustained, are not considered to be subsequent remedial measures.6 The revised statute makes it clear that inadmissible remedial measures are those taken after any injury is caused, not just injury to a particular plaintiff. The statute was further amended to allow evidence of subsequent measures for other purposes, such as ownership, control, feasibility, or for impeachment.7
Overall, there is strong logical support for these amendments. Once fully phased in, they should bring more certainty and predictability to products cases. Practitioners should carefully determine the date a product is placed in service, when the injury occurs, what the state of the art was and what government regulations existed on the date of manufacture, and whether any remedial measures taken were before or after an injury.
Fundamental changes have been made to the law relating to punitive damages. Existing law is relatively straightforward: No claim for punitive damages is allowed until there is a showing of evidence in the record that would provide a reasonable basis for such recovery.8 Once that threshold has been crossed, a defendant could be held liable if conduct supporting punitive damages is proven by a mere preponderance of the evidence. The bar has been raised. Section 768.72(2) now requires proof of such conduct by clear and convincing evidence. Proof of “intentional misconduct” now requires a showing that a defendant has actual knowledge of both the wrongfulness of its conduct and a high probability that an injury to a claimant would result. “Gross negligence” means conduct so reckless or wanting in care as to constitute conscious disregard or indifference to the life, safety, or rights of others.
The punitive damage liability of employers has been significantly modified. Existing law has been defined by the familiar Mercury Motors9 standard, i.e., in order to impose punitive damages against an employer, there must be fault shown, independent of its employee’s conduct. While there was no liability for punitive damages under a respondeat superior theory, all that was necessary was simple negligence proven by the greater weight of the evidence. Now, an employer must be shown to have “actively and knowingly participated” in its employee’s wrongful conduct, condoned the conduct, or engaged in grossly negligent conduct itself.
The amount of punitive damages recoverable has been limited under §§768.73—768.737. The general rule is that punitive damages are capped at the greater of three times the actual damages or $500,000. If the wrongful conduct was “motivated solely by unreasonable financial gain,” punitive damages are capped at the greater of four times the actual damages or $2 million. Only where there has been a specific intent to cause harm is the cap removed. Courts may reduce, but not increase, these awards. In F.S. §768.735 (1999), exceptions to the caps are created for civil actions based on abuse of children, the elderly, or the developmentally disabled, in which the limit is three times the actual damages with no dollar cap. In F.S. §768.736 (1999), a final exception is created for drunken tort-feasors, i.e., those having a blood alcohol content of 0.08 percent or more, where there is no cap.
The legislature addressed what some perceived as an inherent unfairness whereby a defendant could be exposed to numerous punitive damage claims arising from the same conduct. The argument against such multiple exposure is that because punitive damages are created to punish, no public policy goal is satisfied after the first punishment. Under the new law, a party is liable for punitive damages only once.10 A party will not face punitive damage exposure a second time for the same course of conduct unless there is a judicial determination that the prior punitive damage award was insufficient to punish that party. Contingent fees on punitive damage awards must be based upon the final judgment entered, rather than the jury award.11
The apportionment statute, §768.81, has been substantially changed with respect to joint and several liability. Already complex, this statute now has many more arbitrary gradations of liability that will undoubtably make it more difficult than it already is to determine whether a party won or lost following a jury award. Essentially, there are four “levels,” based upon a party’s percentage of fault. The lower a defendant’s percentage of fault, the less likely it need answer to a plaintiff beyond its pro rata share.
When there is any fault apportioned against the plaintiff and a particular defendant’s degree of fault is:
1) Less than or equal to 10 percent, there is no joint and several liability at all;
2) At least 10 percent but less than 25 percent, there is no joint and several liability for economic damages in excess of $200,000;
3) At least 25 percent but less than 50 percent, there is no joint and several liability for economic damages in excess of $500,000; and
4) At least 50 percent, there is no joint and several liability for economic damages in excess of $1 million.
The economic damages apportioned are in addition to the economic and noneconomic damages already apportioned to that defendant based upon its percentage of fault.
If there is no comparative fault attributed to the plaintiff, and a particular defendant’s degree of fault is:
1) Less than 10 percent, there is no joint and several liability;
2) At least 10 percent but less than 25 percent, there is no joint and several liability for economic damages in excess of $500,000;
3) At least 25 percent but less than 50 percent, there is no joint and several liability for economic damages in excess of $1 million; and
4) At least 50 percent, there is no joint and several liability for economic damages in excess of $2 million.
Finally, if any defendant’s fault is less than the plaintiff’s, there is no joint and several liability as to that defendant. Prior law making joint and several liability apply where total damages are less than $25,000 has been repealed.
While these various apportionment categories may be difficult to remember, practitioners should keep in mind the ultimate goal of the statute. Joint and several liability favors plaintiffs. The greater the degree of fault, the more likely there will be joint and several liability, and the more a plaintiff is favored. Conversely, the less a defendant is found to be at fault, the less likely there will be joint and several liability, and the more a particular defendant will be insulated from liability beyond its pro rata share.
Employers have been given a long-sought safe harbor from negligent hiring claims in §768.096. This new statute insulates employers from damages sought by third parties based upon the intentional conduct of an employee by creating a presumption that the employee was not negligently hired if a background investigation is done. This investigation must include five enumerated elements: (1) a criminal background check; (2) a reference check; (3) completion of a job application that inquires into prior criminal convictions; (4) a driver’s license check; and (5) an interview. Failure to perform such an investigation creates no presumption of negligence.
Owners and possessors of real property have been afforded new protections under F.S. §768.075, which already afforded immunity from liability to injuries sustained by trespassers. The blood alcohol level necessary to create immunity from injuries to impaired persons have been lowered to 0.08 percent, in harmony with the criminal standard for driving under the influence. Similarly, under new F.S. §768.36 (1999) a new affirmative defense was created that is reminiscent of contributory negligence. If a plaintiff was under the influence of alcohol (at least 0.08 percent) or drugs, and was over 50 percent liable for his own injuries, recovery is barred.
The immunity is abrogated only by intentional or grossly negligent conduct of a property owner. A trespasser does not become an invitee unless expressly invited upon the property or there has been a “clear intent” to hold the property open to persons whose status is at issue. For undiscovered trespassers, there is no duty to warn of dangerous conditions, only to refrain from intentional misconduct. For discovered trespassers, the duty is to refrain from grossly negligent or intentional conduct, and to warn of dangerous conditions not readily observable. This statute is to have no effect on the attractive nuisance doctrine. Finally, there is no liability for injuries sustained while a claimant was committing a felony.
For almost as long as there have been automobiles, Florida has held owners of vehicles involved in accidents liable under its dangerous instrumentality doctrine.12 The doctrine was changed in 1989 to recognize the reality that long-term leases were merely a financing alternative to purchasing vehicles, and leasing companies were absolved from liability where its customers maintained a specified level of liability insurance.13 The exceptions have now been broadened to protect rental car companies renting vehicles under short-term leases. A rental company is deemed an owner only up to $100,000 per person/$300,000 per incident for bodily injury and $50,000 for property damage. If the renter or operator of the vehicle is uninsured or has less than $500,000 combined single limit coverage, the rental company is liable for up to an additional $500,000 in economic damages only, reduced pro tanto by the coverage of the vehicle operator.
Trial attorneys must be aware of the significant changes created in these practice areas. The entire bill can be found online at www.leg.stat.fl.us/session/1999. Like it or not, these legislative changes will profoundly affect many substantive areas of law into the 21st century.
1 Fla. Stat. §44.102 (1999).
2 Fla. Stat. §57.105 (1999).
3 Fla. Stat. §57.071 (1999).
4 Fla. Stat. §768.77 (1999).
5 Fla. Stat. §400.023 (1999).
6 Sikes v. Seaboard Coast Line R. Co., 429 So.2d 1216 (Fla. 1st D.C.A. 1983). For example, if a dangerous condition is created in 1990, Plaintiff 1 is injured in 1991, the condition is remedied in 1992, and Plaintiff 2 is injured in 1992, the remedial measure would only be “subsequent,” and hence inadmissible, as to Plaintiff 1.
7 This codifies prior case law. See, e.g., Keller Industries v. Volk, 657 So.2d 1200 (Fla. 4th D.C.A. 1995).
8 Fla. Stat. §768.72 (1997).
9 Mercury Motors Express, Inc. v. Smith, 393 So.2d 545 (Fla. 1981).
10 Fla. Stat. §768.73(2) (1999).
11 Fla. Stat. §768.73(3) (1999).
12 Southern Cotton Oil Co. v. Aderson, 86 So.629 (Fla. 1920).
13 Fla. Stat. §324.021 (1989)
Walter G. Latimer is a board-certified civil trial lawyer with Marlow, Connell, Valerius, Abrams, Adler & Newman in Miami. He attended Tulane University (B.S., 1979) and the University of Missouri (J.D., 1983). His practice concentrates primarily in insurance defense and coverage issues.
This column is submitted on behalf of the Trial Lawyers Section, Michael G. Tanner, chair, and D. Keith Wickenden, editor.