Pleading Punitive Damages in Federal Court: Must One Comply with F.S. 68.72?
A ffective July 1, 1986, F.S.§768.72 prohibits a party from pleading punitive damages prior to making a “reasonable showing of evidence” which would “provide a reasonable basis for recovery of such damages.”1 O ver the past decade, the U. S. district courts in Florida have wrestled with whether the statute is procedural and, therefore, applicable to federal diversity litigants, or substantive and, therefore, inapplicable. While the district courts have published numerous opinions discussing the matter, the issue is not clearly decided. This uncertainty, coupled with the unlikelihood of any definitive appellate decision,2 p laces the federal practitioner in a difficult position. Certainty or predictability, however, can be obtained by breaking down the published opinions into the various federal districts. This article provides an overview of the statute and the federal case law from Florida, highlights the arguments advanced by both sides, and provides a summary of the case law in each district.
Entitled “Pleading civil actions; claim for punitive damages,” §768.72 provides:
In any civil action, no claim for punitive damages shall be permitted unless there is a reasonable showing of evidence in the record or proffered by the claimant which would provide a reasonable basis for recovery of such damages. The claimant may move to amend his complaint to assert a claim for punitive damages as allowed by the rules of civil procedure. The rules of civil procedure shall be liberally construed so as to allow the claimant discovery of evidence which appears reasonably calculated to lead to admissible evidence on the issue of punitive damages. No discovery of financial worth shall proceed until after the pleading concerning punitive damages is permitted. (Emphasis added.)
As evident, the statute contains both a pleading element and a discovery element.3 The pleading element requires the plaintiff to make a “reasonable showing by evidence” before punitive damages may be claimed.4 The discovery element creates a “substantive legal right” not to be subject to a punitive damages claim and ensuing financial worth discovery until the court makes a determination about the “reasonable showing.”5
Substantive v. Procedural
The discrepancy among the courts’ opinions is a result of the respective courts’ characterization of the statute. Generally, under the Erie doctrine, state law governs matters of substance while federal law governs matters of procedure.6 When faced with a potential conflict, the court must determine whether the state law directly conflicts with some federal rule or statute. If a court determines that there is no direct conflict, the court considers whether application of the state law will discourage forum shopping and avoid the inequitable administration of laws.7
While there are several conflicting opinions,8 two recent opinions highlight the different approaches taken by Florida’s district courts. In Neill v. Gulf Stream Coach, Inc., 966 F. Supp. 1149 (M.D. Fla. 1997), Judge Hodges from the Middle District analyzed whether §768.72 conflicted with Federal Rules of Civil Procedure 8 and 9.9 In finding the statute substantive, the court emphasized the lack of any timing requirements under the Federal Rules of Civil Procedure as well as the comprehensive scheme of F.S. ch. 768. The court began by noting that while Rule 8 establishes a right to plead generally, there is “no requirement that all claims be plead in the first complaint or that an entitlement to relief will be lost forever if not so plead.”10 Accordingly, the court concluded that the statute and Rule 8 “are capable of harmonious coexistence.”11 “If the Plaintiff ultimately makes the required showing [under §768.72], the complaint may be amended to add claims for punitive damages that, when made, must simply comport with the requirements of Rule 8(a).”12 As for Rule 9, the court again emphasized the lack of a timing provision. While Rule 9 requires that damages be specifically plead, “the lack of a timing provision in Rule 9(g) read in light of the liberal amendment provisions of Rule 15 compels the conclusion that the Rule 9(g) and §768.72 ‘can exist side by side. . . each controlling its own intended sphere of coverage without conflict.’”13
Less than a month after Judge Hodges’ opinion in Neill, Judge Ryskamp from the Southern District held that application of §768.72 “would upset the pleading system constructed by Rules 9(g) and 8(a).” Tutor Time Child Care Systems v. Franks Investment Group, 966 F. Supp. 1188, 1192 (S.D. Fla. 1997). In Tutor Time, the court acknowledged the timing argument but concluded that such an approach created a mini-complaint for punitive damages.14 The court concluded:
The net effect of the statute is to create satellite pleadings for punitive damages in which the Federal Rules have no sway, not to mention satellite proceedings to determine the factual propriety of the satellite pleadings. The Court cannot agree that these satellite procedures do not conflict with the liberal standards of Rule 8.15
The court then applied the same conclusion as to Rule 9:
Rather than merely stating the special damages the plaintiff hopes to recover, as contemplated by Rule 9(g), §786.72 requires the plaintiff essentially to survive a summary judgment-type inquiry on the issue of punitive damages at the pleading stage of litigation. Thus, the Court sees a conflict between Rule 9(g) and §768.72.16
Even though the U. S. district courts within Florida have interpreted the statute differently, the practitioner is not left without any guidance. Breaking the published opinions down into the various federal districts in Florida provides some predictability for the practitioner.
Middle District of Florida
The Middle District of Florida seems to apply the statute without question. The Middle District has 28 published opinions mentioning §768.72. Nine opinions expressly state that the statute is substantive.17 The most thorough analysis is found in Judge Hodges’ opinion in Neill. Additionally, at least 10 cases merely apply the statute without commenting as to whether the statute is substantive or procedural.18 The remaining cases merely mention the statute in ruling on some other issue.
Northern District of Florida
In the Northern District, the issue is not as clearly resolved. The Northern District has only two published cases on the issue. One is a bankruptcy opinion stating that the statute is procedural and, therefore, inapplicable to the federal court litigants.19 The second published opinion is a more recent district court opinion in which the court applies the statute without expressly stating that it is substantive.20
Southern District of Florida
The Southern District has produced the most divided opinions. There are 14 reported opinions, five holding or indicating that the statute is substantive21 and nine holding or indicating that the statute is procedural.22 The division began almost immediately. Of the three earliest cases (all 1989 cases), two apply the statute23 without discussing whether it is substantive or procedural, while the other one, Citron v. Armstrong World Industries, Inc., 721 F. Supp. 1259 (S.D. Fla. 1989), provides the first detailed analysis of the issue and concludes that §768.72 is procedural.24 The court observed that under Erie and its progeny, a federal rule will apply in a federal diversity case “if: (1) the federal rule directly conflicts with the state law; (2) the federal rule is procedural in nature and is within the scope of the Enabling Act, 28 U.S.C. §2072; and (3) the federal rule is constitutional.”25 The court then stated that because §768.72 prohibits “a claim for punitive damages unless there is evidence. . . providing for a reasonable basis for recovery of such damages,” the statute “is in direct conflict with Federal Rule of Civil Procedure 9(g).”26 The court concluded, “[T]he court finds that §768.72 of the Florida Statutes is procedural and therefore inapplicable in federal diversity action.”27
After the detailed analysis in Citron, the issue seemed resolved with courts repeatedly holding that the statute was procedural.28 In December 1993, the issue arose again with Al-Site Corp. v. VSI Int’l, Inc., 842 F. Supp. 507 (S.D. Fla. 1993). The Al-Site court accepted that there were two parts of the statute, but concluded that the statute could not be applied separately — i.e., the discovery element being substantive while the pleading element is procedural — without changing the meaning of the statute. Accordingly, the court held that all of the statute must be applied as substantive law.29
Since the 1993 Al-Site opinion, Southern District courts have split evenly in the four published opinions addressing §768.72. Of the four opinions, two provide a detailed analysis of why the statute is substantive30 or procedural31 while the other two rely upon the analysis of other courts.32
In sum, it appears that the Middle and Northern districts view the statute as substantive and, therefore, applicable. As for the Southern District, the weight of authority holds that the statute is procedural and, therefore, inapplicable.
In addition to analyzing decisions from each of the three district courts, guidance is also found by the inherent limitation of the statute. Case law indicates that if the statute applies, because the statute would then be viewed as substantive, the statute only applies to state law claims. Accordingly, if the litigant is seeking punitive damages pursuant to a federal claim, §768.72 is inapplicable. For example, in Meade v. Prison Health Services, Inc., No. 94:854-CIV-T-117B, 1995 WL 350207 (M.D. Fla. June 8, 1995), the district court held that a punitive damages claim under 42 U.S.C. §1983 need not comply with §768.72. Id. at * 2. Meade is further supported by the opinion in Brennan v. City of Minneola, 723 F. Supp. 1442 (M.D. Fla. 1989), in which the court expressly stated §768.72 “was not applicable to a claim for punitive damages in federal civil rights suit.” Id. at 1443. There is, however, one published opinion in which the district court applied the statute to a punitive damages claim alleged pursuant to 42 U.S.C. §1983.33 This appears to be an abrogation, however. Thus, federal litigants asserting a federal claim need only comply with the Federal Rules of Civil Procedure.
Additionally, the statute does not apply to claims arising before the effective date of July 1, 1986.34 Specifically, the Fourth District Court of Appeal held in Williams v. Florida East Coast Ry. Co., 552 So. 2d 279 (Fla. 4th DCA 1989), that since “the accident occurred in 1983, the procedure outlined in §768.72, Florida Statute (1987), is not applicable here.” Id. at 281, n. 2.
While a definitive opinion from the 11th Circuit would help the federal practitioner, in the interim, the practitioner not only must be aware of the arguments advanced by both sides, but also must know which courts have adopted which position. Generally speaking, the Middle and Northern districts have emphasized the lack of any timing requirements in the Federal Rules of Civil Procedure as well as the comprehensive structure of F.S. ch. 768 to conclude that the statute is substantive and, therefore, applicable. The Southern District, however, has stressed the mini-complaint or satellite proceedings created by the statute to conclude that the statute is procedural and, therefore, inapplicable. q
1 Fla. Stat. §768.72.
2 As the court in Wisconsin Investment Board v. Plantation Square Associates, Ltd., 761 F. Supp. 1569, 1573 (S.D. Fla. 1991), observed, the nature of the issue renders appellate review difficult. “Indeed, because a district court’s decision of whether to apply a state punitive damage pleading rule is not immediately appealable, and because the district’s courts ruling would in all likelihood not affect the outcome of the litigation, appeal of such a ruling, though possible in some narrow contexts, has proven elusive as of yet.”
3 See Al-Site Corp. v. VSI Int’l, Inc., 842 F. Supp. 507, 509 (S.D. Fla. 1993); Wisconsin Inv. Bd. v. Plantation Square Assoc., Ltd., 761 F. Supp. 1569, 1572 (S.D. Fla. 1991).
4 Fla. Stat. §768.72.
5 Globe Newspaper Co. v. King, 658 So. 2d 518, 519 (Fla. 1995).
6 Erie R. Co. v. Tompkins, 304 U.S. 64, 78 (1938).
7 See Neill v. Gulf Stream Coach, Inc., 966 F. Supp. 1149, 1157 (M.D. Fla. 1997).
8 See, e.g., Neill, 966 F. Supp. at 1149; In re Edgewater Sun Spot, Inc., 154 B.R. 338 (N.D. Fla. Bankr. 1993). There is even conflict within the Southern District. See, e.g., Teel v. United Tech. Pratt & Whitney, 953 F. Supp. 1534, 1536 (S.D. Fla. 1997); Blount v. Sterling Healthcare Group, Inc., 934 F. Supp. 1365, 1375 (S.D. Fla. 1996).
9 Neill, 966 F. Supp. at 1157. Fed. R. Civ. P. 8 is entitled “General Rules of Pleading.” Rule 8(a) provides that a claim for relief. . . shall contain (1) a short and plain statement. . . . ” Fed. R. Civ. P. 9 is entitled “Pleading Special Matters.” Rule 9(g) provides that “when items of special damages are claimed, they shall be specifically stated.”
10 Neill, 966 F. Supp. at 1153.
11 Id. at 1154.
13 Id. (quoting Walker v Armco Steel Corp., 446 U.S. 740, 752 (1980)).
15 Id. at 1191–92.
17 See Neill, 966 F. Supp. at 1151 (Hodges, J.); Domke v. McNeil-P.P.C., Inc., 939 F. Supp. 849, 852 (M.D. Fla. 1996) (Kovachevich, J.); Martin v. Honeywell, Inc., No. 95-234-CIV-T-24(A), 1995 WL 868604, at *1 (M.D. Fla. July 18, 1995) (Bucklew, J.); Fletcher v. Florida, 858 F. Supp. 169, 173 (M.D. Fla. 1994) (Kovachevich, J.); Dibernardo v. Waste Management, Inc. of Fla., 838 F. Supp. 567, 571 (M.D. Fla. 1993) (Kovachevich, J.); Marcus v. Carrasquillo, 782 F. Supp. 593, 600 (M.D. Fla. 1992) (Kovachevich, J.); Dah Chong Hong, Ltd. v. Silk Greenhouse, Inc., 719 F. Supp. 1072, 1076 (M.D. Fla. 1989) (Kovachevich, J.); Lancer Arabians, Inc. v. Beech Aircraft Corp., 723 F. Supp. 1444, 1446–47 (M.D. Fla. 1989) (Melton, J.).
18 See Brufsky v. Parker Marine Enters., Inc., No. 96-301-CIV-FTM-17(D), 1997 WL 158309, at *6 (M.D. Fla. Mar. 27, 1997) (Kovachevich, J.); International Ship Repair & Marine Serv., Inc. v. St. Paul Fire & Marine Ins. Co., 944 F. Supp. 886, 897 (M.D. Fla. 1996) (Kovachevich, J.); Water Int’l Network, U.S.A., Inc. v. East, No. 95-16-CIV-T-17A, 1995 WL 416326, at *5 (M.D. Fla. July 7, 1995) (Kovachevich, J.); Meade v. Prison Health Servs., Inc., No. 94:854-CIV-T-17B, 1995 WL 350207, at *2 (M.D. Fla. June 8, 1995) (Kovachevich, J.); Ong v. Brown, Rudnick, Freed & Gesmer, P.A., No. 94-478-CIV-17C, 1994 WL 411756, at *2 (M.D. Fla. July 29, 1994) (Kovachevich, J.); Mahon v. City of Largo, 829 F. Supp. 377, 385 (M.D. Fla. 1993) (Kovachevich, J.); L.S.T., Inc. v. Crow, 772 F. Supp. 1254, 1256 (M.D. Fla. 1991) (Kovachevich, J.); McCarthy v. Barnett Bank of Polk County, 750 F. Supp. 1119, 1127 (M.D. Fla. 1990) (Kovachevich, J.); Knight v. E.F. Hutton and Co., Inc., 750 F. Supp. 1109, 1115 (M.D. Fla. 1990) (Kovachevich, J.); Lewis v. Snap-On Tools Corp., 708 F. Supp. 1260, 1262 (M.D. Fla. 1989) (Kovachevich, J.).
19 See In re Edgewater, 154 B.R. at 338 (Killian, J.).
20 See T.W.M. & S.M. v. American Med. Systems, Inc., 886 F. Supp. 842, 845 (N.D. Fla. 1995) (Vinson, J.).
21 See Teel, 953 F. Supp. at 1536 (Hurley, J.); Sanders v. Mayor’s Jewelers, Inc., 942 F. Supp. 571, 576 (S.D. Fla. 1996) (Lenard, J.); Al-Site Corp. v. VSI Int’l, Inc., 842 F. Supp. 507, 514 (S.D. Fla. 1993) (Atkins, J.); Frio Ice, S.A. v. Sunfruit, 724 F. Supp. 1373, 1383 (S.D. Fla. 1989) (Ryskamp, J.); Bankest Imports, Inc. v. ISCA Corp., 717 F. Supp. 1537, 1542 (S.D. Fla. 1989) (Spellman, J.).
22 See Tutor Time, 966 F. Supp. at 1192 (Ryskamp, J.); Blount v. Sterling Healthcare Group, Inc., 934 F. Supp. 1365, 1375 (S.D. Fla. 1996) (Ungaro-Benages, J.); Burger King Corp. v. Austin, 805 F. Supp. 1007, 1025 n.30 (S.D. Fla. 1992) (Hoeveler, J.); Kingston Square Tenants v. Tuskegee Gardens, 792 F. Supp. 1566, 1579 (S.D. Fla. 1992) (Paine, J.); In re Sahlen & Assoc., Inc. Secs. Litig., 773 F. Supp. 342, 375 (S.D. Fla. 1991) (Hoeveler, J.); Jones v. Wal-Mart Stores, Inc., No. 90-14113-CIV-PAINE, 1991 WL 236503, at *2 (S.D. Fla. Apr. 25, 1991) (Paine, J.); Wisconsin Inv. Bd., 761 F. Supp. at 1573 (Hoeveler, J.); Amerifirst Bank v. Bomar, 757 F. Supp. 1365, 1378 (S.D. Fla. 1991) (Hoeveler, J.); Citron v. Armstrong World Indus., Inc., 721 F. Supp. 1259, 1262 (S.D. Fla. 1989) (Nesbit, J.).
23 See Frio Ice, 724 F. Supp. at 1383; Bankest Imports, 717 F. Supp. at 1542.
24 See Citron, 721 F. Supp. at 1261.
27 Id. at 1262.
28 Beginning with the Amerifirst opinion of January 1, 1991, through the Burger King opinion of October 9, 1992, all the reported opinions from the Southern District held that the statute was procedural and, therefore, inapplicable.
29 See Al-Site, 842 F. Supp. at 514.
30 See Tutor Time, 966 F. Supp. at 1192.
31 See Teel, 953 F. Supp. at 1536–41.
32 See Sanders, 942 F. Supp. at 576 n.5 (stating “the Court adopts the reasoning of the Al-Site and Plantation Square courts with respect to the applicability of the discovery aspect of §768.72 in federal litigation”); Blount, 934 F. Supp. at 1374 (concluding “in light of the persuasive analysis in Plantation, and the strong inclination in this district to hold §768.72 procedural, the undersigned finds that in the instant case §768.72 is inapplicable to Blount’s claim for punitive damages in Count III”).
33 See Fletcher, 858 F. Supp. at 173.
34 See Dolphin Cove Ass’n v. Square D. Co., 616 So. 2d 553, 553 (Fla. 2d D.C.A. 1993).
John Gary Maynard IIIpractices in the litigation, media law, and intellectual property law areas. Prior to joining Holland and Knight, Mr. Maynard served as a law clerk to Judge Susan C. Bucklew of the U.S. District Court for the Middle District of Florida in Tampa.
This column is submitted on behalf of the Trial Lawyers Section, David W. Bianchi, chair, and D. Keith Wickenden, editor.