Kentucky Court of Appeals
Punitive Damages – Constitutional Limitations
Ragland v. Digiuro, 352 S.W.3d 908, 2010 WL 4137183 (Ky.App. October 22, 2010)

This arises out of a tragedy which was the subject of City Confidential at one time. A University of Kentucky football player was shot and killed by a sniper while sitting on a porch at a party. Both the criminal prosecution and the civil litigation against Ragland has been off and on front page news for over ten years now. This opinion arises out of the civil litigation in which Ragland did not even appear to defend. The jury awarded the Digiuro estate compensatory damages of $3,341,708.00 and punitive damages of $60,000,000.00. The Court dispensed with a statute of limitation argument by reference to the law of the case rule. The Court’s opinion constitutes the best example of how to assess the constitutionality of a punitive damages award seen to date. Ultimately, the Court approved a 9 to 1 ratio given the extreme reprehensibility of the murder. If accepted by the high court, this would seem to put a maximum on punitive damage awards where the compensatory damages are substantial as it is difficult to imagine a more horrendous tort.

Kentucky Supreme Court
Professional Liability – Medical - Experts
Woolum v. Hillman, 329 S.W.3d 283 (Ky. October 21, 2010)

This case deals with an issue that has come up from time to time, with mixed results. Since a professional liability case necessarily involves an expert in the same profession as the defendant, it can easily occur that the expert and defendant share the same insurance company. In such a case, plaintiffs have long argued that common insurance shows bias. The facts of this case are a caricature of the argument. In addition to sharing liability insurance, the expert's deposition testimony helped draw a connection. He testified that malpractice claims caused his insurer to go bankrupt, which in turn caused him to quit his practice in Mississippi. He also testified that doctors were leaving Kentucky because malpractice claims were driving up premiums. This is much more than sharing an insurer, and the expert clearly believed that malpractice lawsuits affected premiums, including his. So it is no surprise that the Court approved of admission of this proof at trial. Of legal significance is how the Court reached the decision.

The Court rejected a hard and fast rule that commonality of insurance was admissible, even though bias is an exception to the general rule that liability insurance is inadmissible. KRE 411. Rather, the Court required an analysis under KRE 403 to determine whether the probative value is substantially outweighed by the danger of undue prejudice. The Court reviews such an analysis under an abuse of discretion standard, so the trial court has a great deal of leeway in deciding the issue. It remains to be seen where the Court will draw the abuse of discretion line, but it seems clear that there must be some proof of bias beyond the mere commonality of insurers. (see concurring opinion). If that is not true, then there is no good reason for a 403 analysis in the first place. In the meantime, the defense should screen for liability insurance, and make an informed judgment as to whether to proceed with an expert who shares liability insurers with the client/insured.

Kentucky Supreme Court
Wrongful Death – Viable Fetus
Woolum v. Hillman, 329 S.W.3d 283 (Ky. October 21, 2010)

It has long been settled that a wrongful death action can be brought on behalf a stillborn so long as the baby was viable at the time of the negligence. The plaintiff does not have to prove that it is more likely than not that the fetus would have survived if removed from the womb, nor is it necessary to prove the fetus would have been healthy. Thus expert testimony that a fetus was viable was not undermined by proof that such a baby would be susceptible to serious health risks. While not mentioned by the Court, proof that the baby would have more likely than not been seriously impaired should impact the amount of damages.

Kentucky Court of Appeals
Dram Shop – Punitive Damages
Taylor v. King, 345 SW 3d 2, 2010 WL 3810797 (Ky.App. October 4, 2010), motion for discretionary review filed November 1, 2010 but dismissed by agreement on August 25, 2011 (2010-SC-706-D)

Historically, an action for furnishing alcohol would not lie, on the ground that violence or other untoward conduct was not a foreseeable result of the service of alcoholic beverages. In Grayson Fraternal Order of Eagles, Aerie No. 3738, Inc. v. Claywell, 736 S.W.2d 328 (Ky. 1987), the Kentucky Supreme Court held that where an automobile was concerned an automobile accident could be a foreseeable result of serving alcohol. The opinion was without any basis in logic or precedent, but controlled liquor liability claims until the legislature intervened in enacting KRS KRS 413.241 in 1988. That statute declares that the furnishing of alcohol is not the cause of the drinker’s behavior, but establishes a technical liability under certain circumstances.

In 2007, a panel of the Court of Appeals held that punitive damages could not be recovered in dram shop cases in Kentucky. Jackson v. Tullar, 285 S.W.3d 290 (Ky. App. 2007). The rationale of the Jackson Court was that punitive damages may only be assessed for conduct which caused the injury. The Kentucky Supreme Court was asked to review the Jackson case but declined to do so.

The Taylor Court agreed that KRS 413.241 precluded punitive damages, but held that in enacting KRS 413.241 the legislature violated the so-called jural rights doctrine. This is a court contrived doctrine that has been engrafted onto the Kentucky Constitution, and basically prohibits the legislature from restricting liability where it existed in 1891. There are two problems with this panel's application of the doctrine. First, liability in this context did not exist in 1891, so the doctrine does not apply. Secondly, the United States Constitution prohibits the imposition of punitive damages without causation. It is likely that the Supreme Court will review this case if asked, and if the Court affirms on the jural rights ground this would constitute a gross expansion of the doctrine, which was itself a “power grab” by the Court as to powers which belong to the legislature. However, there is a way out for the Court if it were to choose to take it, as is suggested in the Taylor opinion itself. The opinion suggests that the legislative finding invades the province of the Court to make factual findings. In effect, the Court would seek to preclude the legislature from making public policy based on factual findings, which is of course absurd but may have appeal to some members of the High Court. This case bears watching as it winds through the Court, and may give us another indication of whether the Court is actually shifting back to its traditional function of interpreting the law and will return to its lawmaking ways.