Time to fix court’s mistake on damage capBy Jonathan Small
This month, Gov. Kevin Stitt appointed a new Oklahoma Supreme Court justice, filling a position vacated when Oklahoma voters ousted longtime liberal incumbent Justice Yvonne Kauger last November.
Kauger was the first Oklahoma Supreme Court justice removed by voters in state history. That action came amidst growing voter dissatisfaction with the court’s increasingly liberal bent in recent years.
Among the most notable examples of that trend is a bizarre 2019 ruling striking down the state’s $350,000 cap on vague noneconomic-damages awards in lawsuits. Under that law, Oklahomans could sue for unlimited actual damages, such as lost wages, medical expenses, and lifelong costs from an injury. The bill simply capped the noneconomic-damages portion of lawsuits, an area notorious for “jackpot” justice awards that can far outpace economic reason.
Yet the Oklahoma Supreme Court struck down that law, declaring it a “special law” since the cap applied in cases “where the plaintiff survives the injury-causing event, while persons who die from the injury-causing event face no such limitation.” (The Oklahoma Constitution prohibits capping noneconomic damages in cases involving death.)
The plaintiff in that case reportedly received $9.7 million in payment for an on-the-job accident but wanted millions more in “noneconomic” damages as well.
The negative impact of the court’s activist ruling has been significant.
In July 2019, a few months after the Oklahoma Supreme Court’s ruling, the American Tort Reform Foundation ranked Oklahoma among the nation’s 10 worst “judicial hellholes.” The Oklahoma Supreme Court’s decision on noneconomic caps was one factor cited.
“The Economic and Fiscal Impact of Excessive Tort Costs on Oklahoma,” a study commissioned by the State Chamber Research Foundation and conducted by the Perryman Group, found that excessive tort costs have translated into the loss of $3.7 billion in state gross product each year and almost 32,000 jobs in Oklahoma.
The study estimated the share of state economic losses tied to the Oklahoma Supreme Court’s 2019 decision totaled nearly $2.7 billion in gross product from 2020 to 2023.
However, only one sitting justice remains who was among the majority that struck down the cap in 2019. A new court may look more favorably on the idea. Lawmakers should reinstate the cap, which is sensible and commonly used nationwide.
Eight other states have caps on broad noneconomic damages, while 26 states cap noneconomic damages in medical-malpractice cases. Furthermore, those laws typically exempt cases involving reckless disregard for the rights of others, gross negligence, fraud, or intentional or malicious conduct.
It’s time for Oklahoma to again cap noneconomic damages. Those injured as the result of others’ action would still have access to full financial restoration, but the cap would provide financial certainty for businesses and encourage more investment in Oklahoma.
That’s a win-win for everyone.
Jonathan Small serves as president of the Oklahoma Council of Public Affairs.