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Schovanec: Oklahoma Supreme Court ruling on noneconomic damages could have profound impact

Attorney Ashley Schovanec Web

Ashley M. Schovanec is a litigation attorney who represents individuals and both privately-held and public companies in a wide range of civil litigation matters.

On Tuesday, the Oklahoma Supreme Court ruled Oklahoma’s statutory cap on noneconomic damages violates the Oklahoma Constitution because it singles out for different treatment less than the entire class of similarly situated persons who may sue to recover for bodily injury.

In plain terms, the court found the statute is a “special law” that limits a living plaintiff’s right to recover noneconomic damages to no more than $350,000 and cannot be reconciled with the provision of the Oklahoma Constitution that expressly forbids any statutory damages limitation for injuries resulting in death.

Oklahoma’s statutory cap provides that in any civil action arising from claimed bodily injury, the trier of fact may award a plaintiff for noneconomic loss no more than $350,000, regardless of the number of parties against whom the action is brought or the number of actions brought—unless the claimed bodily injury is the result of more than mere negligence (i.e. reckless disregard for the rights of others, gross negligence, fraud, intentional injury, or malice).

The statute defines noneconomic damages as “nonpecuniary harm that arises from a bodily injury that is the subject of a civil action” and includes damages for, among other things, pain and suffering, loss of consortium, companionship, mental anguish, etc.

In Beason v. I.E. Miller Services, Incorporated, an employee was injured while operating a crane in his employment with I.E. Miller Services. As a result of his injuries, the employee underwent two amputations on parts of his arm. The employee and his wife sued I.E. Miller in a personal injury action. The matter went to trial in Oklahoma County and the jury awarded the employee and his wife a combined total of $15 million – $6 million of which was allocated as noneconomic damages. Applying the statutory cap, the district court reduced the jury verdict to $9.7 million, as the noneconomic damages to plaintiffs was lowered to $700,000, or $350,000 per person. On appeal to the Oklahoma Supreme Court, plaintiffs challenged the damages cap.

The Oklahoma Supreme Court held the statutory damages cap is unconstitutional for one reason: the statue purports to limit recovery for pain and suffering in cases where the plaintiff survives the injury-causing event, while persons who die from the injury-causing event face no such limitation under Oklahoma Constitution Article 23, section 7 (“The right of action to recover damages for injuries resulting in death shall never be abrogated, and the amount recoverable shall not be subject to any statutory limitation . . . . ”).

The court explained that “[b]y forbidding limits on recovery for injuries resulting in death, the people have left it to juries to determine the amount of compensation for pain and suffering in such cases, and no good reason exists for the Legislature to provide a different rule for the same detriment simply because the victim survives the harm-causing event.”

Moving forward, the court noted that if the people of Oklahoma believe the jury system and judicial review are no longer effective in deciding compensation in private personal injury cases, then constitutional amendment is the proper way to make such a change, “not a special law.”

The impact of the Oklahoma Supreme Court’s decision in Beason is profound.

Now, after Beason, with the statutory damages cap removed, an unemployed, catastrophically injured plaintiff, and a defendant, may be looking at a substantially different recovery and exposure.  Consequently, and somewhat counter-intuitively, because the risk of large verdicts just went up, cases may settle earlier because of the uncertainty associated with leaving a damages calculation up to a jury.

Ashley M. Schovanec is a litigation attorney with the law firm of Phillips Murrah.

The Wrong Claim – Defining boundaries to Burk tort actions

Complaints of wrongful termination by employees have been heard in courtrooms across the nation for as long as there has been a legal venue in which to bring and defend such claims. It can be argued that the nature of the employer-employee relationship has been evolving ever since.

In Oklahoma, the employer-employee relationship is characterized by the employment-at-will doctrine. This means that either the employer or employee may end the employment relationship at any time for any reason, barring some exceptions. Exceptions for the employer include retaliatory termination, basing the decision to terminate on the employee’s race, gender, religion, national origin and other prior-identified protected classes, and whether the employee is hired under the conditions of a specific contractual agreement that lays out conditions for termination.

In the above exceptions, there are adequate remedies available through various employment and anti-discrimination laws. However, over time, there has been an evolution of claims that exist outside of this framework, where there existed no adequate legal remedies.

In 1989, the Oklahoma Supreme Court began chipping away at the employment-at-will doctrine in a landmark case known as Burk v. Kmart Corp. The Court recognized a new actionable tort claim that established an exception to the at-will termination rule in a narrow class of cases, which was subsequently referred to as a Burk tort.

“An at-will employee may have an actionable tort claim if his discharge is ‘contrary to a clear mandate of public policy as articulated by constitutional, statutory or decisional law,’” the Court held.

Burk or not Burk?

Outside of law firm offices, legislative chambers and courtrooms, the term “Burk tort” is not very remarkable. Yet, for decades, the questions of which entities can be sued for which alleged employment violations, and which legal remedies are appropriate for the matters at hand, have been and continue to be vigorously argued.

In a recent case brought before the U.S. District Court for the Western District of Oklahoma, Phillips Murrah Director Byrona J. Maule, arguing for the Defense, was granted dismissal of a wrongful termination claim brought under the Burk tort framework. This particular, seemingly obscure motion to dismiss is important because, had it not been successful, the claim could have altered current Oklahoma employment law by expanding the Burk tort into a new area.

In this recent case, the Plaintiff asserted that the Oklahoma Occupational Safety & Health Standards Act (OOSHSA) established a clear mandate of public policy that was allegedly violated by his employer, a privately owned company in Oklahoma City. However, as pointed out by Maule, in 1984, the Oklahoma legislature specifically removed private employers from the purview of OOSHSA, effectively limiting its public policy statement to only apply to public employers. Therefore, because the OOSHSA Act does not articulate a public policy with regard to a private employer, it could not support a Burk tort claim. The Court further found the federal OSHA statutes did not establish an Oklahoma public policy, and therefore did not articulate a public policy on which a Burk tort claim could be founded.

The Order handed down by the U.S. District Court for the Western District of Oklahoma quoted Griffin v. Mullinix, 1997 OK 120:

“See Griffin, at 179 (“[I]n 1984, the state legislature fundamentally changed the existing Occupational Safety & Health Standards Act, removing private employers from the definition under the Act … [T]he legislature’s decision to limit application of the Act to public employers limited the entire Occupational Safety & Health Standards Act, including the public policy statement. Therefore, [w]e find that an Act, which at one time applied broadly to all employers and now applies to public employers only, is not an adequate basis upon which to premise the private tort action of a private employee.”).

The Defendant’s Motion to Dismiss was granted, and a subsequent Plaintiff’s Motion to Amend Complaint was denied, based on the Plaintiff’s failure to state a claim against the Defendant upon which relief can be granted. Since the Defendant is a privately-owned company, OOSHA did not articulate a public policy that supported a Burk tort claim.