Punitive Damages in Lawsuits to Be Blocked by New Law

Punitive Damages in Lawsuits to Be Blocked by New Law



The ability of manufacturers in Arizona to evade some liability for their faulty products could rely on what the lawmakers remember and think about the Ford Pinto.

Lawsuits over the car during the seventies became a textbook case on how companies balance human life with financial risks. It also has become Exhibit Number 1 in why companies must be subject to punitive damages.

Today, the case is being used by the Arizona Trial Lawyers Association to stop an Arizona legislation aimed at minimizing such jury awards here in cases where products injure or kill people.

Crafted by the Arizona Chamber of Commerce and Industry, SB1336 provides that courts and juries cannot punish companies financially when their product was designed, manufactured, packaged, sold or labeled as mandated by a government agency. It would also prohibit punitive damages when the products comply with state or federal rules and standards.

Punitive damages are also sometimes referred to as exemplary damages. These are above and beyond any award to pay damages to plaintiffs for their financial loss. Instead, punitive damages serve as punishment to a company for a deliberate or offensive act, or to make an example of the corporation so that others will not follow said acts.

Marc Osborn, a chamber lobbyist, said that the way it is being perceived by the companies, if they are in compliance of any regulatory requirements, their conduct must not be regarded or considered as outrageous or deliberate.

He said, “If you’re going to make a product and the government tells you how to make that product, that should be your basis or standard.”