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4 Ways Kraft Shooting Case Could Reshape Punitive Damages Litigation

Posted On behalf of Schmidt Kramer on Jul 24, 2017 in News

justice statute Originally Published by Max Mitchell, The Legal Intelligencer
July 21, 2017

The Pennsylvania Superior Court has tossed out a $38.5 million punitive damages award in a case involving a fatal shooting at a Kraft factory, but according to several plaintiffs attorneys, the ruling tossed out much more than money.

On July 18, a three-judge Superior Court panel determined the plaintiffs in Wilson v. U.S. Security Associates were time-barred from seeking punitive damages in their lawsuit stemming from the shooting that left two women dead. As part of the decision, the unanimous panel held that the plaintiffs' attempts to reinstate their punitive damages claim "improperly added a new cause of action."

According to the opinion, although the plaintiffs had initially sought punitive damages, they later stipulated to strike the punitive damages—including the words "reckless, outrageous, intentional, and/or wanton"—from the complaint without prejudice. However, after the plaintiffs retained new counsel, they sought to reinstate the punitive damages claims. The trial court allowed it, but Superior Court Judge William Platt said the plaintiffs were simply too late.

"Quite plainly, and without factual dispute, the statute of limitations had expired," Platt said.

The ruling has led to some buzz in Pennsylvania, with attorneys on both sides saying it could lead to some changes when it comes to litigating punitive damages.
Attorney Shanin Specter of Kline & Specter, who represented the plaintiffs, said that not long after the ruling came out, attorneys began discussing the case on Twitter and contacting him with their thoughts about the ruling's possible implications.

"My iPhone has exploded with emails from practitioners across the state saying that the opinion is a sea change in the law and procedurally disastrous and unworkable," Specter said.

He said he plans to seek an en banc review of the three-judge panel's decision.

Several defense attorneys, however, said the court's ruling is essentially about ensuring fairness to all parties.

"Here they withdrew not only the punitive damages claim itself, but also all of the allegations of the types of conduct that would support punitive damages," Marshall Dennehey Warner Coleman & Goggin attorney Teresa Sachs, who represented U.S. Security Associates, said. "We feel that this was a correct decision, and completely in accordance with existing law."

Preliminary Problems

The overarching concern from the plaintiffs bar is that it does away with case law dating back 30 years, and will sow confusion about how attorneys should pursue punitive damages going forward.

As the plaintiffs attorneys describe it, the ruling largely goes against the Superior Court's 1983 decision in Daley v. Wanamaker, and adds a new time crunch when it comes to pursuing punitive damages. The lawyers said the opinion could be seen as requiring plaintiffs to file for punitive damages before they have enough evidence to show the allegedly reckless conduct, which would increase the chances to losing that avenue of damages at the preliminary objections stage.
According to attorney Slade McLaughlin of McLaughlin & Lauricella, the opinion "turns everything upside down."

"What this opinion says is you have to file a separate count for punitive damages before any discovery's been done. How do you prove the extent of unreasonable conduct?" he said. "It's a very, very tumultuous opinion."

Members of the defense, however, disagreed, saying the decision should not lead to any major changes.

"It's not unheard of that a court would deny a plaintiff the right to amend a complaint after the statute of limitations ends," Foley, Comerford & Cummins attorney Daniel Cummins, who focuses on insurance defense, said. "It's a bit unusual of a decision, but it's not totally unheard of. Arguments can be made to limit the impact of the Wilson decision to its facts."

Stalling the Clock

As a result of the perceived preliminary objections issues, plaintiffs attorneys said they will need to find ways to work around what they see as a newly imposed clock regarding their claims.

Max Kennerly of Kennerly Loutey suggested that attorneys may want to wait until the last minute to announce that they are pursuing punitive damages claims.

"This opinion would suggest to plaintiffs lawyers to wait until as late as possible so you don't run into the time problem. ... Nobody wants to intentionally game the system with late filings, but this opinion would somewhat encourage that," Kennerly said. "As a plaintiffs lawyer, I don't know what I'm supposed to do with this now."

Get Aggressive

Schmidt Kramer attorney Scott Cooper said he was similarly concerned about the time constraints, but suggested that attorneys might want to aggressively seek punitive damages almost immediately after filing.

"The decision has thrown the baby out with the bath water," he said. "Now, you almost have to deal with the discovery before the complaint's done, if you're pleading it as a separate cause of action. ... There's going to be a rush to the courthouse steps in order to make sure that you've pled your cause of action."

Christie & Young attorney James Young said the opinion could be read to suggest that plaintiffs will have a limited amount of time to assert a punitive damages claims after the date of an alleged incident. But, he added, any impact on how punitive damages are pursued will be slight.

"This is undoubtedly going to lead to more skirmishes over punitive damages," he said. "But I don't think there's going to be a great change. Those right now are happening earlier rather than later."

Stipulations

McLaughlin said the ruling essentially means plaintiffs should no longer be willing to remove language regarding the reckless conduct.
"Once you let those averments go, you can't bring them back in," McLaughlin said. "That's what this is saying, that's a separate cause of action, and it's not consistent with anything I've seen. It's a new direction that I don't think is a good one."

Swartz Campbell attorney Josh Byrne agreed that largest effect the ruling is likely to have will be on the willingness of plaintiffs to voluntarily dismiss questionable punitive damages claims.

However, he added that there would still be ways for both sides to come to an agreement on litigating possible punitive damages.

"As a general rule, if there's a stipulation that tolls the statute of limitations, then any amendment will be liberally allowed," Byrne said.

Max Mitchell can be contacted at 
215-557-2354 or mmitchell@alm.com. Follow him on Twitter @MMitchellTLI.