In 2005, Ohio passed legislation enacting tort reform, establishing, among other things, statutory caps on awards of punitive damages in tort cases. However, a significant question remained regarding whether employment cases qualified as "torts" and were therefore subject to Ohio's tort reform restrictions. The answer to this question could substantially impact how employers defend employment cases and alter the maximum liability employers could face from adverse jury verdicts.
Ohio's somewhat confusing tort reform law provides that there is no limit to the amount of compensatory damages representing economic losses that may be awarded by a jury to a plaintiff in a tort case. However, compensatory damages representing non-economic losses are capped at the greater of $250,000 or three times a plaintiff's economic damages, up to a total of $350,000 (Ohio Revised Code Chapter 2315.18). Punitive damages also may be awarded by a jury in a tort case, but are limited to two times the total amount of the total compensatory damages - the sum of the economic and non-economic losses - awarded to that plaintiff (O.R.C. Chapter 2315.21).
Award reduced by $35 million
For the first time, on May 19, 2011, an Ohio appeals court has determined that the tort reform law's damages caps apply to employment cases. In Luri v. Republic Services, Inc., et al., the Eighth District Court of Appeals held that the statutory punitive damages limits in Ohio's tort reform law do in fact apply to claims of employment discrimination and retaliation brought under the Ohio Civil Rights Act (O.R.C. Chapter 4112). Accordingly, the court ordered that the approximately $46 million awarded to the plaintiff, Ronald Luri, at trial - the largest retaliatory discharge jury award in Ohio history - must be reduced by approximately $35 million pursuant to the applicable tort reform provisions.
Before being terminated by his employer, Luri was asked by his supervisors to discharge three of the oldest employees reporting to him. Luri informed his superiors that he had concerns that age and disability discrimination lawsuits could result if such employees were discharged and refused to fire them. Luri then began receiving poor job reviews for allegedly not accomplishing certain directives and was thereafter terminated as a result of those reviews.
Luri subsequently filed a lawsuit against his employer alleging a claim of retaliatory discharge under O.R.C. Chapter 4112.02. At trial, Luri presented evidence demonstrating that one of his supervisors altered a piece of evidence in an effort to justify his termination after he knew he was named as a party in the lawsuit. At least in part because of this, the jury eventually found in favor of Luri, awarding him $3.5 million in compensatory damages and a total of approximately $43 million in punitive damages from among all five of the defendants Luri sued.
The defendants appealed, alleging, among other things, that the trial court erred by failing to reduce the jury's verdict pursuant to Ohio's tort reform law, which provides a statutory cap on non-economic and punitive damages for tort claims. The appeals court held that an action brought under O.R.C. Chapter 4112 is in fact a tort action and therefore, upon proper motion, the statutory limits on damages set forth in Ohio's tort reform law should be applied to such employment claims. The court ruled that the trial court committed reversible error in not doing so.
Issue likely headed for Ohio Supreme Court
The court reached its conclusion by evaluating the language of Ohio's tort reform law itself, the intent of the legislature and the few cases previously evaluating this issue. Specifically, the court relied on a recent case from the United States District Court for the Southern District of Ohio, Geiger v. Pfizer, Inc., which held that an action brought under O.R.C. Chapter 4112 is a "tort action" as it is a "civil action for damages for injury or loss to person or property" to determine that such employment cases would therefore be subject to Ohio's tort reform provisions.
Because the tort reform law indicates that punitive damages must be capped at twice the amount of the compensatory damages awarded to a plaintiff, the appeals court concluded that the trial court was required to reduce the $43 million punitive damages award to $7 million - two times the $3.5 million in compensatory damages the jury awarded to Luri. The court further determined that such an award is consistent with notions of due process and remanded the matter back to the trial court in order to enter an amount of punitive damages consistent with the restrictions of the tort reform law.
Luri argued that, even if the tort reform punitive damages cap applied to his claim, the statute allowed him to recover a punitive damages award of twice his compensatory damages from each defendant. Because he had sued multiple defendants, Luri claimed that in such circumstances, the maximum amount of punitive damages should be calculated for each defendant. The majority disagreed, holding that the total amount of punitive damages to which Luri was entitled pursuant to the applicable statute was twice his compensatory damages award. A dissenting opinion, however, agreed with Luri, finding that the tort reform statute calculates the maximum award of punitive damages as "two times the amount of the compensatory damages awarded to the plaintiff from that defendant[.]"
Because the amount of money at issue in Luri is so significant, it is likely that the Ohio Supreme Court may be asked to consider the case. While this issue is far from well-settled, employment cases in Cuyahoga County are, for the time being, subject to the damages caps set forth in Ohio's tort reform law. It is likely, too, that courts in other Ohio jurisdictions will look to this case for guidance.