Under Arkansas law, punitive damages awards for unintentional acts are limited to $250,000 or three times the amount of compensatory damages, whichever is greater. Recently, an Arkansas state court declared that the punitive damages cap violated two articles of the Arkansas Constitution.
On Oct. 20, 2008, the NAM joined with other groups in an amicus brief that urged the appellate court to declare the punitive damages cap to be constitutional.
First, we argued that the cap does not violate the Arkansas Constitution’s prohibition against statutory limits on compensatory damages, since punitive damages, which are awarded to punish malicious conduct, are clearly distinct from compensatory damages, which are awarded to compensate for injury.
Second, we argued that the cap does not violate the separation of powers clause of the state Constitution. Trial courts retain the power to determine the amount of punitive damages, within guidelines established by the legislature pursuant to its traditional and constitutional authority to classify crimes and determine punishment.
Furthermore, the cap is in line with punishments typical at common law, similar to other civil penalties for wrongdoing, much like caps enacted in many other states, consistent with due process, and supported by recommendations made by influential groups such as the ABA Special Committee on Punitive Damages. Additionally, we cited cases from eighteen states whose courts have upheld various punitive damages reforms.
On Sept. 24, 2009, the Arkansas Supreme Court dismissed the appeal on procedural grounds because the lower court did not finalize its decision on all the claims and defendants. The case could be appealed again once that is done.