Senate Bill 1720c1
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Florida Senate - 2000 CS for SB 1720
By the Committee on Governmental Oversight and Productivity;
and Senator Latvala
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1 A bill to be entitled
2 An act relating to punitive damages in
3 class-action suits; creating s. 768.733, F.S.;
4 prescribing the amount of bond or equivalent
5 surety required to stay the execution of
6 punitive-damages judgments in class-action
7 suits, pending appellate review; providing for
8 application of the act to certain pending
9 cases; providing an effective date.
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11 WHEREAS, the State of Florida is reviewing options to
12 protect its receipt of payments under the tobacco settlement
13 agreement entered into by the state and participating
14 manufacturers in settlement of "State of Florida et al. v.
15 American Tobacco Co.," Case No. 95-1466AH (Fla. 15th Cir. Ct.,
16 1996), and
17 WHEREAS, the action by the State of Florida which was
18 the subject of the settlement agreement was brought to recover
19 compensatory and punitive damages from the settling
20 manufacturers, and all such claims were settled, and
21 WHEREAS, other claims have been filed and may be filed
22 under the laws of this state for damages of injured
23 individuals and for punitive damages to vindicate and punish
24 the same or similar conduct that was the subject of the action
25 by the State of Florida against the settling manufacturers,
26 and
27 WHEREAS, the State of Florida itself would be at risk
28 in its continued receipt of settlement payments if the ability
29 of participating manufacturers to make the payments were
30 threatened by a requirement that the manufacturers immediately
31 pay massive awards of punitive damages, and
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Florida Senate - 2000 CS for SB 1720
302-2180A-00
1 WHEREAS, the purpose of punitive damages is the
2 punishment of each wrongdoer by exacting from his or her
3 pocketbook a sum of money which, according to his or her
4 financial ability, will hurt, but not bankrupt, and
5 WHEREAS, punitive damages require appropriate
6 substantive and procedural safeguards to minimize the risk of
7 unjust punishment, and
8 WHEREAS, while the amount of a punitive-damages
9 judgment should provide retribution and deterrence, it should
10 not financially destroy or bankrupt the defendant or
11 constitute a "grossly excessive" punishment, and
12 WHEREAS, there is no statutorily articulated
13 substantive standard for the courts of this state to apply in
14 order to determine when a punitive-damages judgment is grossly
15 excessive, and
16 WHEREAS, a plaintiff's right to punitive damages is
17 subject to the plenary authority of the Legislature and the
18 establishment or elimination of such a claim is clearly a
19 substantive, rather than a procedural, decision of the
20 Legislature, as recognized in Alamo Rent-A-Car, Inc. v.
21 Mancusi, 632 So.2d 1352, 1358 (Fla. 1994), and
22 WHEREAS, cases involving punitive damages in class
23 actions frequently involve significant contested legal issues,
24 and parties should be afforded reasonable opportunity to fully
25 pursue their rights in appellate courts without oppressive
26 costs that would effectively eliminate or impair their
27 due-process rights, NOW, THEREFORE,
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29 Be It Enacted by the Legislature of the State of Florida:
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Florida Senate - 2000 CS for SB 1720
302-2180A-00
1 Section 1. Section 768.733, Florida Statutes, is
2 created to read:
3 768.733 Punitive damages and bonds in class actions;
4 limitations.--
5 (1) In any civil action that is brought as a certified
6 class action, the court may not enter a judgment for punitive
7 damages against a defendant in an amount that, if fully
8 executed upon, would financially destroy or bankrupt the
9 defendant.
10 (2) In any civil action that is brought as a certified
11 class action, the trial court, upon the posting of a bond or
12 equivalent surety as provided in this section, shall stay the
13 execution of any judgment, or portion thereof, entered on
14 account of punitive damages pending completion of any state
15 appellate review of the judgment.
16 (3) The required bond or equivalent surety acceptable
17 to the court for imposition of the stay shall be the lowest
18 of:
19 (a) The amount of the punitive-damages judgment, plus
20 twice the statutory rate of interest;
21 (b) One hundred million dollars, regardless of the
22 amount of punitive damages; or
23 (c) Ten percent of the net worth of the defendant as
24 determined by applying generally accepted accounting
25 principles to the defendant's financial status as of December
26 31 of the year prior to the judgment for punitive damages.
27 (4) If, at any time after notice and hearing, the
28 court finds that a defendant who has posted a bond or
29 equivalent surety pursuant to paragraph (3)(b) or paragraph
30 (3)(c) is purposefully moving assets with the intent to avoid
31 the punitive-damages judgment, the court shall increase the
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CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2000 CS for SB 1720
302-2180A-00
1 bond or equivalent surety to the amount determined pursuant to
2 paragraph (3)(a). If the defendant does not post the
3 additional bond required by the court, the stay shall be
4 revoked.
5 Section 2. This act applies to all cases pending on
6 the effective date of this act in which an award for punitive
7 damages has not been finally reduced to judgment through trial
8 and subsequent appeals and to all cases commenced on or after
9 the effective date of this act.
10 Section 3. This act shall take effect upon becoming a
11 law.
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13 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
14 SB 1720
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16 Provides that in any civil action that is a certified class
action, the court may not enter a judgment for punitive
17 damages against a defendant in an amount that, if fully
executed upon, would destroy or bankrupt the defendant.
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Requires the trial court to stay the execution of any
19 judgment, or portion thereof, on account of punitive damages
pending completion of any state appellate review of the
20 judgment if a bond or equivalent surety is posted as provided.
21 Provides that the bond must be the lowest of: (a) the amount
of the punitive damages plus twice the statutory rate of
22 interest; (b) one hundred million dollars; or (c) ten percent
of the defendant's net worth.
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Provides that the provisions apply to all cases pending on the
24 effective date of the bill.
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