Calendar No. 347

104TH CONGRESS

2D SESSION S. 1618

A BILL

To provide uniform standards for the award of

punitive damages for volunteer services.

MARCH 15, 1996

Read the second time and placed on the calendar
II

Calendar No. 347

104TH CONGRESS

2D SESSION S. 1618

To provide uniform standards for the award of punitive damages for volunteer

services.

IN THE SENATE OF THE UNITED STATES

MARCH 14 (legislative day, MARCH 13), 1996

Mr. ABRAHAM for Mr. DOLE (for himself and Mr. HATCH) introduced the

following bill; which was read the first time

MARCH 15, 1996

Read the second time and placed on the calendar

A BILL

To provide uniform standards for the award of punitive

damages for volunteer services.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. UNIFORM STANDARDS FOR AWARD OF PUNI4 TIVE DAMAGES.

5 (a) GENERAL RULE.—Punitive damages may, to the

6 extent permitted by applicable State law, be awarded

7 against a defendant if the claimant establishes by clear
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1 and convincing evidence that conduct carried out by the

2 defendant with a conscious, flagrant indifference to the

3 rights or safety of others was the proximate cause of the

4 harm that is the subject of the action—

5 (1) in any civil action where the claim relates

6 to volunteer services performed by the defendant for

7 a government entity or a not for profit organization

8 organized and conducted for public benefit and oper9 ated primarily for charitable, civic, educational, reli10 gious, welfare, or health purposes; or

11 (2) in any civil action where the claim relates

12 to activities or services performed by a not for profit

13 organization organized and conducted for public ben14 efit and operated primarily for charitable, civic, edu15 cational, religious, welfare, or health purposes, not

16 including health care providers.

17 (b) LIMITATION ON AMOUNT.—

18 (1) IN GENERAL.—The amount of punitive

19 damages that may be awarded in an action described

20 in subsection (a) may not exceed the greater of—

21 (A) 2 times the sum of the amount award22 ed to the claimant for economic loss and non23 economic loss; or

24 (B) $250,000.
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1 (2) SPECIAL RULE.—Notwithstanding para2 graph (1), in any action described in section (a)

3 against an individual whose net worth does not ex4 ceed $500,000 or against an owner of an unincor5 porated business, or any partnership, corporation,

6 association, congregation, unit of local government,

7 or organization which has fewer than 25 full-time

8 employees, the punitive damages shall not exceed the

9 lesser of—

10 (A) 2 times the sum of the amount award11 ed to the claimant for economic loss and non12 economic loss; or

13 (B) $250,000.

14 (3) EXCEPTION FOR PARTICULAR CATEGORIES

15 OF MISCONDUCT.—The limitations on the amount of

16 punitive damages contained in paragraphs (1) and

17 (2) shall not apply in any action described in sub18 section (a)(1) or (a)(2) where the misconduct for

19 which punitive damages are awarded—

20 (A) constitutes a crime of violence (as that

21 term is defined in section 16 of title 18, United

22 States Code) or act of international terrorism

23 (as that term is defined in section 2331 of title

24 18) for which the defendant has been convicted

25 in any court;
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1 (B) constitutes a hate crime (as that term

2 is used in the Hate Crime Statistics Act (28

3 U.S.C. 534 note));

4 (C) involves a sexual offense, as defined by

5 applicable State law, for which the defendant

6 has been convicted in any court;

7 (D) involves misconduct for which the de8 fendant has been found to have violated a Fed9 eral or State civil rights law; or

10 (E) where the defendant was under the in11 fluence (as determined pursuant to applicable

12 State law) of intoxicating alcohol or any drug,

13 as defined in section 104(b)(2) of this title, at

14 the time of the misconduct for which punitive

15 damages are awarded.

16 (4) EXCEPTION FOR INSUFFICIENT AWARD IN

17 CASES OF EGREGIOUS CONDUCT.—

18 (A) DETERMINATION BY COURT.—If the

19 court makes a determination, after considering

20 each of the factors in subparagraph (B), that

21 the application of paragraph (1) would result in

22 an award of punitive damages that is insuffi23 cient to punish the egregious conduct of the de24 fendant against whom the punitive damages are

25 to be awarded or to deter such conduct in the
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1 future, the court shall determine the additional

2 amount of punitive damages (referred to in this

3 paragraph as the ‘‘additional amount’’) in ex4 cess of the amount determined in accordance

5 with paragraph (1) to be awarded against the

6 defendant in a separate proceeding in accord7 ance with this paragraph.

8 (B) FACTORS FOR CONSIDERATION.—In

9 any proceeding under paragraph (A), the court

10 shall consider—

11 (i) the extent to which the defendant

12 acted with actual malice;

13 (ii) the likelihood that serious harm

14 would arise from the conduct of the de15 fendant;

16 (iii) the degree of the awareness of

17 the defendant of that likelihood;

18 (iv) the profitability of the misconduct

19 to the defendant;

20 (v) the duration of the misconduct

21 and any concurrent or subsequent conceal22 ment of the conduct by the defendant;

23 (vi) the attitude and conduct of the

24 defendant upon the discovery of the mis-
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1 conduct and whether the misconduct has

2 terminated;

3 (vii) the financial condition of the de4 fendant; and

5 (viii) the cumulative deterrent effect

6 of other losses, damages, and punishment

7 suffered by the defendant as a result of the

8 misconduct, reducing the amount of puni9 tive damages on the basis of the economic

10 impact and severity of all measures to

11 which the defendant has been or may be

12 subjected, including—

13 (I) compensatory and punitive

14 damage awards to similarly situated

15 claimants;

16 (II) the adverse economic effect

17 of stigma or loss of reputation;

18 (III) civil fines and criminal and

19 administrative penalties; and

20 (IV) stop sale, cease and desist,

21 and other remedial or enforcement or22 ders.

23 (C) REQUIREMENTS FOR AWARDING ADDI24 TIONAL AMOUNT.—If the court awards an addi25 tional amount pursuant to this subsection, the
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1 court shall state its reasons for setting the

2 amount of the additional amount in findings of

3 fact and conclusions of law.

4 (D) PREEMPTION.—This section does not

5 create a cause of action for punitive damages

6 and does not preempt or supersede any State or

7 Federal law to the extent that such law would

8 further limit the award of punitive damages.

9 Nothing in this subsection shall modify or re10 duce the ability of courts to order remittiturs.

11 (5) APPLICATION BY COURT.—This subsection

12 shall be applied by the court and application of this

13 subsection shall not be disclosed to the jury. Nothing

14 in this subsection shall authorize the court to enter

15 an award of punitive damages in excess of the jury’s

16 initial award of punitive damages.

17 (c) BIFURCATION AT REQUEST OF ANY PARTY.—

18 (1) IN GENERAL.—At the request of any party

19 the trier of fact in any action that is subject to this

20 section shall consider in a separate proceeding, held

21 subsequent to the determination of the amount of

22 compensatory damages, whether punitive damages

23 are to be awarded for the harm that is the subject

24 of the action and the amount of the award.
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1 (2) INADMISSIBILITY OF EVIDENCE RELATIVE

2 ONLY TO A CLAIM OF PUNITIVE DAMAGES IN A PRO3 CEEDING CONCERNING COMPENSATORY DAMAGES.—

4 If any party requests a separate proceeding under

5 paragraph (1), in a proceeding to determine whether

6 the claimant may be awarded compensatory dam7 ages, any evidence, argument, or contention that is

8 relevant only to the claim of punitive damages, as

9 determined by applicable State law, shall be inadmis10 sible.

11 (d) DEFINITION.—

12 HEALTH CARE PROVIDER.—The term ‘‘health

13 care provider’’ means any person, organization, or

14 institution that is engaged in the delivery of health

15 care services in a State and that is required by the

16 laws or regulations of the State to be licensed, reg17 istered, or certified by the State to engage in the de18 livery of such services in the State.