In Lewellen v. Franklin, a fraud and Missouri Merchandising Practices Act (“MMPA”) case, the Missouri Supreme Court has struck down the cap on punitive damages enacted by the Missouri legislature during its 2005 tort reform in certain cases. Lillian Lewellen (“Lewellen”) obtained a verdict against Chad Franklin National Auto Sales North, LLC (“National”) and its owner, Chad Franklin (“Franklin”), for $25,000 in actual damages and $1,000,000 in punitive damages on both claims, fraudulent misrepresentation and violation of the MMPA. Lewellen elected to take judgement for actual and punitive damages for fraudulent misrepresentation against Franklin and for actual and punitive damages for violation of the MMPA against National. Pursuant to section 510.265, RSMo,the trial court reduced the punitive damages verdict against Franklin and National to $500,000 and $539,050, respectively. On appeal, the Missouri Supreme Court found this statute unconstitutional as applied to Lewellen’s fraudulent misrepresentation claim and reinstated the full amount of the punitive damages.
Lewellen asserted that the reduction of her punitive damages award against Franklin violated her right to trial by jury as guaranteed by article I, section 22(a) of the Missouri Constitution, which provides “[t]hat the right of trial by jury as heretofore enjoyed shall remain inviolate.” In other words, if there was a right to a trial by jury before the adoption of the Missouri Constitution, then the legislature can not enact laws that affect that right. In Lewellen’s case, the right to trial by jury on claims of fraud existed at common law before the enactment of the first Missouri Constitution in 1820. Similarly, a party had a right to have a jury decide the amount of punitive damages in a fraud case as of 182o. Therefore, when applied to a fraudulent misrepresentation claim or any claim for which the right to a trial by jury existed prior to the adoption of the Missouri Constitution, section 510.265 infringes on the right to trial by jury and is unconstitutional.
Note that the defendants also argued that the award of punitive damages violated their due process rights. After analysis, the Court disagreed, but did acknowledge that there may be cases in which the reduction of punitive damages is warranted due to their affect on the defendants’ due process rights.