Pleading punitive damages in federal court: must one comply with F.S. 768.72?

• Author: Maynard, John Gary, III
• Position: Florida

Effective July 1, 1986, F.S. [sections] 768.72 prohibits a party from pleading punitive damages prior to making a "reasonable showing of evidence" which would "provide a reasonable basis for recovery of such damages."[1] Over the past decade, the U. S. district courts in Florida have wrestled with whether the statute is procedural and, therefore, applicable to federal diversity litigants, or substantive and, therefore, inapplicable. While the district courts have published numerous opinions discussing the matter, the issue is not clearly decided. This uncertainty, coupled with the unlikelihood of any definitive appellate decision,[2] places the federal practitioner in a difficult position. Certainty or predictability, however, can be obtained by breaking down the published opinions into the various federal districts. This article provides an overview of the statute and the federal case law from Florida, highlights the arguments advanced by both sides, and provides a summary of the case law in each district.

Background: [sections] 768.72

Entitled "Pleading civil actions; claim for punitive damages," [sections] 768.72 provides:

In any civil action, no claim for punitive damages shall be permitted unless there is a reasonable showing of evidence in the record or proffered by the claimant which would provide a reasonable basis for recovery of such damages. The claimant may move to amend his complaint to assert a claim for punitive damages as allowed by the rules of civil procedure. The rules of civil procedure shall be liberally construed so as to allow the claimant discovery of evidence which appears reasonably calculated to lead to admissible evidence on the issue of punitive damages. No discovery of financial worth shall proceed until after the pleading concerning punitive damages is permitted. (Emphasis added.)

As evident, the statute contains both a pleading element and a discovery element.[3] The pleading element requires the plaintiff to make a "reasonable showing by evidence" before punitive damages may be claimed.[4] The discovery element creates a "substantive legal right" not to be subject to a punitive damages claim and ensuing financial worth discovery until the court makes a determination about the "reasonable showing."[5]

Substantive v. Procedural

The discrepancy among the courts' opinions is a result of the respective courts' characterization of the statute. Generally, under the Erie doctrine, state law governs matters of substance while federal law governs matters of procedure.[6] When faced with a potential conflict, the court must determine whether the state law directly conflicts with some federal rule or statute. If a court determines that there is no direct conflict, the court considers whether application of the state law will discourage forum shopping and avoid the inequitable administration of laws.[7]

While there are several conflicting opinions,[8] two recent opinions highlight the different approaches taken by Florida's district courts. In Neill v. Gulf Stream Coach, Inc., 966 F. Supp. 1149 (M.D. Fla. 1997), Judge Hodges from the Middle District analyzed whether [sections] 768.72 conflicted with Federal Rules of Civil Procedure 8 and 9.[9] In finding the statute substantive, the court emphasized the lack of any timing requirements under the Federal Rules of Civil Procedure as well as the comprehensive scheme of F.S. ch. 768. The court began by noting that while Rule 8 establishes a right to plead generally, there is "no requirement that all claims be plead in the first complaint or that an entitlement to relief will be lost forever if not so plead."[10] Accordingly, the court concluded that the statute and Rule 8 "are capable of harmonious coexistence."[11] "If the Plaintiff ultimately makes the required showing [under [sections] 768.721, the complaint may be amended to add claims for punitive damages that, when made, must simply comport with the requirements of Rule 8(a)."[12] As for Rule 9, the court again emphasized the lack of a timing provision. While Rule 9 requires that damages be specifically plead, "the lack of a timing provision in Rule 9(g) read in light of the liberal amendment provisions of Rule 15 compels the conclusion that the Rule 9(g) and [sections] 768.72 `can exist side by side ... each controlling its own intended sphere of coverage without conflict.'"[13]

...