Arkansas Supreme Court Justice Courtney Goodson, Part Two: Striking Down Tort Reform

by Jonathan Keim

In Part 1 of this series, I wrote about the gifts and contributions Justice Goodson has received from trial lawyers.  The most obvious question arising from those facts is whether Justice Goodson’s jurisprudence reflects any sort of bias in favor of such lawyers.  That question was answered most clearly in the 2011 opinion she wrote in Bayer Cropscience LP v. Schafer (Ark. 2011), in which she struck down the state’s cap on punitive damages.  On her way to eliminating the cornerstone of the tort reform package passed in 2003, Justice Goodson seriously misread the state constitution.  The practical impact of the case is that it is now much easier for trial lawyers to get rich by bringing abusive lawsuits in Arkansas, and state leaders have been struggling ever since to find a way to restore balance to the legal system.  

The story starts in the mid-2000s, when the plaintiffs filed suit in Arkansas against a manufacturer of genetically-modified food products. The plaintiffs alleged that the defendant harmed them, depressing the price of the United States rice supply by negligently releasing a modified rice product during field trials, thus causing a large-scale drop in the price of American-grown rice. They claimed compensatory and punitive damages.

In a pretrial motion, the plaintiffs argued to the trial court that the state law cap on punitive damages was unconstitutional. They asserted that a subordinate clause in Article 5, Section 32 of the Arkansas Constitution – which generally grants the legislature power to regulate damage awards under the state workmen’s compensation laws – forbade the legislature from limiting punitive damages awards in their case.

The trial court bought the argument and struck down the statute. A jury then awarded the plaintiffs several million dollars in compensatory damages and $42 million in punitive damages. Had the punitive damages cap been left in place, it would have limited the punitive awards to the greater of $250,000 per plaintiff or three times the compensatory damage award.

The Arkansas Supreme Court affirmed the district court’s decision, with Justice Goodson writing for the court.  (It is worth noting that the lead counsel for plaintiffs/appellees had made the maximum contribution to Goodson.  Lawyers for the defendants contributed as well, but half as much.)

On the constitutionality of the punitive damages cap, Goodson begins by stressing the “strong presumption of constitutionality” Arkansas courts are supposed give to state statutes, resolving any doubt in favor of constitutionality.  But she then goes on to resolve every question against a finding of constitutionality.

Her most egregious error comes when applying a constitutional provision that says the following (emphasis added):

The General Assembly shall have power to enact laws prescribing the amount of compensation to be paid by employers for injuries to or death of employees, and to whom said payment shall be made. It shall have power to provide the means, methods, and forum for adjudicating claims arising under said laws, and for securing payment of same. Provided, that otherwise no law shall be enacted limiting the amount to be recovered for injuries resulting in death or for injuries to persons or property; and in case of death from such injuries the right of action shall survive, and the General Assembly shall prescribe for whose benefit such action shall be prosecuted.

Goodson interprets the italicized sentence, which carves out an exception to legislative power, as if it bars all legislation limiting punitive damages. But this is an obvious error because this case did not involve “injuries to persons or property” at all. There is no hint that there were actual physical injuries in this case, only economic injuries. Thus, this provision of the state constitution couldn’t even apply to this case. After all, as Goodson concedes, “injuries to persons or property” under this section only means “physical injuries to the person and physical injuries to property. Nonetheless, Goodson claims later in the opinion that a physical injury was present because the farmers had to clean their farm equipment to remove stray GMO seeds. This is another long-distance reach, since it’s a harm for which the plaintiffs (who were not bashful about their claims) didn’t even bother seeking compensation. 

Indeed, far from resolving “any doubts” in favor of the legislature and constitutionality as she claimed, Goodson was doing precisely the opposite: stretching the constitutional text in search of a reason to strike down the punitive damages cap. 

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