Iowa’s State House Reintroduces Bill That Significantly Limits Liability and Noneconomic Damages for Trucking Companies
Last year, we reported that the Iowa legislature introduced a bill capping non-economic damages to $1 million in personal injury and wrongful death actions involving commercial motor vehicles. The bill was an effort to counter social inflation and the unreasonably high verdicts occurring across the country, and it would have brought predictability to the level of exposure faced by trucking companies and their insurers. Last year’s bill, however, did not pass a vote in the House.
On January 31, 2023, a subcommittee in the Iowa House of Representatives advanced House Study Bill 114 (“HSB 114”), which introduces three significant changes to civil actions involving commercial motor vehicles in the state.
First, HSB 114 addresses direct negligence claims against trucking companies. If a trucking company stipulates that at the time of the accident the truck driver was acting within the course and scope of his/her employment, then the company may file a motion with the trial court to dismiss any claims of direct negligence against it. This includes claims of negligent hiring, training, supervision, entrustment, or any other claims of direct negligence. Thus, following a stipulation by the trucking company, the trial court “shall dismiss from the civil action any claim of the employer’s direct negligence . . . .” This section, however, would not apply to circumstances involving the operation of a commercial motor vehicle while intoxicated or under the influence of drugs, alcohol, or other substances.
Second, HSB 114 caps “[t]he total amount recoverable by each plaintiff in any civil action involving the operation of a commercial motor vehicle for noneconomic damages for personal injury or death . . .” to $1 million. The damages cap applies regardless of the number of claims sought or defendants named in the case.
Third, HSB 114 provides that claims for punitive or exemplary damages cannot be asserted in any initial claim for relief. They can be brought only after the exchange of initial disclosures and after the plaintiff establishes prima facie proof of a triable issue. To do so, the plaintiff must establish by a “preponderance of clear, convincing, and satisfactory evidence” that sufficient admissible evidence exists that the conduct of the defendant constituted willful and wanton disregard for the rights or safety of another. Upon establishing a prima facie case, the plaintiff may amend the pleadings to include a claim for punitive or exemplary damages.
Should HSB 114 become law, the change would better protect trucking companies and their insurers from unreasonable and disproportionate verdicts in Iowa, and perhaps, provide the blueprint for other states to follow.
As always, we will continue to monitor any legal trends similar to Iowa’s legislation and provide more information as it is develops. Please contact us with any questions.