Iowa Legislature Proposes Caps on Commercial Motor Vehicle Liability, Damages
Kansas City, Mo. (March 9, 2023) - The Iowa House and Senate have recently proposed companion bills that would limit employer liability in civil actions involving commercial motor vehicles. The proposed bills would place a $2 million damages cap on noneconomic damages for each plaintiff in any personal injury or wrongful death action against the owner or operator of a commercial motor vehicle, regardless of the number of claims, theories of recovery, or defendants in the civil action. The damages cap would be adjusted for inflation starting January 1, 2026, and every even-numbered year thereafter. The damages cap would not apply if the operator of the commercial motor vehicle was convicted of operating under the influence of alcohol or drugs in violations of Iowa Code § 321J.2 or found to be in violation of the Federal Motor Carrier Safety Regulations regarding the use of drugs (49 C.F.R § 392.4) or alcohol (49 C.F.R. § 392.5).
The pending bills would also allow defendant employers to be liable on the theory of respondeat superior for any and all damages if the employer is willing to stipulate that the driver is alleged to have caused the accident and was the employer’s employee, acting in the course and scope of employment, on the date and time of the accident. If the employer makes this stipulation, the employer may file a motion to dismiss any claims of the employer’s direct negligence in hiring, training, supervising, or trusting the employee, or other claims of direct negligence on the part of the employer for the employee’s harmful conduct or other similar claims.
Finally, the proposed legislation would require that any claim for punitive or exemplary damages be filed after the exchange of initial disclosures pursuant to the Iowa Rules of Civil Procedure and after the plaintiff establishes prima facie proof of a triable issue.
Potential Impact on Transportation Industry
If passed, this would be a positive development for the transportation industry and would help deter nuclear verdicts that award tens of millions of dollars in injury and wrongful death lawsuits against trucking companies.
Under the current law, an employer is generally liable for an employee’s negligence and may be held responsible for direct negligence relating to hiring, training, supervising, or trusting an employee, or other claims of direct negligence on the part of the employee’s harmful conduct. The bills provide that the liability of an employer for an accident involving a commercial motor vehicle shall be based on respondeat superior if the employer makes certain stipulations. This approach streamlines litigation and avoids the need for discovery regarding an employer’s training and safety programs.
Under the current law and under these bills, the mere assertion of a claim for punitive damages cannot form the basis for discovery of the wealth or ability of a defendant to pay damages on behalf of the party from whom punitive damages are claimed. The claimant must first show that sufficient admissible evidence exists to support a prima facie case, establishing by a preponderance of clear, convincing, and satisfactory evidence, that the conduct of the defendant from which the claim arose constituted willful and wanton disregard for the rights or safety of another.
For more information on these proposed laws, contact the author of this alert. Visit our Transportation Practice page for additional alerts in this area.
Alexander DeMasi, Associate