South Carolina juries would be limited to awarding $350,000 in punitive damages to winners of civil lawsuits under a bill approved by the S.C. House on Wednesday.
The proposed cap will make the state more appealing to businesses, argued House lawmakers, even though punitive damages are rare in the state.
House Speaker Bobby Harrell, R-Charleston, and other bill supporters said juries should not be allowed to grant cash awards in the millions of dollars to victims after they have already won compensatory judgments, which typically are based on actual loss of income and property or personal injury.
Punitive damages are additional financial penalties granted in cases in which a jury determines a defendant has behaved recklessly. Opponents of the cap say those judgments serve as the ultimate deterrent for bad behavior and are an important consumer protection.
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But House lawmakers sided overwhelmingly - in a 104-9 vote - with those who view punitive damages as bad for business.
"Today, by passing our comprehensive Business Tort Reform Bill, the House took another major leap forward in making South Carolina a great place to do business," Harrell said. "Maintaining our low-tax and pro-business climate is key to our state's economic recovery."
House lawmakers debated the bill for hours Wednesday, with several amendments to raise the cap failing.
Some Democrats challenged the claim businesses would refuse to locate in South Carolina out fear of lawsuits.
Others asked whether any dollar amount is enough compensation for someone who has been maimed or a child who has been killed. Citing runaway Toyotas and incompetent doctors as reasons punitive damages are needed, opponents of the bill say punitive judgments send a message to corporations about protecting consumers.
"Let me tell you what this is truly about; it's corporate greed," said Rep. Chris Hart, D-Richland, who talked about how one insurance company made $58.1 billion in profits last year.
Hart said the bill is about protecting those businesses over the interests of future victims.
Hart, an attorney, also pointed out punitive damages are rare in South Carolina. The state's three largest counties - Charleston, Greenville and Richland - had 136 personal injury verdicts in 2007 and 2008. Punitive damages were awarded in seven, or 5 percent, of those cases.
But Hart and other opponents were a distinct minority in the House, where a lack of a punitive award cap was viewed as a stumbling block to attracting business.
Harrell and House Judiciary chairman James Harrison both made the point that neighboring Georgia and North Carolina have both capped punitive damage awards.
Harrell said the bill, if it becomes law, would put South Carolina on equal footing.
"Unlike a business in a neighboring state, a business in our state is too often one lawsuit away from being put out of business," he said.
The bill needs one more House vote before moving to the Senate.