Moving Target: Target Statutory Cap on Punitive Damages No Longer Required To Be Plead As An Affirmative Defense

Written by: Lindsay A. Nishan, Esq. and Lauren Spears Gresh, Esq. 

As attorneys and adjusters participating in litigation in the State may recall, South Carolina Court of Appeals decision Garrison v. Target Corporation sent many defense counsel scrambling to amend their answers in April of 2020 after the Court held that the benefit of the punitive damage cap set forth in South Carolina Code Ann. § 15-32-530 is waived if not asserted as an affirmative defense in defendant’s responsive pleadings. 429 S.C. 324, 838 S.E.2d 18 (Ct. App. 2020).

For reference, the statute provides that unless the wrongful conduct alleged was motivated primarily by unreasonable financial gain or the defendant’s actions can subject the defendant to conviction of a felony, punitive damages “may not exceed the greater of three times the amount of compensatory damages awarded to each claimant entitled thereto or the sum of $500,000.” South Carolina Code Ann. § 15-32-530. Target had failed to raise § 15-32-530 as an affirmative defense in its responsive pleadings and was held by the Court of Appeals to have therefore waived the application of the punitive damages cap set forth in the statute.

However, this decision has been reversed by the South Carolina Supreme Court as it applies to the affirmative defense requirement and now the statutory cap on punitive damages no longer needs to be plead as an affirmative defense to avoid waiving its applicability.

The Court held on review that the statute was constructed to require the trial court to apply the cap “where a jury has rendered a verdict for punitive damages exceeding the amount outlined in subsection (A), and in such cases, the trial court is required to conduct the inquiry set forth in subsections (B) and (C), as applicable.” Garrison v. Target Corp., 2022 WL 222553 (2022).

Best interpreted, the statute has no discretionary language permitting the trial court to require the punitive damages cap to be plead as an affirmative defense. Rather, the cap is required to be applied by the trial court as the court finds applicable under the subsections, which, in reality, provides that the cap will always be allowed unless the trial court determines that a situation in subsection (C) applies.[1]

While this holding provides a respite to defendants who may seek to apply the cap on punitive damages if necessary, it may be best practice to continue asserting the cap in responsive pleadings as a matter of course in all cases in which punitive damages are pled.

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[1] (C) However, when the trial court determines one of the following apply, there shall be no cap on punitive damages:

(1) at the time of injury the defendant had no intent to harm and determines that the defendant’s conduct did in fact harm the claimant; or

(2) the defendant has pled guilty to or been convicted of a felony arising out of the same act or course of conduct complained of by the plaintiff and that act or course of conduct is a proximate cause of the plaintiff’s damages; or

(3) the defendant acted or failed to act while under the influence of alcohol, drugs, other than lawfully prescribed drugs administered in accordance with a prescription, or any intentionally consumed clue, aerosol, or other toxic vapor to the degree that the defendant’s judgment is substantially impaired.

South Carolina Code Ann. § 15-32-530