1.1                          A bill for an act 
  1.2             relating to civil actions; regulating punitive 
  1.3             damages; amending Minnesota Statutes 1994, section 
  1.4             549.20, subdivisions 3, 4, 5, and by adding 
  1.5             subdivisions. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1994, section 549.20, 
  1.8   subdivision 3, is amended to read: 
  1.9      Subd. 3.  Any award of punitive damages shall be measured 
  1.10  by those factors which justly bear upon the purpose of punitive 
  1.11  damages~~,~~.  In an award of punitive damages, the amount of the 
  1.12  damages must be reasonably related to the amount of the award of 
  1.13  any compensatory damages under subdivision 6, paragraph (c).  In 
  1.14  determining the amount of punitive damages, the trier of facts 
  1.15  shall consider all relevant evidence, including the seriousness 
  1.16  of hazard to the public arising from the defendant's misconduct, 
  1.17  the profitability of the misconduct to the defendant, the 
  1.18  duration of the misconduct and any concealment of it, the degree 
  1.19  of the defendant's awareness of the hazard and of its 
  1.20  excessiveness, the attitude and conduct of the defendant upon 
  1.21  discovery of the misconduct, the number and level of employees 
  1.22  involved in causing or concealing the misconduct, the financial 
  1.23  condition of the defendant, and the total effect of other 
  1.24  punishment likely to be imposed upon the defendant as a result 
  1.25  of the misconduct, including compensatory and punitive damage 
  2.1   awards to the plaintiff and other similarly situated persons, 
  2.2   and the severity of any criminal penalty or civil fines to which 
  2.3   the defendant may be subject. 
  2.4      Sec. 2.  Minnesota Statutes 1994, section 549.20, 
  2.5   subdivision 4, is amended to read: 
  2.6      Subd. 4.  [SEPARATE PROCEEDING IN A CIVIL ACTION.] In a 
  2.7   civil action in which punitive damages are sought, the trier of 
  2.8   fact shall, if requested by any of the parties, first determine 
  2.9   whether compensatory damages are to be awarded.  Evidence of the 
  2.10  financial condition of the defendant and other evidence relevant 
  2.11  only to punitive damages is not admissible in that proceeding.  
  2.12  After a determination has been made, the trier of fact shall, in 
  2.13  a separate proceeding, determine whether and in what amount 
  2.14  punitive damages will be awarded consistent with subdivision 6. 
  2.15     Sec. 3.  Minnesota Statutes 1994, section 549.20, 
  2.16  subdivision 5, is amended to read: 
  2.17     Subd. 5.  [JUDICIAL REVIEW.] The court shall specifically 
  2.18  review the punitive damages award in light of the factors set 
  2.19  forth in ~~subdivision~~ subdivisions 3 and 6 and shall make 
  2.20  specific findings with respect to them.  The appellate court, if 
  2.21  any, also shall review the award in light of the factors set 
  2.22  forth in that subdivision.  Nothing in this section may be 
  2.23  construed to restrict either court's authority to limit punitive 
  2.24  damages. 
  2.25     Sec. 4.  Minnesota Statutes 1994, section 549.20, is 
  2.26  amended by adding a subdivision to read: 
  2.27     Subd. 6.  [LIMITATION ON PUNITIVE DAMAGES.] (a) In general, 
  2.28  punitive damages otherwise permitted by applicable law shall not 
  2.29  be awarded against the manufacturer or seller of a product, 
  2.30  drug, or device that caused the harm claimed by the plaintiff if:
  2.31     (1) the product, drug, or device was subject to approval 
  2.32  under United States Code, title 21, section 355, or premarket 
  2.33  approval under United States Code, title 21, section 360e, by 
  2.34  the Food and Drug Administration with respect to the safety of 
  2.35  formulation or performance of the aspect of the product, drug, 
  2.36  or device that caused the harm; or by the adequacy of the 
  3.1   packaging or labeling of the product, drug, or device; and 
  3.2      (2) the product, drug, or device was approved by the Food 
  3.3   and Drug Administration, or the product, drug, or device is 
  3.4   generally recognized as safe and effective according to 
  3.5   conditions established by the Food and Drug Administration and 
  3.6   applicable regulations, including packaging and labeling 
  3.7   regulations.  
  3.8      (b) Paragraph (a) does not apply in a case in which the 
  3.9   court determines, on the basis of clear and convincing evidence, 
  3.10  that the defendant:  
  3.11     (1) withheld from or misrepresented to the Food and Drug 
  3.12  Administration information concerning the product, drug, or 
  3.13  device that is required to be submitted under the federal Food, 
  3.14  Drug and Cosmetic Act that is material and relevant to the harm 
  3.15  suffered by the claimant; or 
  3.16     (2) made an illegal payment to an official of the Food and 
  3.17  Drug Administration for the purpose of securing approval of the 
  3.18  product, drug or device.  
  3.19     (c) Awards of punitive damages must be reasonably related 
  3.20  to the amount of compensatory damages awarded to any one party 
  3.21  or parties.  The determination will be based on the factors 
  3.22  contained in subdivision 3 and in a separate proceeding as set 
  3.23  out in subdivision 4.  
  3.24     Sec. 5.  Minnesota Statutes 1994, section 549.20, is 
  3.25  amended by adding a subdivision to read: 
  3.26     Subd. 7.  [USE OF PUNITIVE DAMAGE AWARDS.] Consistent with 
  3.27  the purpose of punitive damages and to assist in providing 
  3.28  health care to the citizens of Minnesota, all punitive damage 
  3.29  awards shall be given to the commissioner of finance and placed 
  3.30  into an account designated solely for the purpose of providing 
  3.31  health care to citizens who do not have access to this care.  
  3.32  The legislature shall by appropriation from this account carry 
  3.33  out the intent of this subdivision.