LB57 LB57
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LEGISLATURE OF NEBRASKA
ONE HUNDRED EIGHTH LEGISLATURE
FIRST SPECIAL SESSION
LEGISLATIVE BILL 57
Introduced by Wayne, 13.
Read first time July 29, 2024
Committee: Judiciary
1 A BILL FOR AN ACT relating to civil actions; to amend sections 13-910,
2 59-1608.03, and 59-1614, Reissue Revised Statutes of Nebraska,
3 section 81-8,219, Revised Statutes Cumulative Supplement, 2022;
4 section 59-1608.04, Reissue Revised Statutes of Nebraska, as amended
5 by Laws 2024, LB1413, section 41; and section 87-303.11, Reissue
6 Revised Statutes of Nebraska, as amended by Laws 2024, LB934,
7 section 6; to state findings; to define terms; to authorize punitive
8 damages as prescribed; to require punitive damages to be
9 appropriated for the use of the common schools; to allow certain
10 tort claims involving death, child abuse, or sexual assault of a
11 child under the Political Subdivisions Tort Claims Act and the State
12 Tort Claims Act; to change provisions of the Consumer Protection Act
13 and Uniform Deceptive Trade Practices Act relating to civil
14 penalties; to provide operative dates; to harmonize provisions; and
15 to repeal the original sections.
16 Be it enacted by the people of the State of Nebraska,
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1 Section 1. The Legislature finds and declares that:
2 (1) Article VII, section 5, of the Constitution of Nebraska provides
3 in part that all fines, penalties, and license money arising under the
4 general laws of the state shall belong and be paid over to the counties
5 respectively where the same may be levied or imposed;
6 (2) Article VII, section 5, of the Constitution further provides
7 that all such fines, penalties, and license money shall be appropriated
8 exclusively to the use and support of the common schools in the
9 respective subdivisions where the same may accrue;
10 (3) Punitive damages are in the nature of fines or penalties;
11 (4) Punitive damages are awarded both to punish the defendant and to
12 deter the defendant and others from similar conduct. Punitive damages are
13 appropriate in many situations where compensatory damages would be
14 inadequate because the defendant acted in a truly egregious fashion; and
15 (5) Additional funds available for the public schools could be used
16 to provide property tax relief.
17 Sec. 2. For the purposes of sections 1 to 7 of this act:
18 (1) Compensatory damages means damages intended to make whole the
19 loss of an injured party and no more. The term includes general and
20 special damages and does not include nominal, exemplary, or punitive
21 damages;
22 (2) Gross negligence means the absence of even slight care in the
23 performance of a duty involving an unreasonable risk of harm;
24 (3) Malice means hatred, spite, or ill-will or the doing of a
25 wrongful act intentionally without just cause or excuse;
26 (4) Nominal damages means damages that are not designed to
27 compensate an injured party and are less than one thousand dollars;
28 (5) Punitive damages means damages that a party in a civil action is
29 ordered to pay (a) based on aggravating circumstances, (b) to penalize
30 such party, or (c) to provide additional deterrence and discourage
31 similar conduct in the future. The term does not include compensatory
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1 damages or nominal damages; and
2 (6)(a) Reckless disregard means the person acted with reckless
3 disregard of the rights, health, or safety of others and the person was
4 either aware, or did not care, that there was a substantial and
5 unnecessary risk that such person's conduct would cause serious harm to
6 others.
7 (b) In order for the conduct to be with reckless disregard of
8 another's rights, health, or safety, it must have been unreasonable under
9 the circumstances and there must have been a high probability that the
10 conduct would cause serious harm to others.
11 Sec. 3. (1) Subject to this section, in an action for the breach of
12 an obligation not arising from contract, other than an insurance
13 contract, the trier of fact may, in addition to compensatory damages,
14 award punitive damages for the sake of example and by way of punishing
15 the defendant.
16 (2) In determining the amount, if any, of punitive damages to award,
17 the trier of fact shall consider the following factors:
18 (a) The seriousness of the hazard to the public arising from the
19 defendant's misconduct;
20 (b) The profitability of the misconduct to the defendant;
21 (c) The duration of the misconduct and any concealment of it;
22 (d) The degree of the defendant's awareness of the hazard and of its
23 excessiveness;
24 (e) The target of the conduct was financially vulnerable;
25 (f) The attitude and conduct of the defendant upon discovery of the
26 misconduct or hazard;
27 (g) The conduct involved repeated actions or was an isolated
28 incident;
29 (h) In the case of a defendant that is a corporation or other
30 entity, the number and level of employees involved in causing or
31 concealing the misconduct; and
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1 (i) The financial condition of the defendant.
2 (3)(a) Category I. The trier of fact may award punitive damages
3 subject to the limit in subdivision (3)(b) of this section if the trier
4 of fact finds by clear and convincing evidence:
5 (i) That the defendant acted with gross negligence, fraud, or
6 reckless disregard; or
7 (ii) If the defendant is an insurer, that the defendant recklessly
8 disregarded its duty to deal fairly and act in good faith with its
9 insured.
10 (b) An award of punitive damages under this subsection shall not
11 exceed the greater of:
12 (i) One million dollars; or
13 (ii) The amount of any compensatory damages awarded.
14 (4)(a) Category II. The trier of fact may award punitive damages
15 subject to the limit in subdivision (4)(b) of this section if the trier
16 of fact finds by clear and convincing evidence:
17 (i) That the defendant acted intentionally and with malice toward
18 others; or
19 (ii) If the defendant is an insurer, that the defendant
20 intentionally and with malice breached its duty to deal fairly and act in
21 good faith with its insured.
22 (b) An award of punitive damages under this subsection shall not
23 exceed the greater of:
24 (i) Five million dollars;
25 (ii) Three times the amount of any compensatory damages awarded; or
26 (iii) The increased financial benefit derived by the defendant as a
27 direct result of the conduct causing the injury to the plaintiff and
28 other persons or entities.
29 (c) The trial court shall reduce any award for punitive damages
30 awarded pursuant to subdivision (4)(b)(iii) of this section by the amount
31 the court finds the defendant has previously paid as a result of all
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1 punitive damage verdicts entered in any court of this state for the same
2 conduct by the defendant.
3 (5) Category III. The trier of fact may award punitive damages
4 without regard to any limit set forth in this section if:
5 (a) The trier of fact finds by clear and convincing evidence:
6 (i) That the defendant acted with gross negligence, fraud, or
7 reckless disregard; or
8 (ii) If the defendant is an insurer, that the defendant recklessly
9 disregarded its duty to deal fairly and act in good faith with its
10 insured; and
11 (b) The trial court finds, on the record and out of the presence of
12 the jury, that there is evidence beyond a reasonable doubt that the
13 defendant acted intentionally and with malice and engaged in conduct
14 threatening to human life.
15 (6) Except as provided in section 5 of this act, the determination
16 of what amount, if any, of punitive damages to award shall be made by the
17 trier of fact in a separate proceeding that is conducted after the trier
18 of fact has made findings regarding any compensatory damages.
19 Sec. 4. (1) An award of punitive damages must be specifically
20 prayed for in the pleading.
21 (2) The party requesting punitive damages shall cause a copy of such
22 pleading to be served upon the Attorney General and the county attorney.
23 The county attorney shall notify the school board for any school district
24 that may receive punitive damages if any are awarded.
25 (3) Upon an award of punitive damages, the court shall notify the
26 county attorney. The county attorney or local school board may become a
27 party to the action solely to protect and enforce the interests of the
28 common schools in any award of punitive damages.
29 Sec. 5. Whether to award punitive damages, and the amount of such
30 damages, shall be determined by the trier of fact unless waived by all
31 parties.
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1 Sec. 6. Any award of punitive damages shall be remitted to the
2 State Treasurer for distribution in accordance with Article VII, section
3 5, of the Constitution of Nebraska.
4 Sec. 7. (1) Sections 1 to 7 of this act are cumulative with and
5 supplemental to any other laws of this state that authorize punitive
6 damages.
7 (2) Nothing in sections 1 to 7 of this act shall prevent a court
8 from ordering restitution or ordering payment of attorney's fees.
9 Sec. 8. Section 13-910, Reissue Revised Statutes of Nebraska, is
10 amended to read:
11 13-910 The Political Subdivisions Tort Claims Act and sections
12 16-727, 16-728, 23-175, 39-809, and 79-610 shall not apply to:
13 (1) Any claim based upon an act or omission of an employee of a
14 political subdivision, exercising due care, in the execution of a
15 statute, ordinance, or officially adopted resolution, rule, or
16 regulation, whether or not such statute, ordinance, resolution, rule, or
17 regulation is valid;
18 (2) Any claim based upon the exercise or performance of or the
19 failure to exercise or perform a discretionary function or duty on the
20 part of the political subdivision or an employee of the political
21 subdivision, whether or not the discretion is abused;
22 (3) Any claim based upon the failure to make an inspection or making
23 an inadequate or negligent inspection of any property other than property
24 owned by or leased to such political subdivision to determine whether the
25 property complies with or violates any statute, ordinance, rule, or
26 regulation or contains a hazard to public health or safety unless the
27 political subdivision had reasonable notice of such hazard or the failure
28 to inspect or inadequate or negligent inspection constitutes a reckless
29 disregard for public health or safety;
30 (4) Any claim based upon the issuance, denial, suspension, or
31 revocation of or failure or refusal to issue, deny, suspend, or revoke
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1 any permit, license, certificate, or order. Nothing in this subdivision
2 shall be construed to limit a political subdivision's liability for any
3 claim based upon the negligent execution by an employee of the political
4 subdivision in the issuance of a certificate of title under the Motor
5 Vehicle Certificate of Title Act and the State Boat Act except when such
6 title is issued upon an application filed electronically by an approved
7 licensed dealer participating in the electronic dealer services system
8 pursuant to section 60-1507;
9 (5) Any claim arising with respect to the assessment or collection
10 of any tax or fee or the detention of any goods or merchandise by any law
11 enforcement officer;
12 (6) Any claim caused by the imposition or establishment of a
13 quarantine by the state or a political subdivision, whether such
14 quarantine relates to persons or property;
15 (7) Any claim arising out of the following acts: Assault assault,
16 battery, false arrest, false imprisonment, malicious prosecution, abuse
17 of process, libel, slander, misrepresentation, deceit, or interference
18 with contract rights. This , except that this subdivision does not apply
19 to a claim: under
20 (a) Under the Healthy Pregnancies for Incarcerated Women Act;
21 (b) When the harm caused by child abuse or sexual assault of a child
22 is a proximate result of the failure of a political subdivision or an
23 employee of the political subdivision to exercise reasonable care to
24 either:
25 (i) Control a person over whom the political subdivision has taken
26 charge; or
27 (ii) Protect a person who is in the political subdivision's care,
28 custody, or control from harm caused by a nonemployee actor; or
29 (c) Involving a death when the death is a proximate result of the
30 failure of a political subdivision or an employee of the political
31 subdivision to exercise reasonable care to either:
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1 (i) Control a person over whom the political subdivision has taken
2 charge; or
3 (ii) Protect a person who is in the political subdivision's care,
4 custody, or control from harm caused by a nonemployee actor;
5 (8) Any claim by an employee of the political subdivision which is
6 covered by the Nebraska Workers' Compensation Act;
7 (9) Any claim arising out of the malfunction, destruction, or
8 unauthorized removal of any traffic or road sign, signal, or warning
9 device unless it is not corrected by the political subdivision
10 responsible within a reasonable time after actual or constructive notice
11 of such malfunction, destruction, or removal. Nothing in this subdivision
12 shall give rise to liability arising from an act or omission of any
13 political subdivision in placing or removing any traffic or road signs,
14 signals, or warning devices when such placement or removal is the result
15 of a discretionary act of the political subdivision;
16 (10) Any claim arising out of snow or ice conditions or other
17 temporary conditions caused by nature on any highway as defined in
18 section 60-624, bridge, public thoroughfare, or other public place due to
19 weather conditions. Nothing in this subdivision shall be construed to
20 limit a political subdivision's liability for any claim arising out of
21 the operation of a motor vehicle by an employee of the political
22 subdivision while acting within the course and scope of his or her
23 employment by the political subdivision;
24 (11) Any claim arising out of the plan or design for the
25 construction of or an improvement to any highway as defined in such
26 section or bridge, either in original construction or any improvement
27 thereto, if the plan or design is approved in advance of the construction
28 or improvement by the governing body of the political subdivision or some
29 other body or employee exercising discretionary authority to give such
30 approval;
31 (12) Any claim arising out of the alleged insufficiency or want of