Iowa commercial vehicle lawsuit cap heading to governor’s desk

DES MOINES — Senate Republicans have passed a bill to cap non-economic damages in commercial vehicle lawsuits, sending it to Gov. Kim Reynolds’ desk for a signature.

The Senate gave final passage Monday to Senate File 228, a bill that would cap non-economic damages at $5 million in lawsuits involving commercial vehicles and provide limited liabilities for employers in those lawsuits.

The bill passed 31-19. Three Republicans joined all Democrats in voting no.

Supporters of the bill have said it would prevent “nuclear verdicts” — which have been seen in other states — that deliver tens or hundreds of millions of dollars in lawsuits against trucking companies. They also argued the limits would bring down insurance coverage rates in the state and bring more certainty to a vital industry.

The bill was supported by business groups, trucking companies and many other businesses. It was opposed by trial lawyers and justice groups.

"The goal of this amendment is protecting Iowans who are injured while lowering and protecting predictability and stability for our critical components of our supply chain," said Sen. Mike Bousselot of Ankeny, the bill's floor manager.

The Senate passed a version with a $2 million cap and broader liability protections in February, but the House amended the bill to increase the cap to $5 million. Bousselot said the bill is "far short of the policy that would be ideal," but that it represents an agreement between the Iowa trucking industry and trial lawyers.

Democrats have said the bill will take away Iowans' rights to a trial by jury to decide fair compensation in situations of serious injury or death caused by a commercial vehicle.

While he voted against the bill, Sen. Nate Boulton, D-Des Moines, said the amended version represented a significant compromise and took out some of the most objectionable pieces of the original bill.

"The work done by so many in this chamber and in the House to continue working on this legislation and prevent the harshest of outcomes from becoming real in that original legislation is truly appreciated," he said.

Damages cap

The bill would cap damages from death, injury and other non-economic sources in lawsuits involving commercial vehicle drivers and companies at $5 million. Economic damages would not be capped, and all punitive damages would go to the plaintiff.

The cap would not apply if the driver of a commercial vehicle was doing one of the following at the time of the incident:

•Operating with an alcohol concentration of 0.04 or more

•Operating under the influence of a drug

•Refusing to submit to alcohol testing

•Committing a felony involving the use of the vehicle

•Using the vehicle to illegally manufacture or distribute a controlled substance

•Driving without a commercial driver’s license or while the license is suspended or revoked

•Reckless driving

•Using an electronic device while driving

•Speeding more than 15 mph above the speed limit

Commercial vehicle definition

The list of trucks covered by the bill includes those weighing more than 26,000 pounds, vehicles transporting hazardous materials, some livestock transportation vehicles and road tractors. It does not include vehicles designed for 16 or more passengers, including buses, or delivery or pickup trucks used for commercial purposes.

The Senate bill originally had a much broader definition of commercial vehicle, which included buses, delivery trucks and company-owned pickup trucks

Employer liabilities

The bill would shield commercial vehicle employers from liability stemming from direct negligence in hiring an employee who causes a crash, but employers still could be sued for direct negligence in supervising, training or trusting an employee.

"When a company knows the operator of a commercial motor vehicle should no longer be behind the wheel, they now will have a higher duty of care because it will be liable for higher damages that those decisions cause," Boulton said. "That's better for safety on our roads. It's better for Iowans."