Ark. court affirms $50M verdict for rice farmers
National News
The Arkansas Supreme Court on Thursday affirmed a nearly $50 million verdict for farmers who say they lost money because a company's genetically altered rice seeds contaminated the food supply and drove down crop prices.
Bayer, the German conglomerate whose Bayer CropScience subsidiary produced the seeds, had argued that Arkansas tort laws set a limit on punitive damages and that courts should set aside jury awards that "shock the conscience." In the April 2010 verdict, a Lonoke County jury awarded $42 million in punitive damages and $5.9 million in actual damages.
The company said a lower court erred last year in ruling that a cap on punitive damages is unconstitutional.
But in its 24-page opinion released Thursday, the state Supreme Court agreed with the lower court that the cap on punitive damages was unconstitutional. Associate Justice Courtney Hudson Goodson wrote that the cap "limits the amount of recovery outside the employment relationship," while the Arkansas constitution only allows limits on compensation paid by employers to employees.
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Workers’ Compensation Subrogation of Administrative Fees and Costs
When a worker covered by workers’ compensation makes a claim against a third party, the workers’ compensation insurance retains the right to subrogate against any recovery from that third party for all benefits paid to or on behalf of a claimant injured at work. When subrogating for more than basic medical and indemnity benefits, the Texas workers’ compensation subrogation statute provides that “the net amount recovered by a claimant in a third‑party action shall be used to reimburse the carrier for benefits, including medical benefits that have been paid for the compensable injury.” TX Labor Code § 417.002.
In fact, all 50 states provide for similar subrogation. However, none of them precisely outlines which payments or costs paid by a compensation carrier constitute “compensation” and can be recovered. The result is industry-wide confusion and an ongoing debate and argument with claimants’ attorneys over what can and can’t be included in a carrier’s lien for recovery purposes.
In addition to medical expenses, death benefits, funeral costs and/or indemnity benefits for lost wages and loss of earning capacity resulting from a compensable injury, workers’ compensation insurance carriers also expend considerable dollars for case management costs, medical bill audit fees, rehabilitation benefits, nurse case worker fees, and other similar fees. They also incur other expenses in conjunction with the handling and adjusting of workers’ compensation claims. Workers’ compensation carriers typically assert, of course, that, they are entitled to reimbursement for such expenditures when it recovers its workers’ compensation lien. Injured workers and their attorneys disagree.