Arizona’s legislature recently passed a bill that will negate punitive damage claims on products or services that received regulatory approval or otherwise comply with state and/or federal law. If Gov. Jan Brewer signs the bill plaintiffs would be prohibited from obtaining punitive damages with limited exceptions. Plaintiffs could still seek punitive damages when: the injury occurred after regulators ordered a company to remove a product from the market or its terms of approval were substantially altered; the company withheld relevant information from the government during the approval process; or the company bribed a government official. The Arizona bill goes a step further than recently enacted bills in Wisconsin and South Carolina. The AZ bill prohibits punitive damages compared to the other states that put caps on punitive damage claims. Once this new law is enacted it will be a step toward the European system which generally provides that if a product complies with applicable standards, it is presumed not to be defective. The Arizona bill highlights the need for manufacturers and other companies in the stream of commerce to be proactive in compliance with all federal and state statutes and regulations.

For more information, please contact Sean T. Stadelman.