Civil Actions - Punitive Damage Awards - Surcharge
HB 906 would change Maryland law governing punitive damages in civil actions. It provides that punitive damages may be awarded in a negligence case only if the plaintiff proves by clear and convincing evidence that the defendant acted with gross negligence, and it defines gross negligence in detail as conduct showing a serious disregard for the rights or safety of others. The bill also directs the State Court Administrator to impose a surcharge equal to 50% of any punitive damages award, payable by the defendant to the State, while prohibiting juries from being told about the surcharge.
The surcharge would be assessed after all proceedings in the civil case are complete and deposited into the Blueprint for Maryland’s Future Fund, which supports education funding. The bill also amends the Education Article to include this new revenue source in the Fund’s list of receipts. It states that the surcharge is separate from the punitive damages owed to the plaintiff and may not reduce the plaintiff’s award.
The bill’s stated purpose is to abrogate the Maryland Court of Appeals decision in Owens-Illinois, Inc. v. Zenobia, which established existing punitive damages criteria. It applies only prospectively, meaning it would not affect punitive damages actions filed before the bill’s effective date of October 1, 2026. In practical terms, the bill would tighten the standard for punitive damages and create a new state revenue stream tied to such awards.
Because there are no committee transcripts or recorded votes provided, the available context does not show detailed public debate or formal support/opposition. The bill’s structure suggests likely interest from both tort reform and education funding perspectives: supporters may view it as limiting punitive damages to truly egregious conduct while directing additional revenue to schools, while critics may object to the surcharge as an added burden on defendants or to the policy choice of tying education funding to litigation recoveries.
HB 906 would add a new section to the Courts and Judicial Proceedings Article governing punitive damages in negligence cases, raising the evidentiary threshold to clear and convincing proof of gross negligence and authorizing a 50% surcharge on punitive damages awards. It would also amend the Education Article so surcharge revenue is deposited into the Blueprint for Maryland’s Future Fund, affecting both civil litigation practice and education finance. The bill would prospectively override the punitive damages standard from Owens-Illinois, Inc. v. Zenobia for future cases only.
No committee testimony or vote record is provided, so there is no documented floor or committee sentiment in the materials. Based on the bill text, the measure appears to blend two policy goals that may attract mixed reactions: limiting punitive damages to more serious misconduct and generating revenue for the Blueprint for Maryland’s Future Fund. That combination suggests potential support from education funding advocates and tort reform proponents, alongside likely concern from plaintiffs’ lawyers and civil defense interests about the surcharge and the altered punitive damages standard.
The main points of contention are likely the higher punitive damages threshold, the definition of gross negligence, and the new 50% surcharge on punitive damages awards. Plaintiffs’ advocates may argue the bill makes punitive damages harder to obtain and adds complexity, while defendants may object to the surcharge as an additional financial penalty beyond the award itself. Another possible point of debate is the bill’s express intent to abrogate Owens-Illinois, Inc. v. Zenobia, which changes existing case law and could be viewed as a significant shift in Maryland tort law. The use of punitive damages revenue for education funding may also draw criticism from those who prefer a more direct or stable funding source.