By Lee J. Morehead, Esq.
The Colorado Court of Appeals in Ross v. Public Service articulated a significant expansion of liability for corporations in wrongful‐death cases. The plaintiffs (the heirs of Carol Ross) sued the utility company Xcel Energy after a drilling incident ruptured a natural‐gas pipeline, resulting in an explosion that killed Ms. Ross and destroyed her home.
At trial, the jury awarded $15 million in noneconomic damages. The district court applied the statutory wrongful-death cap of roughly $436,070 (for that period) because it concluded the so‐called “felonious killing exception” did not apply to corporations. On appeal, the Court of Appeals held: (1) that the “felonious killing exception” to the noneconomic‐damages cap does apply to corporations, not just individuals; and (2) that the trial court improperly applied the damages cap by first allocating fault to Xcel Energy before applying the cap.
This decision carries significant implications for Colorado businesses. Companies previously may have assumed that liability under the felonious killing exception was limited to individuals. With this expansion, corporations face potential uncapped noneconomic damages in wrongful-death cases when the facts support a felonious killing. This raises risk profiles for companies, particularly in industries with high‐hazard operations (utilities, pipelines, construction, etc.).
Further, plaintiffs in wrongful-death suits will be more inclined to attempt to invoke the felonious killing exception when a corporation is involved. The decision provides additional leverage in settlement discussions and may change how corporate defendants approach risk management and litigation strategies. The uncertainty of what constitutes corporate “felonious killing” will spawn further litigation and fact‐intensive inquiry.
With the noneconomic cap revision, corporations will need to review their insurance coverages to assure adequacy in mitigating risks presented by this liability expansion. Corporate boards and risk officers will need to reassess operational safety protocols, drilling/excavation oversight, pipeline monitoring, and compliance to avoid triggering liability exposure. Federal and state regulators may also increase the degree of oversight and management over those industries that they regulate.
Now, more than ever, is the time for companies to review operational safety protocols with risk managers and update existing regulatory compliance programs. Contracts should be reviewed with the company’s general counsel or legal representatives to ensure protection, should a subcontractor or vendor cause a death. Companies should speak with their insurance brokers to reevaluate limits, exclusions, and excess coverages that may be required to ensure their liability under this cap expansion is addressed.
