Punitive Damages

Question 1

Generally

Answer 1

PUNITIVE: $ awarded punish or deter wrongdoer for outrageous conduct [D focused]
○ Legal ($) remedy = entitled jury trial
○ Discretionary = no right to punitive

TREBLE Damages: 3 (or 2) times compensatory are awarded upon proving violation of law
○ Usually automatic by statute [Might require a showing of malice/gross neg]

Generally awarded in Torts & NOT in Contracts

Question 2

Qualifying for Punitive Damages

Answer 2

1. Parasitic: Must get compensatory [or nominal] damages to get punitive damages
2. Claim: Tort; Not K [unless also independent tort]
3. Mens Rea: D Malice [intentional] or Conscious Disregard [reckless] NOT mere negligence
4. Liability/Vicarious Liability
   ○ 2 Tests of Vicarious Liability for Punitive Damages
   ■ 1. Scope of Employment
   ■ 2. Complicity Rule (Rst Torts)
   - Principal authorized act
   - Recklessly employed unfit employee
   - Manager acts in scope of employment
   - Ratified or approved act

Question 3

When are Punitive Damages NOT Available

Answer 3

D is a municipality or union
Tort reform (29 states)
Statutory Exclusions (ex: not allowed under ADA)

Question 4

Measuring Punitive Damages

Answer 4

Jury determines initial amount
● Judicial Review for EXCESSIVENESS [shock the conscious? Rational basis?]
● State law factors to decide
● If excessive, remittitur [knock award down, tell P they can accept less or judge will order a new trial]

*EXCESSIVE Review Factors:
● Reprehensibility of D’s conduct
● Ratio: compensatory to punitive → Usually it is a 1:3 ratio
○ Does compensatory award already have a punitive factor? Like loss of consortium, etc.
● Wealth of D (courts usually don’t look at this, as long as the punitive amount is greater than the amount the D would have spent to avoid that action, that is enough to have a punitive effect)
● Other criminal or civil sanctions;
● D’s Profits from illegality
● Other Plaintiffs, more punitives likely on the way

Question 5

Punitive Damages and Due Process

Answer 5

Due Process Problem → 14th A: state cannot arbitrarily deprive of property or liberty interest
○ Arbitrary Procedure: Procedural Due Process
■ Fair notice of potential penalty to D + Standards to guide discretion (factors)
○ Arbitrary Result: Substantive Due Process
■ Severity, quantity of award is too big = arbitrary

The 3 GUIDEPOSTS
● Punitive Damages must be reasonably necessary to vindicate the states legit interest in punishment/deterrence, otherwise the award would violate due process.

3 Guideposts to determine if violated DP:
○ Reprehensibility (bad faith or reckless disregard)
○ Ratio
○ Other sanctions for similar actions

Question 6

Ratio of Compensatory Damages to Punitive Damages

Answer 6

Campbell suggests that 4x should be limit of constitutional impropriety
○ Large compensatory award can justify a lower ratio
○ Higher ratio, smaller compensation (e.g., for bed bugs; large punitives upheld)