Not So Fast On Punitive Damages Award

The threat of punitive damages can be a “game changer” in a civil action. Subjective in nature, punitive damages are  akin to aiming a bazooka at a fly, with collateral damage inflicted on any defendant in harm’s way. In other words, a claim of punitive damages can transform an otherwise modest claim for compensatory damages into a high stakes, risky litigation.

The United States Supreme Court has spoken three times in the last fifteen years on the subject of punitive damages. Each time the Supreme Court has reduced jury awards for punitive damages and articulated general standards to judge their reasonableness.

Most recently, the Second Circuit Court of Appeals, the court hearing appeals from federal courts in New York, Connecticut and Vermont, weighed in on whether a punitive damages award that was five times larger than its companion compensatory award was excessive and should be reduced. In Payne v. Jones and City of Utica, a decorated Viet Nam veteran was transported to a local emergency room for treatment of a minor injury. Plaintiff was apparently suffering from Post Traumatic Stress Disorder and arrived “combative and disoriented.” The police responded to the hospital and the defendant officer, Brandon Jones, slapped plaintiff in the head while plaintiff was being examined by the paramedics. Consistent with the local protocol for dealing with mentally ill patients, plaintiff was handcuffed and transported to another hospital for further care.

At the second hospital, the defendant police officer noticed plaintiff’s Marine Corps tattoo and quipped, “Marines are pussies.” In response, plaintiff kicked the police officer in the groin area. Not a wise move particularly for a handcuffed prisoner: the police officer responded by punching the plaintiff in the face and neck 7-10 times and kneeing him in the back. The officer’s retaliation only stopped when a nursed intervened.

Plaintiff filed suit against both the police officer and his employer, the City of Utica, alleging that the officer used excessive force. At trial, the jury found in favor of plaintiff and awarded $60,000 in compensatory and $300,000 in punitive damages. On appeal, defendants challenged the punitive damages award as excessive.

In an opinion that should provide some comfort for defendants, the Second Circuit found the punitive damages award to be excessive and ordered it reduced to $100,000 or the case retried. Stressing that punitive damages are “by nature speculative, arbitrary approximations,” the Second Circuit ruled that the award for punitive damages failed each of the “guideposts” that must be cleared before a punitive damages award may stand.

The Payne decision is welcomed news for private companies and municipalities. Prevailing plaintiffs are certainly entitled to fair and reasonable compensation but, in these difficult economic times, punitive damages can strangle both local companies and governmental entities. Payne makes clear that the federal courts should – and do—take their roles as gatekeepers seriously when reviewing whether a punitive damages award may stand.

If you have any questions or comments about this post, please email Paul at pclark@wcmlaw.com