Punitive damages in tort law serve to punish wrongdoers and deter future misconduct. They go beyond compensating victims, expressing society's disapproval of egregious behavior. Courts consider factors like the defendant's conduct, harm caused, and financial condition when awarding these damages.

Constitutional limits ensure punitive damages aren't excessive or arbitrary. Key Supreme Court cases have established guidelines for determining appropriate amounts, including the reprehensibility of conduct, ratio to compensatory damages, and comparison to similar penalties. These limits protect defendants' due process rights.

Punitive Damages in Tort Law

Purpose of punitive damages

• Punish defendant for egregious conduct
  • Deter similar future behavior by defendant and others (general deterrence)
• Provide additional compensation to plaintiff beyond compensatory damages
  • Acknowledge severity of defendant's actions
• Express society's disapproval of defendant's behavior
  • Reinforce societal norms and values (public trust in legal system)

Standard for punitive liability

• Conduct must exceed mere negligence
  • Gross negligence, reckless disregard for safety of others, or intentional misconduct
• Specific standards vary by jurisdiction
  • Some states require clear and convincing evidence (higher burden of proof)
  • Others require proof beyond a reasonable doubt (criminal standard)
• Factors considered in determining appropriate standard
  • Nature of defendant's conduct (egregiousness)
  • Potential harm to plaintiff and society (magnitude of risk)
  • Need for deterrence (likelihood of future misconduct)

Factors in punitive damage amounts

• Reprehensibility of defendant's conduct
  • Duration of misconduct (ongoing vs. isolated incident)
  • Degree of defendant's awareness of harm (knowledge vs. ignorance)
  • Any attempts to conceal or cover-up misconduct
• Actual or potential harm suffered by plaintiff
  • Physical injury (bodily harm)
  • Emotional distress (mental anguish)
  • Economic losses (medical expenses, lost wages)
• Defendant's financial condition
  • Ability to pay punitive damages (wealth, assets)
  • Ensuring award is significant enough to deter future misconduct (meaningful punishment)
• Proportionality to compensatory damages
  • Single-digit ratio between punitive and compensatory damages (5:1, 9:1)
  • Higher ratios may be justified in cases with low compensatory damages (nominal damages)

Constitutional limits on punitive awards

• Due process clause of Fourteenth Amendment
  • Prohibits grossly excessive or arbitrary punishments (fundamental fairness)
  • Requires fair notice of severity of penalty (foreseeability)
• BMW of North America, Inc. v. Gore (1996) established three guideposts for evaluating punitive damages
  1. Degree of reprehensibility of defendant's conduct
  2. Ratio between punitive and compensatory damages
  3. Comparison to civil or criminal penalties for similar misconduct
• State Farm Mutual Automobile Insurance Co. v. Campbell (2003)
  • Reiterated importance of three guideposts
  • Suggested single-digit ratios between punitive and compensatory damages are more likely constitutional
• Philip Morris USA v. Williams (2007)
  • Punitive damages cannot punish defendant for harm caused to non-parties
  • Juries must be instructed to prevent due process violations