Academic journal article Defense Counsel Journal

Limits on Punitive Damages May Be Enforced by Courts

Academic journal article Defense Counsel Journal

Limits on Punitive Damages May Be Enforced by Courts

Article excerpt

DAMAGES

Limits on Punitive Damages May Be Enforced by Courts

Federal courts have authority derived from the U.S. Constitution to reduce punitive damages awards to constitutional scope without plaintiffs' concurrence or the offer of a new trial, the I 1th Circuit concluded in Johansen v. Combustion Engineering Inc., 170 F.3d 1320 (1999).

The case had a tortuous history. Fifteen property owners of 16 parcels recovered compensatory damages for the discharge of acidic water into streams that ran through their property. Individual awards ran from $1,000 to $10,000, for an aggregate of $47,000. In the punitive damages phase of the trial, the jury awarded a total $45 million. The trial judge found this "shocking" and ordered a new trial if the plaintiffs didn't accept a remittitur to $IS million. The 1I th Circuit affirmed, 67 F.3d 314 (1995), but the U.S. Supreme Court remanded for consideration in the light of its decision in BMW of North America Inc. v. Gore, 517 U.S. 559 (1996), in which it held that the Constitution does not permit "excessive" punitive damages awards.

When the case went back to the district court, the judge ruled that the Constitution would not permit punitives in this case to exceed 100 times each compensatory award. This resulted in an aggregate punitive damages award of $4. …

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