Academic journal article Defense Counsel Journal

38,000-to-1 Punitive Damages Ratio Gets Approval

Academic journal article Defense Counsel Journal

38,000-to-1 Punitive Damages Ratio Gets Approval

Article excerpt

Talk about a disparity of the ratio of punitive to compensatory damages, here's one for the books. In a tangled procedural mess, the U.S. Court of Appeals for the Federal Circuit has ended up approving $20 million in punitive damages against $526 in compensatory damages. Nothing wrong with that, the court held in Tronzo v. Biomet Inc., 236 F.3d 1342 (2001).

In a federal district court action by a physician against a medical device manufacturer, the plaintiff asserted patent infringement and state law counts for breach of confidential relationship, fraud, and unjust enrichment. He won the jury's favor on all his claims. After some adjustments, the district judge entered judgment for $7.134 million in compensatory and $20 million in punitive damages. 950 F.Supp. 1149 (S.D. Fla. 1996).

On appeal, the Federal Circuit held that the compensatory damages were miscalculated and remanded, but the defendant manufacturer did not appeal the punitive damages award, which the jury awarded on its finding of wanton or willful conduct. 156 F.3d 1154 (Fed.Cir. 1998).

Back in the district court, the court recalculated in accordance with the remand and set compensatory damages at $520. Recognizing that this created a 38,000-to-1 ratio of punitive to compensatory damages, the district judge reduced the punitive award to $52,000-100 times compensatory damages.

Back again in the Federal Circuit, the court ruled in an opinion by Judge Archer that the defendant manufacturer lost its chance to challenge the punitive award by failing to appeal that facet of the case in the first trip to the Federal Circuit. It reversed the district court's reduction of punitive damages and reinstated the $20 million punitive award, creating a disparity of 38,000 to 1 with the compensatory award. The court turned down the defendant's contention that the challenge was not waived because the disparity first arose on the remand, stating that the appropriateness of the punitive award was ripe for a challenge on legal and constitutional grounds in the first appeal.

Also rejected was the defendant's contention that the court had discretion to consider this issue in view of the fact that its new challenge was quite different-challenging a 38,000-to-1 ratio, as compared to the 2.8-to-1 ratio that existed at the time of the first appeal. True, the court conceded, 38,000 to 1 is a "high ratio," perhaps even enough to "raise a suspicious judicial eyebrow," to borrow a phrase from Justice O'Connor's dissent in TXO Products Corp. v. Alliance Resources Corp., 509 U.S. 443, 481 (1993). But, the court added, disparity is only one of the three tests set out by the U.S. Supreme Court in Gore to determine whether a punitive award in within constitutional limitations. Of the three Gore guideposts, the court observed, the most important is the reprehensibility of the defendant, and on this point the court emphasized the defendant's bad conduct as supporting the disparity.

DISABILITY LAW

ADA Applied to Professional Golf Tournaments

Thanks to the U.S. Supreme Court, Casey Martin, a disabled professional golfer will be able to use a golf cart in PGA Tour Inc. tournaments. In PGA Tour Inc. v. Martin, 121 S.Ct. 1879 (2001), the Court held that the American with Disabilities Act protects access by a qualified but disabled golfer to professional golf tournaments and that the use of a golf cart is a "reasonable" accommodation that would not "fundamentally alter the nature" of the tournaments.

The PGA Tour prohibits the use of carts in its top-level tournaments in which the most skilled professionals golfers play, although it permits their use at the first levels of its qualifying school. Martin, who is afflicted with Klippel-Trenaunay-Weber syndrome, a degenerative circulatory disorder that obstructs the flow of blood from his right leg to his heart, challenged the no-cart rule under Title III of the ADA, which prohibits discrimination against an individual on the basis of disability in "any place of public accommodation. …

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