Keeping the "Civil" in Civil Litigation: The Need for a Punitive Damage-Actual Damage Link in Title VII Cases.(employment Discrimination)
Searle, David C., Duke Law Journal
Most jurisdictions subscribe to the common law rule that a plaintiff must be awarded actual damages before recovering punitive damages. (1) This rule stems from the view that without a finding of actual damages, there effectively exists no cause of action to support a punitive damage award. (2) Moreover, a plaintiff who is unable to show damages worthy of compensation is seen by the common law as undeserving of the potential windfall provided by punitive damages. (3)
Despite the desirability of the common law rule, Congress forsook it in drafting civil rights legislation, most particularly Title VII. (4) When Congress amended Title VII through the enactment of [section] 1981a in 1991, (5) it did not explicitly require that workplace discrimination plaintiffs be awarded actual damages before receiving punitive damage awards. This omission has resulted in some trial courts permitting juries to award punitive damages, sometimes running into the hundreds of thousands of dollars, in Title VII cases when neither compensatory nor nominal damages have been found. (6) Some reviewing courts have upheld these awards by reasoning that mere liability under Title VII is all that is required to support a punitive damage award. (7) Other courts have held steadfast to the common law rule by requiring that a plaintiff be awarded either compensatory or nominal damages before receiving an award of punitive damages. (8) The circuit split has resulted from a disagreement not only as to the propriety of the actual damage-punitive damage link, but also as to whether a prevailing plaintiff is presumptively injured when a defendant is found liable under Title VII.
Although neither the plain text of [section] 1981a nor federal common law explicitly requires an actual damage-punitive damage link, such a link is necessary to maintain the integrity of punitive damage awards in Title VII cases. Courts that have circumvented this link by requiring only a Title VII violation, but not compensatory or even nominal damages before an award of punitive damages, run the risk of converting civil actions into quasi-criminal proceedings, raising concerns of fundamental fairness and constitutional due process. In Part I, I discuss the basic rationale underlying the common law rule that actual damages be a prerequisite to an award of punitive damages, noting that this rule is consistent with the separate functions of the civil and criminal justice systems, as well as the contemporary justifications for punitive damages. I also show that a failure to satisfy the actual damage-punitive damage link renders a punitive damage award constitutionally "excessive" under the Supreme Court's decision in BMW of North America, Inc. v. Gore. (9) In Part II, I critique the reasoning of those courts that have deemed the actual damage-punitive damage link satisfied by presuming injury upon a violation of Title VII. I conclude that this is an inadequate response to the concerns underlying the common law rule, and that these courts have overstepped their bounds by making such a bold and far-reaching presumption.
I. THE NEED FOR AN ACTUAL DAMAGE-PUNITIVE DAMAGE LINK
A majority of states require that a punitive damage award be predicated upon actual damages, whether compensatory or nominal. (10) Congress did not explicitly adopt this rule in drafting civil rights legislation, including Title VII. Some courts have concluded simply that as a matter of federal common law, it is unnecessary to find any damages, whether compensatory or nominal, before permitting a punitive damage award in a Title VII action. (11) Such a conclusion not only overlooks the important justifications behind the common law rule, it may in fact deprive defendants of their constitutional rights of due process.
A. Origins of the Common Law Rule
The common law requirement that punitive damages be accompanied by an award of actual damages has its genesis in two fundamental foundations of the law that are intimately tied together: the separate functions of civil and criminal law, (12) and the punishment and deterrence justifications for punitive damages. …