Theoretically, as I understand it, punitive damages are designed to deter future illegal behavior, in both the defendant and in others considering similar future behavior, as well as to punish the defendant for his past egregiously illegal behavior, and there is no top dollar amount that is theoretically possible.
But suppose the jury is infuriated and wants to turn the defendant into a pauper, and further suppose the defendant is fabulously wealthy but insists on committing the acts he’s been found liable for previously and the previous sanctions have had no effect on his current actions. The past juries have hit him with punitive damages of 5 million, but he continues doing what he does, so the next jury hits him with 10 million, and the next one socks him with 20 million in damages. Still he blithely continues doing what all these juries have found him liable for.
Can a jury ask to know how much he has left, and then hit him with every penny of that sum?
Assuming they can do that, or something very close to that, what if he still persists in committing the act they have found him guilty of, even after every penny he has has been assessed? Is there a point where the judicial system just gives up, says “We’ve done all that we’re allowed to do”? Is the defendant free at that point to commit the act indefinitely?
Eleven states have caps on punitive damages - this was relevant recently when Alex Jones was sued. Texas limited the amount of punitive damages that could be awarded in that case. Other states may have different caps or no caps at all.
In regards to your hypothetical, a jury is instructed on methods for determining/awarding punitive damages. The jury of course can do whatever - just like they can find someone guilty or not guilty in defiance of the evidence. The jury is supposed to consider
I imagine that in the case that a jury discarded those guidelines and acted with intention to bankrupt a defendant, there would likely be solid grounds for an appeal.
Well, this is the key part, isn’t it? If the defendant, be he Elon Musk or Bill Gates or George Soros or Jeff Bezos, just laughs at the jury, says in so many words, “I have lots of money–if they hit me with a billion in damages, so what? I still have more billions than I can count,” is that the limit of the jury’s ability to deter his egregious behavior?
As with most questions of this type, it depends on the state. Each state has different rules for punitive damages. In some states your liabiity insurance will pay for them. In other states that’s against the law. Some states have caps based on a multiple of the actual damage incurred. Others may have other types of caps. In some states punitive damages are essentially unlimited.
In BMW v. Gore, the Supreme Court held that a punitive award that was “grossly excessive” could violate the Due Process Clause. Which is pretty vague. The Court seemed to suggest that you look at three things: the degree of reprehensibility of the conduct; the disparity between the punitive damages and the harm suffered by the plaintiff; and “the difference between this remedy and the civil penalties authorized or imposed in comparable cases”.
I don’t know how you apply all that, but I think that a jury motivated by an animus toward a particular defendant and a desire to turn him “into a pauper” is likely going to be problematic.
Say a particular judge keeps hearing cases by the same plaintiff against the same defendant for repeating the same defamatory behavior already awarded in favor of the plaintiff. Does the judge have any recourse to impact the defendant beyond judgements by the juries? Could he/she hold the defendant in contempt? “Mr. Billionaire, I keep seeing you here for repeating behavior already determined to be defamatory. You clearly have no respect for the legal system or this courtroom. I’m holding you in contempt and fining you billion dollars for every time you discuss the defendant in public or on social media.”
So it’s starting to sound like a mega-billionaire can keep committing an act he’s been previously sanctioned for, for as long as his bankbook holds up.
Now that I think of it, if he keeps raising funds by appealing to those who agree with what he’s saying, this could even be a profit-making venture for him.
IANAL, but ISTR that the SCOTUS has a general position on punitive damages that – among other things – puts a suggested cap at 9X actual (compensatory) damages.
Any of our attorneys want to fact check my recollection (and cite)?
How does this apply in civil cases against corporations? Since they can just deduct the ‘punitive damages’ from their taxes.
Specifically thinking of the Fox News settlement with Dominion Voting Systems. The IRS allows them to treat lawsuit damages as ‘normal and customary’ business expenses, I don’t see how this has ANY deterrant effect.
IANAL, but my understanding is that in an un-capped state, there is no limit, and if the point is to deter bad behavior, then someone like Elon Musk could be hit for many billions of dollars.
This is, as you might imagine, a hotly contested legal issue. There are a lot of factors, but it generally boils down to the ratio between actual damages and the punitive award. The Supreme Court has said in Federal maritime cases, the limit is a one to one ratio to actual damages.
For other cases, “a single digit” ratio (9:1) is generally the upper limit, but courts have found exceptions for small damage cases with really bad conduct. For most cases, courts will allow 4:1 without too much of a question, although for truly “substantial” actual damage awards, the Supreme Court has said 1 to 1 might be the limit.
As had been noted, some states have caps, and other states require a percentage of any punitive verdict go to the State and not the plaintiff (but you can’t tell the jury that). Washington generally does not allow punitive damages, but you can get something similar for timber trespass, consumer protection, and insurance bad faith cases. You can also import the punitive damage law from another state under choice of law principles, if the conduct occurred in that other state.