1. Limits on Damages
a. Definitions
i. compensatory – which compensate a party “to make him whole” following injury by the defendant;
ii. punitive – which serve to punish the defendant for conduct that is reprehensible;
iii. nominal – which may be awarded upon a finding for the plaintiff when actual harm suffered is either insignificant or impossible to prove.
iv. No constitutionally set maximum ratio of punitive to compensatory damages but the fact finder’s discretion to set punitive damages is not unfettered. Due process requires that a jury be given some measure of guidance in determining punitive damages, that an award of such damages be reasonable and not grossly excessive, and that there be opportunity for meaningful appellate review.
b. BMW v. Gore – guy buys BMW with bad paint job
i. Whereever something is unfair then it is an equitable action and in equity there is a more flexible statute of limitations, ie laches, and in law are cases youre looking for damages more rigid statute of limitations
ii. **punitive damages will be higher in bigger companies
iii. **deep punitive damages to make it “sting” for the defendant
iv. Due Process Clause of the 14th amendment prohibits a State from imposing “grossly excessive punishment on a tortfeasoer”
v. Punitive Damages may properly be imposed to further a states legitimate interest in punishing unlawful conduct and deterring its repetition.
vi. States have flexibility in determining the level of punitive damages that they will allow in different classes of cases and in any particular case. Most states that authorize exemplary damages afford the jury similar latitude, requiring only that the damages awarded be reasonably necessary to vindicate the states legitimate interests in punishment and deterrence.
vii. Only when an award can fairly be categorized as “grossly excessive” in relation to these interests does it enter into the zone of arbitrariness that violates the Due Process Clause of the 14th amendment. For that reason, the federal excessiveness inquiry appropriately begins with an identification of the state interests that a punitive award is designed to serve.
viii. But while we do not doubt that Congress has ample authority to enact such a policy for the entire Nation, it is clear that no single state could do so or even impose its own policy choice on neighboring states. Ones states power to impose burdens on the interstate market for automobiles is not only subordinate to the federal power over interstate commerce, but is also constrained by the need to respect the interests of other states.
ix. State may not imp
intentionally through affirmative acts of misconduct, or when the target is financially vulnerable, can warrant a substantial penalty.
xvi. Second, most commonly cited indicium of an unreasonable or excessive punitive damages award is its ratio to the actual harm inflicted on the plf.
xvii. Exemplary damages must be a reasonable relationship to compensatory damages.
xviii. Comparison between compensatory award and the punitive award is significant.
xix. BMW’s status as an active participant in the national economy implicates the federal interest in preventing individual states from imposing undue burdens on interstate commerce. While each state has ample power to protect its own consumers, none may use the punitive damages deterrent as a means of imposing its regulatory policies on the entire Nation.
xx. Where the appropriate remedy requires a new trial or merely an independent determination by the State Supreme Court of the award necessary to vindicate the economic interests of the State’s consumers is a matters that should be addressed by the state court in the first instance.
