Supreme Court asks states to reform punitive damages laws.For the fifth time in the past six years, the Years, The
the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109]
See : Time U.S. Supreme Court has agreed to hear oral arguments in a case challenging the constitutionality of a punitive damages Monetary compensation awarded to an injured party that goes beyond that which is necessary to compensate the individual for losses and that is intended to punish the wrongdoer. award.
The case, TXO TXO Taxi Orange (Austrian reality TV show) Production Corp. vs. Alliance Resources Corp. et. al., features a jury award of $19,000 compensatory damages A sum of money awarded in a civil action by a court to indemnify a person for the particular loss, detriment, or injury suffered as a result of the unlawful conduct of another. and $10 million punitive damages--a ratio of more than 530 to 1.
The decision to hear this case came as a surprise because the Court had directly addressed the punitive damages issue in March 1991 in Pacific Mutual Life Insurance Co. vs. Haslip, now commonly known as the Haslip case.
In Haslip, the Court determined that the due process clause of the 14th Amendment placed restraints on the common law of punitive damages. Although the plaintiff in Haslip was successful in keeping her punitive damages award and the constitutionality of Alabama's law on punitive damages was upheld, the Court sent a wake-up call to state legislatures--the law of punitive damages in many states was out of control and needed to be fixed.
The Supreme Court said that punitive damages had "run wild" in this country, and "unlimited jury discretion in fixing punitive damages may invite extreme results that jar one's constitutional sensibilities." But the Court declined to "draw a mathematical bright line between the constitutionally acceptable and the constitutionally unacceptable that would fit every case." The Court indicated, however, that a punitive damage award of four times the compensatory award may be close to that line.
In the wake of the Haslip decision, the Supreme Court vacated and remanded 12 different punitive damages awards. The justices indicated that the Haslip opinion had constitutional teeth and that the Court was placing confidence and trust in state legislatures to clear up and clean up their punitive damages system. The Court's acceptance of the TXO case may signal a lack of patience with the state legislative process and a new willingness to articulate specific reforms.
The Courts vs. the Legislatures
Since Haslip, five appellate courts A court having jurisdiction to review decisions of a trial-level or other lower court.
An unsuccessful party in a lawsuit must file an appeal with an appellate court in order to have the decision reviewed. have held state punitive damages systems unconstitutional: Virginia, South Carolina South Carolina, state of the SE United States. It is bordered by North Carolina (N), the Atlantic Ocean (SE), and Georgia (SW). Facts and Figures
Area, 31,055 sq mi (80,432 sq km). Pop. (2000) 4,012,012, a 15. , West Virginia West Virginia, E central state of the United States. It is bordered by Pennsylvania and Maryland (N), Virginia (E and S), and Kentucky and, across the Ohio R., Ohio (W). Facts and Figures
Area, 24,181 sq mi (62,629 sq km). Pop. , Maryland and Tennessee. Although these courts have tried to improve the punitive damages system, they may not be the best forum. I believe that role belongs to state legislatures. Courts deal only with narrow legal issues--they cannot invoke broad-based reform. Courts also lack the ability to hold hearings and consider the views of all interested parties in our society, i.e., doctors, manufacturers, consumers, organized labor Organized Labor
An association of workers united as a single, representative entity for the purpose of improving the workers' economic status and working conditions through collective bargaining with employers. Also known as "unions". . Legislatures, by way of contrast, can deal with the subject as a whole and can obtain information that will enable them to make sound public policy judgments.
Legislative Help Is Needed
The current system of uncertainties in punitive damages has created legal chaos. A recent General Accounting Office study shows that reversals of punitive damages awards in some states are running over 90 percent. Often, these cases have to be retried re·tried
Past tense and past participle of retry. with major legal expenses being borne by both sides and, ultimately, by society. The fault in these cases does not rest with the jury or, for the most part, the judges. The problem is the absence of clear rules on punitive damages--rules that can and should be enacted by state legislatures.
Suggestions for Implementing Haslip
* Raise the burden of proof. Many legislatures have revised the burden of proof in punitive damages cases to "clear and convincing evidence clear and convincing evidence n. evidence that proves a matter by the "preponderance of evidence" required in civil cases and beyond the "reasonable doubt" needed to convict in a criminal case. (See: beyond a reasonable doubt) ." This burden allows juries to think seriously about whether they should award punitive damages.
* Provide clear guidelines for the jury. Haslip suggested that the appropriate standard was conscious wrongdoing wrong·do·er
One who does wrong, especially morally or ethically.
* Provide guidelines for review. Haslip suggested that states should have clear guidelines for reviewing punitive damages awards and determining whether they are fair.
* Prevent multiple impositions of punitive damages for what is, in essence, the same course of conduct. Multiple imposition of punitive damages exhausts a company's resources before people are compensated for their harms.
* Place rational limits on punitive damages. Haslip suggested that a ratio of $4 of punitive damages to $1 of compensatories was close to the line of being unconstitutional. A very workable scheme has been developed by the American College of Trial Lawyers The American College of Trial Lawyers is a professional trial organization composed of trial lawyers from the United States and Canada. Founded in 1950, the College is dedicated to maintaining and improving the standards of trial practice, the administration of justice and the and provides a ratio of $3 punitives to $1 compensatories. To deal with cases of particularly egregious e·gre·gious
Conspicuously bad or offensive. See Synonyms at flagrant.
[From Latin behavior where compensatories are small, an award up to $250,000 would be allowed. On the other hand, where compensatories are particularly high, i.e., above $1 million, a smaller ratio such as 2:1 is more appropriate. If the defendant has honestly complied with the regulatory system, such as the Food and Drug Administration or the Federal Aviation Administration Federal Aviation Administration (FAA), component of the U.S. Department of Transportation that sets standards for the air-worthiness of all civilian aircraft, inspects and licenses them, and regulates civilian and military air traffic through its air traffic control , punitive damages should not be allowed.
The Supreme Court in Haslip indicated that punitive damages was an area in dire need of reform. The Court has placed key responsibility for formulating and implementing the reform with state legislators. If they do not meet it, however, the Court may develop its own guidelines. State legislators have the power, the resources and the skills to develop guidelines that can meet both the letter and the spirit of the Haslip case. Now is the time to proceed and answer the wake-up call of the Court.
Victor E. Schwartz, a Washington, D.C., attorney, regularly files briefs in punitive damage cases pending before the U.S. Supreme Court for such groups as the American Automobile Manufacturers Association, the Chamber of Commerce of the U.S., the National Association of Manufacturers and others. He is co-author of the most widely used torts casebook A printed compilation of judicial decisions illustrating the application of particular principles of a specific field of law, such as torts, that is used in Legal Education to teach students under the Case Method system. , Cases and Materials on Torts.