Friday, October 1, 2010

Federal Judge Rules that Punitives Can Only Exceed Compensatories by 9-1 Ratio; I don't see why

Slashing a jury's punitive award of $500,000 down to $270,000, a federal judge has ruled that the constitutional maximum for punitive awards is ordinarily no more than nine times the compensatory award -- even in cases where the defendant is a repeat violator. Go here for the full story. I have never really understood this line of reasoning. There is no reason why punitive damages need to have any ratio/relationship to compensatory damages at all. Punitive damages are assessed to punish, not to compensate, and they are imposed to deter conduct on the part of the defendant that is particularly irresponsible, reprehensible, dangerous, offensive, etc. To justify placing a hard limit on punitives based on the ratio of compensatories to punitives one has to say that the evaluation of how bad the conduct is depends only on the amount of compensatory damages it causes. Evidently, this is inconsistent with the goals of tort law and of the use of punitive damages in the first place. There are many other factors that should be used to determine how bad a person's conduct really is.

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