Opinion ID: 1927554
Heading Depth: 1
Heading Rank: 8

Heading: Standards and Measures for the Award of Punitive Damages

Text: Historically, courts have been loath to inquire into the amount of jury verdicts for punitive damages. The inability or unwillingness of courts to deal with standards for punitive damages is a residue of the early history of common law. It was at comparatively a recent period that the jury has relinquished its control over actions even of contract, and that any approach has been made to a fixed and legal measure of damages. T. Sedgwick, A Treatise on the Measure of Damages 214 (1847), quoted in M. Horwitz, The Transformation of American Law, 1780-1860, at 83 (1977). Only by degrees was the principle recognized `that the amount of compensation [was] to be regulated by the direction of the court, and that the jury cannot substitute their vague and arbitrary discretion for the rules which the law lays down.' Horwitz, supra, at 83 (quoting Sedgwick, supra, at 214). The doctrine of exemplary damages is thus seen to have originated in a survival in this limited class of cases of the old arbitrary power of the jury. 1 T. Sedgwick, A Treatise on the Measure of Damages § 349, at 689 (9th ed. 1912). Appellate records are replete with evidence that judges desperately seek guidance on this issue in instructing juries. Note, Exemplary Damages in The Law of Torts, supra, 70 Harv.L.Rev. at 529-30; see also Note, The Expanding Availability of Punitive Damages in Contract Actions, 8 Ind.L.Rev. 668, 672 (1975) (lack of ascertainable standards responsible for reluctance of courts to interfere with punitive damages awards). I believe that guidance can be given to juries in their instructions. Instructions can include identification and examination of the recurring forms of marketing misbehavior that have been considered most deserving of punishment, such as fraudulent misconduct, knowing violations of safety standards, inadequate testing and manufacturing procedures, and failure to warn of known dangers before marketing as well as post-marketing failure to remedy known dangers. See Owen, Punitive Damages In Products Liability Litigation, supra, 74 Mich.L.Rev. at 1329-52, 1369-70. In addition to marketing misbehavior, juries should balance society's interests against the defendant's interests. Factors to consider include the severity of threatened harm, the degree of reprehensibility of defendant's conduct, the profitability of the conduct, the financial condition of the enterprise, the amount of compensatory damages assessed, the cost of litigation, the potential criminal sanctions, and other civil actions against the defendant based on the same conduct. In this way, trial courts could give greater content to the framework within which a jury should assess punitive damages. The jury should be instructed about the purposes of the doctrine, which do not include giving plaintiffs a windfall; that in products-liability cases recovery of punitive damages should be based upon the extent to which the manufacturer's marketing conduct exhibits a conscious or reckless indifference to the risk that its product may be excessively dangerous to consumers; that the jury's imposition of sanctions should serve to shape the manufacturer's conduct to reflect its concern for human values without diminishing the utility of the mass-produced merchandise. Furthermore, one of the underlying, unwritten premises of awarding punitive damages is that plaintiffs are often under-compensated by compensatory damages. Expenses of litigation, counsel fees, and expert fees are extremely high and burden plaintiffs. A candid recognition of this issue would be consistent with reality. Finally, some consideration of the relationship of an award of punitive damages to an award of compensatory damages is appropriate and should be brought to the jury's attention. Nappe, supra, 97 N.J. at 55-57 (O'Hern, J., concurring).