Opinion ID: 1542810
Heading Depth: 1
Heading Rank: 4

Heading: Punitive Damages Compared to the Harm

Text: Under the second Gore guidepost, we compare the punitive award to the actual harm inflicted on the plaintiff (compensatory damages). See Gore, supra, 517 U.S. at 580, 116 S.Ct. 1589. This guidepost reflects the principle discussed supra that a punitive damage award must be reasonable and proportional to the harm suffered. While the Supreme Court has recognized that a comparison between the compensatory award and the punitive award is significant, the Court has also consistently rejected the notion that the constitutional line is marked by a simple mathematical formula. Id. at 581-82, 116 S.Ct. 1589. In evaluating the damages awards under this guidepost, first, we must determine the proper numbers to compare. Examining the differences in purpose behind the various types of damages a plaintiff may receive provides guidance. Compensatory damages `are intended to redress the concrete loss that the plaintiff has suffered by reason of the defendant's wrongful conduct.' State Farm, supra, 538 U.S. at 416, 123 S.Ct. 1513 (quoting Cooper Indus., Inc., supra note 12, 532 U.S. at 432, 121 S.Ct. 1678). The purpose of the treble damages provision of the CPPA is remedial. By contrast, punitive damages serve a broader function; they are aimed at deterrence and retribution. Id. When treble damages are awarded for remedial purposes, they are not a substitute for punitive damages and the heightened proof requirements for punitive damages do not apply. Dist. Cablevision Ltd. P'ship v. Bassin, 828 A.2d 714, 727 (D.C.2003) The remedial purpose of treble damages, as distinguished from punitive damages, is particularly apparent given the fact that the treble damages provision of the CPPA, D.C.Code § 28-3905(k)(1), authorizes the court to treble damages without the plaintiff having to establish anything beyond the CPPA violation itself: [O]nce it is established that a consumer [has] suffered any damage, the CPPA authorizes [the] court[] to award treble damages without further findings.  Byrd, supra, 902 A.2d at 782 (emphasis added) (quoting Dist. Cablevision, supra, 828 A.2d at 729). Therefore, [b]oth the treble damages, which under the CPPA `serve as a remedial rather than punitive purpose,' and the separate punitive damages are justified. Byrd, supra, 902 A.2d at 782-83. Here, neither the $60,000 award nor the $180,000 award after trebling is a substantial award when considering the equity that Wilson lost in her house and the non-economic harm that she suffered. When applying the second guidepost, comparing the punitive award to the harm, we look at both actual and potential damages. See Gore, supra, 517 U.S. at 582, 116 S.Ct. 1589 (emphasis in original); see also Ayala v. Washington, 679 A.2d 1057, 1070 (D.C.1996). It follows that, within the context of the CPPA, we would compare the treble figure to the punitive award, because the treble figure reflects the legislature's desire to ensure full compensation. Dist. Cablevision, supra, 828 A.2d at 727. Therefore, the ratio of punitive to treble compensatory damages for each appellant respectively is: 11.1:1 for Abell, 6:1 for Modern Management, and 1.1:1 for Baltimore. [21] Although the Supreme Court recognized in State Farm that [s]ingle-digit multipliers are more likely to comport with due process, while still achieving the State's goals of deterrence and retribution, the Court also reasoned that the award in each case must be based upon the facts and circumstances of the defendant's conduct and the harm to the plaintiff. State Farm, supra, 538 U.S. at 425, 123 S.Ct. 1513. Indeed, low awards of compensatory damages may properly support a higher ratio than high compensatory awards, if, for example, a particularly egregious act has resulted in only a small amount of economic damages. A higher ratio may also be justified in cases in which the injury is hard to detect or the monetary value of noneconomic harm might have been difficult to determine. Gore, supra, 517 U.S. at 582, 116 S.Ct. 1589. While in Daka, Inc. v. Breiner we upheld a 39:1 ratio, concluding that it did not exceed single digit ratios to a significant degree given the conduct in question, and then in Daka, Inc. v. McCrae , we concluded that a ratio of 26:1 did exceed single digit ratios to a significant degree, the explanation is found in the compensatory damages that were awarded. Numerically, the ratios differed because the compensatory damages were only $10,000 in Breiner and $187,500 in McCrae, despite the fact that both were based upon workplace discrimination by the same company. This further evidences the importance of looking beyond the ratio at the specific awards in relation to the conduct for each case. [22] Other courts applying the Gore guideposts have upheld a wide range of ratios. In EEOC v. Fed. Express Corp., 513 F.3d 360, 377 (4th Cir.2008), the Fourth Circuit noted that [n]otwithstanding [the defendant's] contention, the 12.5:1 ratio between the compensatory and punitive damages awards does not, as a matter of law, render the punitive damages award unconstitutionally excessive. The court reasoned that the Supreme Court explained in Gore, [that] a punitive damages award should bear some reasonable relationship to the corresponding award of compensatory damages, but such a relationship is only one factor in an excessiveness analysis. Id. (citations omitted). Some courts have interpreted the single-digit ratio language to justify any award less than 10 times the compensatory award. See, e.g., Goldsmith v. Bagby Elevator Co., Inc., 513 F.3d 1261, 1283-84 (11th Cir.2008) (upholding a 9.2:1 ratio where the conduct was exceedingly reprehensible); Zhang v. Am. Gem Seafoods, Inc., 339 F.3d 1020, 1044 (2003) (a ratio slightly more than 7:1 was not unconstitutionally excessive); Thomas v. Nat'l Legal Prof'l Assoc., 594 F.Supp.2d 31, 34 (D.D.C.2009) ([T]he Court cannot say with `legal certainty' that a ratio of 6.5:1 between Plaintiff's punitive and compensatory damages violated Defendants' due process rights. (citations omitted)). Others have interpreted the language as a guide, but not binding, particularly when the conduct is reprehensible and the ratio is far below the triple digit ratios reviewed by the Supreme Court. See Planned Parenthood of the Columbia/Willamette, Inc. v. Am. Coal. of Life Activists, 422 F.3d 949, 962 (9th Cir.2005); see also Romano v. U-Haul Int'l, 233 F.3d 655 (1st Cir.2000) (upholding a 19:1 ratio); see also note 21, supra. These cases demonstrate that there is no set number that is indicative of an unconstitutional award, further proving that the ratios involved in this case are not necessarily excessive on their face, as appellants contend. Our focus in evaluating the punitive awards here remains on the reasonableness of the award, considering the degree of reprehensibility of the conduct and the interest in deterring the conduct. Our court has recognized, albeit in a different context, that [a]n excessive verdict is one which `is beyond all reason, or ... is so great as to shock the conscience.' Scott v. Crestar Fin. Corp., 928 A.2d 680, 688 (D.C.2007) (affirming the trial court's decision to set aside the compensatory award that was extraordinarily disproportionate to the injuries and losses claimed, after the plaintiff's counsel asked jurors to send a message through the compensatory award) (citations omitted). [23] `Because the purpose of punitive damages is to punish a tortfeasor and deter future [harmful] conduct, the amount of such damages should be enough to inflict punishment, while not so great as to exceed the boundaries of punishment and lead to bankruptcy.' [24] Breiner, supra, 711 A.2d at 101 (citing Jonathan Woodner v. Breeden, 665 A.2d 929, 941 (D.C.1995)). While appellants might plausibly argue that the award against Abell should raise a suspicious judicial eyebrow, TXO, supra, 509 U.S. at 481, 113 S.Ct. 2711, Abell testified that he owned fifty to seventy houses and one-hundred-and-fifty apartment units, and that he and his wife had a combined net worth of approximately $10 million dollars. [A] punitive damages award must remain of sufficient size to achieve the twin purposes of punishment and deterrence. Saunders v. Branch Banking and Trust Co. of Va., 526 F.3d 142, 154 (4th Cir.2008). The jury was instructed to consider the net worth when determining what damages would be sufficient to serve as a deterrent. After considering all of the evidence presented about appellants' scheme, the jury concluded that the punitive awards were warranted in the amounts specified. Here, Wilson suffered more than just the financial harm. She not only lost the equity in her house, but she also suffered the emotional harm of being evicted from the home that she had maintained for over twenty-two years, [25] while she was physically, emotionally and financially vulnerable. This is a case where the compensatory award was not very large, compared to the equity that Wilson lost in her house. Therefore, the ratio of punitive to compensatory damages comports with the second Gore guidepost and does not indicate that the awards are unconstitutionally excessive.