Opinion ID: 76790
Heading Depth: 3
Heading Rank: 2

Heading: Ratio Between Compensatory and Punitive Damages

Text: 32 Although the Supreme Court has resisted establishing a specific ratio beyond which a damage award will violate the Constitution, in practice few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process. Id. at 425, 123 S.Ct. 1513. Obviously, this single-digit multiplier was exceeded in this case to a considerable extent. However, as the Supreme Court has explained, in some situations a higher ratio may be appropriate where a particularly egregious act has resulted in only a small amount of economic damages. Id. (internal quotation marks omitted). Given the small amount of economic damages in this case, the district court believed that AT&T's conduct fell within this exception, since the company's conduct was deceitful, involved repeated illegal acts, and targeted the financially vulnerable. 33 We agree with the district court that a mechanical application of the Supreme Court's single-digit multiplier formula would not adequately take account of the seriousness of AT&T's misconduct. In Johansen v. Combustion Engineering, Inc., 170 F.3d 1320 (11th Cir.1999), we upheld a punitive award of $4.35 million dollars, which was around 100 times the amount of actual damages awarded by the jury, because this amount was justified by the need to deter this and other large organizations from a `pollute and pay' environmental policy. 170 F.3d at 1339. 8 We noted that the defendant in Johansen was a large and extremely wealthy international corporation and that sometimes a bigger award is needed to attract the... attention of a large corporation in order to promote deterrence effectively. Id. at 1338 (internal quotation marks omitted). We later explained that the result in Johansen was motivated by the recognition that the combination of a small damages award and a strong state interest in deterrence of a particular wrongful act may justify `ratios higher than might otherwise be acceptable.' W&O, Inc., 213 F.3d at 616 (quoting Johansen, 170 F.3d at 1338). 34 Like the state interest at issue in Johansen, Georgia's interest in deterring fraud and illegal gambling also justifies a ratio higher than might otherwise be acceptable. Johansen, 170 F.3d at 1338. Reducing the jury's award to an amount not significantly larger than nine times the actual damages awarded in this case would mean that AT&T would receive a sanction of little more than a thousand dollars. Such an amount, levied against a company as large as AT&T, would utterly fail to serve the traditional purposes underlying an award of punitive damages, which are to punish and deter. See Gore, 517 U.S. at 568, 116 S.Ct. 1589 (Punitive damages may properly be imposed to further a State's legitimate interests in punishing unlawful conduct and deterring its repetition.). Therefore, we agree with the district court that this case falls within the exception articulated in Gore. 35