Opinion ID: 4470994
Heading Depth: 4
Heading Rank: 1

Heading: The type of harm

Text: The district court determined that the first State Farm reprehensibility factor—which looks to whether the harm caused was physical, rather than economic—weighed in favor of Plaintiff because he suffered emotional harm 13 Further, in identifying the guideposts that should be used in determining whether the amount of a particular punitive damages award exceeds constitutional limits, the degree of reprehensibility of the misconduct is likewise highly significant. 30 Case: 17-11447 Date Filed: 01/09/2020 Page: 31 of 77 (“feeling horrible”) and physical harm (loss of appetite and insomnia), rather than purely economic damages. The district court’s finding is not clearly erroneous. Granted, there was no serious or life-threatening physical harm here as Plaintiff was never hospitalized nor in need of substantial medical treatment. Had this been the case, this factor would weigh even more heavily in the analysis. Nevertheless, the district court properly considered Plaintiff’s emotional distress in weighing this factor. See McGinnis v. Am. Home Mortg. Servicing, Inc., 901 F.3d 1282, 1288–89 (11th Cir. 2018) (finding a high degree of reprehensibility where the defendant’s conduct caused physical and emotional harm, in addition to economic harm). Citing Bogle v. McClure, 332 F.3d 1347, 1359, 1362 (11th Cir. 2003) and Goldsmith v. Bagby Elevator Company, Inc., 513 F.3d 1261, 1275, 1283 (11th Cir. 2008), McGinnis noted that we have at least twice upheld substantial punitive damages awards when the underlying compensatory damages award was based either entirely or substantially on the plaintiff’s emotional distress. McGinnis, 901 F.3d at 1290. And Plaintiff understandably suffered considerable emotional distress when he was twice wrongly identified as a criminal by Defendant and, as a result, lost two job opportunities. This emotional distress manifested itself in physical symptoms. Specifically, Plaintiff testified regarding his diminished appetite, insomnia, and headaches. Accordingly, this factor weighs in Plaintiff’s favor. 31 Case: 17-11447 Date Filed: 01/09/2020 Page: 32 of 77 2. Indifference to or reckless disregard for health and safety The district court found that the second factor—whether the defendant’s conduct evinced an indifference to or a reckless disregard of the health or safety of others—also weighed in Plaintiff’s favor. According to the district court, Defendant’s FCRA violations “put Plaintiff’s livelihood at stake,” and the jury could reasonably infer that losing the Rent-A-Center and Winn-Dixie job opportunities “affected [Plaintiff’s] ability to pay for basic necessities like food, water, shelter, and clothing.” The district court also noted that Defendant’s conduct “affected [Plaintiff’s] mental health and ability to eat and sleep.” We conclude that the district court erred in characterizing this factor as having been met. In the first place, we read this factor, which looks to whether the defendant’s conduct showed a reckless disregard for the health or safety of others, as focusing on something larger than whether the reckless conduct might impact a particular person’s ability to obtain a particular job. At any rate, the court’s analysis on this point was based on speculation, and not the record. See Johansen, 170 F.3d at 1335. Although not being hired for the Rent-A-Center and Winn-Dixie jobs undoubtedly had a temporary, negative financial impact on Plaintiff, there is no evidence that it actually impinged on his ability to pay for basic necessities. And to the extent that one can typically expect the loss of a job opportunity to negatively impact a person’s financial status, that factor is accounted for in the 32 Case: 17-11447 Date Filed: 01/09/2020 Page: 33 of 77 third factor, discussed below. Similarly, to the extent the loss of a job opportunity might impact one’s health, that is accounted for in the first factor, discussed above. In short, the mere fact that Plaintiff understandably suffered emotional distress from twice being wrongfully labeled a criminal falls well short of proof that Defendant’s conduct revealed an indifference to or reckless disregard for health and safety. While courts “may consider the risk of harm to others as part of the reprehensibility analysis,” Action Marine, 481 F.3d at 1320, there is no evidence indicating that the issuance of an erroneous background report, as a general matter, presents a risk to the health or safety of others, or that the specific errors Defendant made in Plaintiff’s case presented a substantial risk of injury to him.14 Thus, the district court erred in determining that the second State Farm factor weighs in favor of Plaintiff. 3. Financial vulnerability The district court found that the third State Farm factor—whether the target of the misconduct was financially vulnerable—also weighed in Plaintiff’s favor. The court noted that Plaintiff “had little-to-no income when he applied for the Rent-A-Center and Winn-Dixie positions,” and that Plaintiff “worked part-time at 14 McGinnis found that this second factor—“indifference to or reckless disregard of the health or safety of others”—was met in its case because the defendant there was well aware of the emotional damage and stress it was wreaking on Ms. McGinnis, but it reacted with only “indifference, obstinacy, and, at times, belligerence.” McGinnis, 901 F.3d at 1288–89. Here, however, Defendant promptly corrected each of the two reports in question once Plaintiff notified Defendant of its error. 33 Case: 17-11447 Date Filed: 01/09/2020 Page: 34 of 77 two funeral homes . . . to make ends meet.” The court found that this case was particularly compelling because Plaintiff “was of such limited means that he still lived at home with his mother.” Defendant argues that the district court’s findings concerning this factor were speculative. It is true that Plaintiff offered no evidence setting out the precise status of his financial position when he applied for the Rent-A-Center position. The only evidence Plaintiff presented as to this issue was his own testimony that he “was doing . . . graphic designing in between [job interviews] trying to make money.” He did not state how much money he was making when he applied for the Rent-A-Center or Winn-Dixie jobs. Moreover, although the district court assumed that Plaintiff had lived with his mother because of his “limited means,” Plaintiff never offered an explanation for his living arrangements. That said, it seems obvious from the evidence that Plaintiff was hardly swimming in money. When the Rent-A-Center job offer was withdrawn, Plaintiff sought and obtained other employment. When he lost that job, he obtained a job at a gas station and had to quit that job because the cost of his own gas to get to work ate up much of what he was making. Given Plaintiff’s difficulty in maintaining consistent employment and the income levels of the jobs he sought, one can reasonably infer some financial vulnerability on his part. It is foreseeable that an individual relying on the types of jobs Plaintiff was seeking would be greatly 34 Case: 17-11447 Date Filed: 01/09/2020 Page: 35 of 77 impacted by a background check that foreclosed employment in even these positions. And it is this factor on which the district court’s observations are most apt concerning the potential impact of Defendant’s error on Plaintiff’s inability to pay for basic necessities. We therefore conclude that this third factor favors the imposition of punitive damages. 4. Repeated actions or isolated incidents “[E]vidence that a defendant has repeatedly engaged in prohibited conduct while knowing or suspecting that it was unlawful” weighs in a plaintiff’s favor. Gore, 517 U.S. at 576–77. The district court found that this fourth State Farm factor also weighed in Plaintiff’s favor. We agree. First, as to Plaintiff, this was hardly an isolated incident. After Defendant mistakenly attributed another person’s criminal record to Plaintiff during the background investigation for the Rent-A-Center job, just a year later it repeated this error when conducting the Winn-Dixie investigation, again attributing a criminal conviction of this same felon to Plaintiff. As to Defendant’s assertion that, in the larger scheme of things, this was an anomalous case, both parties cite the same statistics to support their positions. Defendant notes that the error rate for incorrectly attributing information of all types—not just the type of information at issue here—from someone other than the subject of the investigation was quite low. Specifically, for the three-year period 35 Case: 17-11447 Date Filed: 01/09/2020 Page: 36 of 77 of time between 2010 and 2013, and based on the number of successful challenges brought by individuals who disputed inclusion of public records belonging to another individual, Defendant’s error rate nationally was just 0.38 percent and its error rate in Florida ranged from 0.28 percent in 2013 to 0.64 percent in 2012. Plaintiff takes this same evidence and notes that given the large number of investigative reports generated by Defendant (3.5 million during this time period), even an admittedly low error rate resulted in the issuance of over 13,000 background reports that incorrectly attributed information from another person’s public records to the subject of the investigation. It is true that Plaintiff never introduced evidence breaking down how many of these 13,000+ errors arose when Defendant had failed to use three identifiers in a common-name situation. This failure of specific proof constitutes a lapse by Plaintiff that will come back to haunt him when we explore the question whether the extremely high amount of punitive damages awarded by the jury here can be sustained. Nevertheless, as we understand the record, Defendant is neither arguing that Plaintiff’s case represents an isolated occurrence nor denying that this type of error occurred from time to time when Defendant failed to use three identifiers for a subject with a common name. Thus, for purposes of determining whether any punitive damages could properly be awarded by the jury, we conclude that Plaintiff 36 Case: 17-11447 Date Filed: 01/09/2020 Page: 37 of 77 has satisfied this fourth factor, which looks to whether the Defendant engaged in repeated reckless conduct. 5. Intentional malice, trickery, or deceit, as opposed to a “mere accident” The district court found that the fifth State Farm factor was “at best, neutral” because even if Defendant did not act out of intentional malice, trickery, or deceit, “its actions weren’t a ‘mere accident.’” It is true that the jury found that Defendant had acted willfully, and willful conduct connotes something more than a simple accident; that is, willfulness requires, at a minimum, a showing of recklessness. Yet, there was no evidence of intentional malice, trickery, or deceit by Defendant, and it seems that this factor is looking at intentional misconduct—or something close thereto—which is clearly absent in this case. At worst, Defendant acted recklessly, but without any intent to harm Plaintiff. And as to both reports regarding Plaintiff, Defendant promptly corrected its error once advised that it had made a mistake. Accordingly, we conclude that this factor weighs in Defendant’s favor. In sum, three of the five State Farm reprehensibility factors weigh in Plaintiff’s favor and two factors weigh in Defendant’s favor. Thus, in scoring reprehensibility, Defendant’s conduct was sufficiently reprehensible to warrant some amount of punitive damages, albeit that conduct was clearly not at the highest level of reprehensibility. The question then become whether the punitive 37 Case: 17-11447 Date Filed: 01/09/2020 Page: 38 of 77 damages awarded here were so excessive as to be deemed unconstitutional, thereby warranting a reduction by this Court. Given the high level of generality in the standards used to determine this question, the answer is almost always an uncertain one. And so it is here. C. Whether the Punitive Damages Awarded Were So Excessive As to Violate Defendant’s Due Process Rights 1. Ratio of punitive damages to actual damages The Supreme Court has noted that the most important factor in reviewing a punitive damages award is the reprehensibility of the defendant’s conduct, and the Court has set out five factors for evaluating reprehensibility. But because it is difficult to quantify a particular degree of reprehensibility—and still harder to attach a monetary figure to even a rough quantification—the Court has indicated that reviewing courts should also look to the ratio between the compensatory damages award and the punitive damages award in evaluating whether a particular punitive damages award is so excessive as to be deemed unconstitutional. If the disparity between a compensatory damages award and the punitive damages award is too great, the punitive award may be deemed unconstitutional. But how does one determine when the disparity is so great that a constitutional violation has occurred? The answer: Not easily. As explained above, the shorthand guidance extrapolated from the Supreme Court’s decisions is as follows. The Court has indicated that a ratio greater than 4:1 between punitive 38 Case: 17-11447 Date Filed: 01/09/2020 Page: 39 of 77 and compensatory damages will likely be close to the line of constitutional impropriety. Moreover, few awards exceeding a single-digit ratio (that is, anything greater than a 9:1 ratio) to a significant degree will satisfy due process. But the Court has emphasized that these are not hard and fast rules. Sometime even a 4:1 ratio may be too great. If, for example, the plaintiff has received a substantial compensatory damages award, then a lesser ratio as low as 1:1 may reach the outer limits of the due process guarantee and a punitive damages award that exceeds that ratio will be suspect. On the other hand, if a particularly egregious act has resulted in only a small amount of compensatory damages, then a greater ratio can be justified. Accordingly, we will operate under the assumption that a 4:1 ratio is the Court’s suggested default guideline, but that this ratio may be adjusted depending on the above factors. The ratio in this case of punitive damages to compensatory damages is a little over 13:1. For sure, this is not as “breathtaking” as was the 500:1 ratio in Gore, but it is also well outside the 4:1 range deemed “close to the line” of constitutional impropriety in Haslip. Further, it exceeds a single-digit ratio between punitive and compensatory damages, which according to the Supreme Court in State Farm raises a red flag that the punitive damage amount likely violates the due process clause. See State Farm, 538 U.S. at 425 (“[I]n practice, few awards exceeding a single-digit ratio between punitive and compensatory 39 Case: 17-11447 Date Filed: 01/09/2020 Page: 40 of 77 damages, to a significant degree, will satisfy due process.”). Finally, while a higher ratio may be acceptable if the compensatory damages award is low, here the compensatory damages award of $250,000 was clearly not a small amount of money, particularly given that Plaintiff contended that his lost wages were only in the $75,000 range. As set out above, higher ratios between compensatory damages and punitive damages are more reasonably justified when the former is for a relatively small amount of money. For these reasons, we begin our analysis with antennae raised, as we consider whether the default 4:1 ratio, or something close thereto, should constitute the uppermost range in this case, for due process purposes. Before setting out our analysis in this case, we start with a review of cases from this Circuit, followed by a review of cases from other circuit courts. 2. Examination of punitive damages cases from this Circuit We have previously evaluated punitive damages awards with similar ratios in only two cases: EEOC v. W&O, Inc., 213 F.3d 600 (11th Cir. 2000) and Goldsmith v. Bagby Elevator Company, Inc., 513 F.3d 1261 (11th Cir. 2008). Unfortunately, as the underlying conduct in those cases was more reprehensible than that here, neither is terribly analogous to this case. In W&O, three employees sued their employer for pregnancy discrimination. W&O, 213 F.3d at 607. The jury awarded the employees backpay in relatively modest amounts: $3,800.24, 40 Case: 17-11447 Date Filed: 01/09/2020 Page: 41 of 77 $6,225.46, and $26,231.43.15 Id. at 609. After taking into account the statutory cap, each employee also received $100,000 in punitive damages, yielding approximate ratios of 26:1, 16:1, and 4:1, respectively. Id. at 609, 616. The aggregate ratio of punitive damages to back pay was 8.3:1. Id. at 616. We concluded that the punitive damages awards were reasonable. Id. at 616–17. W&O, however, provides little guidance for this case. First, although the 26:1 and 16:1 ratios were higher than the 13:1 ratio in this case, the compensatory damages award in W&O was very small in comparison to the more substantial $250,000 compensatory damages award in this case. As explained above, a higher ratio is supportable if the amount of compensatory damages is low. See Gore, 517 U.S. at 582. Additionally, the underlying action in W&O challenged a written policy that expressly discriminated against pregnant women, and the evidence showed that the owner had made several disparaging comments about pregnant women. W&O, 213 F.3d at 607–08. The egregiousness of the repetitive, intentional discrimination at issue in W&O is simply not present here. Similarly, in Goldsmith, the plaintiff alleged repeated racial discrimination at his place of employment. Goldsmith, 513 F.3d at 1274–75. The jury awarded the plaintiff $27,160.59 in back pay, $27,160.59 in damages for mental anguish, and 15 We concluded that we could consider an award of back pay when deciding whether a punitive damages award is disproportionate to the plaintiff’s actual damages award. W&O, 213 F.3d at 615. 41 Case: 17-11447 Date Filed: 01/09/2020 Page: 42 of 77 $500,000 in punitive damages, yielding a ratio of approximately 9:1. Id. at 1275. We concluded that the punitive damages award did not violate due process. Id. at 1285. Like W&O, however, Goldsmith provides little guidance. Again, the actual damages in Goldsmith were much smaller than the compensatory damages in this case: in fact, one-fifth the size of the compensatory damages here. Further, the ratio of punitive damages to actual damages (9:1) did not exceed a single-digit multiplier, as did the 13.1 ratio in this case. But the most significant difference between Goldsmith and this case is the substantially greater level of reprehensibility displayed in the facts of Goldsmith, which involved repeated acts of intentional racial discrimination, harassment, and retaliation. See id. at 1267 (describing racism as “an evil to be remedied in our Nation”). Specifically, the plaintiff’s supervisor and another employee repeatedly used racial slurs against plaintiff, and the company president had also uttered a racial slur. Id. at 1269, 1273–74. When the plaintiff complained to the defendant’s vice president, the vice president said, “You are just going to have to accept it.” Id. (quotation marks omitted). Further, the plaintiff was fired after filing an EEOC charge, as were other black employees who had been terminated for reporting racial slurs or filing EEOC charges. Id. at 1271–74. 42 Case: 17-11447 Date Filed: 01/09/2020 Page: 43 of 77 As Goldsmith noted, “[t]he dominant consideration in the evaluation of a punitive damages award is the reprehensibility of the defendant’s conduct.” Id. at 1283. Justifying its affirmance of the punitives in the case before it, Goldsmith noted that our court has upheld punitive damages awards that substantially exceed compensatory damages when the misconduct was “exceedingly reprehensible.” Id. at 1284. That characterization, the panel noted, applied to the case before it as the “flagrant disregard of Goldsmith’s federal rights was exceedingly reprehensible, and there was evidence of a pattern of retaliatory and discriminatory misconduct” by the defendant. Id. The sort of intentional, malevolent behavior described in Goldsmith, however, is a far cry from Defendant’s conduct in this case, which was, at worst, a willful disregard of the possibility that inaccurate information would find its way into a criminal background report. Since Gore, our Court has examined whether punitive damages awards comply with due process in a few other cases, but they involve dissimilar ratios. In Kemp v. American Telephone & Telegraph Co., 393 F.3d 1354 (11th Cir. 2004), the jury awarded the plaintiff $1 million in punitive damages, but only $115.05 in actual damages, after finding the defendant guilty of fraudulent billing practices and collecting illegal gambling debts, in violation of federal and state Racketeer Influenced and Corrupt Organizations (“RICO”) statutes. Id. at 1357. Concluding that a million-dollar award was so excessive as to violate the defendant’s due 43 Case: 17-11447 Date Filed: 01/09/2020 Page: 44 of 77 process right, we vacated the punitive damages award and directed the trial court to reduce the punitive damages to $250,000. Id. at 1365. We explained our thinking. Although defendant AT&T “deserved to pay a serious penalty for its misconduct,” one that would “be large enough to deter [] misconduct,” we concluded that “one million dollars, in relationship to the amount of harm that occurred in this case, is constitutionally excessive.” Id. As to the award amount we settled on—$250,000—we acknowledged that the Supreme Court has said that few awards substantially exceeding a single-digit ratio between compensatory and punitive damages would satisfy due process and further acknowledged that a $250,000 punitive damages award, with a compensatory damages award of only a hundred dollars, greatly exceeded this single-digit ratio. Id. at 1363, 1364. Yet, given this small amount of compensatory damages, a punitive damages award that did not exceed a 9:1 ratio would have totaled only about $1,000, which we concluded “would not effectively punish [defendant] AT&T for its conduct or serve any deterrent value whatsoever.” Id. at 1365. As to the $250,000 figure that we finally arrived at, we noted that although “there is no algorithm that yields a precise figure,” we were “persuaded that an award that was less than $250,000 would not serve as a meaningful deterrent to a corporation like AT&T,” but equally persuaded that an “award greater than this amount [] would prove an unconstitutional windfall.” Id. 44 Case: 17-11447 Date Filed: 01/09/2020 Page: 45 of 77 For sure, the ratio in Kemp is a lot bigger than the 13.1 ratio here. But it’s understandable that the ratio would necessarily be a lot larger in that case as the almost nominal compensatory damages award of $115.05 there is dwarfed by the $250,000 in actual damages here. Clearly, with such a small amount of actual damages in Kemp, a fairly large multiplier for the punitive damages was necessary to meaningfully punish and deter the defendant. Additionally, like W&O and Goldsmith, the Kemp defendant’s conduct was far more reprehensible than Defendant’s conduct in this case. In finding the defendant guilty under the federal and state RICO statutes, the jury necessarily determined that the defendant “intentionally participated in a scheme to defraud another of money or property.” See id. at 1359. Additionally, we concluded that the defendant played a “critical role” in the illegal gambling scheme, which “could never have succeeded” without it. Id. at 1365. By contrast, Defendant’s conduct in this case was the willful failure to ensure that reports were accurately generated, which is more aggravated than a negligent failure would have been, but clearly less egregious than the intentional fraud at issue in Kemp. Finally, even though the Kemp defendant engaged in significantly more reprehensible conduct than Defendant did, we nonetheless vacated the punitive damages award of a million dollars, and further concluded that, any amount greater than $250,000 “would prove an unconstitutional 45 Case: 17-11447 Date Filed: 01/09/2020 Page: 46 of 77 windfall.” Id. The punitive damages award in this case—$3.3 million—was more than thirteen times higher than the $250,000 that we said constituted the outside limit of a constitutional award in the Kemp RICO fraud case: a case that involved intentional conduct that was more reprehensible. In Johansen v. Combustion Engineering, Inc. 170 F.3d 1320 (11th Cir. 1999), acidic water from waste areas on the defendant’s former mining site periodically seeped into streams that flowed downstream through the plaintiffs’ properties. Id. at 1326–27. At trial, the jury awarded each plaintiff modest compensatory damages ranging between $1,000 and $10,000 each, 16 but awarded punitive damages in the whopping sum of $45 million for these fifteen property owners. Id. at 1327. The district court found this to be a “shocking” amount that would “give the system a black eye,” and it reduced the punitives to $15 million. Id. After we affirmed the judgment without opinion, the defendant petitioned for certiorari, arguing that the punitive damages award was unconstitutionally excessive. The Supreme Court vacated our judgment and remanded the case for further consideration in light of Gore. Id. On remand, the district court 16 The modest compensatory damages can be explained by the fact that the plaintiffs suffered no personal injuries, risk to human health, diminution in property value, damage to crops or animals, or any other economic loss. Instead the damage was aesthetic and environmental in that the streams looked and smelled bad, the streams no longer contained fish, and the cows would no longer drink from the streams. Id. at 1327. 46 Case: 17-11447 Date Filed: 01/09/2020 Page: 47 of 77 determined that a punitive damages award of $4.35 million would not infringe constitutional limits, and it awarded that amount. Id. Neither side was happy. The plaintiffs appealed, arguing that the district court erred in holding that the $15 million award given after the first trial was unconstitutionally excessive. The defendant appealed, arguing that the $4.35 million announced by the district court, post-remand, was also unconstitutionally excessive. Id. at 1327–28. On appeal, we rejected the plaintiffs’ argument, and concluded that a $15 million award would be “grossly excessive.” As to the $4.35 million reduced amount, arrived at by the district court on remand, that figure produced ratios high enough to “raise a suspicious judicial eyebrow.” Id. at 1338 (quotation marks omitted). Nonetheless, we noted the Supreme Court’s admonition that a low award of compensatory damages will support a higher ratio than will a high compensatory amount, and further that a higher ratio may also be justified when the injury is hard to detect—such as the initially covert environmental damage to the streams—or when it is difficult to value the noneconomic harm. Id. We found this to be such a case. The actual damages were small and the State’s interest in deterring environmental pollution was strong. Id. 47 Case: 17-11447 Date Filed: 01/09/2020 Page: 48 of 77 Moreover, the defendant in Johansen was “a large and extremely wealthy international corporation.”17 Id. We determined that this situation was one in which a substantial disparity between actual damages and punitive damages would not be unconstitutionally excessive because the actual damages were “relatively small,” and the state’s interest in deterring environmental pollution was strong. Id. at 1338. Once again, our case is distinguishable from Johansen. Here, the compensatory damages were not “relatively small.” Id. Moreover, given the potential state civil fines for environmental pollution, the defendant in Johansen was on “fair notice [] that it might be subject to a substantial penalty for pollution of the streams running through its property.” Id. at 1339. Our other cases evaluating, and approving, punitive damages awards all involved significantly lower ratios than the ratio at issue here. Indeed, all four cases considered ratios that were within or close to the 4:1 ratio mentioned in Haslip, Gore, and State Farm. See McGinnis, 901 F.3d at 1290 (5.9:1); Myers v. Cent. Fla. Invs., Inc., 592 F.3d 1201, 1221 (11th Cir. 2010) (approximately 5:1); 17 The evidence in this case does not clearly reveal how wealthy Defendant is. In closing argument, Plaintiff’s counsel asked the jury to impose somewhere between (1) 10% of the company’s cash on hand ($10.8 million), which would total $1,080,000, or (2) 1% of the value of the division of the company that was involved in conducting the background check (whose value counsel suggested could be determined by looking at its purchase price of $336 million), which would total $3.3 million. 48 Case: 17-11447 Date Filed: 01/09/2020 Page: 49 of 77 Action Marine, 481 F.3d at 1321 (approximately 5.5:1); Bogle, 332 F.3d at 1362 (approximately 4:1). Of these four cases, McGinnis had the most similar monetary award ($3 million in punitive damages and $506,000 in compensatory damages), but it involved a “high degree of reprehensibility” not present here. 18 McGinnis, 901 F.3d at 1285, 1287–88. Otherwise, none of the cases involved compensatory or punitive damages awards comparable to the awards here. Accordingly, these cases do little to illuminate the proper disposition of this case. 3. Examination of out-of-circuit punitive damages cases Given the dearth of controlling precedent from this Court and the Supreme Court, we look to see whether our sister circuits provide any persuasive authority. Of the seventeen out-of-circuit cases in which the damages ratio was comparable to the ratio in this case (between approximately 10:1 and 15:1), the punitive damages award was affirmed in eight cases and vacated in nine. See EEOC v. Fed. Express Corp., 513 F.3d 360, 377–78 (4th Cir. 2008) (12.5:1 ratio affirmed); 18 In McGinnis, the jury determined that the defendant mortgage company acted with the specific intent to harm. The defendant raised the monthly mortgage and escrow payments owed by the plaintiff, yet would never explain the reason for the increase, notwithstanding the plaintiff’s repeated and increasingly frantic requests for an explanation. And, indeed, the defendant was not entitled to the increased payments it was demanding. McGinnis, 901 F.3d at 1286–87, 1289. “Undeterred, [the defendant] continued to demand payment of the unexplained amount, collect unwarranted late fees, and proceed to foreclosure without ever justifying the increase,” insisting that the plaintiff “was required to pay any amount [the defendant] demanded.” Id. at 1292. We concluded that all five of the Gore reprehensibility guideposts had been satisfied and that a punitive to compensatory damage ratio of 5.9:1 was not grossly excessive. 49 Case: 17-11447 Date Filed: 01/09/2020 Page: 50 of 77 Alexander v. City of Milwaukee, 474 F.3d 437, 454–55 (7th Cir. 2007) (affirming a range of ratios, the highest of which was approximately 11:1); Casillas-Diaz v. Palau, 463 F.3d 77, 86 (1st Cir. 2006) (affirming 10:1 ratio as to the first of two plaintiffs); Bielicki v. Terminix Int’l Co., 225 F.3d 1159, 1165–66 (10th Cir. 2000) (12:1 ratio affirmed); United Phosphorus, Ltd. v. Midland Fumigant, Inc., 205 F.3d 1219, 1230–31 (10th Cir. 2000) (9.65:1 ratio affirmed); Parsons v. First Inv’rs Corp., 122 F.3d 525, 530–31 (8th Cir. 1997) (11:1 ratio affirmed); Dean v. Olibas, 129 F.3d 1001, 1007–08 (8th Cir. 1997) (14:1 ratio affirmed); Davis v. Rennie, 264 F.3d 86, 117 (1st Cir. 2001) (10:1 ratio affirmed); Lompe v. Sunridge Partners, LLC, 818 F.3d 1041, 1069, 1073 (10th Cir. 2016) (11.5:1 ratio vacated); Ondrisek v. Hoffman, 698 F.3d 1020, 1029, 1031 (8th Cir. 2012) (10:1 ratio vacated); S. Union Co. v. Irvin, 563 F.3d 788, 791–92 (9th Cir. 2009) (10:1 ratio vacated); Bridgeport Music, Inc. v. Justin Combs Publ’g, 507 F.3d 470, 488, 490 (6th Cir. 2007) (9.5:1 ratio vacated); Stogsdill v. Healthmark Partners, L.L.C., 377 F.3d 827, 833–34 (8th Cir. 2004) (10:1 ratio vacated); Clark v. Chrysler Corp., 436 F.3d 594, 606, 608 (6th Cir. 2006) (13:1 ratio vacated); Lust v. Sealy, Inc., 383 F.3d 580, 589, 591 (7th Cir. 2004) (10:1 ratio vacated); Williams v. ConAgra Poultry Co., 378 F.3d 790, 793, 799 (8th Cir. 2004) (10:1 ratio vacated); Watkins v. Lundell, 169 F.3d 540, 546–47 (8th Cir. 1999) (15:1 ratio vacated). 50 Case: 17-11447 Date Filed: 01/09/2020 Page: 51 of 77 Notably, the compensatory damages award in each of the affirmed cases with similar ratios was smaller—some of them significantly so—than the compensatory damages award here, rendering those cases somewhat distinguishable from this case. The largest of these compensatory damages awards was $170,100, and each of the others was less than $100,000. Bielicki, 225 F.3d at 1162 ($170,100, comprising awards of $60,700, $77,800, and $31,600 to each of three plaintiffs, which the Tenth Circuit considered in the aggregate); Davis, 264 F.3d at 116–17 ($100,000); United Phosphorus, 205 F.3d at 1224, 1231 ($67,694.03); Casillas-Diaz, 463 F.3d at 80 ($50,000 awarded to the first of two plaintiffs); Alexander, 474 F.3d at 442 (ranging from $9,500 to $50,000); Parsons, 122 F.3d at 527 ($26,949.51); Fed. Express Corp., 513 F.3d at 363 ($8,000); Dean, 129 F.3d at 1007 ($5,000). The cases with similar ratios in which our sister circuits vacated the punitive damages awards provide some support for Defendant’s position that the punitive damages here were unconstitutionally excessive. In all but one of the vacated cases, the compensatory damages were either comparable to or higher than the compensatory damages in this case. See Ondrisek, 698 F.3d at 1024 ($3 million each for two plaintiffs); Lompe, 818 F.3d at 1068–69 ($1.95 million); Williams, 378 F.3d at 793 ($600,000); Stogsdill, 377 F.3d at 829 ($500,000); S. Union Co., 563 F.3d at 792 ($395,072.38); Bridgeport Music, 507 F.3d at 475 ($366,939); 51 Case: 17-11447 Date Filed: 01/09/2020 Page: 52 of 77 Clark, 436 F.3d at 606 ($235,629.13); Watkins, 169 F.3d at 543 ($235,000); Lust, 383 F.3d at 589 ($27,000). In seven of the nine cases in which the punitive damages were deemed excessive, the punitive damages award was remanded for remittitur to a ratio of 4:1 or less. See Ondrisek, 698 F.3d at 1030–31 (4:1); Lompe, 818 F.3d at 1075–76 (1:1); Williams, 378 F.3d at 799 (1:1); Stogsdill, 377 F.3d at 833–34 (4:1); S. Union Co., 563 F.3d at 792 (3:1); Bridgeport Music, 507 F.3d at 490 (no more than approximately 1:1 or 2:1); Clark, 436 F.3d at 608 (2:1). In one case, the punitive damages award was remanded for a remittitur of a ratio of less than 6:1. Lust, 383 F.3d at 589, 591 (5.6:1). And in the remaining case, the Eighth Circuit did not specify the amount by which the punitive damages award should be remitted, but commented that it was “not persuaded that the award should exceed a 4-to-1 ratio.” Watkins, 169 F.3d at 547. We have also examined fifteen out-of-circuit cases involving compensatory damages awards comparable to (within $50,000 of) the damages in this case. See In re C.R. Bard, Inc., 810 F.3d 913, 917 (4th Cir. 2016) ($250,000); Thomas v. iStar Fin., Inc., 652 F.3d 141, 149 (2d Cir. 2011) (approximately $280,700); Mercado-Berrios v. Cancel-Alegria, 611 F.3d 18, 20 (1st Cir. 2010) ($213,000); Craig Outdoor Advert., Inc. v. Viacom Outdoor, Inc., 528 F.3d 1001, 1020 (8th Cir. 2008) ($250,000 total); Clark, 436 F.3d at 606 ($235,629.13); Casillas-Diaz, 52 Case: 17-11447 Date Filed: 01/09/2020 Page: 53 of 77 463 F.3d at 80 ($250,000 awarded to the second of two plaintiffs); Farfaras v. Citizens Bank & Tr. of Chicago, 433 F.3d 558, 560 (7th Cir. 2006) ($200,000); Stamathis v. Flying J, Inc., 389 F.3d 429, 433 (4th Cir. 2004) ($250,000); DiSorbo v. Hoy, 343 F.3d 172, 186 (2d Cir. 2003) ($250,000); Zimmerman v. Direct Fed. Credit Union, 262 F.3d 70, 72 (1st Cir. 2001) ($200,000); Watkins, 169 F.3d at 543 ($235,000); Pavon v. Swift Transp. Co., 192 F.3d 902, 906 (9th Cir. 1999) ($251,218); Barnes v. Logan, 122 F.3d 820, 821 (9th Cir. 1997) ($261,561); Mathie v. Fries, 121 F.3d 808, 810 (2d Cir. 1997) ($250,000); Cont’l Trend Res., Inc. v. OXY USA Inc., 101 F.3d 634, 635 (10th Cir. 1996) ($269,000). The punitive damages awards were vacated in six of these cases, Clark, 436 F.3d at 608, DiSorbo, 343 F.3d at 189, Watkins, 169 F.3d at 547, Mathie, 121 F.3d at 817, Cont’l Trend Res., 101 F.3d at 643, Mercado-Berrios, 611 F.3d at 30, and upheld in nine, C.R. Bard, 810 F.3d at 918, Thomas, 652 F.3d at 149–50, Craig Outdoor Advert., 528 F.3d at 1021, Casillas-Diaz, 463 F.3d at 86, Farfaras, 433 F.3d at 560, Stamathis, 389 F.3d at 433, Zimmerman, 262 F.3d at 72, Pavon, 192 F.3d at 910, Barnes, 122 F.3d at 825. The majority of the affirmed cases involved ratios of 2:1 or less. Casillas-Diaz, 463 F.3d at 86 (2:1 as to the second of two plaintiffs); Zimmerman, 262 F.3d at 82 (2:1); Pavon, 192 F.3d at 910 (1.2:1); Stamathis, 389 F.3d at 443 (1.4:1); Barnes, 122 F.3d at 821, 824 (approximately 1:1); Farfaras, 433 F.3d at 560, 567 (0.5:1). Only two of these cases had ratios 53 Case: 17-11447 Date Filed: 01/09/2020 Page: 54 of 77 higher than 2:1, and both of them were lower than the ratio in this case. Craig Outdoor Advert., 528 F.3d at 1020 (8:1); C.R. Bard, 810 F.3d at 931 (7:1). As to the cases in which the punitive damages award was vacated, two involved ratios close to the ratio in this case. See Clark, 436 F.3d at 605–06 (approximately 13:1); Watkins, 169 F.3d at 546 (approximately 15:1). The last case, Watkins suggests that the punitive damages award in this case is unconstitutionally excessive. In Watkins, the plaintiffs sued the defendants for breach of contract and fraud regarding a sale of land. Watkins, 169 F.3d at 542. Although the defendants agreed to a settlement, they refused to make any payments in accordance with the settlement or comply with the agreement’s other terms. Id. In addition, the property the defendants used as security for the agreement “turned out to be worthless.” Id. The Eighth Circuit stated that it could fairly be inferred “based on previous conduct, conduct during the settlement, and subsequent conduct, that [one of the defendants] induced the settlement agreement knowing he would never pay any amount.” Id. at 546. Moreover, the defendant gave worthless property as security, made false assurances, and repeatedly attempted to avoid and delay his obligations to the plaintiffs. Id. The district court found that the defendant “engaged in a pattern, practice or scheme characterized by fraud and deceit.” Id. (quotation marks omitted). The Eighth Circuit agreed that 54 Case: 17-11447 Date Filed: 01/09/2020 Page: 55 of 77 the defendant’s conduct was reprehensible, but was “not persuaded that the award should exceed a 4-to-1 ratio.” Id. at 546–47. In this case, by contrast, Defendant did not intentionally engage in fraud or deceit. At worst, it acted with reckless disregard for its obligations under the FCRA. Yet, notwithstanding the greater reprehensibility of the Watkins defendant’s conduct, the Eighth Circuit concluded that the punitive damages award should not exceed a 4:1 ratio. Id. D. Determination of the constitutionality of the present award Trying to extrapolate guiding principles from the caselaw is a migraineinducing exercise, as the dissection of the above cases well reveals. Instead of a firm, fixed mathematical formula for assessing whether a particular punitive damages award is so grossly excessive as to violate a defendant’s due process rights, we instead have guidelines that are so flexible as to almost lose their status as an objective standard. At bottom, the problem is not that that the particular guidelines for determining reprehensibility are not reasonable—they are quite sensible—but that the caselaw thus far has provided no consistent means of monetizing those guidelines. For example, what is a low level of reprehensible conduct as compared to a high level, and how do we monetize those degrees of reprehensibility, and the resulting harm, to determine when a punitive damages award is grossly excessive, versus just slightly excessive? In figuring out whether 55 Case: 17-11447 Date Filed: 01/09/2020 Page: 56 of 77 the ratio between punitive and compensatory damages is too high, how do we gauge whether the compensatory damages award is for a “significant” amount of money (which calls for a lower ratio between the two types of damages) or—if we deem the compensatory damages to be insignificant—whether the underlying conduct was “egregious” enough to allow us to reject the 4:1 ratio-guideline suggested by the Supreme Court? Cf. Williams v. ConAgra Poultry Co., 378 F.3d 790, 799 (8th Cir. 2004) (“It is not that [a high] ratio violates the Constitution. Rather, the mathematics alerts the courts to the need for special justification.”). In reversing a punitive damages award of $3 million and holding that those damages should not have exceeded a 1:1 ratio to a $582,000 compensatory damages award, the Seventh Circuit recently elaborated on the flexible and inexact approach that a reviewing court must take in evaluating a due process challenge to a punitive damages award: The disparity guidepost is not a mechanical rule. The court must calculate the ratio to frame its analysis, but the ratio itself does not decide whether the award is permissible. The answer might be yes, despite a high ratio, if the probability of detection is low, the harms are primarily dignitary, or if there is a risk that limiting recovery to barely more than compensatory damages would allow a defendant to act with impunity. It might be no, even with a low ratio, if the acts are not that reprehensible and the damage is easily or already accounted for. Rather than simply move numbers around on a verdict form to reach a singledigit ratio, courts should assess the purpose of punitive damages and the conduct at issue in order to evaluate the award. 56 Case: 17-11447 Date Filed: 01/09/2020 Page: 57 of 77 Saccameno v. U.S. Bank Nat’l Ass’n, 943 F.3d 1071, 1089–90 (7th Cir. 2019) (citations omitted). Stated less elegantly, it is ultimately up to the reviewing court to eyeball the punitive damages award and, after weighing the egregiousness of the particular misconduct and the harm it has caused, decide whether the award is grossly excessive. As a practical matter, the elasticity of the guidelines means that each court’s decision will be very fact-specific and that it may yield few overarching principles that can be applied to future cases. Yet, we cannot throw up our hands in frustration just because the exercise is so imprecise. In the first place, the Supreme Court has advised us that we must pursue this inquiry when a punitive damages award is challenged as being unconstitutional. As the Supreme Court has noted, a punitive damages award can be so out of whack that it screams a violation of due process, and we are obliged to make that assessment. And it is only through the development of caselaw that more defined principles can emerge. Plus, reviewing courts at least have some guidelines to follow. In contrast, juries are often left to pick a number out of the sky, tethered to nothing more than the jury’s emotional reaction to the misdeed of a corporation with deep pockets.19 With the above caveats, we embark on an 19 The instructions to the jury here included no definition of reprehensibility or any mention of the factors that the Supreme Court has said should inform a decision as to whether the defendant’s conduct was sufficiently reprehensible to warrant punitive damages. 57 Case: 17-11447 Date Filed: 01/09/2020 Page: 58 of 77 analysis of the punitive damages award in this case. We conclude that it is unconstitutionally excessive. 1. Application of the above principles to this case As noted, the Supreme Court in Gore set out two guideposts that are relevant here in determining whether the defendant was on fair notice of the severity of punishment that might be imposed for its misconduct: (1) the degree of reprehensibility of the defendant’s conduct and (2) the disparity between the harm suffered by the plaintiff and the punitive damages award. The jury in this case awarded Plaintiff $250,000 in compensatory damages and $3.3 million in punitive damages. As to the degree of disparity between the punitive damages award and the harm to Plaintiff, the above figures represent a 13.1 ratio between the punitive and compensatory damages. The Supreme Court has stated that a 4:1 ratio will typically be close to the line of constitutional propriety and that few awards exceeding a single-digit ratio to a significant degree will satisfy due process. The 13:1 ratio here obviously violates those benchmarks. While the Supreme Court has made clear that its suggested benchmarks do not create a binding rule and that each case should be considered on its own facts, we will assume this 4:1 ratio to be a default position for purposes of framing our analysis. 58 Case: 17-11447 Date Filed: 01/09/2020 Page: 59 of 77 We therefore turn back to an assessment of the reprehensibility of Defendant’s conduct to determine whether a greater ratio is necessary in this case to achieve the goals of punitive damage: punishment and deterrence. Given the amount of compensatory damages awarded to Plaintiff, we conclude that Defendant’s conduct was not reprehensible enough to justify a ratio higher than 4:1, meaning that the jury’s verdict amount involving a much higher ratio was unconstitutionally excessive. As noted, the jury reasonably found that Defendant willfully violated the FCRA by knowingly or recklessly failing to follow reasonable procedures to assure the maximum possible accuracy of the information included in its criminal background reports, and specifically in its preparation of Plaintiff’s two reports. As to punitive damages based on this willful violation, Plaintiff met three of the five Gore factors used to gauge a defendant’s level of reprehensibility. We therefore conclude that Defendant’s conduct was reprehensible enough to warrant the imposition of punitive damages. Yet, while Defendant’s conduct was sufficiently reprehensible to support an award of punitive damages, it was not, in the grand scheme of things, severely reprehensible. To recap, Defendant’s procedures were deemed unreasonable as to both reports because, contrary to its own formal policy concerning the preparation of a criminal background report for a person with a common name, its actual practice 59 Case: 17-11447 Date Filed: 01/09/2020 Page: 60 of 77 permitted the use of only two, instead of three, identifiers. In this case, the Plaintiff and the person whose criminal record was wrongly attributed to Plaintiff (1) had the same last name and the same or similar first name (Richard versus Ricky) and (2) the same date of birth. In its willingness to use only two identifiers to attribute public information to the subject of an investigation bearing a common name, Defendant should have known that there would be occasions when a subject would be wrongly tagged with another person’s criminal record, even if those occasions might be relatively infrequent. In other words, Defendant should have envisioned that, every now and then, there could be two people living in the same state, with the same name and the same date of birth. In mitigation, Defendant argues that its overall error rate between 2010 and 2013 was quite low, which is true: the rate nationally for all types of errors identified through the dispute resolution process, not just the ones involved in this case, was only 0.38%. But as Plaintiff points out, given the large number of reports issued, even this low rate ensnared over 13,000 people during this time period. Plaintiff, however, never showed how many of the erroneous reports generated for these 13,000+ people arose from use of an inadequate common-name procedure. So, it is impossible for us, on this record, to assess the extent of the notice to Defendant that its practices were resulting in the dissemination of incorrect reports. 60 Case: 17-11447 Date Filed: 01/09/2020 Page: 61 of 77 The second report issued in 2013 involved an additional and even less forgivable lapse by Defendant. After issuing its first report in 2012, Defendant was alerted that it had incorrectly identified Plaintiff Richard A. Williams as being the “Ricky” Williams who had been charged with two counts of drug distribution in 2009. One might reasonably assume that having been made aware of this error, Defendant would take measures to prevent any future attribution of Ricky Williams’ public records to Plaintiff Richard A. Williams. And indeed Defendant did have mechanisms in place to prevent any further attribution of the 2009 drug distribution charges to Plaintiff so that when the time came to issue a second report in 2013, these 2009 charges never appeared on this 2013 report. But Defendant’s automated system lacked the technical capability to ensure that other criminal charges against Ricky Williams—existing then or in the future—that had not appeared in the earlier report would be blocked from attribution to Plaintiff. And that is what happened here: once again, utilizing only two identifiers, Defendant deemed Ricky Williams to be the same person as Plaintiff and the former’s 2004 convictions for assault and battery—which were not blocked because they had not been included in the 2012 background report—found their way into Plaintiff’s 2013 background report.20 20 After the subject of a background report successfully disputes Defendant’s inclusion on his report of another person’s criminal charge, Defendant’s blocking protocol will prevent that specific criminal charge from appearing on future reports prepared for the consumer. But other 61 Case: 17-11447 Date Filed: 01/09/2020 Page: 62 of 77 As for Defendant’s awareness of the inadequacy of its blocking procedure, Plaintiff has failed to bore down into the numbers to disclose how many of the misattributions by Defendant of another person’s criminal record involved a second mistake, such as happened here. Given Plaintiff’s absence of proof, we have no idea whether this kind of occurrence happened a lot or rarely. And a high frequency of this type of occurrence is something that Plaintiff should have seized on and proved at trial if he wanted to justify an award of extraordinarily high punitive damages.21 Yet, Plaintiff failed to do so. Notably, Plaintiff referenced as a basis for punitive damages both the common-name practice that led to the errors in both reports and the blocking failure that contributed to the error in the second report, but Plaintiff understandably relied on this second error as an aggravating factor that warranted the award of substantially more damages for this second report than for the first report.22 Plaintiff’s failure to provide some context for the charges against the same person wrongly identified as the subject may show up on the latter’s future reports if, for example, (1) Defendant simply missed the other charges in preparing the earlier report, (2) the person sustains additional criminal charges after the earlier report was prepared, or (3) the prospective employer authorizing the second background investigation has requested that Defendant use broader time parameters when conducting its investigation. 21 Plaintiff’s counsel asked the jury to award between 1 million and 3.3 million dollars in punitive damages. The jury went high, with a 3.3 million dollar award. 22 In arguing for compensatory damages, Plaintiff’s counsel suggested that the jury should award Plaintiff $100,000 in non-economic compensatory damages for the first erroneous match in the 2012 report and $275,00 for the second mismatch in the 2013 report. In other words, Plaintiff deemed the errors leading to the second erroneous report as representing 73% of the damages Plaintiff was requesting. 62 Case: 17-11447 Date Filed: 01/09/2020 Page: 63 of 77 frequency of this second type of error, however, weakens his case for the extremely high punitive damages he was awarded in this case. Obviously, no cheers are due Defendant. Defendant should have done a better job, and it must pay a price for its lapses. But when one is attempting to monetize how much a defendant should be punished for its conduct, the extent to which the Defendant has acted with the knowledge that its conduct will harm the plaintiff—and thereby with the imputed intent to do so—is an important factor. Indeed, the cases with similar ratios on which our Court has affirmed the punitive damages award involved intentional conduct. Plaintiff failed to show that Defendant’s conduct, while reckless, was so reckless as to imply an intent to create this harm, or that the conduct demonstrated the same degree of intent found in those cases whose punitive damages we have affirmed. And a defendant’s intent plays an important role in gauging the extent of the reprehensibility. In that vein, we contrast Defendant’s conduct with that of the defendant in McGinnis, whose punitive damages award of $3 million was close in amount to the $3.3 million award in this case. In McGinnis, the jury awarded the plaintiff $506,000 in compensatory damages and $3 million in punitive damages, which translates to a ratio of 5.9:1. See McGinnis, 901 F.3d at 1290. In affirming the award of punitive damages, we noted the “high degree of reprehensibility” in the defendant’s conduct: a degree of reprehensibility not present here. As noted 63 Case: 17-11447 Date Filed: 01/09/2020 Page: 64 of 77 above, the defendant in McGinnis tormented the plaintiff with unceasing, unexplained, and unwarranted increases in monthly mortgage payments, accompanied by a stubborn refusal to respond to the plaintiff’s repeated frantic pleas and culminating in the defendant’s efforts to foreclose on her property. In finding a high degree of reprehensibility, the McGinnis panel noted that the plaintiff had demonstrated all five of the Gore factors used to gauge reprehensibility and that the jury had found that the defendant acted with a specific intent to harm the plaintiff. Id. at 1292–93. Nothing of that kind occurred in this case. Here, while Defendant’s protocols were markedly lackluster, Defendant quickly corrected both of its reports when Plaintiff informed Defendant of its error. In short, considering all the above facts, a $3.3 million punitive damages award, on top of $250,000 in compensatory damages,23 is a startling amount of money. We cannot infer that Defendant would have been on notice that its practices, slack though they were, would result in this level of punishment for a single plaintiff’s injuries. That a $3 million punitive damages award, representing a 5.9:1 ratio between punitive and compensatory damages, met constitutional 23 Indeed, as Plaintiff had only claimed that his economic damages were approximately $78,000, Defendant argues that a goodly portion of the remaining $172,000 could also be considered as intended to punish the defendant. See State Farm, 538 U.S. at 426 (holding that to the extent compensatory damages are based on the infliction of emotional distress, such “[c]ompensatory damages . . . already contain this punitive element,” and citing the Restatement of Torts for the proposition that “[i]n many cases in which compensatory damages include an amount for emotional distress . . . there is no clear line of demarcation between punishment and compensation . . . .”). 64 Case: 17-11447 Date Filed: 01/09/2020 Page: 65 of 77 muster in McGinnis does not suggest that the $3.3 million punitive award— representing a 13:1 ratio—should likewise do so on the facts here. We conclude that application of a 4:1 ratio, which would reduce the punitive damages from $3.3 million to $1 million and yield a total award of $1,250,000, does pass constitutional muster. Such an award is sufficient to punish Defendant for its conduct and to deter future such misconduct. While this reduction will surely disappoint Plaintiff, the extent of the reduction will also leave Defendant unhappy because Defendant contends that the ratio here should be no more than 1:1. Defendant relies on the Supreme Court’s advice that when substantial compensatory damages have been awarded, a punitive award that exceeds that compensatory amount may sometimes be deemed unconstitutionally excessive. The notion underlying that principle is an awareness that a defendant may not much care how one characterizes the money it is required to pay; it cares about how much money it is out. Thus, if a plaintiff has already been awarded a substantial compensatory award, the defendant has already been punished—and, correspondingly, deterred—and a higher amount of punitive damages will be unnecessary to get the defendant’s attention. Defendant strongly relies on the Seventh Circuit’s recent decision in Saccameno v. U.S. Bank National Association in support of its position that the punitive damages award here should be in line with a 1:1 ratio. In Saccameno, 65 Case: 17-11447 Date Filed: 01/09/2020 Page: 66 of 77 much like McGinnis, the plaintiff was plagued by a home mortgage servicer who repeatedly claimed that the plaintiff was in default when she was actually current with her payments, who was obstinate in its refusal to correct its records, and who even began unwarranted foreclosure proceedings. Saccameno, 943 F.3d at 1078– 81. This bureaucratic nightmare lasted for months, with the plaintiff able to gain the defendant’s attention only when she filed the lawsuit at issue. Id. at 1080. The jury awarded the plaintiff $582,000 in compensatory damages and $3 million in punitive damages, for a roughly 5:1 ratio. Id. at 1081. On the facts of the case before it, the Seventh Circuit deemed the punitive damages award too steep to pass constitutional muster. Id. at 1086. The court noted the Supreme Court’s admonition that a “substantial” compensatory award may merit a ratio closer to 1:1. Id. at 1090. And the court concluded that a $582,000 compensatory award, based largely on emotional distress, was indeed a “considerable” award for what was an “indifferent, not malicious, mistreatment of a single $135,000 mortgage.” Id. With such a generous compensatory award, the Seventh Circuit concluded that a ratio no higher than 1:1 was necessary to meet constitutional muster. Id. Indeed, had the defendant’s conduct been “truly egregious,” the court might have considered a 5:1 ratio to be warranted. See id. In the case before it, however, the court considered a $582,000 compensatory award “for the indifferent, not malicious,” misconduct to be “a considerable” 66 Case: 17-11447 Date Filed: 01/09/2020 Page: 67 of 77 compensatory award. Id. And citing the Supreme Court’s decision in State Farm, the Seventh Circuit concluded that nearly all of the compensatory award in its case “reflects emotional distress damages that already contain a punitive element.” Id. (alteration accepted) (quotation marks omitted). Given all the above, the Seventh Circuit determined that the ratio in the case before it should not exceed 1:1, meaning the punitive damages award should not have exceeded $582,000. Id. The court acknowledged that we had, in McGinnis, “a factually similar case,” permitted a $3 million punitive award. Id. at 1088. But it distinguished McGinnis, noting that the jury in that case had found a specific intent to harm and that the McGinnis court had concluded that all five Gore factors were present, whereas in its case, only three factors were present. Id. Based on Saccameno, must we conclude here that only a 1:1 ratio, yielding $250,000 in punitive damages, meets constitutional muster? We think not. First, while the Saccameno decision is well reasoned, the Seventh Circuit does not consider emotional distress to constitute proof of the first Gore factor; our Court does.24 Second, the compensatory damages award deemed to be “significant” in Saccameno was more than $500,000; the compensatory award here was $250,000. 24 In McGinnis, relying on earlier case authority, we found that the plaintiff had shown the existence of the first Gore reprehensibility factor, which looked to whether the harm caused was physical as opposed to economic, to be satisfied by the plaintiff’s emotional distress. The Seventh Circuit does not consider “mental deterioration,” such as depression, anxiety, and panic disorders to constitute a physical injury for purposes of the first factor. Id. at 1086. 67 Case: 17-11447 Date Filed: 01/09/2020 Page: 68 of 77 Although $250,000 is certainly a great deal of money, it is below the level that several out-of-circuit decisions have identified as a substantial award for purposes of the 1:1 ratio inquiry, albeit “[w]hat counts as substantial depends on the facts of the case.” Id. at 1090 (collecting cases that have indicated a particular amount of compensatory damages to be substantial and thereby warranting a 1:1 ratio). Third, the Seventh Circuit focused largely on the harm the mortgage company visited on this one debtor-plaintiff by its indifferent and careless treatment of the plaintiff’s account. Here, although Plaintiff failed to develop the statistical information enough to fully illuminate the extent to which Defendant’s protocols led to the erroneous attribution of criminal records to background report subjects, Defendant itself was aware that its actual practices could lead, and had led, to inaccurate results, as these practices were at odds with its own formal acknowledgment that three identifiers should be used for subjects with common names. Further, it does not require a great deal of imagination for a consumer reporting agency to predict that if it has once mismatched an individual with a criminal record not his own, the same mistake could repeat itself in the future, absent some effective mechanism used by the agency to prevent that reoccurrence. A punitive damages award must be sufficient to not only punish Defendant, but also to deter it from continuing to apply slipshod protocols in pursuing its background investigations. We cannot be confident that a punitive damages award 68 Case: 17-11447 Date Filed: 01/09/2020 Page: 69 of 77 of only $250,000 would be strong enough medicine to fully gain Defendant’s attention. Finally, we are mindful that it is only those punitive damages awards that are grossly excessive that are unconstitutional. That being so, we think it prudent to err on the side of endorsing an amount that might seem a bit excessive—and indeed might be more than what we would have imposed had we been jurors—so long as it is not a grossly excessive amount. “Although there is no algorithm that yields a precise figure,” Kemp, 393 F.3d at 1365, we conclude that, under the facts of the case, $1 million—which is four times the compensatory damages—reaches the upper limit of the due process guarantee. Any more than this “would prove an unconstitutional windfall.” Id.