Opinion ID: 1148911
Heading Depth: 1
Heading Rank: 2

Heading: Ratio of Punitive Damages to Actual or Likely Harm

Text: As to the second guidepost, the Supreme Court noted that the perhaps most commonly cited indicium of an unreasonable or excessive punitive damages award is its ratio to the actual harm inflicted on the plaintiff and it noted the principle that exemplary damages must bear a `reasonable relationship' to compensatory damages. 517 U.S. at 580, 116 S.Ct. at 1601. The Court stated: Of course, we have consistently rejected the notion that the constitutional line is marked by a simple mathematical formula, even one that compares actual and potential damages to the punitive award.... 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.... In most cases, the ratio will be within a constitutionally acceptable range, and remittitur will not be justified on this basis. 517 U.S. at 582-83, 116 S.Ct. at 1602-03. (Citations omitted; emphasis original). The ratio of the $6 million punitive damages award to the $992,000 of actual monetary damage is approximately 6:1. When the plaintiffs' awards for mental anguish, as remitted by the trial court, are included, the total of $1,692,000 gives a punitive:compensatory ratio of about 3.5:1. This ratio is obviously far smaller than the 500:1 ratio in BMW, see 517 U.S. at 581-84, 116 S.Ct. at 1602-03, and is even below the approximately 4:1 ratio that the United States Supreme Court found might be close to the line in Haslip, supra. 499 U.S. at 23, 111 S.Ct. at 1046. Thus, it is somewhat difficult to say that in this case the ratio alone must surely `raise a suspicious judicial eyebrow.' BMW at 583, 116 S.Ct. at 1603, quoting TXO Production Corp. v. Alliance Resources Corp., 509 U.S. 443, 481, 113 S.Ct. 2711, 2732, 125 L.Ed.2d 366 (1993) (O'Connor, J., dissenting). This factor does not, in itself, seem to indicate that a substantial remittitur is required. However, given that Ford lacked a malicious intent to wrongfully deprive the plaintiffs of any of their investment, given that Ford made it possible for the plaintiffs to initially borrow most of funds they eventually lost, and given the substantial amount of compensatory damages, we conclude that the conduct in this case indicates that the ratio should not be much greater than 1:1.