Opinion ID: 203690
Heading Depth: 2
Heading Rank: 2

Heading: Due Process Limits on Punitive Damages

Text: We review de novo the district court's determination of the constitutionality of the jury's punitive damages award. Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 436, 121 S.Ct. 1678, 149 L.Ed.2d 674 (2001); Davis, 264 F.3d at 116. De novo review is appropriate here because a punitive award implicates constitutional questions of due process. See Cooper Indus., 532 U.S. at 435, 121 S.Ct. 1678. If we find an award grossly excessive, we may ascertain the amount of punitive award that is appropriate and order the district court to enter judgment in such amount. Bisbal-Ramos, 467 F.3d at 27. Where properly imposed, punitive damages further legitimate state interests in the punishment and deterrence of unlawful conduct. Philip Morris USA v. Williams, 549 U.S. 346, 352, 127 S.Ct. 1057, 166 L.Ed.2d 940 (2007). An award grossly excessive with respect to those interests violates the Due Process Clause, which requires that an individual have fair notice of the penalty to which his conduct could expose him. BMW, 517 U.S. at 574, 116 S.Ct. 1589. In BMW, the Supreme Court provided three guideposts for determining whether a punitive damages award was grossly excessive in this sense: (1) the degree of reprehensibility of the defendant's misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases. Id. at 575, 116 S.Ct. 1589; see also State Farm, 538 U.S. at 418, 123 S.Ct. 1513. In his appeal, Méndez-Ayala urges us to vacate the order of the district court reducing the punitive damages award from $350,000 to $35,000. He argues that the jury's award did not grossly exceed an amount necessary to punish Mayor O'Neill and deter him from similar conduct in the future.
As the Supreme Court has repeatedly stated, and as we have long recognized, the degree of reprehensibility is the most important guidepost in the BMW test. State Farm, 538 U.S. at 419, 123 S.Ct. 1513; Casillas-Diaz, 463 F.3d at 85; Davis, 264 F.3d at 116. In measuring the reprehensibility of a defendant's conduct, the Supreme Court has instructed us to consider whether: the harm caused was physical as opposed to economic; the tortious conduct evinced an indifference to or a reckless disregard of the health or safety of others; the target of the conduct had financial vulnerability; the conduct involved repeated actions or was an isolated incident; and the harm was the result of intentional malice, trickery, or deceit, or mere accident. State Farm, 538 U.S. at 419, 123 S.Ct. 1513 (citing BMW, 517 U.S. at 576-77, 116 S.Ct. 1589). We begin with harm, which is especially significant in the determination of reprehensibility. Conduct involving violence or the threat of violence is generally regarded as being more serious than nonviolent conduct. BMW, 517 U.S. at 575-76, 116 S.Ct. 1589 (citing Solem v. Helm, 463 U.S. 277, 292-93, 103 S.Ct. 3001, 77 L.Ed.2d 637 (1983)). Actual physical injury is not essential. See id. Conduct imposing a significant threat of violence may be considered reprehensible, even if it does not result in actual injury. Romanski v. Detroit Entm't, LLC, 428 F.3d 629, 643-44, 649 (6th Cir.2006) (awarding punitive damages of $600,000 in a section 1983 suit for false arrest where there was no violence, but the threat of physical force was apparent); Lee v. Edwards, 101 F.3d 805, 813 (2nd Cir.1996) (awarding punitive damages of $75,000 for malicious prosecution). A threat of violence may be especially serious if a state official creates it by using his authority. See Lee, 101 F.3d at 810. Although Méndez-Ayala suffered no physical injuries, the Mayor's conduct created a real and serious threat of violence. He used armed police officers to detain the employees, impound their property, and destroy city property by running their vehicles through wet cement. Accompanied by body guards, the Mayor continuously inflamed the situation by verbally accosting Comagro employees, including Méndez-Ayala. On multiple occasions, he told them that their work was shit, no good, junk, and that they should go to hell and jerk off. Méndez-Ayala testified that the Mayor was looking for trouble. After enduring these insults Méndez-Matos squared off with the Mayor and was surrounded by armed officers. During this confrontation, Méndez-Ayala said, he was worried the guards would beat up both him and his father. By conducting himself in this way, the Mayor needlessly transformed a business dispute into a dangerous confrontation. The same facts also speak to the second factor identified by the Supreme Court: whether the defendant's conduct showed reckless disregard of the . . . safety of others. See State Farm, 538 U.S. at 419, 123 S.Ct. 1513. The Mayor's decision to angrily confront and detain the Comagro employees showed little concern for the danger this conduct might create. His explanation that he simply lost his cool does not mitigate his culpability for the dangerous situation he created. At the same time, consideration of the other factors identified by the Supreme Court lessens the reprehensibility of the Mayor's conduct. It was undisputed that before the Mayor arrested the Comagro employees, he told them to leave. If Méndez-Ayala had left the facility immediately instead of questioning the Mayor's actions, the detention might have been avoided. Fortunately, no one was injured as a result of the Mayor's actions. One of the officers assisted Méndez-Ayala during the detainment by escorting him to the Mayor. The Mayor himself ultimately responded to Méndez-Ayala's requests by releasing the workers and returning their personal equipment after two hours. Other reprehensibility factors identified by the Supreme Court play no role here. For example, no evidence suggested that the target of the Mayor's conduct, Méndez-Ayala, was financially vulnerab[le]. The arrest was a one-time occurrence. Nor does the evidence suggest that the Mayor acted with intentional malice, trickery, or deceit. In sum, there is a disconnect between the degree of reprehensibility of the Mayor's conduct and the jury's large punitive damages award. While the Mayor created a serious risk of violence, the absence of any actual injury, his initial request that the employees leave, and the relatively short duration of the arrest and speedy return of equipment lessen the reprehensibility of his conduct. The absence of other factors identified by the Supreme Court, such as vulnerability, also lessens the degree of reprehensibility.
Under the second BMW guidepost, we consider whether punitive damages bear a reasonable relationship to the harm that the defendant's conduct caused or is likely to have caused. BMW, 517 U.S. at 581, 116 S.Ct. 1589. While the ratio of punitive damages to compensatory damages is relevant to this inquiry, the Supreme Court has long declined to impose a bright-line ratio which a punitive damages award cannot exceed. State Farm, 538 U.S. at 424, 123 S.Ct. 1513. Nevertheless, the Court has noted that in practice, few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process. [14] Id. at 425, 123 S.Ct. 1513. However, the focus of our inquiry is not the ratio itself, but whether the measure of punishment is both reasonable and proportionate to the amount of harm to the plaintiff and to the general damages recovered. Id. at 426, 123 S.Ct. 1513. A punitive award many times the size of the compensatory award may be reasonable and proportionate in certain circumstances. For example, particularly egregious conduct that results in relatively low actual damages can support a higher ratio than conduct that is less reprehensible. Romano, 233 F.3d at 655 (internal quotation marks and citation omitted); see BMW, 517 U.S. at 582, 116 S.Ct. 1589. We do not have that situation here. Although the Mayor's conduct was reprehensible, it was not particularly egregious in comparison to defendants' conduct in other cases supporting substantial punitive awards. See, e.g., Davis, 264 F.3d at 91, 117 (repeated punching of mental patient); Casillas-Diaz, 463 F.3d at 82 (suspect beaten unconscious by police); Romano, 233 F.3d at 673 (intentional violation of anti-discrimination law). The Mayor was not violent and he caused no physical injury. Before detaining the employees he asked them to leave the premises. The detention itself lasted two hours. The evidence would not support a conclusion that the Mayor intentionally violated a constitutional right, as did the defendant in Romano. See Romano, 233 F.3d at 669. Conversely, where the compensatory award is substantial, a ratio of punitive-to-compensatory damages larger than one-to-one may be unreasonable. State Farm, 538 U.S. at 425, 123 S.Ct. 1513 (When compensatory damages are substantial, then a lesser ratio, perhaps only equal to compensatory damages, can reach the outermost limit of the due process guarantee.) In this case, although Méndez-Ayala's compensatory damages award was not excessive, it did amply compensate him for the mental distress resulting from his confrontation with the Mayor. Although not the sole determinant in the analysis, this fact supports the one-to-one ratio between the compensatory damages awarded to Méndez-Ayala and a $35,000 punitive damages award. [15]
Under the final BMW guidepost, we consider the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases. [16] State Farm, 538 U.S. at 428, 123 S.Ct. 1513. In discussing this guidepost, the Supreme Court has asked reviewing courts to accord deference to legislative judgment about the appropriate sanction for the conduct at issue. BMW, 517 U.S. at 583, 116 S.Ct. 1589. In the case of section 1983, however, Congress did not address damage awards; therefore, we compare the present award with awards we have permitted in similar section 1983 suits. Davis, 264 F.3d at 117 (citing Zimmerman v. Direct Federal Credit Union, 262 F.3d 70, 82 (1st Cir. 2001)). While we look first to authorities within our own circuit, we are not confined to such sources. See BMW, 517 U.S. at 584, 116 S.Ct. 1589 (considering statutes from various jurisdictions); Romanski, 428 F.3d at 646, 648 (looking outside circuit case law). Although Méndez-Ayala argues that this Court has upheld far larger punitive awards, the facts in those cases differ in critical respects from the facts here. For example, we have affirmed large punitive awards where the plaintiff suffered significant physical injury. In Davis, where we affirmed a punitive damages award of over $1 million, the plaintiff was thrown to the ground and repeatedly punched in the head. Davis, 264 F.3d at 94; see also Casillas-Diaz, 463 F.3d at 86. Where we have approved large awards in the absence of violence, the conduct at issue was typically intentional or malicious, such as discrimination. See, e.g., Rivera-Torres v. Ortiz Velez, 341 F.3d 86, 102 (1st Cir.2003) (affirming a punitive award of $250,000 for politically motivated discrimination); Zimmerman, 262 F.3d at 83-84 (affirming an award of $400,000 for violations of state discrimination law); Romano, 233 F.3d at 673 (affirming an award of $285,000 for violations of Title VII and state law). In contrast, our case law provides no guidance for determining what penalty is appropriate for engaging in a non-violent violation of the Fourth Amendment. Outside our circuit, similar cases have resulted in punitive awards under $100,000. See, e.g., Dean v. Olibas, 129 F.3d 1001, 1007 (8th Cir.1997) (affirming an award of $70,000 for malicious prosecution); Lee, 101 F.3d at 813 (reducing a punitive award from $200,000 to $75,000 for malicious prosecution). The only case upholding a substantially larger punitive award for a non-violent violation of Fourth Amendment rights, Romanski, 428 F.3d at 632, involved malicious conduct not present here.
After applying the BMW guideposts, we agree with the district court that the jury's punitive damages award of $350,000 grossly exceeded what was necessary to punish and deter the Mayor's conduct. See BMW, 517 U.S. at 587, 116 S.Ct. 1589. Because the Mayor lacked fair notice that his conduct could expose him to a penalty of this magnitude, we find that the jury's punitive award violates due process limits. When faced with a case where a punitive damages award is unconstitutionally excessive, but some punitive damages are warranted, we may ascertain the appropriate amount and order the district court to enter judgment in such amount. Bisbal-Ramos, 467 F.3d at 27. We agree with the district court that a punitive award of no more than $35,000 is permissible in this case, and we therefore affirm that award. This award adequately reflects the degree of reprehensibility of the Mayor's conduct. Given the nature of the harm and the adequacy of the jury's compensatory damages award, there is no justification for a great disparity between the compensatory and punitive awards. The award of $35,000 is also consistent with the awards upheld in similar cases. In sum, the same reasons that persuaded us that the jury's award of $350,000 violated due process persuade us that an award of $35,000 comports with due process.