Court Opinion

ID: 9795984
Source: CourtListenerOpinion
Date Created: 2023-08-31 03:44:30.993825+00
Date Added: 2024-06-11T08:43:46.637749
License: Public Domain

ARMSTRONG, J.,
dissenting.
If this were a case in which the jury’s compensatory damage award was substantial, I would agree with the basic approaches taken by the concurrence and by Judge Sercombe to establish the due process limit on punitive damages in this case. Indeed, the “single-digit ratio” formulation of punitive damages can be useful in gauging the proportionality of the wrongful conduct to the punishment when the compensatory damage award is significant. However, the ratio loses its usefulness when we are confronted with a small compensatory award, as we are here. As Judge Sercombe notes in his dissent, the primary purpose of a punitive damage award is to deter wrongful conduct. 226 Or App at 598 (Sercombe, J., dissenting) (citing State Farm Mut. Ins. v. Campbell, 538 US 408, 416, 123 S Ct 1513, 155 L Ed 2d 585 (2003) (Campbell)). Given that, a punitive damage award based on applying the single-digit default ratios to a small award of compensatory *589damages falls far short of achieving that purpose. Rather, this case warrants a punitive damage award higher than $2,000, produced by the four-to-one ratio that the concurrence concludes is appropriate, or $4,500, based on the nine-to-one ratio advanced by Judge Sercombe. Hence, I respectfully dissent.
Fundamentally, deterrence has much less meaning when we apply the suggested single-digit ratios to smaller awards. Accordingly, the Supreme Court has routinely discouraged courts from taking a purely categorical approach to determining the constitutionality of punitive damage awards. See BMW of North America, Inc. v. Gore, 517 US 559, 582, 116 S Ct 1589, 134 L Ed 2d 809 (1996) (“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.”); Pacific Mut. Life Ins. Co. v. Haslip, 499 US 1, 18, 111 S Ct 1032, 113 L Ed 2d 1 (1991) (“We need not, and indeed we cannot, draw a mathematical bright line between the constitutionally acceptable and the constitutionally unacceptable that would fit every case. We can say, however, that [a] general concer[n] for reasonableness * * * properly enter[s] into the constitutional calculus.”).
Likewise, the Oregon Supreme Court has recognized the need for flexibility in this area in order to preserve the deterrent function of punitive damages. As the concurrence notes, 226 Or App at 582-83 (Edmonds, J., concurring), the court in Goddard v. Farmers Ins. Co., 344 Or 232, 261, 179 P3d 645 (2008), identified four factors that courts may consider in justifying a higher punitive damage award. Three of those factors — a particularly egregious act coupled with comparatively low economic damages, a difficult-to-detect injury, or a difficult-to-value noneconomic harm — embody a concern with accurately reflecting the harm caused by wrongful conduct in instances where the compensatory damage award does not. As we concluded in Hamlin v. Hampton Lumber Mills, Inc., 222 Or App 230, 246, 193 P3d 46 (2008), the principle behind those factors addresses “the inherent purposes of punitive [awards] to penalize and deter” and thus “permits] a more expansive award than that dictated by the ratio analysis in those circumstances.”
*590In this case, we confront an issue similar to that discussed in Hamlin. The jury determined that defendant’s noneconomic damages are $500. Although people might reasonably disagree as to what constitutes a “small” award, most, if not all, would agree that $500 is a small amount in the universe of compensatory damages. Additionally, plaintiffs conduct strikes me as remarkably egregious and high handed. Defendant was not in default on a debt to plaintiff— in fact, there was no debt for plaintiff to collect — yet plaintiff intentionally manipulated the process to gain leverage with defendant by making repeated efforts to repossess the vehicle, including sending a collection agency to defendant’s home to take a truck to which it had no right, and threatening defendant with criminal prosecution for failing to voluntarily surrender it. That conduct was not any less reprehensible due to defendant’s familiarity with auto sales, retention of an attorney early in the dispute, or successful evasion of plaintiffs illegal repossession efforts. The fact that the jury found only $500 of the $150,000 in emotional harm that defendant sought goes to the issue of defendant’s damages, not plaintiffs conduct. What is more telling, in my view, is that the jury determined that plaintiff had engaged in very offensive behavior, and that that behavior warranted a punitive damage award of $100,000.
Under those circumstances, the fundamental function of a punitive damage award — deterrence—should still count, and the ratio guidepost should not operate to unduly constrain the underlying function of such an award. The primary dispute between the concurrence and Judge Sercombe is whether the damages are economic or physical, and, hence, which threshold ratio should be applied to the compensatory damages to determine a proper punitive damage award. Respectfully, they miss the point — the resulting awards of $2,000 (based on a four-to-one ratio) or $4,500 (based on a nine-to-one ratio) simply do not adequately serve to deter the wrongful conduct.
Rather, it is the third guidepost, under which we consider civil sanctions authorized in comparable cases, that should provide more guidance in this instance than that provided by ratio analysis. As the concurrence correctly *591explains, plaintiff violated the unlawful debt collection practice statute, ORS 646.639, and ORS 646.641(1) creates a private right of action with a nominal damage award of $200 for such a violation. 226 Or App at 583 (Edmonds, J., concurring). In light of those statutes, the concurrence concludes that the comparable-sanctions guidepost neither supports nor militates against a larger award of punitive damages than the ratio analysis would otherwise permit. Id. at 14. Although I do not disagree with that reasoning based on ORS 646.641(1), I believe that that analysis is incomplete.
The third guidepost does not limit our review to civil penalties authorized or imposed in identical cases; rather, it requires us to consider “civil penalties authorized or imposed in comparable cases.” Campbell, 538 US at 418 (emphasis added). The statutes on unlawful debt collection practices are comparable to the statutes on unlawful trade practices. Both groups of statutes are focused on protecting consumers against improper business and trade practices, and both provide the same private enforcement remedies for violations of them. Compare ORS 646.639 and ORS 646.641 with ORS 646.607, ORS 646.608, and ORS 646.638. However, the unlawful trade practice statutes also authorize the state, through district attorneys and the Attorney General, to bring actions to enjoin unlawful trade practices, ORS 646.632, and to recover civil penalties up to $25,000 for each trade practice violation. ORS 646.642.1
The legislature’s decision to establish a penalty for unlawful trade practice violations up to $25,000 for each violation affects the due process analysis that applies to punitive damage awards on unlawful trade practice claims involving small compensatory awards. The legislature’s decision to establish such a penalty effectively means that, although punitive damage awards greater than $25,000 on unlawful *592trade practice claims may be permitted without violating due process, an award of $25,000 on such a claim cannot violate due process.
I believe that that principle applies to unlawful debt collection practice claims even though the unlawful debt collection practice statutes do not include public enforcement and civil penalty provisions. The unlawful debt collection and unlawful trade practice statutes and claims are sufficiently comparable to lead me to conclude that a punitive damage award of $25,000 in a case such as this, involving a small compensatory award, does not violate due process. In other words, I conclude that the legislative policy to permit civil penalties up to $25,000 for unlawful trade practice violations provides a more appropriate proportionality gauge for punitive damage awards in this and comparable circumstances— where egregious, prohibited conduct yields a small amount of compensatory damages — than does the single-digit formula. That conclusion comes closer to respecting the jury’s judgment as to the appropriate measure of punishment for the unlawful conduct at issue, and it preserves the deterrent function of punitive damages, which the legislature expressly made applicable to both unlawful debt collection and unlawful trade practice claims. Compare ORS 646.641(1) with ORS 646.638(1).2
For those reasons, I conclude that an award of $25,000 in punitive damages would not offend due process. Accordingly, I dissent.
Schuman and Rosenblum, JJ., join in this dissent..

 Currently, violations of the unlawful debt collection practice statutes are not subject to state enforcement -under ORS 646.642. As of this writing, however, the Attorney General is supporting and the 2009 Oregon Legislative Assembly is considering Senate Bill (SB) 328 (2009), which would make the unlawful debt collection practice statutes subject to the same public enforcement regime as the unlawful trade practice statutes. Hence, if SB 328 is enacted, violations of the unlawful debt collection practice statutes will be subject to a civil penalty up to $25,000 per violation.

 The legislature’s decision to authorize punitive damage awards for both unlawful debt collection and unlawful trade practice claims bolsters my conclusion about the due process limit on the punitive damage award in this case. If, as I believe, a $25,000 punitive damage award on an unlawful trade practice claim involving a $500 compensatory damage award would not violate due process, then I do not see how a $25,000 punitive damage award would violate due process in this case.