Court Opinion

ID: 9639203
Source: CourtListenerOpinion
Date Created: 2023-08-22 16:08:14.458862+00
Date Added: 2024-06-11T18:10:14.014133
License: Public Domain

RICHARD B. TEITELMAN, Judge,
concurring.
I concur in the majority opinion and write separately to emphasize the importance of a jury’s punitive damage award in cases brought under statutes such as the Missouri Merchandising Practices Act.
Missouri’s Merchandising Practices Act, Chapter 407, RSMo, is designed to protect Missouri consumers from fraudulent business practices. State ex rel. Nixon v. Telco Directory Publ’g., 863 S.W.2d 596, 601 (Mo. banc 1993). To remedy violations and to deter future prohibited conduct, the statute allows for injunctive relief, payment to the State for the cost of prosecution, punitive damages, restitution to injured consumers, and attorney’s fees. All of these remedial measures are important, but the possibility of punitive damages provides one of the most effective deterrents of future misconduct by a defendant or by others who may be similarly tempted to engage in fraudulent business practices.
In their briefs before this Court, the defendants assert that the punitive damages in this case are excessive for, among other reasons, being disproportionate to the amount of compensatory damages. While this may or may not be the case, it is important to note that while the degree of disparity between the actual damages and punitive damages is relevant in determining whether punitive damages are excessive, this factor alone is not determina*144tive. Instead, courts review punitive awards using three factors: (1) the reprehensibility of the defendant’s misconduct; (2) the disparity between the harm and the punitive award; and (3) the difference between the punitive award and penalties authorized or imposed in comparable cases. State Farm Mut. Ins. v. Campbell, 538 U.S. 408, 418, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003). Because each case must be assessed on its own facts, no court has imposed inviolable constitutional limits on the ratio between punitive and compensatory. To do so would require the courts to supplant the jury’s considered decision in favor of an arbitrary limit that may have no relationship whatsoever to the extent and severity of the defendant’s misconduct.
The Supreme Court’s opinion in State Farm Mut. Ins. v. Campbell, 538 U.S. 408, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003), does not hold otherwise. In Campbell, the Court offered the following dicta:
Our jurisprudence and the principles it has now established demonstrate, however, that, 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.
However, the Court qualified this dicta by stating that in cases involving egregious conduct but a small amount of compensatory damages, ratios greater than a single digit may comport with due process. Id. The Court’s refusal to adopt an arbitrary ratio for reviewing punitive damage awards is consistent with the recognition that punitive damages further a State’s legitimate interests in punishing wrongful conduct and deterring its repetition. State Farm Mut. Ins. Co. v. Campbell, 538 U.S. 408, 416, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003).
Subsequent cases reflect the proper application of Campbell. For instance, in Kemp v. American Telephone & Telegraph Company, 393 F.3d 1354 (11th Cir.2004), AT & T was found to have, as part of a wide practice, billed a customer for improper charges disguised as long-distance charges. The court upheld an award of $115.05 in compensatory damages and $250,000 in punitive damages. Although this amounted to a punitive to compensatory ratio of 2,172:1, the court noted that a lesser amount of punitive damages would utterly fail to serve the traditional purposes underlying an award of punitive damages, which are to punish and deter. Id. at 1363-65. Similarly, in Mathias v. Accor Economy Lodging, Inc., 347 F.3d 672 (7th Cir.2003), the court discussed Campbell at length in upholding an award of $5,000 in compensatory damages and $186,000 in punitive damages where a motel had re-rented rooms known to be infested with bedbugs. Although the ratio of punitive to compensatory was 37:1, the court recognized that a larger punitive damage award was necessary in order to have a sufficient deterrent effect. Id. at 678.
As the foregoing cases establish, courts must consider the propriety of punitive damage awards by giving full consideration to all relevant factors, including whether the award provides a sufficient deterrent effect. There is nothing in the law that vests appellate courts with a license to toss aside considered jury verdicts based upon arbitrary ratios or mathematical formulae. To do so would undermine the essential deterrent effect provided by properly awarded punitive damages.