Court Opinion

ID: 9795985
Source: CourtListenerOpinion
Date Created: 2023-08-31 03:44:30.998328+00
Date Added: 2024-06-11T08:43:46.658918
License: Public Domain

SERCOMBE, J.,
dissenting.
Despite the fact that the jury awarded defendant $100,000 in punitive damages, the concurrence holds that any award of punitive damages in this case in excess of *593$2,000 is grossly excessive and thus would violate plaintiff’s right to due process of law under the United States Constitution. In my view, due process prohibits a punitive damages award in excess of $4,500.
I agree with much of the concurrence’s analysis. For instance, I agree that plaintiffs conduct in this case falls on the lower end of the reprehensibility scale. I also agree that there are no special circumstances in this case that would justify a punitive damages award that would exceed the compensatory damages by more than a single-digit ratio. Rather, my disagreement with the concurrence is a narrow one: In my view, the concurrence errs in holding that due process will allow only a four-to-one ratio of punitive to compensatory damages in this case. For the reasons explained below, due process concerns cannot support a reduction of the jury’s award of $100,000 to less than $4,500 — a nine-to-one ratio of punitive to compensatory damages, within the “single-digit ratio” countenanced by Goddard v. Farmers Ins. Co., 344 Or 232, 258, 179 P3d 645 (2008).
I begin with general principles. In Goddard, the Supreme Court explained:
“Punitive damages awards that are ‘grossly excessive’ violate the Due Process Clause of the Fourteenth Amendment to the United States Constitution, because excessive punitive damages serve no legitimate purpose and constitute arbitrary deprivations of property. BMW of North America, Inc. v. Gore, 517 US 559, 568, 116 S Ct 1589, 134 L Ed 2d 809 (1996). Excessive punitive damages also implicate the requirement of fair notice that is enshrined in the Due Process Clause: Due process dictates that ‘a person receive fair notice not only of the conduct that will subject him to punishment, but also of the severity of the penalty that a state may impose.’ Id. at 574.”
Goddard, 344 Or at 251. The broad question posed by this case is whether the trial court’s reduction to a four-to-one ratio of punitive to compensatory damages was required by the Due Process Clause of the Fourteenth Amendment.
In Goddard, the Oregon Supreme Court reiterated the three “guideposts” originally set out by the United States *594Supreme Court in Gore for determining whether a punitive damages award comports with due process:
“ ‘(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. (quoting State Farm Mut. Ins. Co. v. Campbell, 538 US 408, 418, 123 S Ct 1513, 155 L Ed 2d 585 (2003) (Campbell)). The court in Goddard explained that “[i]t is clear that that analysis must begin, at least, with the aforementioned guideposts * * *. It is less clear how those guideposts can yield a specific numerical figure that represents the maximum constitutionally permissible award.” 344 Or at 256-57.
The first guidepost, reprehensibility, includes whether the harm caused was physical as opposed to economic; whether the tortious conduct evidenced indifference to or reckless disregard of the health or safety of others; whether the target of the conduct had financial vulnerability; whether the conduct involved repeated actions; and whether the harm was the result of intentional malice, trickery, deceit, or mere accident. Id. at 253. “ ‘The existence of any one of these factors weighing in favor of a plaintiff may not be sufficient to sustain a punitive damages award; and the absence of all of them renders any award suspect.’ ” Id. (quoting Campbell, 538 US at 419). As the court explained in Goddard, the first guidepost “does not generate numerical answers at all, because the guidepost itself, and the ‘subfactors’ that go into it, are all qualitative, not quantitative.” 344 Or at 257. Nonetheless, “we may compare the level of reprehensibility exhibited in various cases, and that comparison may lead us to a conclusion that the constitutionally permissible limit in a particular case is ‘high’ or ‘low,’ relative to the limit in another case.” Id.
The third guidepost — which requires the court to consider comparable civil and criminal penalties — “also fails to provide a quantitative measuring stick.” Id. The Oregon Supreme Court has explained that comparable sanctions can *595“be used as a basis for comparing one punitive damages award to another, and not as a direct predictor of the constitutional limits of an individual punitive damages award.” Id That is, the guidepost may militate against a significant punitive damages award if the state’s comparable sanctions are mild or trivial, whereas the guidepost will support a more significant punitive damages award when the state’s comparable sanctions are severe. Id.
The second guidepost — the ratio between punitive damages and actual or potential harm to the plaintiff— “comes closest to providing numerical limits.” Id. The court observed in Goddard that,
“[allthough the Court has professed its reluctance to ‘identify concrete constitutional limits on the ratio between harm, or potential harm, to the plaintiff and the punitive damages award,’ Campbell, 538 US at 424, it has also, at various times, alluded to specific numerical ratios. In [Pacific Mutual Life v.] Haslip, [499 US 1, 23-24, 111 S Ct 1032, 113 L Ed 2d 1 (1991)], for example, the Court stated that a punitive damages award that is more than four times the compensatory damages award ‘may be close to the [constitutional] line.’ In Gore, 517 US at 581, the Court interpreted a prior decision, TXO Production Corp. v. Alliance Resources Corp., 509 US 443, 113 S Ct 2711, 125 L Ed 2d 366 (1993), as suggesting that the ratio could not exceed ten to one. In Campbell, 538 US at 425, the Court suggested that, although a higher ratio may be justified when compensatory damages are small, ‘[w]hen compensatory damages are substantial, * * * a * :|; * ratio [that is] perhaps only equal to compensatory damages * * * can reach the outermost limit of the due process guarantee.’ And, in the same opinion, the Court indicated that due process may be violated by ‘exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree.’ Id. at 425.”
344 Or at 257-58 (emphasis and ellipses in Goddard). The court in Goddard continued:
“But the Court also has conceded that the single-digit ratio may be exceeded in certain circumstances. It has indicated, for example, that higher ratios may be appropriate if ‘a particularly egregious act has resulted in only a small amount of economic damages,’ and in ‘cases in which the *596injury is hard to detect or the monetary value of noneconomic harm might have been difficult to determine.’ Gore, 517 US at 582. This court has identified one other circumstance in which an award that exceeds a single-digit ratio between punitive and compensatory damages might satisfy due process. In Williams [v. Philip Morris, 340 Or 35, 63, 127 P3d 1165 (2006), vac’d on other grounds, 549 US 346, 127 S Ct 1057, 166 L Ed 2d 940, (2007), on remand, 344 Or 45, 176 P3d 1255, cert granted in part, 128 S Ct 2904 (2008)], we held that ‘extraordinarily reprehensible’ conduct on the part of the defendant may provide a basis for overriding concerns that may arise from an award that exceeds a single-digit ratio.”
344 Or at 259 (footnote omitted).
The court in Goddard then summarized its approach to the guideposts:
“In sum, the second guidepost, although far from perfect, does provide at least a rough numerical baseline for calculating a maximum constitutionally permissible punitive damages award in a given case. Specifically, it suggests that due process normally will not permit a punitive damages award in excess of a single-digit ratio to the compensatory damages award.
“Once that rough numerical reference point is established, the other guideposts come into play. As we have suggested, the first (reprehensibility) guidepost primarily is a comparative tool: If the level of reprehensibility exhibited in a case is high relative to other cases, then so will be the constitutionally permissible punitive damages award. The third guidepost also is comparative: If the comparable civil sanctions for certain conduct is high relative to other civil sanctions, then that fact may justify an upward adjustment in the constitutionally permissible amount of punitive damages.”
344 Or at 259 (emphasis in original).
The concurrence goes astray when it uses a four-to-one ratio as its starting point in determining the maximum punitive damages award that due process will permit. Rather, the “rough numerical reference point” that the Supreme Court has established in a noneconomic injury case such as this one is nine to one. In my view, because nothing in *597the record in this case requires an adjustment to that initial amount, due process requires only a reduction of the $100,000 punitive damages award to $4,500.
The court in Goddard observed that, “as a very general rule of thumb, the federal constitution prohibits any punitive damages award that significantly exceeds four times the amount of the injured party’s compensatory damages, as long as the injuries caused by the defendant were economic, not physical.” Id. at 260 (emphasis added). We recently reiterated that rule:
“[A]s a general rule, due process will not permit a punitive damage award exceeding a single-digit ratio to the compensatory damage award. Further, if the injuries that defendant has caused are strictly economic, a punitive damages award generally may not significantly exceed four times the amount of the injured party’s compensatory damages.”
Hamlin v. Hampton Lumber Mills, Inc., 222 Or App 230, 241, 193 P3d 46 (2008) (emphasis added; citations omitted). Here, the jury explicitly found that defendant did not suffer economic injuries, but that he suffered emotional injury. Thus, the four-to-one ratio that the trial court employed — and that the concurrence endorses — was not required as a matter of law. The question remains, of course, what ratio due process will support.
As noted, in Goddard, the court described the dichotomy between the four-to-one ratio and the nine-to-one (or single-digit) ratio as a dichotomy between economic injuries and noneconomic injuries. 344 Or at 260. The Goddard court set the nine-to-one ratio as the default for noneconomic (which presumably includes emotional) injuries: “[D]ue process normally will not permit a punitive damages award in excess of a single-digit ratio to the compensatory damages award.” Id. at 259. The court explained that noneconomic injuries traditionally have been punished more severely than have economic injuries: “By long tradition, and reinforced by existing legal standards at all levels of government, conduct that causes or creates a risk of physical harm to persons is punished more harshly than conduct that causes or potentially causes economic harm.” Id. at 259-60. “[T]he limit,” the *598court concluded, “must be significantly lower for conduct that causes or risks only economic injury.” Id. at 260.
Accordingly, in determining the maximum amount of punitive damages that due process will allow, the rough numerical reference point should be $4,500, or nine times the amount of compensatory damages awarded in this case. The concurrence, although noting that the four-to-one ratio guidepost is relevant “where the only harm is financial,” 226 Or App at 582 (Edmonds, J., concurring), and despite the fact that the jury found by a special verdict that defendant did not suffer economic harm, nonetheless treats that ratio as the relevant one. As noted, that is where the concurrence goes astray.
It is important to remember that the jury awarded defendant $100,000 in punitive damages. Our task is not to review that award de novo, but to determine the maximum amount that due process will permit. See Parrott v. Carr Chevrolet, Inc., 331 Or 537, 555, 17 P3d 473 (2001) (“In Oregon, calculating punitive damages is the function of the jury.”). The concurrence’s answer — that any amount over $2,000 is “grossly excessive” and violates plaintiffs constitutional rights — is hard to square with the goal of punitive damages to punish and deter wrongdoers. See Campbell, 538 US at 416 (punitive damages “are aimed at deterrence and retribution”). I agree that plaintiffs conduct is not very reprehensible in the universe of cases in which juries have awarded punitive damages. Yet, no court of which I am aware has used “low reprehensibility” as the basis to decrease the amount of punitive damages below a single-digit ratio to compensatory damages. Nor am I aware of any court that has determined that a $4,500 punitive damages award constitutes an “extreme result! ] that jar[s] one’s constitutional sensibilities.” Pacific Mut. Life Ins. Co., 499 US at 18. To reduce the award, as the concurrence does, to $2,000 “would exceed our constitutional role.” Goddard, 344 Or at 275; see Parrott, 331 Or at 557 (A reviewing court “must give effect, to the extent practicable, to the state-protected right to have a jury determine the amount of a punitive damages award.”); id. at 558 (court must reduce excessive award to “highest lawful amount”).
*599In sum, I would hold that due process permits an award in this case of no more than $4,500.
Ortega, J., joins in this dissent.