Appellate Law
P
unitive damages questions arise rather frequently both in the appellate arena and in postjudgment motion practice. Often the question is whether the magnitude of the punishment
is constitutionally suspect. Although the U.S. Supreme Court has addressed the topic of
“grossly excessive” punitive damages awards with uncharacteristic frequency over the past 20 years,
the labyrinth of considerations articulated in the precedent remains challenging for many lawyers
and judges to navigate. Add intermediate appellate court decisions to the mix and the challenge is
that much more daunting. While one could write volumes on the topic, the following considerations
provide a helpful starting point for evaluating whether a punitive damages award imposed by a federal
court can be challenged on due process grounds. Additional considerations relevant to state court
punitive damages awards will be addressed in a future article.
1. The Overarching Inquiry—Fair Notice. As a matter of U.S. Supreme Court jurisprudence,
When is a
Punitive
Damages
Award Too
Big?
A Five-Part
Analytical
Framework for
Appeals and PostJudgment Motions
an award of punitive damages is impermissibly excessive, and, thus, a violation of the Due Process
By Robert A. Mandel
enunciated three “guideposts” or benchmarks for evaluating whether the defendant had “fair notice”—
Clause, where the defendant lacked “fair notice” that the punishment could be as severe as the one
imposed for the conduct upon which liability was premised. As Justice David Souter put the issue
in Exxon Shipping Company v. Baker, “The real problem, it seems, is the stark unpredictability of
punitive awards. Courts of law are concerned with fairness as consistency[.]” 554 U.S. 471, 499
(2008). He continued:
[A] penalty should be reasonably predictable in its severity, so that even Justice
Holmes’s “bad man” can look ahead with some ability to know what the stakes are in
choosing one course of action over another. And when the bad man’s counterparts
turn up from time to time, the penalty scheme they face ought to threaten them
with a fair probability of suffering in like degree when they wreak like damage. The
common sense of justice would surely bar penalties that reasonable people would
think excessive for the harm caused in the circumstances..
Id. at 502. Accord State Farm Mut. Auto Ins. Co. v. Campbell, 538 U.S. 408, 417 (2003) and
Honda Motor Co. v. Oberg, 512 U.S. 415, 432 (1994). Thus, “fair notice” is the focal point of the
due process inquiry.
2. The Three Guidepost Paradigm. The U.S. Supreme Court in BMW of N. Am., Inc. v. Gore
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