Monday, August 7, 2023

Pennsylvania Supreme Court Addresses Standard for Determining Constitutionality of Punitive Damages Awards

In its recent Pro-Plaintiff decision in the case of Bert Company v. Turk, No. 13 WAP 2022 (Pa. July 19, 2023) (Op. by Donohue, J.) [Numerous Concurring Opinions written by numerous Justices], the Pennsylvania Supreme Court considered United States Supreme Court precedent in addressing the constitutionality of an award of punitive damages by a civil jury in Pennsylvania. 

More specifically, the court addressed the ratio calculation, that is, the appropriate ratio calculation measuring the relationship between the amount of punitive damages awarded against multiple Defendants who are found to be joint tortfeasors, and the compensatory damages awarded.

The court noted that the ratio is one of the considerations utilized in assessing whether an award of punitive damages is unconstitutionally excessive.

This matter arose out of a business dispute in which the Plaintiffs claimed that the Defendants had poached employees from the Plaintiff’s business as an attempt to harm the Plaintiff’s business.

The jury awarded 11.2 times as many dollars for punitive damages as it did for compensatory damages. More specifically, the jury’s verdict awarded $250,000.00 in compensatory damages as well as a total of $2.8 million dollars in punitive damages. The jury split the damages between the four (4) Defendants.

The Defendants based their 11.2 ratio on the cumulative punitive damages against all four (4) Defendants. The Pennsylvania Supreme Court determined that this was an incorrect calculation.

In its decision, the Pennsylvania Supreme Court noted that the Pennsylvania Superior Court calculated a punitive to compensatory damages ratio using a per-Defendant approach, as calculated by the trial court, rather than a per-judgment approach.

In its own decision, the Pennsylvania Supreme Court generally endorsed the per-Defendant approach as being consistent with federal constitutional principles that require consideration of a Defendant’s due process rights.

The Pennsylvania Supreme Court additionally concluded that, under the facts and circumstances of this case, it was appropriate to consider the potential harm that was likely to occur from the concerted conduct of the Defendants when determining whether the measure of punishment was both reasonable and proportionate. 

As such, the Pennsylvania Supreme Court affirmed the Order of the Superior Court.

Anyone wishing to review a copy of this decision may click this LINK.

Source: Article - “Pa. High Court Adopts Per-Defendant Calculation of Punitive - To - Compensatory Damages Ratio.” By Aleeza Furman of the Pennsylvania Law Weekly (July 19, 2023).

Based on this decision by the Pennsylvania Supreme Court, some commentators have noted that the ability of defendants to challenge the amount of punitive damages awarded, and other commentators have indicated that, now, "the sky's the limit" in terms of the amount of punitive damages that Plaintiffs can recover in a personal injury case.  See "'Sky's The Limit':  Pa. Justices' Punitive Damages Ruling Creates Uncertainty for Defendants." By Aleeza Furman of the Pennsylvania Law Weekly (July 24, 2019).

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