Punitive Damages
August 2003
No longer may plaintiffs attempt to loot the bounties of corporate defendants to make them examples. The U.S. Supreme Court has just hailed in a new era in which relevance and ratios prevail in punitive damages—even in California.
General Credit
1. In the future, plaintiffs targeting a corporation’s assets will need to focus discovery on specific profits from a single act. True False
2. California has traditionally limited punitive damages awards to no more than 10 percent of compensatory damages. True False
3. Nationwide most punitive damage awards deemed appropriate and not excessive have been no more than four times compensatory damages. True False
4. Punitive damages are intended to punish the defendant rather than compensate the plaintiff. True False
5. In <i>Campbell,</i> the Court held that all "bad acts" by State Farm in Utah were relevant and admissible to support an award of punitive damages. True False
6. The three criteria to consider in determining whether a punitive damages award is excessive are: (1) the reprehensibility of a 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 award and the comparable penalties for the same conduct. True False
7. Campbell requires one of the following factors to establish the reprehensibility of the defendant: (1) the harm caused was physical as opposed to economic, (2) the conduct evinced an indifference to or a reckless disregard of the health or safety of others, (3) the target of the conduct had financial vulnerability, (4) the conduct involved repeated actions as opposed to being an isolated incident, or (5) the harm was the result of intentional malice, trickery, or deceit. True False
8. The wealth of the defendant may be considered to determine the degree of indifference exhibited and to set a punitive damages award that will truly punish the defendant. True False
9. Exposing an insured to an excess judgment may serve as a basis for punitive damages against an insurance company. True False
10. <i>Actual harm</i> as the second guidepost under <i>Campbell</i> refers specifically to the amount of compensatory damages awarded to a plaintiff. True False
11. For "substantial" compensatory damage awards of $1 million or more, the Court in <i>Campbell</i> stated that punitive damages should not exceed ten times the compensatory damages. True False
12. Before <i>Campbell</i> the U.S. Supreme Court had never specifically prescribed a ratio which should be used when comparing compensatory and punitive damages awards. True False
13. Defendants recently subjected to large punitive damages awards by state courts may seek further appellate review or a new trial in light of <i>Campbell.</i> True False
14. When it is reexamined in light of <i>Campbell</i> California's highest punitive damages award of $290 million in <i>Romo,</i> will likely be reduced to less than $10 million. True False
15. It would be appropriate to instruct a jury regarding a maximum amount of punitive damages that could be awarded. True False
16. Excessive punitive damage awards are unconstitutional under the excessive fines provision of the Eighth Amendment. True False
17. In California a plaintiff may continue to conduct discovery regarding a defendant's wealth under Civil Code section 3295(a)(2), so long as he or she demonstrates the likelihood of receiving a punitive damages award. True False
18. In the recent Romo decision, the Fifth Circuit first expressed dissatisfaction with considering a defendant’s wealth when measuring punitive damages awards. True False
19. In the present conservative climate, evidence of a company's practices across the nation are necessary to establish punitive damages. True False
20. Under <i>Campbell,</i> the Utah trial court's reduced punitive damages award—from $145 million to $25 million—would not be deemed excessive. True False
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