Complex Litigation: Punitive Damages Class II, page 4

COMPLEX LITIGATION (contined)

Page 4

Counterparts exist to the "limited fund" doctrine—the theories of "limited punishment," "limited generosity" and "punitive damages overkill." They are not established doctrine but do offer promising avenues to reconcile the competing rights of plaintiffs and defendants.

The Haslip-TXO -BMW trilogy implies a due process limitation on the ultimate quantum of punitive damages awarded against a party for one wrong, although the limit is not in the form of a precise relationship between an individual plaintiff’s actual damages and the punitive damages award.

Punitive damages are most likely to survive due process scrutiny if based on evidence establishing the full scope of the harm from the tort—i.e., the actual harm inflicted on all people and the potential harm that may have occurred. As Judge Weinstein observed in Agent Orange: "There must be some limit as a matter of policy or as matter of due process, to the amount of times defendants may be punished for a single transaction." Agent Orange, 100 F.R.D. at 725.

A course of tortious conduct is certified

On occasion, the courts have certified classwide punitive damages trials against defendants arising from a common course of tortious conduct. See, e.g.. Jenkins v. Raymark Industries Inc., 109 F.R.D. 269 (E.D. Texas 1985), aff'd, 782 F.2d 468 (5th Cir. 1986); Hilao v. Estate of Marcos, 103 F.3d 767 (9th Cir. 1996).

The circuit courts have acknowledged the TXO principle that "Due Process... imposes substantive limits beyond which penalties may not go." TXO, 113 S. Ct. at 2718, by articulating a "limited fund" analog to multiple punitive damages awards, variously termed limited punishment, limited generosity and punitive damages overkill. Morgan v. Woessner, 997 F.2d 1244, 1258 (9th Cir. 1993); Dunn v. HOVIC, 1 F.3d 1371 (3d Cir. 1993). HOVIC reduced a punitive award because "district court gave insufficient consideration to the effect of successive punitive awards [in determining] the maximum amount of punitive damages that could reasonably have been awarded." Id. at 1391.

In Morgan, the 9th Circuit ruled that courts reviewing punitive damages awards should consider the mitigating impacts of all awards against defendant for the same conduct, not just punitive awards. 997 F.2d at 1257 and n.14. In the Exxon Valdez litigation, the federal trial court invoked the "limited punishment" theory, at the defendant's request, to certify punitive claims arising from a site-specific incident. [Ms. Cabraser's firm served as one of the class counsel in the Exxon Valdez litigation.]

In short, recent circuit and Supreme Court authority validates the Agent Orange observations -- that individuals do not have the same entitlement to punitive damages that they do to compensatory damages, that the law does limit the amount of punitive damages a jury may award and that prior awards must be considered in mitigation of claims by parties seeking additional punishment for the same conduct.

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