In civil cases, courts sometimes award punitive (or exemplary) damages in addition to compensatory damages. Compensatory damages are meant to redress the "loss the plaintiff has suffered by reason of the defendant's wrongful conduct," in an attempt to "compensate" the injured person for the loss suffered. Where a defendant has engaged in particularly egregious conduct, however, punitive damages can be awarded in addition to compensatory damages. A punitive damages award will generally exceed the actual value of the harm caused by the defendant. Although the permissible motivations behind awarding punitive damages are somewhat unsettled, it is generally accepted that punitive damages serve the dual purposes of deterrence and retribution. The U.S. Supreme Court, for instance, has characterized the imposition of punitive damages as "quasi criminal … private fines" that act as "an expression of [the jury's] moral condemnation." After initially assessing the validity of punitive damage awards based on "general concerns of reasonableness," the modern Court now applies a more detailed, multi-factor framework in reviewing punitive damages. However, the fundamental underlying principle—that punitive damages awards that are grossly excessive or imposed without adequate procedural protections violate Due Process—continues to hold. This report summarizes decisions by the U.S. Supreme Court on punitive damages, synthesizes key factors the Court has employed in considering the constitutionality of punitive damages awards, and discusses the uncertainty surrounding the future of the Court's punitive damages jurisprudence. Historically, large punitive damages awards have been alleged to violate both the Eighth Amendment's prohibition on excessive fines and the Fifth and Fourteenth Amendment's Due Process Clause. The Court, however, has rejected the notion that large punitive damage awards can violate the former provision, holding that the Eighth Amendment is inapplicable where "the government neither has prosecuted the action nor has any right to receive a share of the damages awarded." The Due Process clause, on the other hand, has been interpreted to limit large punitive damages awards. Although the Court has been ambiguous as to whether punitive damages limits exist as a result of procedural or substantive due process, the Court has been clear that while the states have "broad discretion … with respect to the imposition of … punitive damages," the Due Process Clause bans punitive damages awards that are grossly excessive or imposed without adequate procedural protections.
In civil cases, courts sometimes award punitive (or exemplary) damages in addition to compensatory damages. Compensatory damages are meant to redress the "loss the plaintiff has suffered by reason of the defendant's wrongful conduct," in an attempt to "compensate" the injured person for the loss suffered. Where a defendant has engaged in particularly egregious conduct, however, punitive damages can be awarded in addition to compensatory damages. A punitive damages award will generally exceed the actual value of the harm caused by the defendant. Although the permissible motivations behind awarding punitive damages are somewhat unsettled, it is generally accepted that punitive damages serve the dual purposes of deterrence and retribution. The U.S. Supreme Court, for instance, has characterized the imposition of punitive damages as "quasi criminal … private fines" that act as "an expression of [the jury's] moral condemnation."
Historically, large punitive damages awards have been alleged to violate both the Eighth Amendment's prohibition on excessive fines and the Fifth and Fourteenth Amendment's Due Process Clause. The Court, however, has rejected the notion that large punitive damage awards can violate the former provision, holding that the Eighth Amendment is inapplicable where "the government neither has prosecuted the action nor has any right to receive a share of the damages awarded." The Due Process clause, on the other hand, has been interpreted by the court to place certain constitutional limitations on large punitive damages awards. After initially assessing the validity of punitive damage awards based on "general concerns of reasonableness," the modern Court now applies a more detailed, multi-factor framework in reviewing punitive damages. However, the fundamental underlying principle—that punitive damages awards that are grossly excessive or imposed without adequate procedural protections violate Due Process—has consistently formed the foundation of the Court's constitutional analysis. Although the Court has been ambiguous as to whether punitive damages limits exist as a result of procedural or substantive due process, the Court has been clear that while the states have "broad discretion … with respect to the imposition of … punitive damages," the Due Process Clause bans punitive damages awards that are grossly excessive or imposed without adequate procedural protections.
This report summarizes decisions by the U.S. Supreme Court in relevant punitive damages cases, provides a synthesis of the key factors the Court has employed in considering the constitutionality of punitive damages awards, and details the uncertainty surrounding the future of the Court's punitive damages jurisprudence.