Constitutional Constraints on Punitive Damages: Clarity, Consistency, and the Outlier Dilemma

Abstract

Almost twenty years ago, the Supreme Court in BMW v. Gore invoked the Due Process Clause for the first time to invalidate a punitive damages award as excessive. Since then, the Court has issued a handful of decisions that further refine Gore’s tripartite guidepost framework. In this article, we draw on a ten-year span of reported state and federal punitive damages decisions in an attempt to evaluate how lower courts have understood and implemented this constitutionalization of punitive damages law. Ours is not a normative analysis about whether the Court should or should not have federalized punitive damages. Rather, we examined our sample of cases to assess three of the Court’s punitive damages due process objectives.

First, the guideposts were intended to provide clear and predictable ex ante standards regarding the potential monetary consequences of misconduct. Second, the uniform guidepost standards sought to prevent arbitrary or disparate treatment of punitive damages among the states. Third, the guideposts were designed to curb what the Court perceived as erratically high punitive damages awards. We evaluated and coded each punitive damages case in our collection to test the efficacy of the guidepost analysis in accomplishing each of these goals. Our 507 case sample suggests a high degree of uniformity nationwide in the process by which courts conduct the review of punitive damages awards. Less clear, however, is whether that heightened level of judicial review significantly reduced the inconsistency or unpredictability of punitive damages awards overall.

Keywords: Punitive Damages Substantive Due Process, Constitutional Guideposts, Judicial Faithfulness on Remand