The 3rd US Circuit Court of Appeals has ruled that in most cases where the plaintiff wins a "substantial" verdict and the damages are purely economic, then any punitive damages should be on a 1 to 1 ratio.
The ruling in Jurinko v Medical Protective Co. opens a new chapter in the tort reform industry's fight to eventually wipe out the right of consumer and fraud victims to force big business to pay punitive damages for fraud. Although the case arose from a malpractice claim at its roots, there is no reason the court will not expand the ruling to cover all sorts of claims.
Although the US Supreme Court has not gone that far, the 3rd Circuit judges apparently decided that the Supreme Court Justices were heading that direction. Right now the ruling should be limited to its facts, where there was no physical injury and there was no strong evidence of the usual "reprehensible conduct" factors that might otherwise enhance the ratio.
In Jurinko, a jury awarded $7.9 million in an insurance bad faith case brought by a doctor who claimed that his insurer's failure to offer his policy limits led to a $2.5 million malpractice verdict against him. The doctor had a $200,000 policy and less than that was needed to settle the case but apparently the insurance company balked and the jury viewed the undetected cancer worth more than the insurance company hoped for. Well, folks, that kind of claim handling is why they own those big buildings in most downtown metropolitan cities.
Ever since the 2003 decision in State Farm v Campbell, the courts have been restricting the availability of punitive damages as a deterrent to big business fraud, greed and just plain stupidity.
What we said before about Dead Donkeys and Car Dealers (click here) is still true. If there is nothing to discourage deception and fraud, there will be no reason for merchants and big business not to consider it as nothing more than just another cost of doing business. There's a reason the right to a jury trial finds its roots in hundreds of years of social history.
A jury is drawn from the community and includes the common man, the housewife, the business owner, a government worker, and just about everyone else. That collective wisdom is the reason that a jury inherently knows what the right thing is to do in civil disputes before them.
We don't need politicians and judges to reject jury decision just because they think they know better than the everyday people who sit and listen to a dispute and decide what they think is fair.
There's a reason selling a dead donkey isn't tolerated. That's also the reason judges ought to let juries decide cases and reject the arrogant enticement to display their self-proclaimed wisdom.
Burdge Law Office
Helping Consumers, and Consumer Attorneys, Since 1978.