Procedural Protections in Punitive Damage Cases: Ensuring That Juries Are Asking the Right Questions About Wealth Evidence
Volume 81, No. 4, Winter 2008
By Melissa Michelle Davis [PDF]

In the United States Supreme Court’s most recent pronouncement of Due Process Clause constraints on punitive damage awards, Philip Morris USA v. Williams, the Court declared that juries may not use punitive damages to punish defendants directly for harm to nonparties to the litigation, though juries may consider harm to nonparties in appraising the reprehensibility of the defendant’s conduct. In so holding, the Court imposed upon the states an obligation to “avoid procedure that unnecessarily deprives juries of proper legal guidance” and to “provide assurance that juries are not asking the wrong question.” The Court’s decision in Philip Morris revitalizes the role of proper procedural protections in punitive damage cases. Although due process review of punitive damage awards was born out of an examination of the sufficiency of the procedural protections afforded the defendant, prior to Philip Morris, the more result-oriented “excessiveness review” had dominated Supreme Court opinions since its inception in 1993.

The Philip Morris majority put particular emphasis on adequate guidance to juries as a necessary procedural protection for punitive damage defendants–a concern raised by the Court more than a century ago, and one that continues to draw criticism from practitioners and legal scholars as well. Although the Court’s holding in Philip Morris elucidates, to some degree, the guidance courts must provide to jurors in order to check the impact of evidence of harm to strangers to the litigation caused by the defendant’s conduct, there is little consensus as to the guidance courts must provide to jurors in considering other punitive damage evidence that likewise poses an acute due process danger if not properly restrained by the courts.

This disparity and the perceived ineffectiveness of the existing jury instructions to adequately constrain “outlier” punitive awards provide a likely impetus for the Supreme Court’s preference in recent years for the more concrete constraints of the excessiveness review. The Court’s opinion in Philip Morris, however, reminds us that proper procedural protections, even if not alone sufficient to ensure the reasonableness of the punitive damages ultimately awarded, remain essential to a constitutionally sound punitive award. A punitive damage award that is not constitutionally excessive in amount is impermissible nonetheless if the defendant was not afforded adequate assurance against the due process violations often implicated in punitive damage suits.

Preeminent among the exigencies against which states must adequately safeguard is ill-constrained consideration of evidence of the defendant’s wealth. Although most states allow jurors to consider wealth evidence in assessing punitive damages, few states provide jurors with information on how to cabin that consideration, despite the Supreme Court’s repeated exhortations of the due process risks raised by such evidence. This Article takes the position that Philip Morris should control treatment of evidence of the defendant’s wealth, and thus, under the principles of Philip Morris, states are likewise constitutionally obligated to provide jurors with guidance as to the proper function of wealth evidence in assessing punitive damages. Both harm to nonparties and the financial condition of the defendant are properly considered in the jury’s assessment of punitive damages, yet both are only relevant for a limited purpose, and both create considerable risk of bias or prejudice in the jury. States therefore must provide jurors with some parameters for considering wealth evidence to ensure that jurors are not using punitive damages to punish defendants directly for their financial status, just as they must take reasonable measures to ensure that jurors are not punishing defendants directly for harm to nonparties.

In light of the state’s burden to ensure that juries are not asking the wrong questions, this Article identifies a number of remediable inadequacies in state jury instructions with regard to properly restricting consideration of wealth evidence to its relevant role in determining the amount of damages necessary to adequately punish the defendant and deter similar future conduct, but not to punish the defendant directly for its financial status. Despite the complexity of this issue, the Supreme Court has provided considerable legal guidance from which state courts may formulate more efficacious jury instructions; yet, states’ punitive jury instructions largely fail to account for the Court’s pronouncements on this issue. Finally, this Article takes the position that passing such guidance on to the jury, where appropriate, better enables jurors to produce outcomes that abide by applicable legal standards than the presently typical, vague instructions that do not confine the jury to constitutionally permissible consideration of the defendant’s wealth in assessing punitive damages. This and other similar procedural due process issues in punitive damage cases are given new life under Philip Morris, and demand more conscientious treatment from state legislatures and the courts.

Read Article…