New Guideposts for Punitive Damages in California: A Significant Roadblock for Massive Jury Awards?
By John P. Phillips and Peter C. Meier
Two recent California appellate court decisions have reshaped the landscape for punitive damage awards in tort actions. The decision in Romo v. Ford Motor Company, holds that punitive damages may be awarded only in relation to the harm suffered by the individual plaintiffs in the case at hand, not as an actual deterrence of a broad course of conduct. Applying this “narrow view” of the purpose of punitive damages, the court reduced what had been the largest judgment ever upheld by a California appellate court from $290 million to about $23.7 million. Observers agree that the ruling could dramatically reduce most multi-million-dollar punitive awards in the state, by requiring that punitive damages not exceed “single-digit multipliers” over compensatory damages in most cases.