Punitive damages

Punitive damages are monetary awards added to compensatory damages to punish especially wrongful conduct and deter its repetition. Their availability and limits depend on the jurisdiction and type of claim.

Compensatory damages: Monetary awards intended to compensate for losses caused by a defendant’s wrongful conduct. They repair the plaintiff’s loss; punitive damages serve punishment and deterrence.
BMW of North America, Inc. v. Gore: A 1996 U.S. Supreme Court case setting constitutional guideposts for reviewing punitive damages. The Court identified factors for assessing whether a punitive award violates due process.
Nominal damages: A small monetary award recognizing that a legal right was violated without proven substantial loss. They acknowledge wrongdoing without aiming to punish it.
Deterrence: The prevention of harmful conduct by making its expected consequences more costly. Punitive awards are designed partly to discourage defendants and others from repeating misconduct.
Actual malice: A legal standard involving knowledge of falsity or reckless disregard for truth, with definitions varying by context. Some claims require proof of malice or comparable culpability before punitive damages may be available.
State Farm Mutual Automobile Insurance Co. v. Campbell: A 2003 U.S. Supreme Court case reviewing a large punitive-damages award against an insurer. It emphasized proportionality and cautioned against punitive awards many times greater than compensatory damages.
Restitution: A remedy that requires a party to return gains or benefits obtained unjustly. It focuses on reversing unjust enrichment rather than punishing misconduct.
Class action: A lawsuit in which a representative litigates claims on behalf of a defined group. Aggregated claims can magnify the practical stakes of punitive exposure.
Reckless disregard: Conscious indifference to a substantial and unjustifiable risk of harm. It can show the heightened culpability that supports punishment beyond compensation.
Exxon Shipping Co. v. Baker: A 2008 U.S. Supreme Court case limiting punitive damages under federal maritime common law. It adopted a 1:1 punitive-to-compensatory ratio for the maritime claim before the Court.

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