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When people hear “punitive damages,” they may not connect the word “punitive” to “punishment,” but the two words come from the same Latin word. Punitive damages do not compensate the plaintiff for her injuries, but punish and make an example of the defendant, on account of her wrongdoing. Thus, punitive damages are also called “exemplary damages.” There are certain wrongs that have no immoral aspect, such as breach of contract and negligence, so that punitive damages are not proper. But where the wrong done was aggravated by violence, malice, fraud, or intentionally wicked conduct, punitive damages may be just. Most states impose limits on punitive damages, because the plaintiff has already been fully compensated. Alabama, Alaska, and Florida impose a punitive damage limit of $500,000, or 3 times compensatory damages. Virginia and New Jersey limit punitives to $350,000 or 5 times compensatory damages. Georgia, North Carolina, North Dakota, have a punitive damage limit of $250,000, or 2-3 times compensatory damages. The U.S. Supreme Court has limited punitive damages to 9 times compensatory damages. A minority of states have completely outlawed punitive damages: Louisiana, Massachusetts, Nebraska, New Hampshire, and Washington. Other states, such as Texas, Indiana, and Nevada, have more complicated provisions. A number of states apportion some of the punitive award to a state fund, for the benefit of a society that has been wronged. Other states have limited situations where punitive damages are allowed. In California, for instance, punitive damages can only punish defendant’s conduct in the particular case at hand, not for all other possible cases of wrongdoing. As well, the California Supreme Court held that a reasonable range is between 3 and 10 times compensatory damages. |
