Facing a large punitive damages verdict can overwhelm a company, particularly in employment cases. Legal costs can rise quickly, witnesses may feel demoralized, urgent decisions are required and negative publicity can follow. The best approach is to assemble an experienced appellate team and act quickly on a strategic plan for post-trial motions and appeal.
- Punitive damages can strain company resources. Early preparation and a deliberate legal strategy are key to manage costs and response.
- To challenge punitive awards, examine the evidence and assess if the damages are disproportionate. Legal experts recommend swift action to file post-trial motions.
- Federal law provides grounds for comparison with similar cases, supporting appeals if the award significantly exceeds norms.
- Engage an appellate team immediately to evaluate case details and preserve appellate issues, increasing chances for award reduction or reversal.
What Are Punitive Damages?
Punitive damages are financial penalties a court may impose to punish particularly harmful or reckless conduct. Unlike compensatory damages, which aim to make a plaintiff whole, punitive damages are intended to deter similar behavior in the future.
Procedural Considerations
Timing is critical. Once a judgment is entered, deadlines begin for motions such as a new trial, remittitur, which is a court-ordered reduction of a jury’s damages award or judgment as a matter of law. Drafting these motions requires a careful review of the trial record, so the appellate lawyers should start immediately.
For more on strategies for handling punitive damages at trial, see guidance on punishment and deterrents.
While the trial team’s familiarity with the case is valuable, appellate work requires a different skill set. Bringing in a specialist to lead the appeal can make a crucial difference. Post-trial motions give the judge a chance to review the verdict. Judges have broad discretion to assess whether a punitive award is excessive, supported by evidence or influenced by errors. All potential appellate issues should be raised during this stage to preserve them for appeal.
Arguments to Challenge a Punitive Award
Challenging a punitive damages award often requires multiple approaches. Companies can question whether the evidence supports the award, argue that the amount is excessive or raise additional legal factors to reduce or overturn the verdict. The following are the key arguments commonly used on appeal:
Evidence Does Not Support the Award
The first question is whether the evidence supports punitive damages at all. Courts apply a high standard and there are often strong arguments that the case should not have gone to the jury. If successful, a reversal of punitive liability may be possible.
Punitive Damages May Be Excessive
The Supreme Court has identified three factors for determining whether punitive damages are unconstitutionally high:
- Reprehensibility of conduct: Was the behavior severe, harmful, repeated or mitigated by corrective actions?
- Ratio to actual or potential harm: Courts may reduce punitive awards that are disproportionately high compared with compensatory damages.
- Comparison with civil penalties: If the award far exceeds fines allowed for similar conduct, it may be excessive.
Courts have reduced punitive awards substantially in past cases:
- Zakre v. Norddeutsche Landesbank: $2.5 million reduced to $600,000
- Mendez-Matos v. Municipality of Guaynabo: $350,000 reduced to $35,000
- CGB Occupational Therapy v. RHA/Pennsylvania: $30 million reduced to $750,000
Federal Law Considerations
An award can also be challenged under federal common law by comparing it to other punitive damages in similar cases in the same jurisdiction. Showing that the verdict is an outlier can support a reduction.
Additional Considerations for Challenging an Award
A few other points can support a challenge to the award:
- The award exceeds the defendant’s financial condition
- Evidence of juror bias or passion influenced the verdict
- Improper evidence or statements during trial affected the jury’s decision
Planning Your Next Steps
Facing a punitive damages award is challenging, but careful planning and the right appellate team can make a difference. Early action, strategic post-trial motions and well-supported arguments increase the chances of a reduction or reversal.
Lynn Kappelman is a partner in Seyfarth Shaw's Boston office and co-chairs the firm’s National Trial Team. Dawn Solowey is senior counsel in Seyfarth’s Boston office and a member of the firm’s National Trial Team and Appellate Team.
Both Ms. Kappelman and Ms. Solowey have exceptional experience in representing employers in high-stakes post-trial motions and appeals around the country.
