July 16, 2009

More on Sotomayor and Punitive Damages

My co-bloggers have already linked to a few reports about how a Justice Sotomayor might vote in punitive damages cases. This Bloomberg.com story addresses that issue again.

As reported by Bloomberg, Judge Sotomayor struck a pro-business chord during her Senate testimony when she said that "[i]n business, the predictability of law may be the most necessary." That statement echoes the reasoning of Justice Souter in his opinion for the majority in Exxon Shipping, in which he stated that a imposing a maximum one-to-one ratio of punitive damages to compensatory damages eliminates arbitrary and unpredictable outcomes.

The Bloomberg story goes on to note, however, that Judge Sotomayor twice voted to uphold punitive damages against arguments that the awards were unconstitutionally excessive. One of those cases was Motorola Credit Corp. v. Uzan (2d Cir. 2007) 509 F.3d 74. To our knowledge, the $1 billion punitive damages award in that case is the second largest punitive damages award ever to survive appeal in the U.S. It's worth noting, however, that the punitive damages award in that case was only half the amount of the $2 billion compensatory damages award, so that award was well within the one-to-one limit advocated by Justice Souter.

I looked on Westlaw to find the other case referenced in the Bloomberg story and I found Moskowitz v. Coscette [2001 WL 51009]. In that case, the jury awarded $125,000 in compensatory damages and $75,000 in punitive damages. In a summary order, the 2nd Circuit upheld the award. Again, the award was below the one-to-one ratio limit.

In my view, these opinions don't shed much light, if any, on how Justice Sotomayor might vote on punitive damages issues coming before the Supreme Court. They certainly don't indicate how Justice Sotomayor might feel about the validity of the Supreme Court's line of cases, starting with BMW v. Gore, that imposed restrictions on the amount of punitive damages as a matter of due process. All we can say is that Judge Sotomayor has never voted to strike down a punitive damages award as excessive, but she hasn't voted to uphold a punitive damages award exceeding a one-to-one ratio either.