October 16, 2009

Federal Judge Awards $300 Million In Punitive Damages Against Iran

As reported by Bloomberg, a federal district judge in Washington D.C. has awarded $310 million, including $300 million in punitive damages, to a victim of the 1983 embassy bombing in Lebanon. The judge determined that Iran was liable because it funded the Hezbollah terrorists who launched the attack.

The sheer size of this award and the 30-to-1 ratio would seem to raise some constitutional questions, but those questions will never be litigated because Iran is not defending itself. The Bloomberg story reports that U.S. courts have awarded $3.5 billion against Iran in the last few years. Iran has not contested any of the suits or paid any of the judgments. Like the $393 million judgment against Cuba earlier this year, this award is purely symbolic.

Although I have no sympathy for these particular defendants, I wonder whether these "funny money" awards are contributing to a culture that views 9-digit punitive damages awards as an accepted part of our legal system.