August 13, 2012

Does the "clear and convincing evidence" standard of proof for punitive damages make any difference?

In California and many other U.S. jurisdictions, plaintiffs seeking punitive damages must meet a higher burden of proof than the usual "preponderance of the evidence" standard that applies to civil cases.  Plaintiffs must prove by clear and convincing evidence that the defendant engaged in punishable misconduct.  That higher standard of proof is thought to provide defendants with a significant procedural protection against unwarranted punitive damages.

But how does this play out in practice?  Does empirical data confirm that juries are less likely to award punitive damages when the plaintiff is saddled with a higher burden of proof?  The answer is "no," according a recent study entitled Jurors' Use of Standards of Proof in Decisions about Punitive Damages, published in Behavioral Sciences and the Law.  Here's the abstract of the article:

Standards of proof define the degree to which jurors must be satisfied that a fact is true, and plaintiffs in civil lawsuits assume the burden of proving their claims to the requisite standard of proof. Three standards—preponderance of evidence, clear and convincing evidence, and beyond a reasonable doubt—are used by different jurisdictions in trials involving liability for punitive damages. We investigated whether individual mock jurors apply these standards appropriately by instructing them to read two personal injury trial summaries and to use one of three standards in either qualitative or quantitative format when deciding punitive liability. Results showed that jurors tended not to incorporate the standard into their judgments: defendants were just as likely to be found liable when the plaintiff's burden was high (“beyond a reasonable doubt”) as when the burden was low (“preponderance of evidence”). The format of the instruction also had a negligible effect. We suggest that nonuse of the standard of proof is related to jurors' preferences for less effortful or experiential processing in situations involving complicated or ambiguous material.
That's sobering stuff for defendants facing punitive damages in California.  Worse yet, some of our appellate courts have held that the clear and convincing evidence standard is irrelevant in appeal challenging the sufficiency of the plaintiffs' evidence of malice, oppression, or fraud.  In other words, according to those courts, if the plaintiff fails to meet its higher burden at trial but the jury awards punitive damages anyway, there is absolutely nothing the defendant can do about it.  Some of our appellate courts, however, have rejected that notion and held that the sufficiency of the evidence must be measured through the prism of the clear and convincing standard.  Our Supreme Court granted review to resolve that split a few years ago but dismissed review when the parties settled the case.  We assume they'll take the issue up again when the right vehicle comes along.  


Hat tip: Robert Richards on Twitter