How to Defend Punitive Damages Claims · PDF fileHow to Defend Punitive Damages Claims Effectively Page 349 ... California Civil Code Section 3294(b) ... statement 1, 7-8, in Corporate

If a man steals an ox or a sheep, and killsit or sells it, he shall pay five oxen for an ox,and four sheep for a sheep. He shall make res-titution; if he has nothing, then he shall be soldfor his theft. If the stolen beast is found alivein his possession, whether it is an ox or an assor a sheep, he shall pay double.

—EXODUS 22:1

By C. Barry Montgomery andBradley C. Nahrstadt

A PUNITIVE damage award in a high-profile case is a corporate defense coun-sel’s worst nightmare. Consider, as ex-amples,

• $2.7 million punitive damages againstMcDonald’s Corp. for burns a customersuffered from a coffee spill;

• $7.1 million for a secretary who pre-vailed in a sexual harassment case;

• $101 million against General Motorsin a design defect case;

• $125 million against a pharmaceuticalcompany; and

• $3 billion against Exxon Corp. relatedto the Exxon Valdez oil spill.

Although punitive damages often are re-duced by the trial court or on appellate re-view, the original awards usually generatefierce debate and media hype, as well asinjury to the defendant corporation’s repu-tation.

In today’s climate of intensified ac-countability and safety consciousness, ju-ries expect manufacturers, professionalsand other providers of products and ser-vices to account for the safety of their re-spective endeavors. When a plaintiff suc-cessfully proves liability against a highlyvisible defendant on the theory that the de-fendant failed to provide a safe product or

How to Defend Punitive Damages ClaimsEffectively—and Maybe Successfully

IADC member C. Barry Montgomery isa member of Williams & Montgomery,Chicago. He is a graduate of MuskingumCollege (B.A. 1959) and the University ofMichigan (J.D. 1962) and a member ofthe International Academy of Lawyers.

Bradley C. Nahrstadt is an associate inthe same firm. He has a B.A. fromMonmouth College (1989) and a J.D.from the University of Illinois (1992).

Punitive damages cases present difficult challenges to defense counsel,but attention to a lot of details may produce success

service, the threat of a substantial punitivedamages award must be taken seriously. Inaddition to the award itself, the corporationcan anticipate the cost of litigating the is-sue to final appeal and of dealing with hos-tile media exposure and private activistgroups.

In order to avoid this catastrophe, de-fense counsel must focus on the punitiveaspect of the case from the day the fileis opened. All too often, the punitivedamages claim is one of the last thingsconsidered, when it should be one of thefirst.

There are risks associated with claimsfor punitive damages, and there are differ-ent methods that may be employed to pro-tect a corporate defendant from thoseclaims. It is important to remember that thelaw of punitive damages claims variesfrom jurisdiction to jurisdiction and mustalways be carefully researched and ana-lyzed.

A LITTLE HISTORY

Punitive damages in civil actions are de-fined in Section 908 of the Restatement(Second) of Torts as those damages

Page 348 DEFENSE COUNSEL JOURNAL—July 1999

awarded “against a person to punish himfor his outrageous conduct and to deterhim and others like him from similar con-duct in the future.” They have been charac-terized as “exemplary,” because they makean example of a defendant; “punitive,” be-cause they punish a defendant; “vindic-tive,” because they exact revenge on a de-fendant; and “smart money,” because theymake a defendant smart with pain, not in-telligence.1

The concept of punitive damages datesback more 2,000 years before the birth ofChrist to the Code of Hammurabi, underwhich a judge who altered a judgment pre-viously rendered was required to pay atwelve-fold penalty. In 1400 B.C., Hittitelaw, according to Exodus 22:9, requiredthe thief of a “great” bull or horse to repaythe owner with 15 bulls or horses. Exodusalso refers to exemplary damages for thecommission of other egregious acts. Thesebiblical references to exemplary damagesappear to be the first indication that puni-tive damages should bear a multiple, albeitarguably reasonable, relationship to thecompensatory award.2

The first recorded punitive damageaward in a civil case appears in an18th century case in England, Huckle v.Money.3 Lord Camden found that the au-thority for punitive damages awards is in-herent in the jury’s exercise of uncon-trolled discretion in arriving at damages.Interestingly enough, he also found thatthe amount of punitive damages may war-rant a new trial when it is so “outrageous”

that “all mankind at first blush must thinkso.”

In the United States, punitive damageshave existed in one form or another sinceearly days. In 1791, in Coryell v. Col-baugh,4 a New Jersey court held that puni-tive damages may be appropriate “forexample’s sake, to prevent such offensesin the future . . . [and] as would mark [thejury’s] disapprobation.” By 1851, the U.S.Supreme Court noted in Day v. Wood-worth5 that the doctrine of punitive dam-ages was firmly entrenched in the Ameri-can legal system. Justice Grier stated that ajury “may inflict what are called exem-plary, punitive, or vindictive damagesupon a defendant, having in view the enor-mity of his offense rather than the measureof compensation to the plaintiff.”

Although the “theoretical correctness”of the punitive damages doctrine was de-bated as late as the 1880s and 1890s,nearly all American courts had acceptedthe concept by the turn of the century. Inthe last 30 years, thanks in large part to aspread of “consumerism” and extensivemedia attention on defective products, con-sumer goods and services, claims for puni-tive damages have become almost com-monplace.6 According to a pair of recentcommentators, “the doctrine of punitivedamages survives [to this day] because itcontinues to serve the useful purposes ofexpressing society’s disapproval of intoler-able conduct and deterring such conductwhere no other remedy would suffice.”7

PINPOINTING APPLICABLE LAW

A. Choice of Law

Because the law affecting punitive dam-ages varies from jurisdiction to jurisdic-tion, defense counsel may need to analyzechoice of law issues, if appropriate, basedon the facts of the case. Courts typicallyconsider these factors in determiningchoice of law for punitive damages: (1) thestate of the plaintiff’s residence; (2) thestate where the wrongful conduct oc-curred; and (3) competing states’ inter-

1. John D. Kitch, Proving and Disproving Puni-tive Damages, 21 LITIG. 13-14 (Winter 1995).

2. Gary T. Walker & Kenneth E. Keller, Puni-tive Damage Claims in Products Liability Actions,FOR THE DEFENSE 25 (Oct. 1988).

3. 95 Eng. Rep. 768 (K.B. 1763).4. 1 N.J.L. 77 (1791).5. 54 U.S. 363 (1851).6. Walker & Keller, supra note 2, at 25-26. See

also Smith v. Wade, 461 U.S. 30, 35 (1983).7. Jane Mallor & Barry Roberts, Punitive Dam-

ages: Toward a Principled Approach, 31 HASTINGS

L.J. 639 (1980).

Page 349How to Defend Punitive Damages Claims Effectively

ests.8 Also worth noting is that in certainjurisdictions, the law applied to punitivedamages may differ from the law appliedto other issues in the same action.9

B. Punitive Damages Law

It is important to note that there is nocause of action for punitive damagesalone. Nearly all jurisdictions require en-titlement to compensatory damages beforepunitive damages may be awarded, al-though some permit them if injunctive re-lief is granted. In many jurisdictions,nominal damages are insufficient as a mat-ter of law to support punitive damages,while in others nominal damages will sup-port punitive damages. What constitutes“nominal damages” is generally left to thetrial court’s discretion.10

Punitive damages have been prohibitedin certain types of cases, including wrong-ful death cases, property damage claims,and claims against public entities.11 In ad-dition, in most jurisdictions, if the com-plaint sounds in contract, punitive damagesare unavailable.12

Jurisdictions differ in their descriptionsof the type of conduct warranting punitivedamages. Some courts require that thecharacter of negligence necessary is thesame as that required for a conviction ofmanslaughter.13 Others require only ashowing of gross negligence.14 Still others

allow punitive damages when a defendanthas exhibited “reckless or flagrant indiffer-ence,” or “willful,” “wanton” or “mali-cious” disregard of the rights of others.15

Yet others have held that the exhibition ofa “flagrant indifference to the publicsafety” is enough.16

No matter what description is employed,one thing is clear: punitive damages shouldnot be awarded on the basis of the mereinadvertence, mistake or errors of judg-ment that constitute ordinary negligence.17

It is generally recognized that an em-ployer may be liable to third parties for thetortious acts of its employees, but there ap-pears to be a conflict of opinion as to whenan employer can be held vicariously liablefor punitive damages based on an em-ployee’s conduct. According to Section217C of the Restatement (Second) of theLaw of Agency and Section 909 of the Re-statement (Second) of Torts, employers arevicariously liable for punitive damageswhen the employee’s act was ratified, ap-proved or authorized by the employer,when the employee was acting in a mana-gerial capacity, or when the employee wasunfit for duty.18

California Civil Code Section 3294(b)states that an employer may be vicariouslyliable for punitive damages based on theactions of an employee if the employer“had advanced knowledge of the unfitness

13. Chrysler Corp. v. Wolmer, 499 So.2d 823,824 (La. 1986).

14. Schwartz v. Sears, Roebuck & Co., 669 F.2d1091 (5th Cir. 1982) (applying Texas law).

15. Grimshaw v. Ford Motor Co., 174 Cal.Rptr.348 (Cal.App.1981); Dorsey v. Honda MotorCo., 655 F.2d 650 (5th Cir. 1981); Rinker v. FordMotor Co., 567 S.W.2d 655 (Mo.App. 1978);Wangen v. Ford Motor Co., 294 N.W.2d 437 (Wis.1980).

16. Moore v. Remington Arms Co., 427 N.E.2d608 (Ill.App. 1981); Leichtamer v. Am. MotorsCorp., 424 N.E.2d 568 (Ohio 1981).

17. Loitz v. Remington Arms Co., 563 N.E.2d397 (Ill.App. 1990); Deitemann v. Times Inc., 449F.2d 245 (9th Cir. 1971); Clements v. Withers, 437S.W.2d 818 (Tex. 1969).

18. Walker & Keller, supra note 2, at 27. Seealso Agarwal v. Johnson, 160 Cal.Rptr. 141(Cal.App. 1979).

8. John M. Thomas, Compliance with Govern-ment Standards and the New Product Liability Re-statement 1, 7-8, in Corporate Legal Times Confer-ence “How To Minimize and Manage ProductsLiability Cases,” Oct. 12-13, 1995, citing In re AirCrash Disaster near Chicago, 644 F.2d 594 (7h Cir.1981), cert. denied, 454 U.S. 878 (1981); Sheperdv. Boston Old County Ins. Co., 811 F.Supp. 225(S.D. Miss. 1992); People’s Bank & Trust Co. v.Piper Aircraft Corp., 598 F.Supp. 377 (S.D. Fla.1984).

9. Meyer v. Crain Communications Inc., 1992WL 77655 (N.D. Ill. 1992), not reported in F.Supp.

10. Kitch supra note 1, at 14.11. See, e.g., In re Paris Air Crash, 622 F.2d

1315 (9h Cir. 1980) (wrongful death); Eisert v.Grumberg Roofing & Sheet Metal Co., 314 N.W.2d226 (Minn. 1982) (wrongful death and propertydamage); CAL. CIV. CODE § 818.

12. Kitch, supra note 1, at 15.


of the employee and employed him or herwith a conscious disregard of the rights orsafety of others[,] or authorized or ratifiedthe wrongful conduct for which the dam-ages are awarded or was personally guiltyof oppression, fraud or malice.” One Cali-fornia case imposed vicarious liability forpunitive damages without authorization orratification of the actions of employeeswho had been placed in a managerial ca-pacity.19

Other jurisdictions impose punitivedamages on an employer if those damageswould have been charged to the em-ployee—for example, if the employeeacted wantonly or willfully, or with a reck-less indifference to the rights of others.20

Yet other courts require some showing ofan act or omission on the part of the em-ployer before imposing liability, so that an“innocent employer” cannot be held vicari-ously liable for punitive damages.21 Stillother states recognize specific instanceswhere punitive damages cannot be im-puted to an employer for an employee’sact, such as when the employee has beendischarged from personal liability. Essen-tially, a favorable judgment for the em-ployee relieves the employer of liability.22

C. Plaintiff’s Burden of Proof

The burden of proof for punitive dam-ages differs among jurisdictions. For ex-ample, the Indiana Supreme Court has heldthat the standard in that state is proof ofthe misconduct by “clear and convincing

evidence.”23 In Maine, Idaho, Arizona andCalifornia, punitive damages may beawarded only when the plaintiff proves byclear and convincing evidence that the de-fendant acted with malice or engaged inwanton, gross or outrageous conduct.24 InColorado, the standard is “proof beyond areasonable doubt.”25

Clearly, the general rule regarding puni-tive damages and a plaintiff’s burden ofproof is that there is no general rule. De-fense counsel must carefully research theplaintiff’s burden of proof when a punitivedamages claim is made.

FOCUS ON THE PLEADINGS

After determining the applicable law,defense counsel must examine and dissectthe punitive damages claim in the plead-ings. A major task is defining and limitingthe plaintiff’s underlying theory and facts.To the extent the defense allows, theplaintiff’s attorney will resist disclosure ofthe specifics of the punitive damages case.Sometimes this is a strategic move, andother times it is because the plaintiff’s at-torney has not formulated a coherent basisfor the claim. Whatever the case, defensecounsel must compel disclosure of thetheory and the evidence supporting theclaim as early as possible.

A. Attack Plaintiff’s Theory

The first step is to compel the plaintiffto articulate the theory in the complaintclearly. Defense counsel should considermoving for dismissal of the punitive dam-ages claim under applicable state law, Rule12 of the Federal Rules of Civil Procedure,or in appropriate cases, Federal Rule 56.Defense counsel should promptly move tostrike allegations that do not comport withthe governing procedural and substantivelaw and, where permissible, should de-mand particulars as to the factual basis forthe punitive damages claim.

In several jurisdictions, plaintiffs areprohibited from pleading punitive damagesin their original complaint. Moreover, be-

19. Kutcha v. Allied Builders Corp., 98 Cal.Rptr. 588 (Cal.App. 1971).

20. U.S. Concrete Pipe Co. v. Bould, 437 So.2d1061 (Fla. 1983).

21. Country Roads Inc. v. Witt 737 S.W.2d 362(Tex.App. 1987).

22. See Rosenzweig & Sons v. Jones, 72 P.2d417 (Ariz. 1937).

23. Orkin Exterminating Co. v. Traina, 486N.E.2d 1019 (Ind. 1986).

24. See, e.g., Tuttle v. Raymond, 494 A.2d 1353(Me. 1985); Unfried v. Libert, 119 P. 885 (Idaho1911); Linthicum v. Nationwide Life Ins. Co., 723P.2d 675 (Ariz. 1986); CAL. CIV. CODE § 3294(a).

25. COLO. REV. STATS. § 13-25-172(2).


fore a plaintiff may amend the originalcomplaint to include a prayer for punitiverelief, an evidentiary hearing must beheld.26

Punitive damages claims can be elimi-nated even though the plaintiff has allegedenough to support liability on the underly-ing compensatory damages claim. But ifthe defense is unsuccessful in striking thepunitive damages allegations—for ex-ample, for lack of particularity or failure tostate a claim—these efforts will educatethe court and defense counsel as to the na-ture of the punitive damages claim andwill set the stage for future efforts to de-feat the punitive aspects of the case beforetrial.

B. Use Affirmative Defenses

If a defense motion to dismiss is deniedand an answer must be filed, defense coun-sel must negate the facts alleged in thecomplaint regarding punitive damages andmust be sure to include all arguable affir-mative defenses. These include the follow-ing.

1. Statute of Limitations

Since a punitive damages claim is not inand of itself a cause of action, the statuteof limitations that governs the underlyingaction usually is applied as well to the ex-emplary claim. If the underlying action isnot brought within the applicable statute oflimitations, the defendant should assert adefense based on that statute. A trial

court’s disposition of the issue will elimi-nate any punitive damages claim.27

2. Statutory Limitations

Certain statutes, including the FederalTort Claims Act and the Federal Employ-ers’ Liability Act, explicitly prohibit therecovery of punitive damages.28

3. Status of Parties

Defense counsel should examine the sta-tus of the parties joined to the punitivedamages claim. Sometimes certain partiesmay be exempt from punitive damages bylaw—for instance, governmental entities,decedents through their estate, heirs or rep-resentatives, or a defendant who is an in-fant under applicable statutes.29 In addi-tion, exemplary damages may not berecoverable from governmental entitiesthat act in a receivership role.30 The joinderof one party exempt from punitive dam-ages may preclude recovery of punitivedamages against other parties.

4. Compliance with Statutes andRegulations

Although compliance with governmen-tal standards may not be a complete de-fense to a compensatory damage claim, insome jurisdictions it may be treated as acomplete defense to a punitive damagesclaim. Some states, for example, have stat-utes providing that a product is presumedsafe if it complies with required stan-dards.31 In those jurisdictions, compliance

29. Stuart M. Gordon & Diane R. Crowley, De-fending the Punitive Damages Claim, 49 INS.COUNS. J. 300, 311 (July 1982); IND. CODE § 34-4-16.5-4; OR. REV. STAT. § 30.270; WIS. STAT.§ 893.80 (4); Lawrence v. Virginia Ins. Reciprocal,979 F.2d 1053 (5th Cir. 1992).

30. Diaz v. McAllen State Bank, 975 F.2d 1145(5th Cir. 1992).

31. J. Jeffrey Zimmerman, Patrick J. Phillips &Joseph G. Bisceglia, A Review of the Illinois CivilJustice reform Act of 1995, 83 ILL . B.J. 288;McDaniel v. McNeal Labs. Inc., 240 N.W.2d 822(Neb. 1976).

26. MINN. STAT. § 549.191; IDAHO CODE § 6-1604(2); 735 ILL. COMP. STAT. 5/2-604.1; FLA. STAT.ch. 160, § 768.72.

27. See generally JAMES D. GHIARDI & JOHN J.KIRCHER, PUNITIVE DAMAGES LAW AND PRACTICE ch.9, at page 68 (1997). See, e.g., TENN. CODE ANN.§ 28-3104, which provides a one-year limitationsperiod in which to bring a civil action seeking com-pensatory or punitive damages for violations of thefederal civil rights statutes.

28. 28 U.S.C. § 2671 et seq. and 45 U.S.C. § 51et seq.


should be included in an affirmative de-fense.

5. Common Law Privileges

When the underlying cause of action al-leges an intentional tort, defense counselshould consider pleading one or more ofthe common law privileges to intentionaltorts. If the defendant’s conduct is laterfound to have been privileged, the plain-tiff’s underlying action will be defeated,along with the claim for punitive damages.Moreover, to the extent that a privilegemust be proved as an affirmative defense,alleging it will allow the defense to“present its own case” and not merely relyon cross-examination of the plaintiff’s wit-nesses.32

6. Provocation

During the pleading stage, if the factswarrant it, defense counsel should considerarguing that the plaintiff’s actions “pro-voked” the defendant’s conduct and thusmitigate the plaintiff’s possible exemplaryrecovery. At least two courts have held,“Provocation, while not a justification or adefense in an action for compensatorydamages for an assault, may be consideredin mitigation of exemplary damages.”33

7. Acting on Advice of Counsel

Another possible defense may be thefact that the defendant acted on the adviceof counsel. This is relevant to proving in-tent or knowledge, which in turn tends torebut allegations of malice and bad faith.Acting on the advice of counsel, however,

will not always preclude an award of puni-tive damages. To invoke this defense, thedefendant must plead and prove full dis-closure of the situation and good faith reli-ance on the advice procured.34

8. Constitutional Challenges

If defense counsel intends to attack theconstitutionality of punitive damages at alater stage in the proceeding, the attackshould be preserved specifically throughthe use of affirmative defenses.

One of the major constitutional argu-ments against punitive damages is basedon the U.S. Constitution's 14th Amend-ment due process clause, which requiresthat legal proceedings be consistent withfundamental fairness, ordinary notions offair play, settled rules of law, and not of-fend the community’s sense of decency.Several recent U.S. Supreme Court casesdiscuss the constitutionality of punitivedamages under the due process clause

In 1991, in Pacific Mutual Life Insur-ance Co. v. Haslip,35 the Court upheld theAlabama standard of review for punitivedamages awards against a due processchallenge. Justice Blackmun articulated atwo-part test to be used to determinewhether the procedures employed in Ala-bama satisfied common law and proce-dural requirements: (1) the state must pro-vide the jury with “adequate guidance” asto the nature and intent of punitive dam-ages; and (2) the post-verdict judicial re-view, both by the trial court and appellatecourts, must ensure that the amount of pu-nitive damages is reasonable.

In 1993, however, the Court in TXOProduction Corp. v. Alliance ResourcesCorp.,36 appeared to retreat from its moredefinitive Haslip decision in a confusingplurality result expressed in four separateopinions. In TXO, it was argued that theaward of punitive damages violated bothprocedural and substantive due process,but the award ultimately was upheldthrough a wide variety of legal reasoning.

In addition to being confusing, TXO of-fers little guidance for defense counsel re-

32. GHIARDI & K IRCHER, supra note 27, at 69,citing W. PAGE KEETON ET AL., PROSSER & KEETON

ON TORTS § 65 (5th ed. 1984).33. Traister v. Gerton, 626 P.2d 737 (Colo.App.

1981). See also Garrett v. Olsen, 691 P.2d 123(Or.App. 1984).

34. GHIARDI & K IRCHER, supra note 27, at 70,citing Hamilton County Bank v. Hinkle CreekFriends Church, 478 N.E.2d 689 (Ind.App. 1985).

35. 499 U.S. 1 (1991).36. 509 U.S. 443 (1993).


garding the limits that are to be placed onpunitive damages. According to the Court,punitive damages awards are to be mea-sured under a “grossly excessive stan-dard.” The Court articulated a similarstance a year later in Honda Motor Co. v.Oberg,37 in which it refused to create astandard for determining the excessivenessof punitive damages.

The Court’s most recent pronouncementcame in 1996 in BMW of North America v.Gore.38 The plaintiff sued BMW in Ala-bama state court for allegedly selling a$41,000 BMW sedan with an undisclosedretouched paint job. The jury awarded theplaintiff $4,000 in compensatory damagesand $4 million in punitive damages. TheAlabama Supreme Court later reduced thataward to $2 million because the jury im-properly multiplied the plaintiff’s com-pensatory damages by the number of auto-mobiles sold in all 50 states, not justAlabama.

In an opinion authored by JusticeStevens, the U.S. Supreme Court held thatthe $2 million punitive damages awardwas grossly excessive and therefore ex-ceeded constitutional limits. According tothe Court, when an award can be catego-rized as “grossly excessive” in relation tothe state’s interest in punishment and de-terrence, it enters a “zone of arbitrarinessthat violates” the due process clause.

The Court concluded that Alabama ex-ceeded the scope of its legitimate interestbased on the application of the followingthree “guideposts”: (1) the degree of repre-hensibility, (2) the ratio of the punitivedamages award to the actual harm inflictedon the plaintiff, and (3) the state’s sanc-tions for comparable misconduct. Defensecounsel should carefully review these cri-teria and, where appropriate, fashion thesecriteria into a constitutional affirmative de-fense designed to guard the defendant’sdue process rights.

Yet another issue that arises in regard tothe constitutionality of punitive damages iswhat limitations apply in cases in which adefendant has been subjected to multiple

or successive punitive damages awards. Afederal district court in New Jersey heldthat due process considerations prohibitthe imposition of multiple or successivepunitive damage awards against the defen-dant for the same course of conduct.39

When dealing with a defendant who hasbeen subjected to multiple punitive dam-age awards, defense counsel should pleada violation of the defendant’s due processrights as an affirmative defense.

Another constitutional challenge thatcan be made is that punitive damagesawards violate the Eighth Amendment’sprohibition against excessive fines. TheU.S. Supreme Court in Browning-FerrisIndustries v. Kelco Disposal Inc.40 heldthat an excessive fine argument was notavailable under the Eighth Amendmentwhen the suit is between private parties. Ithas yet to be determined whether govern-mental involvement would produce thesame result.

Three states (Utah, Florida and Georgia)have recently enacted statutes that allowthe state to recover a portion of punitivedamages in a range of civil actions.41

These statutes reflect the intent of punitivedamages to punish the wrongdoer, ratherthan to compensate an injured party. De-fense counsel working under a statute inwhich the state shares in or affirmativelyseeks punitive damages should be wary ofpotential abuse and should seek constitu-tional protection pursuant to the excessivefines clause of the Eighth Amendment.

Yet another argument that can be madeas an affirmative defense is that an awardof punitive damages would violate theseparation of powers doctrine, since the

37. 512 U.S. 415 (1994).38. 517 U.S. 559 (1996).39. Juzwin v. Amtorg Trading Corp., 705

F.Supp. 1053 (D. N.J. 1989), vacated on othergrounds, 718 F.Supp. 1233 (D. N.J. 1989).

40. 492 U.S. 257 (1989).41. James McKowan, Punitive Damages: State

Trends and Developments, 14 REV. LITIG. 419(1995), citing, FLA. STAT. § 768.73; GA. CODE § 51-12-5.l(e)(2); UTAH CODE § 78-18-1(3).


court and jury would be usurping the ex-clusive power of the legislature to definecrimes and establish punishments. In therelatively few jurisdictions in which plain-tiffs may recover punitive damages oncontract claims, defense counsel may optto argue that an award of punitive damageswould violate the contract clause of Article1, Section 10, of the U.S. Constitution. Inaddition, counsel may wish to file an affir-mative defense than an award of punitivedamages would violate the defendant’sconstitutional right not to be placed twicein jeopardy for the same conduct.42

Affirmative defenses raising constitu-tional challenges may not be successful atthe trial level, but including them in theanswer to the complaint will preservethem. For that reason alone, defense coun-sel is well advised to consider incorporat-ing constitutional affirmative defenses inthe answer.

INVESTIGATE THE CLAIM

The defense of a punitive damagesclaim involves a race for the facts. Defensecounsel should realize that they start thisrace at a disadvantage. Not only does theplaintiff’s attorney have a substantial leadin the investigation of the particular eventsthat give rise to the claim, but in mostcases the attorney also will be drawing onthe experience of the plaintiffs’ bar insimilar cases. With this in mind, it cannotbe stressed enough that defense counselmust investigate the claim for punitivedamages at the earliest possible stage.

A. Meeting with Defendant and Inter-viewing Defendant’s Employees

While the applicable law is being deter-mined, and the pleadings are being put inorder, the very first thing that defensecounsel should do is to meet with corpo-

rate representatives who will explain andjustify the conduct alleged as giving rise tothe punitive damages claim. In these earlystages, counsel can begin to “circle thecorporate wagons.” This involves inform-ing the corporation of the nature of the pu-nitive damages claim, as well as the seri-ousness of the claim, even if the plaintiff’stheory has not yet been delineated in thepleadings. At this point, counsel can beginbuilding a working rapport with corporateofficers who may serve as witnesses at thetrial and who invariably can aid counsel inthe investigation of the claim.

It is critical at this juncture that defensecounsel stress to the corporate defendantthe importance of presenting a unifiedfront through to the conclusion of the liti-gation. In fortifying the unified front, de-fense counsel must stress to personnelfrom management on down the corporateladder that there will be no passing of thebuck, pointing of fingers at other employ-ees, or any discussion of the case outsidethe corporate environment.

Finally, counsel should work hand-in-hand with corporate management at theearliest stages of preparation in order tocreate an impression of corporate harmonyand to avoid damaging statements from alllevels of the corporation. Counsel shouldalso be sure to discuss with the defendantthe costs involved in defending the puni-tive damages claim. These may be sub-stantial, but defense dollars are well spenton early and thorough efforts to underminepunitive damages claims.

B. Building Rapport with Defendant’sEmployees

Defense counsel must ascertain whichemployees were involved in the incidentsor actions giving rise to the punitive dam-ages claim and build a rapport with them.For example, in the product liability con-text, defense counsel should meet the keypeople affiliated with the corporation whowere responsible for the research, testing,design and construction of the product.These employees will explain and justify

42. It should be noted that the double jeopardyclause does not apply to cases between private par-ties. United States v. Halper, 490 U.S. 435, 451(1981).


how the product was developed and manu-factured; they will be the most importantwitnesses at trial. In addition, they willprovide invaluable assistance in directingthe course of future investigation and dis-covery.

Once the key employees have beenidentified and interviewed, defense coun-sel should extend the investigation toformer employees and outside consultantsor contractors who helped develop theproduct. These potential witnesses, be-cause of the lack of direct interest, may beamong the defendant’s most effective wit-nesses. They also are the individuals inwhom the plaintiffs’ investigators will beparticularly interested.

The prosecution of most punitive dam-ages claims proceeds according to one ormore proven formulas or themes. One verypopular formula with corporate defendantsis for plaintiffs to develop their casesthrough the cooperation and contributionof disgruntled former employees of the de-fendant company. The defense team mustbe on the lookout for “rotten eggs.”

Through early investigation and meet-ings with the corporate defendant, defensecounsel can learn the identities of problemwitnesses before the plaintiff’s discoveryrequests are filed. Defense counsel mustthen spend time with these potential wit-nesses, not only to learn what they know,but to encourage their cooperation with thedefendant. This step cannot be emphasizedenough, since meetings with these indi-viduals will allow counsel to learn moreabout the witnesses they will be workingwith during the course of the litigation andto win those individuals over before theiridentity must be disclosed during discov-ery.

Defense counsel should be careful tomaintain the attorney-client privilege withall these witnesses, to explain the privilegeto the witnesses, and to encourage them tospeak freely. Whenever defense counselreviews any documents that are uncovered,the privilege ramifications of the docu-ments must be considered. To protect and

maintain the attorney-client privilege, de-fense counsel is wise to keep all documen-tation within the control of a specified, de-fined control group.

DISCOVERY

Discovery efforts on the punitive dam-ages aspect of a case must exceed that nor-mally devoted to the liability and compen-satory damages aspects. A passive role indiscovery when punitive damages aresought is a recipe for disaster.

A. Discovery Addressed to Plaintiff

Aggressive discovery against the plain-tiff should commence as soon as possible.Specific interrogatories should be designedto elicit information regarding the theoryand facts in support of the punitive dam-ages claim, any documents that would sup-port the claim, and any experts expected totestify. If the answers set forth factual ma-terial that enables the defense to outlinethe claim, defense counsel is in a positionto alert the defendant and the defendant’switnesses of the plaintiff’s expected theoryand approach.

In addition, defense counsel shouldserve a request for production of docu-ments, mindful of the fact that the plain-tiff’s attorney may have a complete libraryof defense documents obtained from thenetwork of plaintiffs’ attorneys whohandle similar cases. This library of docu-ments will enable the plaintiff’s attorney toscrutinize whether all relevant documentshave been produced by the defendant inresponse to his own request to produce. Toensure possession of all of a client’s docu-ments and to blunt any effort by the plain-tiff to imply guilt on the basis of failure toproduce, defense counsel should requestthat the plaintiff’s counsel produce any andall of the defendant’s documents in theplaintiff’s possession.

Plaintiffs’ attorneys often respond to de-fense interrogatories in a general way, in-dicating that specific answers cannot beprovided because discovery has not yet


been completed. These typically vague,non-responsive answers should be chal-lenged with motions to compel, motionsfor a more definite statement, or othersimilar motions, in an attempt to make theplaintiff commit to paper the theories onwhich the punitive damages claim rests.

Motions to compel more complete re-sponses to discovery serve at least twopurposes.

First, even assuming that no discoverywas undertaken prior to the filing of thelawsuit, the plaintiff’s attorney obviouslydid not file the lawsuit in a vacuum; thereis some theory or theories underlying theclaim. The plaintiff’s attorney should berequired to set forth those theories as soonas possible.

A second reason for filing a motion tocompel is to determine whether theplaintiff’s claim for punitive damages isfrivolous. When a complaint has no sup-porting facts, having the plaintiff admit asmuch educates the judge to the possibilitythat the plaintiff has simply embarked on afishing expedition. In light of this informa-tion, some judges will severely limit dis-covery or cause other problems for theplaintiff’s attorney.43

B. Discovery Addressed to Defendant

Many successful punitive damages casesare based on incriminating informationcontained in answers to interrogatories orincriminating documents produced by thedefendant. Defense counsel should workclosely with the appropriate corporate rep-resentatives to ensure that the plaintiff’sinterrogatories are answered as accuratelyand carefully as possible. Special careshould be taken so as not to volunteer in-formation that has not been specifically re-quested, and every effort must be made toobject to the questions that are vague, am-biguous, overbroad or unduly burdensome.

It cannot be stressed enough how impor-tant it is to respond carefully and methodi-cally to a request for documents. Defensecounsel must review all the relevant docu-ments in the defendant’s possession in or-der to know all the pertinent information inthe documents and be able to pinpointdocuments that may have the potential tocause problems.

Every effort should be made to resistbroad discovery requests that seek an all-inclusive or exhaustive production of alldocuments in the defendant’s possession.Possible objections are that the documentscontain trade secrets, are protected by theattorney-client privilege, or are irrelevant.When required to produce voluminousdocuments, defense counsel should makeevery effort to obtain a protective orderfrom the court to prohibit the dissemina-tion of the documents to parties outside thelawsuit.

It is of particular importance in a puni-tive damages case for defense counsel toensure that relevant documents are not de-stroyed or withheld and that production tothe plaintiff is complete. The destructionor withholding of key documents can de-stroy a defendant at trial. If the jury be-lieves the defendant has deliberately de-stroyed or withheld material documents,the likelihood of a very big hit—runawaycompensatory and punitive damagesawards—is greatly enhanced.

Extreme care should be exercised to pre-vent the inadvertent destruction of poten-tially relevant documents. Defense counselshould promptly advise the client thatdocuments must not be destroyed after thecommencement of litigation or firsthandknowledge of the claim. As to materialsalready disposed of before the beginningof the case, defense counsel must be pre-pared to demonstrate that the disposal waspursuant to a pre-established corporatedocument retention and disposal policy.Defense counsel should establish thedefendant’s corporate document retentionsystem early on and should look for a cat-egorization of documents and retention pe-

43. See generally for discovery against theplaintiff, Albert H. Parnell, An Aggressive DefenseAgainst Punitive Damages Claims (Part I), FOR THE

DEFENSE 18, 20 (Oct. 1987).


riods for each category, as well as thedocument destruction process and its en-forcement and control procedures.44

Given that the philosophy of punitivedamages is to punish the defendant, theplaintiff’s attorney undoubtedly will arguethat the jury is entitled to know the extentof the defendant’s wealth so that it can de-cide what penalty is substantial enough topunish the defendant for its bad deeds. Tothat end, the plaintiff’s attorney will useinterrogatories or requests for productionof documents designed to discover thedefendant’s financial worth.

Some states have statutes governing thescope of discovery in punitive damagescases. For example, in some jurisdictions,information regarding a defendant’s assetsmay not be sought until the plaintiff hasmade a prima facie showing that the defen-dant may be liable for punitive damages.45

In others, evidence of a defendant’s finan-cial worth is not admissible, even thoughthe jury is authorized to award punitivedamages.46 When possible, defense coun-sel should take advantage of these statutesto limit or defeat requests for financial in-formation.

Depending on the law of the particularjurisdiction, defense counsel should resistdiscovery of financial information eitherby obtaining a protective order on theground that a prima facie case does notexist or deferring the discovery until a casefor punitive damages is proved. At thevery least, counsel should ask for a protec-tive order to put financial information un-der seal until the appropriate time.47

Usually plaintiffs can discover only in-formation regarding the defendant’s networth, not gross earnings. The rationale forthis rule is simple: net worth more accu-rately establishes the defendant’s true fi-nancial status, and the defendant may beunduly prejudiced by proof of high grossearnings that do not correctly reflect theactual financial condition. Many courtslimit how far back the financial discoverymay go, often restricting it to two or threeyears before the incident being litigated.48

In some limited circumstances, evidenceof the defendant’s financial status maywork to the defendant’s advantage. A direfinancial condition implies an inability topay a large punitive damages award. If thatis the situation, the defendant should con-sider presenting that evidence at trial in or-der to contend on appeal that the amountof punitive damages awarded constitutesan undue financial burden.49

One final thing should be mentioned re-garding the disclosure of financial infor-mation. Defense counsel should be verycareful when the court has allowed discov-ery on this issue to make certain that thedefendant is completely honest in the fi-nancial information provided. If the jurythinks that the defendant has “fudged thenumbers,” nothing good can happen attrial.50

C. Depositions of Defense Witnesses

The importance of the depositions of thedefendant’s representatives cannot beoverstated. Mistakes and inaccuracies indiscovery depositions are unlikely to beovercome, are unlikely to be meaningless,usually cannot be explained away, and willnot become less important with time. Inaddition, conflicts between witnesses thatseem largely irrelevant may be extremelysignificant to the jury.

For these reasons, it is essential that de-fense counsel meet with the defense wit-nesses days in advance of their deposition

44. Michael A. Brown, Preventing Litigation inProducts Liability Cases: Can It Be Done? 1, 5, inCorporate Legal Times Conference, supra note 8.

45. See, e.g., CAL. CIV. CODE § 3295; Rupert v.Sellers, 368 N.Y.S.2d 904 (App.Div. 4th Dep’t1975).

46. See, e.g., Smith v. Colorado Interstate GasCo., 794 F.Supp. 1035, 1044 (D. Colo. 1992);Shane v. Rhines, 672 P.2d 895 (Alaska 1983);Fowler v. Mantooth, 683 S.W.2d 250, 253 (Ky.1984); Texas Pub. Util. Corp. v. Edwards, 358So.2d 1025 (Ala. 1978).

47. Kitch, supra note 1, at 16.48. Id.49. See, e.g., Motsch v. Pine Roofing Co., 533

N.E.2d 1 (Ill.App.1989).50. Kitch, supra note 1, at 16.


testimony. Counsel must go over their ver-sions of events so that each has a familiar-ity with the others’ expected testimony andeach has some sense of history and per-spective regarding the events that are al-leged to give rise to the claim for punitivedamages. Spending many hours with thedefense witnesses has the added advantageof providing defense counsel with a clearunderstanding of how all of the witnessesinterrelate with each other. In addition,proper preparation of defense witnessesprobably will highlight testimony that maycause difficulties during cross-examinationat trial.51

MOTIONS FOR SUMMARYJUDGMENT

After discovery has been completed andthe plaintiff has been pinned down to acertain version of events, defense counselshould consider a motion for summaryjudgment. If the plaintiff’s attorney has re-sisted particularization of the punitivedamages claim, that may be advanta-geously turned against him. Although inmost jurisdictions courts are usually reluc-tant to grant summary judgment, they of-ten are willing to do so on the issue ofpunitive damages because such damagestraditionally have not been favored by thelaw.52 This is especially true when theplaintiff has not articulated a viable theoryfor recovering punitive damages. More-over, trial courts are not blind to the factthat often a plaintiff’s compensatory dam-age claim will survive a summary judg-ment motion, and for that reason they willenter partial summary judgment for the de-fense on the issue of punitive damages.

Even if the motion is not successful, theprocess itself may be beneficial. If nothingelse, it forces the plaintiff’s attorney to re-spond and to articulate a cogent theory re-garding the punitive damages claim rightbefore trial.

TRYING PUNITIVEDAMAGES CASES

A. Pretrial Motions

1. In Limine

The motion in limine probably is de-fense counsel’s very best tool in confiningthe scope of inquiry at trial to narrow mat-ters of relevance. One important aspect ofthe motion is to limit all references or evi-dence of punitive damages at trial untilsuch time as the plaintiff makes a primafacie showing of entitlement to such relief.This motion should include a request thatthe plaintiff be restricted in the openingstatement from making any reference to orproviding a full factual discussion of theissue of punitive damages. Another issuethat should be included is a request thatany evidence of other misconduct on thepart of the defendant, including evidenceof other lawsuits, be barred.

In addition, if the judge usually issues apretrial instruction to the jury regardingpunitive damages, defense counsel shouldconsider filing a motion in limine if thereis any reasonable basis to ask the judge todelay reference to the punitive damagesclaim because of its weakness and the like-lihood that it might be subject to a motionfor a directed verdict.53

One of the issues that repeatedly pre-sents itself is the plaintiff’s attempt to in-troduce pattern and practice evidence. Un-der this theory, the plaintiff will attempt tointroduce evidence of other claims againstthe defendant that, although not necessar-ily similar to the claim in the instant case,nevertheless bolsters the plaintiff’s casethat the defendant is a horrendous entityworthy of punitive damages punishment.54

Sometimes, in response to specific dis-covery requests, plaintiffs will not disclose

51. See generally for defense witness deposi-tions, Parnell, supra note 43, at 22.

52. Gombos v. Ashe, 322 P.2d 933 (Cal.App.1958).

53. See Albert H. Parnell, An Aggressive De-fense Against Punitive Damages Claims (Part II),FOR THE DEFENSE 25 (Nov. 1987).

54. See generally Jonathan Gross, Defending“Pattern and Practice” Evidence in Punitive Dam-ages Cases, 61 DEF. COUNS. J. 403, 405, 406 (July1994), for this and the following paragraph.


the identity and nature of the other claimsthey intend to try to put into evidence attrial. In these cases, defense counselshould use a motion in limine to excludeevidence of other claims as a sanction fordiscovery abuse or to force the court toestablish what the evidence of other activi-ties can and cannot be used to prove at thetime of trial.

2. Bifurcate or Trifurcate

Another motion that defense counselshould consider is to bifurcate or trifurcatethe trial. If the court orders the trial bifur-cated, the jury first hears evidence on li-ability and the amount of actual damages.If the jury finds liability exists for punitivedamages, the same jury then hears evi-dence relevant only to the amount of puni-tive damages and makes its findings basedon the evidence presented during bothphases of the bifurcated trial.55 If the trialis trifurcated, the jury first decides liabil-ity, then compensatory damages, and thenpunitive damages.

Most courts, but not all, have the powerto order a bifurcated trial. In fact, at least13 states now require bifurcation of trialsin which punitive damages are sought.56

Some of these states require bifurcation ofthe entire punitive damages claim, includ-ing liability and amount.57 In the majority,however, only the amount of punitivedamages is bifurcated.

The ability to bifurcate the trial is im-portant because it can block harmful evi-dence that may not be admissible on issuesother than punitive damages. It also pro-motes efficiency in that if the jury finds forthe defendant on the liability question, thepunitive aspects of the case need never betried.

The basis of these motions is that theplaintiff’s proof of compensatory damagesdoes not involve evidence of defendant’saggravated conduct or, just as important,wealth. When presenting a motion to bifur-cate, defense counsel should argue to thecourt that trying the punitive damagesclaim with the compensatory damages

claim would introduce evidence that wouldunfairly prejudice the defendant in thejury’s consideration of the basic liabilityand compensatory damages issues.

3. Advantages

By filing carefully reasoned and judi-cially supported motions in limine, defensecounsel can either narrow the issues at trialor, at the very least, clarify them and gaina more thorough understanding of theplaintiff’s trial strategy. Pretrial motionsshould be designed to make the plaintiffreveal as much as possible about thetheory of the claim and the tactics of theattack. An effective pretrial motion strat-egy also may acquaint the defense teamwith nuances of the plaintiff’s case that ul-timately may prove helpful during the trial.

B. Trial Briefs

If a punitive damages case is tried, atrial brief should be submitted solely onthe punitive damages aspect. The trial briefshould outline arguments supporting thedelay of all statements from the plaintiff’sattorney about punitive damages until thenecessary evidence has been produced tojustify placing the claim before the jury. Italso should state the requirements to befulfilled by the plaintiff before submitting

55. Steven G. Goode, Defending AgainstPunitives, 21 LITIG. 29, 31 (Winter 1995).

56. See, e.g., FED. R. CIV. P. 42(b); ALA. CODE

R. 42(b); Alaska R. Ct. 42(b); ARIZ. REV. STAT. R.42(b); ARK. CODE ANN. R. 42(b); COLO. REV. STAT.R. 42(b); DEL. CODE ANN. R. 42(b); D.C. CODE ANN.§ 11-946 (explaining that federal procedural rulesgovern in District of Columbia); IDAHO CT. R.42(b); IND. CODE ANN. § 34 APP. R. 42(b); IOWA

CODE ANN. R. 186; KAN. STAT. ANN. § 60-242(b);KY. REV. STAT. ANN. R. 42.02; MD. R. CIV. P. 2-503(b); MICH. CT. R. 2.505(b); MONT. CODE ANN. R.42(b); N.D. CENT. CODE 42(b); OHIO REV. CODE

ANN. R. 42(b); R.I. GEN. LAWS R. 42(b); TENN.CODE ANN. R. 42.02; UTAH CT. R. 42(b); VT. STAT.ANN. R. 42(b); W. VA. CODE R. 42(b); WYO. STAT.R. 42(b).

57. They are California, Georgia, Kansas, Min-nesota, Missouri, Montana, Nevada, New Jersey,North Dakota, Ohio, Tennessee, Texas, Utah andWyoming. Goode, supra note 55, at 31.


arguments and before the court instructsthe jury on the issue of punitive damages.

C. Selecting a Jury

It is vitally important that defense coun-sel conveys to the prospective jurors, fromstart to finish, that defense counsel is com-mitted to the defendant’s cause. Even be-fore the voir dire, counsel should pay spe-cial attention to the age, sex, ethnicbackground, dress and demeanor of eachindividual. An effort should be made to de-termine what the prospective jurors arereading and what they are doing with theirtime while they are waiting. Personal char-acteristics and interests that make prospec-tive jurors appealing to defense counselmake them good candidates for the jury—or at least the kinds of individuals onwhom defense counsel should focus oncevoir dire begins.58

Defense counsel should describe the de-fendant to the prospective jurors in such amanner that they will not see the defendantas a callous institution and that it acted as aresponsible corporation or individualwould have in similar circumstances. Spe-cial attention should be paid to desensitiz-ing some of the punitive damages issuesthat the plaintiff will raise during trial, in-cluding the extent of the injuries, disabili-ties, and the claimed amount of loss.

Defense counsel should present thedefendant’s theory of the case beginningwith voir dire. The defense theory, to theextent that the court will permit, should in-clude references to both the facts and thelaw that support the defendant’s version ofevents.

One of the key issues that should be ad-dressed during voir dire is the burden of

proof. Regardless of the jurisdiction, a ju-ror must be able to follow the court’s in-structions on the burden of proof. This isespecially important if the case is in a ju-risdiction where proof of punitive damagesrequires more than a preponderance of theevidence. Defense counsel must describethe purpose of punitive damages to dis-cover whether prospective jurors can dis-tinguish between compensatory and puni-tive damages and to determine if they haveany preconceived opinions that the plain-tiff is entitled to be compensated.

One other consideration should be keptin mind, especially in a products liabilityaction. Defense counsel should make a listof the products made by the defendant thatmight have been used by the jurors. Thenames of each of the products should beread to the jury during voir dire, and theyshould be questioned about their use ofthese products. Jurors who provide favor-able comments or impressions about thedefendant’s products should be targetedfor inclusion on the jury.59

Over the years, numerous studies havebeen performed regarding the types of in-dividuals who are inclined and disinclinedto grant punitive damages. Without ignor-ing their instincts, defense counsel shouldrecognize the types of persons to keep offthe jury in a punitive damages case. It hasbeen suggested that individuals who aredepressed and underemployed are morelikely to award punitive damages.

Some studies suggest that people whohave suffered significant personal losses,such as the death of love ones, job disap-pointments, divorces or similar situations,are particularly inclined to award punitivedamages. In the same category, some stud-ies place people who lack a set of values orwho are strongly liberal in their social andpolitical beliefs in the category of personswho are inclined to award punitive dam-ages. Interestingly enough, some also sug-gest that women are slightly more likelythan men to award punitive damages.60

In order to impanel a defense jury in apunitive damages case, defense counsel

58. See generally Steven A. Cozen & JoannSelleck, Picking a Jury in a Punitive DamagesCase, FOR THE DEFENSE 13-15 (Jan. 1988), for thisand the following three paragraphs.

59. Parnell (Part II), supra note 53, at 26.60. Walker & Keller, supra note 2, at 31; Debra

Cassens Moss, Punitive-Damages Jurors: StudySuggests Selecting Depressed People, A.B.A. J. 18(Sept. 1988).


should look for people who have had prob-lems in their lives and have overcomethem on their own. Ideal jurors may evenexpress some hesitancy about levying pu-nitive damages on a defendant who eitheracted reasonably under the circumstancesor merely made a mistake. Some commen-tators have suggested that conservative,well-educated, intelligent or financiallywell-off persons are less likely to part withthe defendant’s money.61

D. Opening Statement

Without a doubt, the opening statementis the most important part of any trial. Thejurors are receptive to new information andthey are eager to learn the defense posi-tion. They want to know if the plaintiff’sallegations are true and if the defendant isreally as bad as the plaintiff’s attorney hasled them to believe in the plaintiff’s open-ing statement. They want defense counselto tell them where the plaintiff is wrong.The jurors must be provided with short,concise, and believable explanations sup-porting the contention that punitive dam-ages are inappropriate in this case.62

E. Presenting Evidence

1. Theory of the Defense

Defense counsel must make a special ef-fort to elicit testimony designed to bolsterthe defendant’s theory of the case and toput into play the theory originally formu-lated when the complaint was filed. Sev-eral theories have proven successful inresisting punitive damages claims, particu-larly in products liability actions.63 Theyare:

• There is not really a danger or a de-fect in the product itself.

• The injury was caused by the plain-tiff’s assumption of the risk or misuse ofthe product.

• Even after the course of conduct wasset in motion, the plaintiff’s personal ac-tion could have prevented the occurrence.

• The manufacturer did not know—andcould not have known—of the hazard or

defect at the time of manufacture.• The defendant knew of some danger

associated with the use of its product, andthrough investigation, research and testing,it determined certain safety precautionsthat were adequately explained to theplaintiff or the user on the label.

• The defendant complied with all stateand federal regulations in the manufactureand distribution of the product.

• The activities of the manufacturerwere reasonable and all that one would ex-pect based on the knowledge available.

• To the extent that there have beenother injuries associated with the use ofsimilar products, the manufacturer’s prod-uct was somehow different, or the way inwhich the product was used was different.

2. Personalize Corporate Defendants

Keeping in mind that the plaintiff willseek not only compensation but also pun-ishment of the defendant, defense counselmust have as a primary goal to personalizethe corporate defendant—that the “corpo-ration” is a composition of individualpeople who would be affected by an awardof punitive damages against the corpora-tion. As a legal entity, the corporation isincapable of suffering, but an award of pu-nitive damages hurts the employees whodepend on the corporation for their liveli-hood, as well as stockholders, suppliers,charities, and often entire communities thatrely on the defendant’s continued health.64

3. Choose Good CorporateRepresentatives

One way to personalize the corporatedefendant and favorably affect the jury’sevaluation of the corporation’s integrity isto present knowledgeable and appealing

61. Cozen & Selleck, supra note 58, at 16-17.62. Parnell (Part II), supra note 53, at 27-28.63. Alan F. Herman, Damages: Practical Tips

on the Trial of the Issue of Punitive Damages, DRIDamages Seminar Coursebook, page B-54 (March1997).

64. Goode, supra note 55, at 32.


corporate representatives throughout thecourse of the trial. “Humanizing” the cor-poration should start during voir dire,when beside defense counsel there sits thedefendant’s most appealing representativeand who appears to be the very personifi-cation of good faith, sincerity, profession-alism, honesty and credibility.65

The corporate representatives must havesufficient stature within the corporation tosignal the defendant’s concern with thecase. Defense witnesses must be selectedcarefully based not only on what theyknow, but on how they will reflect thedefendant’s interest and integrity.

In a products liability action, themanufacturer’s top-level manager must becalled to testify and to show concern forthe plaintiff and for the product. That per-son must have some familiarity with theproduct, be able to describe it and to dis-cuss the concerns that management has forover-all safety, its image, and the con-sumer. This person has to be an amenable,quick-witted individual who can project animage of trust to the jury and the court, aswell as being fully prepared about all as-pects of the litigation.

If the litigation involves the adequacy ofa warning label, the designer of the labelor the official with the responsibility forensuring that the label was properly drawnmust testify. The designer of the label cantell why the label was prepared as it was,how the language was chosen, and whatsafety factors were considered. Nothing isworse than to have a challenge against thelabel without any real person stepping upfor the defendant to take responsibility forit.66

4. Emphasize Reasonableness ofDefendant’s Conduct

Defense counsel must affirmativelydemonstrate the reasonableness of the

defendant’s conduct in light of circum-stances as they existed at the relevant time.Especially in products liability cases, it isimportant to show whether there wereprior complaints or accidents, and if so,whether and when the defendant learned ofthem. If counsel can show that the defen-dant has a clean record—no citations, nofines, no lawsuits, no licenses suspendedor revoked—then counsel can argue thatthe defendant satisfied society’s recog-nized standards of conduct and should notbe punished with punitive damages.67

5. Portray Defendant as Honest andForthright

It is of paramount importance to per-suade the jury that the defendant is makinga full and frank disclosure. The slightesthint of deception or cover-up can be fatal.Defense counsel should exude the attitudethat the more the jury knows, the better theoutcome will be for the defense. Defensewitnesses should be adequately preparedbefore trial to ensure that they will not ap-pear evasive or defensive. If they and de-fense counsel appear less than forthright,the jury will assume that the defendant’scourse of conduct was undertaken with thesame level of integrity.

6. Point to Culpable Conduct ofPlaintiff and Others

To the extent possible, the defenseshould shift the jury’s attention from thedefendant’s conduct to the conduct of theplaintiff or others. All of the plaintiff’s be-havior, including personal habits, domesticdisputes, exaggerations, malingering andother types of behavior, must be thor-oughly described to the jury. If theplaintiff’s actions, as viewed against thejurors’ reasonable expectations, suggestthat the injury was the plaintiff’s ownfault, the defense must be ready to assertthe theories of contributory negligence orassumption of the risk.68 Although com-parative negligence, misuse, or assumptionof the risk may not bar an award of puni-tive damages as a matter of law, most ju-

65. Cozen & Selleck, supra note 58, at 16.66. Parnell (Part II), supra note 53, at 30.67. Goode, supra note 55, at 32.68. Parnell (Part II), supra note 53, at 28.


ries will sense something fundamentallyunfair in punishing a defendant for an in-jury that would not have occurred but forthe plaintiff’s own negligence or misuse ofthe product.

The defense should not lose sight of oneof the primary advantages for focusing onthe plaintiff’s behavior or the behavior ofanother party, including a co-defendant.Evidence of the plaintiff’s fault, or anotherparty’s fault, may serve as an effectivecounter-balance to an allegation of outra-geous behavior on the part of the defen-dant. If defense counsel can plant in thejury’s mind the notion that the defendant isnot the only party at fault, the threat of apunitive damages award will be greatly re-duced.

Defense counsel also should rememberthat although some experts suggest that thejury must be continually reminded of theplaintiff’s fault and greed and the high bur-den of establishing entitlement to punitivedamages, such a frontal attack on theplaintiff may backfire. A caveat worth re-membering is the importance of beingsubtle. Juries are rarely amenable to defen-dants who try to excuse their behaviorsolely by attacking others.

7. Show Compliance with ApplicableFederal and State Standards

Even in jurisdictions that do not have apresumption under which a defendant whocomplied with applicable state and federalstandards has a complete defense to puni-tive damages, compliance still should beemphasized. The jury should be made tounderstand the defendant’s concern for thesafety of the product, service or other in-strumentality that allegedly caused thedamages.

The jury also should be reminded of themanufacturer’s attempt to build safety intoits products by observing specific designcriteria. Even if the jury finds that the cri-teria were inadequate, the defendant’sdemonstrated concern for the quality of itsproduct or service may preclude an awardof punitive damages. Again, defense coun-

sel should avoid presenting the jury withthe perception of indifference.

8. Introduce Evidence of SubsequentRemedial Measures

Careful consideration should be given asto whether the client will favor or opposethe introduction of post-accident remedialchanges. They may serve as indications ofcorporate concern for safety and supportthe argument that no punitive damages arerequired, because the problem has beenremedied voluntarily by the defendant. If,however, such a strategy is chosen, de-fense counsel should strongly considermoving to bifurcate the punitive damagesclaim in order to avoid the possibility of anadmission of liability as to the compensa-tory damages claim.

9. Justify, Don’t Apologize

In explaining the defendant’s conduct, aclear distinction must be made betweenapology and justification. Apologies dur-ing trial offer too little too late. To avoidpunitive damages, what must be presentedat trial is a clear explanation of the deci-sions and conduct of the defendant thatdemonstrate that the conduct, althoughperhaps faulty, is not deserving of punish-ment. If the jury does not receive a clearand logical explanation for the events thatled to the manufacturer of an allegedly de-fective product or the provision of an al-legedly substandard service, it will assumethe worst—that the defendant placed self-ish business concerns over concerns for thesafety of its product or service.

10. Educate the Jury on PunitiveDamages

During the defendant’s case, the jurymust be reminded of the practical effectsof a substantial award of punitive dam-ages. Plaintiffs will highlight the defen-dant’s total assets and net worth, whileprofits and operating margins of most cor-porations reflect much smaller values. Ifpunitive damages are to serve a curative


69. 512 U.S. 415 (1994).

function, the cure should not kill the pa-tient. Moreover, the amount of punishmentshould bear some rational relationship tothe harm caused. If punitive damages havebeen awarded against the defendant inother suits on account of the same defec-tive product or service, defense counselshould carefully consider whether to bringthat fact to the jury’s attention in mitiga-tion of the imposition of an additionalaward.

F. Directed Verdict

After the close of the plaintiff’s case-in-chief, defense counsel should move for adirected verdict on the punitive damagesclaim. This is the last chance to keep theissue away from the jury. Depending onthe jurisdiction’s standard of proof, de-fense counsel may have an increasinglygood chance of winning such a motion.Where, for example, the plaintiff mustshow by clear and convincing evidencethat the defendant acted with malice or en-gaged in wanton, gross or outrageous con-duct, trial judges often are receptive to amotion for a directed verdict if the plaintiffhas failed to bring out truly damaging evi-dence that would meet a heightened bur-den of proof.

G. Preserving the Record

In the event that defense counsel’s mo-tion for a directed verdict is denied, andthe jury is charged with addressing the is-sue of punitive damages, defense counselmust make a concerted effort, before thereturn of the verdict, to preserve all errorsin connection with the punitive damagesissues. Counsel must make sure that (1) allappropriate objections have been statedwith sufficient particularity for the record;(2) that all necessary offers of proof havebeen made; and (3) that any exhibits havebeen properly offered into evidence.

H. Instructions and Closing Argument

Jury instructions and closing argumentoffer defense counsel a final opportunity toeducate the jury on the very limited legalbasis for the imposition of punitive dam-ages. Counsel should emphasize that theterms used in the instructions to describethe conduct warranting punitive damagesare precise legal concepts. Those terms—“reckless,” “malice,” etc.—should be de-fined and contrasted with mere negligence.The jury must understand that punitivedamages are an extraordinary remedyawarded only for truly outrageous conduct.

Defense counsel should use closing ar-gument as the last opportunity to presentthe defendant’s theory of the case. Counselmust be fair and reasonable and shouldmake every effort not to overreach. If apunitive damages award is probable, anoutright denial of fault most likely willprove to be counter-productive. In thatcase and in order to avoid an excessivelylarge punitive damages verdict, counselshould consider providing the jury withspecific guidance as to the amount of puni-tive damages that should be awarded ifthey are inclined to do so. That may wellserve as a way to reign in a potential run-away punitive damages verdict.

AFTER THE VERDICT

If punitive damages are awarded, de-fense counsel should undertake further ef-forts. One study cited by the U.S. SupremeCourt in Honda Motor Co. v. Oberg foundthat “over half of punitive damages awardswere appealed, and that more than half ofthose appealed resulted in reductions or re-versals of the punitive damages.”69

A. Judgment Notwithstanding Verdict

If the jury opts for punitive damages,defense counsel should request that thetrial court enter judgment notwithstandingthe verdict on the punitive damages claimbased on the insufficiency of the evidencepresented at trial. This motion may havesignificant potential where the standard of


proof exceeds the preponderance of theevidence standard. Moreover, the trialcourt may be more sympathetic to defensearguments once it knows that the plaintiffwill be fairly compensated for actual dam-ages.

B. Remittitur

Even if the trial court believes that anaward of punitive damages is warranted insome amount, defense counsel may arguesuccessfully for remittitur based on the un-reasonable amount of the punitive dam-ages. Remittiturs have been granted re-cently to reduce punitive damages awardsto reasonable levels. Counsel should takecare to preserve arguments regarding re-mittitur for purposes of appeal, as errorswith respect to punitive damages are oftenthe focus of review in the appellate courts.

CONCLUSION

Defending a punitive damages claim re-quires particular care and preparation sincemost of the evidence used to prove theclaim is initially under the control of the

defendant, and the risk of incurring asubstantial verdict is ever present. Beforeresponding to discovery, defense counselshould aggressively seek out the facts andformulate a precise defense strategy. Dur-ing the proceedings, counsel should pur-sue the issue, continually challenging thebasis of the claim and seeking to limit itsscope.

At trial, the jury’s attention should bedirected to the plaintiff’s conduct. The de-fendant corporation’s own conduct shouldbe explained accurately within its histori-cal context, without apology. What thejury seeks is a logical explanation for whatoccurred. They will forgive mistakes injudgment, but they will not forgive—orforget—evasiveness, dishonesty or disin-terest by defense witnesses or counsel.

Defense counsel must clearly explainthe purpose and legal limits of the punitivedamages remedy and demonstrate why pu-nitive damages should not be awarded. Toignore the punitive damages issue, or tofail to draw out the particulars of thedefendant’s conduct and the applicablelaw, is to court disaster.

Documents

How to Defend Punitive Damages Claims · PDF fileHow to Defend Punitive Damages Claims Effectively Page 349 ... California Civil Code Section 3294(b) ... statement 1, 7-8, in Corporate