In Turley v. ISG Lackawanna, the Second Circuit clarified the standards for awarding punitive damages in employment discrimination cases. It provides a good review of the law, as well as how it applies in specific cases.
In this race discrimination case, the plaintiff “endured an extraordinary and steadily intensifying drumbeat of racial insults, intimidation, and degradation over a period of more than three years” which the court outlined in some detail.
While the court upheld, “under the exceptional and egregious facts of this case,” the jury’s award of $1.32 million for plaintiff’s “past and future emotional distress, mental anguish, inconvenience, and loss of enjoyment of life,” it struck down the jury’s $24 million punitive damages award as excessive.
Noting its role of ensuring that punitive damages are “fair, reasonable, predictable, and proportionate” and that “[l]arge punitive damages awards also implicate constitutional due process principles,” the court went on to explain the three “guideposts” articulated by the Supreme Court for reviewing punitive damages awards:
(1) “the degree of reprehensibility” associated with the defendants’ actions; (2) “the disparity between the harm or potential harm suffered” and the size of the punitive award; and (3) the difference between the remedy in this case and the penalties imposed in comparable cases.
In determining that the punitive damages awarded were excessive, the court reasoned:
The disparity between the punitive damages award and the already sizable compensation, however, gives us pause. As a general matter, the four-to-one ratio [following the district court’s remittitur] of punitive to compensatory damages awarded is close to the line of constitutional impropriety. And where, as here, the compensatory damages award is imprecise because of the nature of the injury and high when compared with similar cases, a lesser ratio, perhaps only equal to compensatory damages, can reach the outermost limit of the due process guarantee. The district court’s extensive damages judgment here therefore tests these constitutional limits. …
A lower award also is necessary to bring the punitive damages in this case into alignment with comparable awards in other cases. Upon reviewing the Second Circuit and New York cases brought to our attention, it appears that punitive awards for workplace discrimination rarely exceed $1.5 million.
The court concluded by directing the district court to impose a “remittitur” – i.e., a procedure used by courts to reduce the amount of a damage award considered to be impermissibly high – and to provide the precise calculation of punitive damages.