Sometimes clients and friends comment to us when they hear about a huge jury verdict in the news like the recent case in Florida where a jury awarded a widow of a smoker $17 million dollars in actual damages and $23.6 Billion dollars in punitive damages. A shocking verdict like that one makes a lot of people doubt our jury system and always gets a lot of play in the media because it is sensational. In talking about cases like the Florida case it is common for us to find out that most people dont know the whole story. The United States Supreme Court has ruled that any award of punitive damages must be rationally related to the amount awarded for actual damages. The court has not given a strict ratio but most appellate courts will allow a ratio between 3 to 1 and 5 to 1. Texas law (except in a few limited exceptions) caps punitive damages at 2 times the amount of economic damages (such as medical bills, lost wages, etc.) plus the amount awarded for pain and suffering and emotional distress (up to a max of $750,000). This means in Texas the amount of punitive damages in the smoking case could have been no more than about $35 million. If on review, the amount of actual damages is reduced (which is very possible) that would reduce the amount that could be awarded in punitive damages also. Florida law has similar formulas that will reduce the verdict. The bottom line is that no court will ever allow the $23.6 billion to stand. It will be reduced drastically or thrown out entirely. The problem we see is that the news and media usually never run a follow-up story about how the verdict was thrown out or reduced. This leads to a mistaken belief among many people that huge verdicts like the Florida case are normal and actually allowed by our courts. For more information on how damages are calculated in Texas, check out the blog on our website about damages in Texas being posted later today.
Posted on: Thu, 24 Jul 2014 16:21:53 +0000
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