• April 17, 2009

All defendants reasonably want to know the degree of exposure they face in litigation. Particularly early on in a lawsuit, before discovery, trying to assess the likelihood of punitive damages can be a hard call for some cases and predicting the amount of punitive damages may be extremely difficult if not impossible with any satisfactory precision.

Today, the U.S. Court of Appeals for the Eighth Circuit, following U.S. Supreme Court precedent over the past decade or so, seemed to zero in on the “4x” multiplier for punitive damages generally — i.e., four times the actual damages is deemed to serve the punitive purpose without running afoul of the due process clause of the U.S. Constitution’s Fifth Amendment.

Not all cases will be held to the “4x” multiplier, clearly. For example, where damages are nominal, the Eigth Circuit panel (Melloy, Beam, Gruender) recognized that the multiplier would have to increase. Alternately, for cases involving not merely intentionally wrongful acts but truly outrageous behavior, the Court recognized the possibility of “upward departures” from the 4x norm.

Nevertheless this decision should give litigators in the 8th Circuit, at least, some general guidelines for some cases to counsel clients on a range of potential damages should they be found liable.

Wallace v. DTG Operations, Inc., Case No. 08-1474 (April 17, 2009).

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