In a story published by the Daily Business Review, Edward G. Guedes, who chairs the firm’s appellate practice group, discussed what might be the largest U.S. mass tort in history, which alleges 3M failed to adequately warn veterans and military personnel of the alleged flaws of its Combat Arms CAEv2 earplugs. Ed commented on whether a U.S. Army sergeant’s $12 million punitive damages award, in relation to the $800,000 in compensatory damages awarded, is excessive. Ed discusses the ratio of punitive damages to compensatory damages in the context of key U.S. Supreme Court precedents.
“Here, the ratio appears to be around 15 to one, which raises an eyebrow, so to speak, but doesn’t scream denial of due process,” Ed said in an email. “It’s possible that there was sufficient evidence of extremely egregious conduct on the part of 3M that would help support the greater than single-digit ratio.”
Ed further explained the question is not whether the compensatory damages were low, but if the punitive damages are excessively high, referencing Supreme Court rulings Pacific Mutual Life Ins. Co. v. Haslip and BMW of North America v. Gore. In the former case, the ratio of punitive damages to compensatory damages was roughly four to one, and the highest court in the country upheld it, Ed said. However, in the latter, the ratio was 500 to one, and was deemed constitutionally defective by the U.S. high court.
So far, juries have ruled in favor of the plaintiffs in four separate trials. In one of the prior trials, the ratio of punitive to compensatory damages was about nine to one, which Ed said is less potentially objectionable “from a due process perspective,” because it is a single-digit ratio.