From the Exxon v. Baker decision, which, under federal maritime law (foreshadowing future rulings on state civil law), cut a $2.5 billion punitive damages award down to $500 million, for a 1:1 ratio with compensatory damages:
The common sense of justice would surely bar penalties that reasonable people would think excessive for the harm caused in the circumstances.
Obviously. That’s why we have juries, trial judges, appeal judges, and state supreme court judges to determine and review punitive damage awards. A jury, of course, is in far better position than an appeal judge years later to assess the real circumstances, being how they actually sit in the presence of the witnesses and, after swearing an oath, fairly consider all the evidence.
But the above quote is just a throwaway line, unconnected to any reasoning or holding. The Supreme Court actually held:
The real problem, it seems, is the stark unpredictability of punitive awards. Courts of law are concerned with fairness as consistency, and evidence that the median ratio of punitive to compensatory awards falls within a reasonable zone, or that punitive awards are infrequent, fails to tell us whether the spread between high and low individual awards is acceptable. The available data suggest it is not. A recent comprehensive study of punitive damages awarded by juries in state civil trials found a median ratio of punitive to compensatory awards of just 0.62:1, but a mean ratio of 2.90:1 and a standard deviation of 13.81.
Even to those of us unsophisticated in statistics, the thrust of these figures is clear: the spread is great, and the outlier cases subject defendants to punitive damages that dwarf the corresponding compensatories.
I have a proposal: would all persons who, in the future, are going to engage in intentional, wanton, willful, or reckless conduct, agree now to do so in a predictable fashion?
Seems to me the "real problem" is that life is complicated and — shockingly — unpredictable. It’s no surprise that different defendants, in different cases with different facts, will be punished differently. It’s also no surprise that a jury will find a given number sufficient to deter wrongdoing in one circumstance is insufficient to deter wrongdoing in another circumstance.
Confining and directing the method by which punitive damages are determined is appropriate; no one should be railroaded to punishment, or punished for conduct or harm unproven in court.
Arbitrarily asserting that punishment is not permitted to be as variable as the underlying conduct that was punished, however, is unconscionable.