South Carolina Lawyer
SC Lawyer, January 2007, #3.
Don't Gamble on Due Process Review of Punitive Damages
South Carolina LawyerJanuary 2007Don't Gamble on Due Process Review of Punitive DamagesBy William J. Watkins Jr.Punitive damages have long been available at common law. In one of the earliest cases, the Court of King's Bench in 1763 allowed punitive damages related to an illegal general warrant and the imprisonment of a printer who had criticized government policy. See Huckle v. Money, 95 Eng. Rep. 768 (K.B. 1763). Twenty-one years later, a South Carolina court approved "exemplary damages" when the defendant slipped a large quantity of Spanish fly into the plaintiff's drink and thus caused plaintiff to suffer extreme pain for two weeks. See Genay v. Norris, 1 S.C.L. 6 (1 Bay 6) (1784). The defendant's prank was a "drunken frolic," but the court nonetheless described it as "a very wanton outrage upon a stranger" warranting punitive damages. Id.
Gamble v. Stevenson: 1991
Pac. Mut. Life Ins. Co. v. Haslip: 1991
Although punitive damages have been available at common law since before American independence, only recently have courts required post-verdict review of punitive damages to determine compliance with due process. In South Carolina, this review has been conducted under Gamble v. Stevenson, 305 S.C. 104, 406 S.E.2d 350 (1991). Gamble, however, was decided several years before the U.S. Supreme Court gave specific guidance on due process requirements in the punitive damages context. Hence, lawyers and trial judges should be careful when examining a punitive damages award under the Gamble factors. Gamble has not been overruled, but a Gamble review might not meet the standards set by the U.S. Supreme Court.
Gamble arose from an automobile accident in which Stevenson's car hit Gamble's car because a stop sign had been removed by agents of Southern Bell during the repair of an underground telephone line. Id. at 105, 406 S.E.2d at 351. Stevenson cross-complained against Southern Bell and received a $5,000 award of actual damages and $87,500 in punitive damages. Id. at 107, 406 S.E.2d at 352. Southern Bell appealed, and one of the issues raised was the due process and equal protection implications of the punitive damages award. Id. at 111, 406 S.E.2d at 353.
In reviewing the award, the S.C. Supreme Court made clear that it was responding to the U.S. Supreme Court's decision in Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S. 1 (1991), which was decided three months prior to Gamble. In Haslip, the Supreme Court considered the narrow issue of "whether the Due Process Clause render[ed] the punitive damages award in this case constitutionally unacceptable." 499 U.S. at 18. Holding that the common law method - in and of itself - does not violate due process, the Court also concluded that the punitive damages assessed against Pacific Mutual were not violative of the Due Process Clause. Id. at 17, 19. Pacific Mutual had the benefit of "the full panoply" of Alabama's procedural protections: (1) the jury was adequately instructed on punitive damages, (2) reasonable post-verdict review procedures existed in the trial court and (3) meaningful appellate review was available. Id. at 23. The holding in Haslip was limited, deciding that the particular procedures in this case were not unreasonable, yet providing "no guidance as to whether other any other procedures are sufficiently 'reasonable[.]' " Id. at 24 (Scalia, J., concurring) (emphasis in original).
After noting the trial court properly charged the jury on punitive damages and that meaningful appellate review existed in South Carolina, the Gamble Court turned to post-verdict review procedures. 305 S.C. at 111-12, 406 S.E.2d at 354. In response to Haslip, the S.C. Supreme Court held that, when examining a punitive damages award, trial courts shall conduct a post-trial review and that they may consider the following:
(1) defendant's degree of culpability; (2) duration of the
conduct; (3) defendant's awareness or concealment; (4) the existence of similar past conduct; (5) likelihood the award will deter the defendant or others from like conduct; (6) whether the award is reasonably related to the harm likely to result from such conduct; (7) defendant's ability to pay; and finally, (8) as noted in Haslip, "other factors" deemed appropriate.
The S.C. Supreme Court indicated that findings should be placed on the record. Id. Ultimately, the S.C. Supreme Court, based on the factors, upheld the punitive damages award in Gamble.
Id. at 112, 406 S.E.2d at 355.
BMW of N. Am., Inc. v. Gore: 1996
Five years after Ha...