Litigation

Oregon Court of Appeals approves 4-to-1 ratio for punitives in debt collection case

By Lori Bauman

Earlier this month, the Oregon Court of Appeals approved a reduction of a jury's award of punitive damages for violation of the Oregon Unlawful Debt Collection Practices Act.  In Lithia Motors, Inc. v. Yovan, the jury found for the buyer of a used car on his unlawful debt collection claim against Lithia Motors.  The jury awarded to the buyer $500 in noneconomic damages for emotional injury, and $100,000 in punitive damages, making the ratio of punitive to compensatory damages 200 to 1.

The trial court judge reduced the punitive damages to $2,000, which is four times compensatory damages.  The trial court's action was affirmed by an equally divided Court of Appeals sitting en banc.  Judge Walter Edmonds wrote for the court, stating that the 4-to-1 ratio is consistent with the "general ceiling for puntive damages when the only harm is financial."

Judge Timothy Sercombe and Judge Rex Armstrong dissented, arguing that $2,000 in punitives was not enough to deter future wrongful conduct. 

See our coverage of Goddard v. Farmers Insurance, a 2008 Oregon Supreme Court opinion regarding punitive damages for economic harm, here. 

Full post as published by Northwest Business Litigation Blog on March 30, 2009 (boomark / email).