Litigation

Oregon Supreme Court tosses single-digit ratio for punitive damages in employment case

By Lori Bauman

On Thursday, a divided Oregon Supreme Court affirmed a jury award of punitive damages of $175,000 in a case in which compensatory damages were only $6,000.  In Hamlin v. Hampton Lumber Mills, Inc., plaintiff was a former employee of defendant who was not rehired after recovering from a workplace injury.  He claimed discrimination based on his filing of a workers' compensation claim. 

The Court of Appeals, in reviewing the verdict in 2008, had held that the punitive damages of 30 times compensatory damages was grossly excessive under the Due Process Clause of the U.S. Constitution, and stated that the ratio of punitive to compensatory damages in non-personal-injury cases should generally not exceed 4:1.  In this week's ruling, the Supreme Court disagreed and declined to apply the single-digit ratio, holding that where the compensatory award is small -- $12,000 or less -- and where defendant's conduct is sufficienly reprehensible, an award in excess of a single-digit ratio is not grossly excessive.  

Justice Martha Lee Walters wrote the majority opinion for five members of the Court.  Retiring Justice Michael Gillette wrote a dissenting opinion.  He noted that judges have struggled to apply Due Process limitations in cases such as this, and ended with a plea to the United States Supreme Court to give state courts more guidance on the issue.

See our earlier posts on Hamlin in the Court of Appeals and other Oregon cases addressing punitive damages here, here and here.

Full post as published by Northwest Business Litigation Blog on January 08, 2011 (boomark / email).