Punitive Damages v. Criminal Punishment: Professor Leo Romero Enters the Debate

November 11, 2009

Professor Leo Romero

In cases in which punitive damages are awarded, why is the offending conduct not punished criminally?

That question propelled Professor Leo Romero into a new area of research, which has resulted in one article and another in progress. His article, "Punitive Damages, Criminal Punishment and Proportionality: The Importance of Legislative Limits", was published in the Connecticut Law Review [41 Conn. L. Rev. 109 (2008)], and has generated broad national interest.

That article was the basis of an invitation to speak at the St. Thomas Law Journal's fall 2009 symposium titled, Exxon Valdez Revisited: Rights and Remedies. And Stanford Law Professor Jeffrey Fisher relied on Romero's research extensively in his article, "The Exxon Valdez Case and Regularizing Punishment", (26 Alaska Law Review 1 (2009)).

Romero studied a series of recent U.S. Supreme Court rulings that reduced large punitive awards. The high court views punitive damages solely as punishment, borrowed the criminal-law concept of proportionality and applied it to punitive damages through the due process clause.

He compared the Supreme Court’s decisions, reviewing criminal sentences and punitive damages for excessiveness, and found that the high court upholds severe criminal penalties but rejects high punitive damages awards. Romero concluded that the explanation for the different approaches is the presence of legislative limits for criminal sentences (a statutory maximum) and the absence of any limit on punitive damages (open-ended jury verdicts). The Supreme Court defers to the legislative judgment regarding the proper proportion of penalty to crime in the criminal context, but does not accord any deference to jury verdicts in reviewing punitive damages awards.

As a result, the Supreme Court has adopted a ratio of punitive damages to compensatory damages to determine whether an award is proportional or excessive. A ratio of more than 9:1, the Court wrote, will violate due process.

In its most recent decision on punitive damages, the Supreme Court signaled that a 1:1 ratio may well be the outer limit for punitive damages. In the Exxon Valdez case, , the Supreme Court in 2008 reduced to $507 million a $5 billion jury award against Exxon Shipping Co. for the catastrophic oil spill in Prince William Sound in 1989. This amount was the same as that awarded in compensatory damages. 

"Reviewing punitive damages for excessiveness in the absence of legislative limits places the Supreme Court in a difficult position," Romero writes in his article. "What a jury in a particular case determined to be the appropriate damages, or what an appellate court considered to be proportional, does not convey the same societal judgment about the proportionality of punishment to misconduct and does not command the same deference that a legislative judgment does."

Romero adds that large punitive damage awards in double-digit ratios can pass the due process test of proportionality if they are authorized by a legislature. Just as the Supreme Court defers to legislative judgments regarding the proper proportion of punishment to crime, Romero believes it will defer to legislative judgments regarding the proper amount of punitive damages for wrongful conduct. If states wish to insulate large punitive damages awards, they must enact legislative limits, even high caps, on punitive damages.

Romero's scholarship brings his criminal law perspective to a national debate dominated by torts, remedies and constitutional law academics.

“It has been exciting to see the response my article has received," he says. "A tracking service reports more than 300 full-text downloads of the article in eight months.”