The New Calculus of Punitive Damages for Employment Discrimination Cases

Document Type

Article

Publication Date

Summer 2010

Abstract

To determine whether a punitive damages award is constitutionally excessive, courts are required, among other things, to consider the ratio of compensatory to punitive damages. No longer is the total sum of remedies the only relevant calculation in determining whether an award is excessive. The numbers the judge decides to use in the ratio comparison also become important, in many cases determining whether excessiveness review is even warranted.

Owing in part to the complexities of the employment discrimination remedies regime, courts make numerous errors when undertaking the required comparison in the employment discrimination context. When conducting the excessiveness calculus, some judges fail to value back pay and front pay, resulting in an exaggeration of the difference between the harm to the plaintiff and the awarded punitive damages. Likewise, judges often ignore the value of nonmonetary equitable relief awarded to the plaintiff. Additionally, little consideration has yet been given to how the division of damages across legal theories or causes of action affects the excessiveness inquiry.

While some of these problems result from courts' failures to properly reconcile the specialized remedies regime of Title VII with the excessiveness inquiry, others point to more fundamental issues with the constitutional inquiry itself. Hinging that inquiry on numbers that can easily be manipulated leads to serious questions regarding whether the inquiry actually and appropriately tests excessiveness. This article describes the analytic red herrings that may confuse courts conducting an excessiveness review, uses these missteps to illustrate fundamental flaws with excessiveness review, and suggests ways to minimize mistakes.

Part II of this article provides an overview of the Supreme Court's jurisprudence on the constitutional review of punitive damages and describes relevant aspects of the Title VII remedies regime. Part III describes some of the errors courts have made and may make when applying punitive damages review to employment discrimination awards. Part IV explores ways to avoid these mathematical and conceptual missteps and discusses remaining ambiguities in the Supreme Court's test for evaluating punitive damages. This article concludes in Part V.

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