Damaged Goods: Why, In Light of the Supreme Court's Recent Punitive Damages Jurisprudence, Congress Must Amend the Federal Rules of Evidence
Since the 1980s, a wide range of courts and commentators have expressed concern over large punitive damages awards handed out by civil juries against a wide array of tortfeasors. A late 2001 study revealed that from 1985 to 2001, eight multi-billion dollar punitive damages awards were granted, with four of them being handed down in the years 1999 to 2001 alone.' Not surprisingly, all but one of these verdicts were handed down against large corporations. Among the current members of the U.S. Supreme Court, Justice John Paul Stevens in particular has regularly noted the especially dangerous tendency the current punitive damages regime poses:
We have admonished that "[p]unitive damages pose an acute danger of arbitrary deprivation of property. Jury instructions typically leave the jury with wide discretion in choosing amounts, and the presentation of evidence of a defendant's net worth creates the potential that juries will use their verdicts to express biases against big businesses, particularly those without strong local presences."
While many commentators note that punitive damages awards are still so rare that this should not pose a concern, others disagree, and still others posit that an even more pressing threat is the havoc that expectations of punitive damages awards can wreak on settlement negotiations.
Within the past nine years, the United States Supreme Court has issued two landmark tort decisions, BMW of North America v. Gore, and State Farm Mutual Automobile Insurance Co. v. Campbell, holding in both instances that excessive punitive damages awards, which were upheld by their respective state supreme courts, violated the Due Process Clause of the Fourteenth Amendment to the Constitution of the United States. In light of the fact-specific nature of these cases, as well as the Court's refusal to adopt a bright-line rule as to when punitive damages awards should be deemed excessive, questions remain regarding the precedential value of these cases and if the principles they espouse will be applied faithfully by the state courts that review punitive damages verdicts. In fact, it is unclear whether these two decisions will have any effect at all in causing lower courts to rein in punitive damages awards in post-verdict appellate review. The Supreme Court itself has acknowledged this worry, stating that "[b]ecause no two cases are truly identical, meaningful comparisons of such awards are difficult to make."
With these worries in mind, many commentators have suggested imposing additional constraints to reduce the risk of excessive punitive damages rendered by juries, or alternatively, to make such awards easier to strike down once they are rendered. Somewhat surprisingly, the Supreme Court entered the fray in Gore by identifying a limit on excessive punitive damages awards imposed by substantive due process. While Gore and its progeny ostensibly focus on after-the-fact checks on civil juries, this Note asserts that a more prudent and efficient means of ensuring reasonable and "non- excessive" punitive damages verdicts would be to prevent juries from even hearing the type of evidence that Gore and State Farm chastised trial courts for admitting in the first place. The most effective way to accomplish this constitutionally required goal would be to have Congress amend the Federal Rules of Evidence to take some discretion away from trial judges in situations analogous to Gore and State Farm. In particular, the Federal Rules should be amended to render inadmissible all types of evidence describing wrongful conduct by the defendant which: (1) bears minimal relation to the tort at issue; (2) occurred in another jurisdiction; (3) was legal when and where it occurred; or (4) for some other reason has no "nexus to the specific harm suffered by the plaintiff."
This Note will begin by offering in Part II a brief overview of the punitive damages landscape, and how the determination of whether a punitive damages award is "grossly disproportionate" was changed by Gore and State Farm. Next, Part III will argue that these two cases, by invoking the Due Process Clause of the Fourteenth Amendment to strike down awards based on evidence admitted pursuant to state procedural rules, requires Congress and state legislatures to draft a new rule of evidence that presumes that these types of aforementioned evidence must be excluded from trial in cases where punitive damages are sought. In Part IV, this Note will then explore the alternative argument that even if a new rule is not constitutionally mandated, a new Federal Rule of Evidence along these lines should nevertheless be added as a matter of sound policy. Finally, Part V of this Note will suggest the substance of the new rule and apply it to specific examples from prior cases.