When we are asked to assist with post-verdict motions after a jury has returned a large punitive award, all too often we find that the verdict form relating to punitive liability asks only whether the standard for punitive liability has been satisfied. That presents a handicap from which it may be impossible to recover.
Most states identify several alternative bases on which punitive damages may be imposed. For example, in California punitive damages may be imposed if the jury finds by clear and convincing evidence that the defendant’s tort was attended by fraud, malice, or oppression.
If the verdict form asks simply whether the defendant was guilty of fraud, malice, or oppression, and the jury answers “yes,” the defendant will have to show in its post-trial motion that none of those three potential bases for punitive damages is supported by sufficient evidence in order to obtain judgment as a matter of law.
If, however, the verdict form requires the jury to answer “yes” or “no” for each of the three alternative bases, and the jury answers “yes” on only one or two of the grounds, the defendant can focus its sufficiency attack on those grounds. And if the jury answers “yes” as to all three grounds, the defendant is no worse off than if the jury had returned a general verdict on punitive liability. Even more usefully, when it comes to the punitive amount phase of the trial, evidence and argument relating only to a ground that was not a basis for liability can be excluded. Similarly, if the award is challenged for excessiveness, such evidence cannot be invoked in support of the amount.
The same logic applies if a state cap statute contains several disjunctive exceptions to the cap.
Whether to seek special interrogatories on factors relating to the amount of punitive damages is a closer strategic question. Any such findings would have to be accepted by the reviewing courts unless they are unsupported by sufficient evidence. So if defense counsel suspect that the jury is hostile, they may not want to solicit specific findings.
On the other hand, if defense counsel detect no overt hostility from the jury, it may be advantageous to seek specific findings on factors that might bear on the courts’ excessiveness review, such as whether the conduct was an isolated incident, whether the defendant’s management participated in, authorized, or condoned the misconduct, whether and to what extent the defendant profited from the conduct, whether the defendant’s conduct comported with government regulations and/or industry custom and standards, etc. Because courts often assume that the jury found against the defendant on every factor as to which there is any evidence at all, there is much to gain if favorable findings can be obtained on some of the factors from the jury.