The Virginia Business Litigation Blog
Juries are usually told they can award to a successful plaintiff whatever amount they decide is appropriate, however high that number might be. The judge, however, will scrutinize any award of monetary damages to ensure it is supported by the evidence admitted at trial. Courts have a duty to correct a verdict that plainly appears to be unfair or would result in a miscarriage of justice. When it appears to the court that a verdict is unfair in that it is out of proportion to the actual damages sustained, the court has a duty to correct the injustice. (See Gazette, Inc. v. Harris, 229 Va. 1, 48 (1985)). A trial court may set aside a verdict if it shocks the court’s conscience, indicating that the jury was likely motivated by passion or prejudice, or that the jury misconceived or misconstrued the facts or law, or where the verdict is so disproportionate to the injuries suffered as to suggest that it is “not the product of a fair and impartial decision.” (See Edmiston v. Kupsenel, 205 Va. 198, 202 (1964)). Trial courts have the power to order a new trial (Va. Code § 8.01-383), or they may give the plaintiff the option of “remittitur” of the excessive verdict in lieu of a new trial (Va. Code § 8.01- 383.1), permitting him to accept judgment for an amount less than the jury awarded.
When analyzing awards of punitive damages for excessiveness, courts look to a number of factors, including (1) the reasonableness between the damages sustained and the amount of the punitive damages award and the measurement of punishment required; (2) whether the award will amount to a double recovery; (3) the proportionality between the compensatory and punitive damages; and (4) the ability of the defendant to pay. (See Baldwin v. McConnell, 273 Va. 650, 657 (2007)). Punitive damage awards that are grossly excessive can also be unconstitutional in that they violate the Due Process Clause of the Fourteenth Amendment. The Due Process Clause requires consideration of factors such as (1) whether the award bears a reasonable relationship to the award of compensatory damages; (2) the relationship between the punitive damages award and the actual or potential damage that might have been caused by the acts; (3) the grievousness or degree of reprehensibility of the acts; (4) the degree of malicious intent; (5) the ratio of the award to civil or criminal penalties that could be imposed for comparable misconduct; and (6) the wealth of the wrongdoer. (See BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 568, 575 (1996)).
An opinion came out yesterday in Fairfax County that illustrates some of these principles. The case, Richard B. Grundy v. Charles H. Brown, III, D.D.S. PC, was a battle of dentists. The opinion doesn’t recite the whole factual background but apparently Dr. Grundy worked as a dentist for Dr. Brown’s dental practice for around five years before the relationship between the two dentists soured and Dr. Grundy was fired. Dr. Grundy filed a complaint with the Board of Dentistry in which he stated as follows:
Patients are paying higher copays due to changing of procedure codes, paying extra fees for material(s) in addition to contracted insurance fees, having their non-destroyed PHI thrown into the dumpster daily, not being contacted when breach of all patient records were ransomed, having physical injuries occur due to untrained staff, theft of paid implant components, voiding implant warranties by placing cheaper non-brand components.
Dr. Grundy also filed a lawsuit against Dr. Brown and his practice and Dr. Brown filed a counterclaim for defamation per se based on Dr. Grundy’s statement to the Board of Dentistry. The case was tried and the jury came out with a mixed verdict, finding in favor of Dr. Grundy on some claims but finding in favor of Dr. Brown on others. With respect to Dr. Brown’s defamation claim, the jury found that one or more of the statements made by Dr. Grundy to the Board of Dentistry was false and defamatory, that Dr. Grundy had waived or abused any qualified privilege he had to make these statements, and that Dr. Grundy made the statements knowing they were false or made them so recklessly as to amount to a willful disregard for the truth. Therefore, the jury found in Dr. Brown’s favor. It awarded him just $1.00 in compensatory damages (presumably due to the lack of evidence of any harm caused to Dr. Brown’s reputation or his practice) but also awarded $200,000.00 in
punitive damages.
Dr. Grundy asked the court to reduce the punitive damage award. Applying the above principles, the court agreed with Dr. Grundy that under the particular circumstances of this case, the $200,000 awarded by the jury–an amount that is 200,000 times the amount of compensatory damages awarded–was “excessive, unreasonable, shocks the Court’s conscience, and violates the Due Process Clause the Fourteenth Amendment and is impermissible under the First Amendment.”
The court noted that while it was certainly wrongful to make a knowingly false statement to the Board of Dentistry, the statements did not appear to cause any substantial harm to Dr. Brown. Dr. Brown kept his license to practice dentistry and his practice continued treating patients and earning income. The court also looked to the fact that the penalty for making a false statement to the police is only $2500. The maximum fine for perjury is also $2500. In short, reasoned the court, the conduct on which the $200,000 award was based was not “particularly egregious.”
The court concluded that $25,000 would have been a more appropriate punitive damages award. It told Dr. Brown he could do one of three things: (1) accept that reduced amount, (2) reject it and seek a new trial, or (3) accept the reduced amount under protest and appeal.