Dangerous Precedent with Punitive Damages

Posted 1:19 PM by Michael Fox

Although not an employment law case, Friday's decision by the Ohio Supreme Court on punitive damages, caught my eye. Dardinger v. Anthem Blue Cross & Blue Shield(Ohio 12/20/02). The story itself is a sad one, with the denial of a request for an experimental cancer fighting drug being delivered the day after the insured's funeral. The Indianapolis Star has the story, and its headline has it right, calling it an 'historic ruling'.

Unfortunately, punitive damages, and particularly the threat of them is a driving force in many employment law cases. What the Ohio Supreme Court did was to affirm a large punitive damage award ($30 million) but the historical act was to specify that $20 million should go for cancer research at a state medical institution. Although a number of states have statutory mechanisms to divide punitive damages between plaintiffs and the state, this if the first time that a court has accorded itself such powers under common law. The dissent talks about the dangers of a court assuming such power.

In addition to taking on a clearly legislative function, for which it could be argued that courts are not particularly well suited, it increases the risk of potential defendants when juries think that they are empowered to fund civic needs out of 'punitive damages'. The court made clear that attorneys fees would be awarded out of the whole of the punitive damage award, so there will probably be little outcry from that quarter. In the on-going debate over punitive damages, this seems one idea that should not survive.

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