That conclusion was strongly supported in the US Supreme Court's recent decision in the Exxon Valdez punitive damages case, Exxon Shipping Co. v. Baker, 554 U. S. ____ (2008) (slip opinion, formatted below from .pdf to .doc format by LawPundit), which, although it is a special case of maritime law, definitely sets the logical/legal standards for treatment of punitive damages in other cases in the future.
In the Exxon Valdez case, the jury had initially awarded $5 billion in punitive damages, which the Court of Appeals for the Ninth Circuit had reduced to $2.5 billion based upon due process considerations. The US Supreme Court now held that the amount was excessive as a matter of maritime common law and reduced the award of $2.5 billion punitive damages to $500 million, invoking a 1:1 maximum limit (in maritime cases) of punitive damages to compensatory damages (here, $507 million).
Justice Souter, speaking for the court, wrote what appears to be an intentionally detailed, historically-tracing and forward-looking opinion on the legal aspects of punitive damages, essentially telling us that the days of excessive and serendipity punitive damage awards are over, surely not only in maritime law (opinion excerpted and formatted by LawPundit):
[SOUTER, J., delivered the opinion of the Court, in which ROBERTS, C. J., and SCALIA, KENNEDY, and THOMAS, JJ., joined, and in which STEVENS, GINSBURG, and BREYER, JJ., joined, as to Parts I, II, and III. SCALIA, J., filed a concurring opinion, in which THOMAS, J., joined. STEVENS, J., GINSBURG, J., and BREYER, J., filed opinions concurring in part and dissenting in part. ALITO, J., took no part in the consideration or decision of the case....]
"There are three questions of maritime law before us: whether a shipowner may be liable for punitive damages without acquiescence in the actions causing harm, whether punitive damages have been barred implicitly by federal statutory law making no provision for them, and whether the award of $2.5 billion in this case is greater than maritime law should allow in the circumstances. We are equally divided on the owner’s derivative liability, and hold that the federal statutory law does not bar a punitive award on top of damages for economic loss, but that the award here should be limited to an amount equal to compensatory damages....
... Exxon raises an issue of first impression about punitive damages in maritime law, which falls within a federal court’s jurisdiction to decide in the manner of a common law court, subject to the authority of Congress to legislate otherwise if it disagrees with the judicial result. See U. S. Const., Art. III, §2, cl. 1; see, e.g., Edmonds v. Compagnie Generale Transatlantique, 443 U. S. 256, 259 (1979) (“Admiralty law is judge-made law to a great extent”); Romero v. International Terminal Operating Co., 358 U. S. 354, 360–361 (1959) (constitutional grant “empowered the federal courts . . . to continue the development of [maritime] law”). In addition to its resistance to derivative liability for punitive damages and its preemption claim already disposed of, Exxon challenges the size of the remaining $2.5 billion punitive damages award. Other than its preemption argument, it does not offer a legal ground for concluding that maritime law should never award punitive damages, or that none should be awarded in this case, but it does argue that this award exceeds the bounds justified by the punitive damages goal of deterring reckless (or worse) behavior and the consequently heightened threat of harm. The claim goes to our understanding of the place of punishment in modern civil law and reasonable standards of process in administering punitive law, subjects that call for starting with a brief account of the history behind today’s punitive damages.
The modern Anglo-American doctrine of punitive damages dates back at least to 1763, when a pair of decisions by the Court of Common Pleas recognized the availability of damages “for more than the injury received.” Wilkes v. Wood, Lofft 1, 18, 98 Eng. Rep. 489, 498 (1763) (Lord Chief Justice Pratt). In Wilkes v. Wood, one of the foundations of the Fourth Amendment, exemplary damages awarded against the Secretary of State, responsible for an unlawful search of John Wilkes’s papers, were a spectacular £4,000. See generally Boyd v. United States, 116 U. S. 616, 626 (1886). And in Huckle v. Money, 2 Wils. 205, 206–207, 95 Eng. Rep. 768, 768–769 (K. B. 1763), the same judge who is recorded in Wilkes gave an opinion upholding a jury’s award of £300 (against a government officer again) although “if the jury had been confined by their oath to consider the mere personal injury only, perhaps [£20] damages would have been thought damages sufficient.”
Awarding damages beyond the compensatory was not, however, a wholly novel idea even then, legal codes from ancient times through the Middle Ages having called for multiple damages for certain especially harmful acts. See, e.g., Code of Hammurabi §8 (R. Harper ed. 1904) (tenfold penalty for stealing the goat of a freed man); Statute of Gloucester, 1278, 6 Edw. I, ch. 5, 1 Stat. at Large 66 (treble damages for waste). But punitive damages were a common law innovation untethered to strict numerical multipliers, and the doctrine promptly crossed the Atlantic, see, e.g., Genay v. Norris, 1 S. C. L. 6, 7 (1784); Coryell v. Colbaugh, 1 N. J. L. 77 (1791), to become widely accepted in American courts by the middle of the 19th century, see, e.g., Day v. Woodworth, 13 How. 363, 371 (1852).
Early common law cases offered various rationales for punitive-damages awards, which were then generally dubbed “exemplary,” implying that these verdicts were justified as punishment for extraordinary wrongdoing, as in Wilkes’s case. Sometimes, though, the extraordinary element emphasized was the damages award itself, the punishment being “for example’s sake,” Tullidge v. Wade, 3 Wils. 18, 19, 95 Eng. Rep. 909 (K. B. 1769) (Lord Chief Justice Wilmot), “to deter from any such proceeding for the future,” Wilkes, supra, at 19, 98 Eng. Rep., at 498–499. See also Coryell, supra, at 77 (instructing the jury “to give damages for example’s sake, to prevent such offences in [the] future”).
A third historical justification, which showed up in some of the early cases, has been noted by recent commentators, and that was the need “to compensate for intangible injuries, compensation which was not otherwise available under the narrow conception of compensatory damages prevalent at the time.”8 Cooper Industries, Inc. v. Leatherman Tool Group, Inc., 532 U. S. 424, 437–438, n. 11 (2001) (citing, inter alia, Note, Exemplary Damages in the Law of Torts, 70 Harv. L. Rev. 517 (1957)). But see Sebok, What Did Punitive Damages Do? 78 Chi.-Kent L. Rev. 163, 204 (2003) (arguing that “punitive damages have never served the compensatory function attributed to them by the Court in Cooper”). As the century progressed, and “the types of compensatory damages available to plaintiffs . . . broadened,” Cooper Industries, supra, at 437, n. 11, the consequence was that American courts tended to speak of punitive damages as separate and distinct from compensatory damages, see, e.g., Day, supra, at 371 (punitive damages “hav[e] in view the enormity of [the] offence rather than the measure of compensation to the plaintiff”). See generally 1 L. Schlueter, Punitive Damages §§1.3(C)–(D), 1.4(A) (5th ed. 2005) (hereinafter Schlueter) (describing the “almost total eclipse of the compensatory function” in the decades following the 1830s).
Regardless of the alternative rationales over the years, the consensus today is that punitives are aimed not at compensation but principally at retribution and deterring harmful conduct.9 This consensus informs the doctrine in most modern American jurisdictions, where juries are customarily instructed on twin goals of punitive awards. See, e.g., Cal. Jury Instr., Civil, No. 14.72.2 (2008) (“You must now determine whether you should award punitive damages against defendant[s] . . . for the sake of example and by way of punishment”); N. Y. Pattern Jury Instr., Civil, No. 2:278 (2007) (“The purpose of punitive damages is not to compensate the plaintiff but to punish the defendant . . . and thereby to discourage the defendant . . . from acting in a similar way in the future”). The prevailing rule in American courts also limits punitive damages to cases of what the Court in Day, supra, at 371, spoke of as “enormity,” where a defendant’s conduct is “outrageous,” 4 Restatement §908(2), owing to “gross negligence,” “willful, wanton, and reckless indifference for the rights of others,” or behavior even more deplorable, 1 Schlueter §9.3(A).10
Under the umbrellas of punishment and its aim of deterrence, degrees of relative blameworthiness are apparent. Reckless conduct is not intentional or malicious, nor is it necessarily callous toward the risk of harming others, as opposed to unheedful of it. See, e.g., 2 Restatement §500, Comment a, pp. 587–588 (1964) (“Recklessness may consist of either of two different types of conduct. In one the actor knows, or has reason to know . . . of facts which create a high degree of risk of . . . harm to another, and deliberately proceeds to act, or to fail to act, in conscious disregard of, or indifference to, that risk. In the other the actor has such knowledge, or reason to know, of the facts, but does not realize or appreciate the high degree of risk involved, although a reasonable man in his position would do so”). Action taken or omitted in order to augment profit represents an enhanced degree of punishable culpability, as of course does willful or malicious action, taken with a purpose to injure. See 4 id., §908, Comment e, p. 466 (1979) (“In determining the amount of punitive damages, . . . the trier of fact can properly consider not merely the act itself but all the circumstances including the motives of the wrongdoer . . .”); cf. Alaska Stat. §09.17.020(g) (2006) (higher statutory limit applies where conduct was motivated by financial gain and its adverse consequences were known to the defendant); Ark. Code Ann. §16–55–208(b) (2005) (statutory limit does not apply where the defendant intentionally pursued a course of conduct for the purpose of causing injury or damage).
Regardless of culpability, however, heavier punitive awards have been thought to be justifiable when wrongdoing is hard to detect (increasing chances of getting away with it), see, e.g., BMW of North America, Inc. v. Gore, 517 U. S. 559, 582 (1996) (“A higher ratio may also be justified in cases in which the injury is hard to detect”), or when the value of injury and the corresponding compensatory award are small (providing low incentives to sue), see, e.g., ibid. (“[L]ow awards of compensatory damages may properly support a higher ratio . . . if, for example, a particularly egregious act has resulted in only a small amount of economic damages”); 4 Restatement §908, Comment c, p. 465 (“Thus an award of nominal damages . . . is enough to support a further award of punitive damages, when a tort, . . . is committed for an outrageous purpose, but no significant harm has resulted”). And, with a broadly analogous object, some regulatory schemes provide by statute for multiple recovery in order to induce private litigation to supplement official enforcement that might fall short if unaided. See, e.g., Reiter v. Sonotone Corp., 442 U. S. 330, 344 (1979) (discussing antitrust treble damages).
State regulation of punitive damages varies. A few States award them rarely, or not at all. Nebraska bars punitive damages entirely, on state constitutional grounds. See, e.g., Distinctive Printing and Packaging Co. v. Cox, 232 Neb. 846, 857, 443 N. W. 2d 566, 574 (1989) (per curiam). Four others permit punitive damages only when authorized by statute: Louisiana, Massachusetts, and Washington as a matter of common law, and New Hampshire by statute codifying common law tradition. See Ross v. Conoco, 2002–0299, p. 14 (La. 10/15/02), 828 So. 2d 546, 555; Flesner v. Technical Communications Corp., 410 Mass. 805, 813, 575 N. E. 2d 1107 1112 (1991); Fisher Properties v. Arden-Mayfair, Inc., 106 Wash. 2d 826, 852, 726 P. 2d 8, 23 (1986); N. H. Rev. Stat. Ann. §507:16 (1997); see also Fay v. Parker, 53 N. H. 342, 382 (1872). Michigan courts recognize only exemplary damages supportable as compensatory, rather than truly punitive, see Peisner v. Detroit Free Press, Inc., 104 Mich. App. 59, 68, 304 N. W. 2d 814, 817 (1981), while Connecticut courts have limited what they call punitive recovery to the “expenses of bringing the legal action, including attorney’s fees, less taxable costs,” Larsen Chelsey Realty Co. v. Larsen, 232 Conn. 480, 517, n. 38, 656 A. 2d 1009, 1029, n. 38 (1995).
As for procedure, in most American jurisdictions the amount of the punitive award is generally determined by a jury in the first instance, and that “determination is then reviewed by trial and appellate courts to ensure that it is reasonable.” Pacific Mut. Life Ins. Co. v. Haslip, 499 U. S. 1, 15 (1991); see also Honda Motor Co. v. Oberg, 512 U. S. 415, 421–426 (1994).11 Many States have gone further by imposing statutory limits on punitive awards, in the form of absolute monetary caps, see, e.g., Va. Code Ann. §8.01–38.1 (Lexis 2007) ($350,000 cap), a maximum ratio of punitive to compensatory damages, see, e.g., Ohio Rev. Code Ann. §2315.21(D)(2)(a) (Lexis 2001) (2:1 ratio in most tort cases), or, frequently, some combination of the two, see, e.g., Alaska Stat. §09.17.020(f) (2006) (greater of 3:1 ratio or $500,000 in most actions). The States that rely on a multiplier have adopted a variety of ratios, ranging from 5:1 to 1:1.12
Despite these limitations, punitive damages overall are higher and more frequent in the United States than they are anywhere else. See, e.g., Gotanda, Punitive Damages: A Comparative Analysis, 42 Colum. J. Transnat’l L. 391, 421 (2004); 2 Schlueter §22.0. In England and Wales, punitive, or exemplary, damages are available only for oppressive, arbitrary, or unconstitutional action by government servants; injuries designed by the defendant to yield a larger profit than the likely cost of compensatory damages; and conduct for which punitive damages are expressly authorized by statute. Rookes v. Barnard,  1 All E. R. 367, 410–411 (H. L.). Even in the circumstances where punitive damages are allowed, they are subject to strict, judicially imposed guidelines. The Court of Appeal in Thompson v. Commissioner of Police of Metropolis,  Q. B. 498, 518, said that a ratio of more than three times the amount of compensatory damages will rarely be appropriate; awards of less than £5,000 are likely unnecessary; awards of £25,000 should be exceptional; and £50,000 should be considered the top.
For further contrast with American practice, Canada and Australia allow exemplary damages for outrageous conduct, but awards are considered extraordinary and rarely issue. See 2 Schlueter §§22.1(B), (D). Noncompensatory damages are not part of the civil-code tradition and thus unavailable in such countries as France, Germany, Austria, and Switzerland. See id., §§22.2(A)–(C), (E). And some legal systems not only decline to recognize punitive damages themselves but refuse to enforce foreign punitive judgments as contrary to public policy. See, e.g., Gotanda, Charting Developments Concerning Punitive Damages: Is the Tide Changing? 45 Colum. J. Transnat’l L. 507, 514, 518, 528 (2007) (noting refusals to enforce judgments by Japanese, Italian, and German courts, positing that such refusals may be on the decline, but concluding, “American parties should not anticipate smooth sailing when seeking to have a domestic punitive damages award recognized and enforced in other countries”).
American punitive damages have been the target of audible criticism in recent decades, see, e.g., Note, Developments, The Paths of Civil Litigation, 113 Harv. L. Rev. 1783, 1784–1788 (2000) (surveying criticism), but the most recent studies tend to undercut much of it, see id., at 1787–1788. A survey of the literature reveals that discretion to award punitive damages has not mass-produced runaway awards, and although some studies show the dollar amounts of punitive-damages awards growing over time, even in real terms,13 by most accounts the median ratio of punitive to compensatory awards has remained less than 1:1.14 Nor do the data substantiate a marked increase in the percentage of cases with punitive awards over the past several decades.15 The figures thus show an overall restraint and suggest that in many instances a high ratio of punitive to compensatory damages is substantially greater than necessary to punish or deter.
The real problem, it seems, is the stark unpredictability of punitive awards. Courts of law are concerned with fairness as consistency, and evidence that the median ratio of punitive to compensatory awards falls within a reasonable zone, or that punitive awards are infrequent, fails to tell us whether the spread between high and low individual awards is acceptable. The available data suggest it is not. A recent comprehensive study of punitive damages awarded by juries in state civil trials found a median ratio of punitive to compensatory awards of just 0.62:1, but a mean ratio of 2.90:1 and a standard deviation of 13.81. Juries, Judges, and Punitive Damages 269.16 Even to those of us unsophisticated in statistics, the thrust of these figures is clear: the spread is great, and the outlier cases subject defendants to punitive damages that
dwarf the corresponding compensatories. The distribution of awards is narrower, but still remarkable, among punitive damages assessed by judges: the median ratio is 0.66:1, the mean ratio is 1.60:1, and the standard deviation is 4.54. Ibid. Other studies of some of the same data show that fully 14% of punitive awards in 2001 were greater than four times the compensatory damages, see Cohen 5, with 18% of punitives in the 1990s more than trebling the compensatory damages, see Ostrom, Rottman, & Goerdt, A Step Above Anecdote: A Profile of the Civil Jury in the 1990s, 79 Judicature 233, 240 (1996). And a study of “financial injury” cases using a different data set found that 34% of the punitive awards were greater than three times the corresponding compensatory damages. Financial Injury Jury Verdicts 333.
Starting with the premise of a punitive-damages regime, these ranges of variation might be acceptable or even desirable if they resulted from judges’ and juries’ refining their judgments to reach a generally accepted optimal level of penalty and deterrence in cases involving a wide range of circumstances, while producing fairly consistent results in cases with similar facts. Cf. TXO Production Corp. v. Alliance Resources Corp., 509 U. S. 443, 457–458 (1993) (plurality opinion). But anecdotal evidence suggests that nothing of that sort is going on. One of our own leading cases on punitive damages, with a $4 million verdict by an Alabama jury, noted that a second Alabama case with strikingly similar facts produced “a comparable amount of compensatory damages” but “no punitive damages at all.” See Gore, 517 U. S., at 565, n. 8. As the Supreme Court of Alabama candidly explained, “the disparity between the two jury verdicts . . . [w]as a reflection of the inherent uncertainty of the trial process.” BMW of North America, Inc. v. Gore, 646 So. 2d 619, 626 (1994) (per curiam). We are aware of no scholarly work pointing to consistency across punitive awards in cases involving similar claims and circumstances.17
The Court’s response to outlier punitive damages awards has thus far been confined by claims at the constitutional level, and our cases have announced due process standards that every award must pass. See, e.g., State Farm Mut. Automobile Ins. Co. v. Campbell, 538 U. S. 408, 425 (2003); Gore, 517 U. S., at 574–575. Although “we have consistently rejected the notion that the constitutional line is marked by a simple mathematical formula,” id., at 582, we have determined that “few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process,” State Farm, 538 U. S., at 425; “[w]hen compensatory damages are substantial, then a lesser ratio, perhaps only equal to compensatory damages, can reach the outermost limit of the due process guarantee,” ibid.
Today’s enquiry differs from due process review because the case arises under federal maritime jurisdiction, and we are reviewing a jury award for conformity with maritime law, rather than the outer limit allowed by due process; we are examining the verdict in the exercise of federal maritime common law authority, which precedes and should obviate any application of the constitutional standard. Our due process cases, on the contrary, have all involved awards subject in the first instance to state law. See, e.g., id., at 414 (fraud and intentional infliction of emotional distress under Utah law); Gore, supra, at 563, and n. 3 (fraud under Alabama law); TXO, supra, at 452 (plurality opinion) (slander of title under West Virginia law); Haslip, 499 U. S., at 7 (fraud under Alabama law). These, as state-law cases, could provide no occasion to consider a “common-law standard of excessiveness,” Browning-Ferris Industries, 492 U. S., at 279, and the only matter of federal law within our appellate authority was the constitutional due process issue.
Our review of punitive damages today, then, considers not their intersection with the Constitution, but the desirability of regulating them as a common law remedy for which responsibility lies with this Court as a source of judge-made law in the absence of statute. Whatever may be the constitutional significance of the unpredictability of high punitive awards, this feature of happenstance is in tension with the function of the awards as punitive, just because of the implication of unfairness that an eccentrically high punitive verdict carries in a system whose commonly held notion of law rests on a sense of fairness in dealing with one another. Thus, a penalty should be reasonably predictable in its severity, so that even Justice Holmes’s “bad man” can look ahead with some ability to know what the stakes are in choosing one course of action or another. See The Path of the Law, 10 Harv. L. Rev. 457, 459 (1897). And when the bad man’s counterparts turn up from time to time, the penalty scheme they face ought to threaten them with a fair probability of suffering in like degree when they wreak like damage. Cf. Koon v. United States, 518 U. S. 81, 113 (1996) (noting the need “to reduce unjustified disparities” in criminal sentencing “and so reach toward the evenhandedness and neutrality that are the distinguishing marks of any principled system of justice”). The common sense of justice would surely bar penalties that reasonable people would think excessive for the harm caused in the circumstances.
With that aim ourselves, we have three basic approaches to consider, one verbal and two quantitative. As mentioned before, a number of state courts have settled on criteria for judicial review of punitive-damages awards that go well beyond traditional “shock the conscience” or “passion and prejudice” tests. Maryland, for example, has set forth a nonexclusive list of nine review factors under state common law that include “degree of heinousness,” “the deterrence value of [the award],” and “[w]hether [the punitive award] bears a reasonable relationship to the compensatory damages awarded.” Bowden v. Caldor, Inc., 350 Md. 4, 25–39, 710 A. 2d 267, 277–284 (1998). Alabama has seven general criteria, such as “actual or likely harm [from the defendant’s conduct],” “degree of reprehensibility,” and “[i]f the wrongful conduct was profitable to the defendant.” Green Oil Co. v. Hornsby, 539 So. 2d 218, 223–224 (1989) (internal quotation marks omitted). But see McClain v. Metabolife Int’l, Inc., 259 F. Supp. 2d 1225, 1236 (ND Ala. 2003) (noting but not deciding claim that post-trial review under Green Oil “is unconstitutionally vague and inadequate”).
These judicial review criteria are brought to bear after juries render verdicts under instructions offering, at best, guidance no more specific for reaching an appropriate penalty. In Maryland, for example, which allows punitive damages for intentional torts and conduct characterized by “actual malice,” U. S. Gypsum Co. v. Mayor and City Council of Baltimore, 336 Md. 145, 185, 647 A. 2d 405, 424–425 (1994), juries may be instructed that
“An award for punitive damages should be:
“(1) In an amount that will deter the defendant and others from similar conduct.
“(2) Proportionate to the wrongfulness of the defendant’s conduct and the defendant’s ability to pay.
“(3) But not designed to bankrupt or financially destroy a defendant.” Md. Pattern Jury Instr., Civil, No. 10:13 (4th ed. 2007).
In Alabama, juries are instructed to fix an amount after considering “the character and degree of the wrong as shown by the evidence in the case, and the necessity of preventing similar wrongs.” 1 Ala. Pattern Jury Instr., Civil, No. §23.21 (Supp. 2007).
These examples leave us skeptical that verbal formulations, superimposed on general jury instructions, are the best insurance against unpredictable outliers. Instructions can go just so far in promoting systemic consistency when awards are not tied to specifically proven items of damage (the cost of medical treatment, say), and although judges in the States that take this approach may well produce just results by dint of valiant effort, our experience with attempts to produce consistency in the analogous business of criminal sentencing leaves us doubtful that anything but a quantified approach will work. A glance at the experience there will explain our skepticism.
The points of similarity are obvious. “[P]unitive damages advance the interests of punishment and deterrence, which are also among the interests advanced by the criminal law.” Browning-Ferris Industries, 492 U. S., at 275.18 See also 1977 Restatement §908, Comment a, at 464 (purposes of punitive damages are “the same” as “that of a fine imposed after a conviction of a crime”); 18 U. S. C. §3553(a)(2) (requiring sentencing courts to consider, inter alia, “the need for the sentence imposed . . . to provide just punishment for the offense” and “to afford adequate deterrence to criminal conduct”); United States Sentencing Commission, Guidelines Manual §1A1.1, comment. (Nov. 2007).
It is instructive, then, that in the last quarter century federal sentencing rejected an “indeterminate” system, with relatively unguided discretion to sentence within a wide range, under which “similarly situated offenders were sentenced [to], and did actually serve, widely disparate sentences.”19 Instead it became a system of detailed guidelines tied to exactly quantified sentencing results, under the authority of the Sentencing Reform Act of 1984, 18 U. S. C. §3551 et seq. (2000 ed. and Supp. V).
The importance of this for us is that in the old federal sentencing system of general standards the cohort of even the most seasoned judicial penalty-givers defied consistency. Judges and defendants alike were “[l]eft at large, wandering in deserts of uncharted discretion,” M. Frankel, Criminal Sentences: Law Without Order 7–8 (1973), which is very much the position of those imposing punitive damages today, be they judges or juries, except that they lack even a statutory maximum; their only restraint beyond a core sense of fairness is the due process limit. This federal criminal law development, with its many state parallels, strongly suggests that as long “as there are no punitive damages guidelines, corresponding to the federal and state sentencing guidelines, it is inevitable that the specific amount of punitive damages awarded whether by a judge or by a jury will be arbitrary.” Mathias v. Accor Economy Lodging, Inc., 347 F. 3d 672, 678 (CA7 2003).
This is why our better judgment is that eliminating unpredictable outlying punitive awards by more rigorous standards than the constitutional limit will probably have to take the form adopted in those States that have looked to the criminal-law pattern of quantified limits. One option would be to follow the States that set a hard dollar cap on punitive damages, see supra, at 22, a course that arguably would come closest to the criminal law, rather like setting a maximum term of years. The trouble is, though, that there is no “standard” tort or contract injury, making it difficult to settle upon a particular dollar figure as appropriate across the board. And of course a judicial selection of a dollar cap would carry a serious drawback; a legislature can pick a figure, index it for inflation, and revisit its provision whenever there seems to be a need for further tinkering, but a court cannot say when an issue will show up on the docket again. See, e.g., Jones & Laughlin Steel Corp. v. Pfeifer, 462 U. S. 523, 546–547 (1983) (declining to adopt a fixed formula to account for inflation in discounting future wages to present value, in light of the unpredictability of inflation rates and variation among lost-earnings cases).
The more promising alternative is to leave the effects of inflation to the jury or judge who assesses the value of actual loss, by pegging punitive to compensatory damages using a ratio or maximum multiple. See, e.g., 2 ALI Enterprise Responsibility for Personal Injury: Reporters’ Study 258 (1991) (hereinafter ALI Reporters’ Study) (“[T]he compensatory award in a successful case should be the starting point in calculating the punitive award”); ABA, Report of Special Comm. on Punitive Damages, Section of Litigation, Punitive Damages: A Constructive Examination 64–66 (1986) (recommending a presumptive punitive-to-compensatory damages ratio). As the earlier canvass of state experience showed, this is the model many States have adopted, see supra, at 22, and n. 12, and Congress has passed analogous legislation from time to time, as for example in providing treble damages in antitrust, racketeering, patent, and trademark actions, see 15 U. S. C. §§15, 1117 (2000 ed. and Supp. V); 18 U. S. C. §1964(c); 35 U. S. C. §284.20 And of course the potential relevance of the ratio between compensatory and punitive damages is indisputable, being a central feature in our due process analysis. See, e.g., State Farm, 538 U. S., at 425; Gore, 517 U. S., at 580.
Still, some will murmur that this smacks too much of policy and too little of principle. Cf. Moviecolor Ltd. v. Eastman Kodak Co., 288 F. 2d 80, 83 (CA2 1961). But the answer rests on the fact that we are acting here in the position of a common law court of last review, faced with a perceived defect in a common law remedy. Traditionally, courts have accepted primary responsibility for reviewing punitive damages and thus for their evolution, and if, in the absence of legislation, judicially derived standards leave the door open to outlier punitive-damages awards, it is hard to see how the judiciary can wash its hands of a problem it created, simply by calling quantified standards legislative. See State Farm, supra, at 438 (GINSBURG, J., dissenting) (“In a legislative scheme or a state high court’s design to cap punitive damages, the handiwork in setting single-digit and 1-to-1 benchmarks could hardly be questioned”); 2 ALI Reporters’ Study 257 (recommending adoption of ratio, “probably legislatively, although possibly judicially”).
History certainly is no support for the notion that judges cannot use numbers. The 21-year period in the rule against perpetuities was a judicial innovation, see, e.g., Cadell v. Palmer, 1 Clark & Finnelly 372, 6 Eng. Rep. 956, 963 (H. L. 1833), and so were exact limitations periods for civil actions, sometimes borrowing from statutes, see C. Preston & G. Newsom, Limitation of Actions 241–242 (2d ed. 1943), but often without any statutory account to draw on, see, e.g., 1 H. Wood, Limitations of Actions §1, p. 4 (4th ed. 1916). For more examples, see 1 W. Blackstone, Commentaries on the Laws of England 451 (1765) (listing other common law age cut-offs with no apparent statutory basis). And of course, adopting an admiralty-law ratio is no less judicial than picking one as an outer limit of constitutionality for punitive awards. See State Farm, supra, at 425.21
Although the legal landscape is well populated with examples of ratios and multipliers expressing policies of retribution and deterrence, most of them suffer from features that stand in the way of borrowing them as paradigms of reasonable limitations suited for application to this case. While a slim majority of the States with a ratio have adopted 3:1, others see fit to apply a lower one, see,
e.g., Colo. Rev. Stat. Ann. §13–21–102(1)(a) (2007) (1:1); Ohio Rev. Code Ann. §2315.21(D)(2)(a) (Lexis 2005) (2:1), and a few have gone higher, see, e.g., Mo. Ann. Stat. §510.265(1) (Supp. 2008) (5:1). Judgments may differ about the weight to be given to the slight majority of 3:1 States, but one feature of the 3:1 schemes dissuades us from selecting it here. With a few statutory exceptions, generally for intentional infliction of physical injury or other harm, see, e.g, Ala. Code §6–11–21(j) (2005); Ark. Code Ann. §16–55–208(b) (2005), the States with 3:1 ratios apply them across the board (as do other States using different fixed multipliers). That is, the upper limit is not directed to cases like this one, where the tortious action was worse than negligent but less than malicious,22 exposing the tortfeasor to certain regulatory sanctions and inevitable damage actions;23 the 3:1 ratio in these States also applies to awards in quite different cases involving some of the most egregious conduct, including malicious behavior and dangerous activity carried on for the purpose of increasing a tortfeasor’s financial gain.24 We confront, instead, a case of reckless action, profitless to the tortfeasor, resulting in substantial recovery for substantial injury. Thus, a legislative judgment that 3:1 is a reasonable
limit overall is not a judgment that 3:1 is a reasonable limit in this particular type of case.
For somewhat different reasons, the pertinence of the 2:1 ratio adopted by treble-damages statutes (offering compensatory damages plus a bounty of double that amount) is open to question. Federal treble-damages statutes govern areas far afield from maritime concerns (not to mention each other);25 the relevance of the governing rules in patent or trademark cases, say, is doubtful at best. And in some instances, we know that the considerations that went into making a rule have no application here. We know, for example, that Congress devised the treble damages remedy for private antitrust actions with an eye to supplementing official enforcement by inducing private litigation, which might otherwise have been too rare if nothing but compensatory damages were available at the end of the day. See, e.g., Reiter, 442 U. S., at 344.
That concern has no traction here, in this case of staggering damage inevitably provoking governmental enforcers to indict and any number of private parties to sue. To take another example, although 18 U. S. C. §3571(d) provides for a criminal penalty of up to twice a crime victim’s loss, this penalty is an alternative to other specific fine amounts which courts may impose at their option, see §§3571(a)–(c), a fact that makes us wary of reading too much into Congress’s choice of ratio in one provision. State environmental treble-damages schemes offer little more support: for one thing, insofar as some appear to punish even negligence, see, e.g., Mass. Gen. Laws, ch. 130, §27, while others target only willful conduct, see, e.g., Del. Code Ann., Tit. 25, §1401 (1989), some undershoot and others may overshoot the target here. For another, while some States have chosen treble damages, others punish environmental harms at other multiples. See, e.g., N. H. Rev. Stat. Ann. §146–A:10 (2005) (damages of oneand-a-half times the harm caused to private property by oil discharge); Minn. Stat. Ann. §115A.99 (2005) (civil penalty of 2 to 5 times the costs of removing unlawful solid waste). All in all, the legislative signposts do not point the way clearly to 2:1 as a sound indication of a reasonable limit.
There is better evidence of an accepted limit of reasonable civil penalty, however, in several studies mentioned before, showing the median ratio of punitive to compensatory verdicts, reflecting what juries and judges have considered reasonable across many hundreds of punitive awards. See supra, at 25–26, and n. 14. We think it is fair to assume that the greater share of the verdicts studied in these comprehensive collections reflect reasonable judgments about the economic penalties appropriate in their particular cases.
These studies cover cases of the most as well as the least blameworthy conduct triggering punitive liability, from malice and avarice, down to recklessness, and even gross negligence in some jurisdictions. The data put the median ratio for the entire gamut of circumstances at less than 1:1, see supra, at 25–26, and n. 14, meaning that the compensatory award exceeds the punitive award in most cases. In a well-functioning system, we would expect that awards at the median or lower would roughly express jurors’ sense of reasonable penalties in cases with no earmarks of exceptional blameworthiness within the punishable spectrum (cases like this one, without intentional or malicious conduct, and without behavior driven primarily by desire for gain, for example) and cases (again like this one) without the modest economic harm or odds of detection that have opened the door to higher awards. It also seems fair to suppose that most of the unpredictable outlier cases that call the fairness of the system into question are above the median; in theory a factfinder’s deliberation could go awry to produce a very low ratio, but we have no basis to assume that such a case would be more than a sport, and the cases with serious constitutional issues coming to us have naturally been on the high side, see, e.g., State Farm, 538 U. S., at 425 (ratio of 145:1); Gore, 517 U. S., at 582 (ratio of 500:1). On these assumptions, a median ratio of punitive to compensatory damages of about 0.65:126 probably marks the line near which cases like this one largely should be grouped. Accordingly, given the need to protect against the possibility (and the disruptive cost to the legal system) of awards that are unpredictable and unnecessary, either for deterrence or for measured retribution, we consider that a 1:1 ratio, which is above the median award, is a fair upper limit in such maritime cases.27
The provision of the CWA respecting daily fines confirms our judgment that anything greater would be excessive here and in cases of this type. Congress set criminal penalties of up to $25,000 per day for negligent violations of pollution restrictions, and up to $50,000 per day for knowing ones. 33 U. S. C. §§1319(c)(1), (2). Discretion to double the penalty for knowing action compares to discretion to double the civil liability on conduct going beyond negligence and meriting punitive treatment. And our explanation of the constitutional upper limit confirms that the 1:1 ratio is not too low. In State Farm, we said that a single-digit maximum is appropriate in all but the most exceptional of cases, and “[w]hen compensatory damages are substantial, then a lesser ratio, perhaps only equal to compensatory damages, can reach the outermost limit of
the due process guarantee.” 538 U. S., at 425.28
Applying this standard to the present case, we take for granted the District Court’s calculation of the total relevant compensatory damages at $507.5 million. See In re Exxon Valdez, 236 F. Supp. 2d 1043, 1063 (D. Alaska 2002). A punitive-to-compensatory ratio of 1:1 thus yields maximum punitive damages in that amount.
We therefore vacate the judgment and remand the case for the Court of Appeals to remit the punitive damages award accordingly.
It is so ordered.
8 Indeed, at least one 19th-century treatise writer asserted that there was “no doctrine of authentically ‘punitive’ damages” and that “judgments that ostensibly included punitive damages [were] in reality no more than full compensation.” Pacific Mut. Life Ins. Co. v. Haslip, 499 U. S. 1, 25 (1991) (SCALIA, J., concurring in judgment) (citing 2 S. Greenleaf, Law of Evidence 235, n. 2 (13th ed. 1876)). “This view,” however, “was not widely shared.” Haslip, supra, at 25 (SCALIA, J., concurring in judgment) (citing other prominent 19th-century treatises). Whatever the actual importance of the subterfuge for compensation may have been, it declined.
9 See, e.g., Moskovitz v. Mount Sinai Medical Center, 69 Ohio St. 3d 638, 651, 635 N. E. 2d 331, 343 (1994) (“The purpose of punitive damages is not to compensate a plaintiff, but to punish and deter certain conduct”); Hamilton Development Co. v. Broad Rock Club, Inc., 248 Va. 40, 45, 445 S. E. 2d 140, 143 (1994) (same); Loitz v. Remington Arms Co., 138 Ill. 2d 404, 414, 563 N. E. 2d 397, 401 (1990) (same); Green Oil Co. v. Hornsby, 539 So. 2d 218, 222 (Ala. 1989) (same); Masaki v. General Motors Corp., 71 Haw. 1, 6, 780 P. 2d 566, 570 (1989) (same); see also Cooper Industries, Inc. v. Leatherman Tool Group, Inc., 532 U. S. 424, 432 (2001) (punitive damages are “intended to punish the defendant and to deter future wrongdoing”); State Farm Mut. Automobile Ins. Co. v. Campbell, 538 U. S. 408, 416 (2003) (“[P]unitive damages . . . are aimed at deterrence and retribution”); 4 Restatement §908, Comment a.
10 These standards are from the torts context; different standards apply to other causes of action.
11 A like procedure was followed in this case, without objection.
12 See, e.g., Mo. Rev. Stat. Ann. §510.265(1) (Vernon Supp. 2008) (greater of 5:1 or $500,000 in most cases); Ala. Code §§6–11–21(a), (d) (2005) (greater of 3:1 or $1.5 million in most personal injury suits, and 3:1 or $500,000 in most other actions); N. D. Cent. Code Ann. §32–03.2–11(4) (Supp. 2007) (greater of 2:1 or $250,000); Colo. Rev. Stat. Ann. §13–21–102(1)(a) (2007) (1:1).
Oklahoma has a graduated scheme, with the limit on the punitive award turning on the nature of the defendant’s conduct. See Okla. Stat., Tit. 23, §9.1(B) (West 2001) (greater of 1:1 or $100,000 in cases involving “reckless disregard”); §9.1(C) (greater of 2:1, $500,000, or the financial benefit derived by the defendant, in cases of intentional and malicious conduct); §9.1(D) (no limit where the conduct is intentional, malicious, and life threatening).
13 See, e.g., RAND Institute for Civil Justice, D. Hensler & E. Moller, Trends in Punitive Damages, table 2 (Mar. 1995) (finding an increase in median awards between the early 1980s and the early 1990s in San Francisco and Cook Counties); Moller, Pace, & Carroll, Punitive Damages in Financial Injury Jury Verdicts, 28 J. Legal Studies 283, 307 (1999) (hereinafter Financial Injury Jury Verdicts) (studying jury verdicts in “Financial Injury” cases in six States and Cook County, Illinois, and finding a marked increase in the median award between the late 1980s and the early 1990s); M. Peterson, S. Sarma, & M. Shanley, Punitive Damages: Empirical Findings 15 (RAND Institute for Civil Justice 1987) (hereinafter Punitive Damages: Empirical Findings) (finding that the median punitive award increased nearly 4 times in San Francisco County between the early 1960s and the early 1980s, and 43 times in Cook County over the same period). But see T. Eisenberg et al., Juries, Judges, and Punitive Damages: Empirical Analyses Using the Civil Justice Survey of State Courts 1992, 1996, and 2001 Data, 3 J. of Empirical Legal Studies 263, 278 (2006) (hereinafter Juries, Judges, and Punitive Damages) (analyzing Bureau of Justice Statistics data from 1992, 1996, and 2001, and concluding that “[n]o statistically significant variation exists in the inflation-adjusted punitive award level over the three time periods”); Dept. of Justice, Bureau of Justice Statistics, T. Cohen, Punitive Damage Awards in Large Counties, 2001, p. 8 (Mar. 2005) (hereinafter Cohen) (compiling data from the Nation’s 75 most populous counties and finding that the median punitive damage award in civil jury trials decreased between 1992 and 2001).
14 See, e.g., Juries, Judges, and Punitive Damages 269 (reporting median ratios of 0.62:1 in jury trials and 0.66:1 in bench trials using the Bureau of Justice Statistics data from 1992, 1996, and 2001); Vidmar & Rose, Punitive Damages by Juries in Florida, 38 Harv. J. Legis. 487, 492 (2001) (studying civil cases in Florida state courts between 1989 and 1998 and finding a median ratio of 0.67:1). But see Financial Injury Jury Verdicts 307 (finding a median ratio of 1.4:1 in
“financial injury” cases in the late 1980s and early 1990s).
15 See, e.g., Cohen 8 (compiling data from the Nation’s 75 most populous counties, and finding that in jury trials where the plaintiff prevailed, the percentage of cases involving punitive awards was 6.1% in 1992 and 5.6% in 2001); Financial Injury Jury Verdicts 307 (finding a statistically significant decrease in the percentage of verdicts in “financial injury” cases that include a punitive damage award, from 15.8% in the early 1980s to 12.7% in the early 1990s). But see Punitive Damages: Empirical Findings 9 (finding an increase in the percentage of civil trials resulting in punitive damage awards in San Francisco and Cook Counties between 1960 and 1984).
One might posit that ill effects of punitive damages are clearest not in actual awards but in the shadow that the punitive regime casts on settlement negotiations and other litigation decisions. See, e.g., Financial Injury Jury Verdicts 287; Polinsky, Are Punitive Damages Really Insignificant, Predictable, and Rational? 26 J. Legal Studies 663, 664–671 (1997). But here again the data have not established a clear correlation. See, e.g., Eaton, Mustard, & Talarico, The Effects of Seeking Punitive Damages on the Processing of Tort Claims, 34 J. Legal Studies 343, 357, 353–354, 365 (2005) (studying data from six Georgia counties and concluding that “the decision to seek punitive damages has no statistically significant impact” on “whether a case that was disposed was done so by trial or by some other procedure, including settlement,” or “whether a case that was disposed by means other than a trial was more likely to have been settled”); Kritzer & Zemans, The Shadow of Punitives, 1998 Wis. L. Rev. 157, 160 (1998) (noting the theory that punitive damages cast a large shadow over settlement negotiations, but finding that “with perhaps one exception, what little systematic evidence we could find does not support the notion” (emphasis deleted)).
16 This study examined “the most representative sample of state court trials in the United States,” involving “tort, contract, and property cases disposed of by trial in fiscal year 1991–1992 and then calendar years 1996 and 2001. The three separate data sets cover state courts of general jurisdiction in a random sample of 46 of the 75 most populous counties in the United States.” Juries, Judges, and Punitive Damages 267. The information was “gathered directly” from state-court clerks’ offices and the study did “not rely on litigants or third parties to report.” Ibid.
17 The Court is aware of a body of literature running parallel to anecdotal reports, examining the predictability of punitive awards by conducting numerous “mock juries,” where different “jurors” are confronted with the same hypothetical case. See, e.g., C. Sunstein, R. Hastie, J. Payne, D. Schkade, W. Viscusi, Punitive Damages: How Juries Decide (2002); Schkade, Sunstein, & Kahneman, Deliberating About Dollars: The Severity Shift, 100 Colum. L. Rev. 1139 (2000); Hastie, Schkade, & Payne, Juror Judgments in Civil Cases: Effects of Plaintiff’s Requests and Plaintiff’s Identity on Punitive Damage Awards, 23 Law & Hum. Behav. 445 (1999); Sunstein, Kahneman, & Schkade, Assessing Punitive Damages (with Notes on Cognition and Valuation in Law), 107 Yale L. J. 2071 (1998). Because this research was funded in part by Exxon, we decline to rely on it.
18 This observation is not at odds with the holding in Browning- Ferris, that the Excessive Fines Clause of the Eighth Amendment does not apply to punitive damages. See Browning-Ferris, 492 U. S., at 275. That conclusion did not reject the punitive nature of the damages, see ibid., but rested entirely upon our conviction that “the concerns that animate the Eighth Amendment” were about “plac[ing] limits on the steps a government may take against an individual,” ibid. Thus the Clause “does not constrain an award of money damages in a civil suit when the government neither has prosecuted the action nor has any right to receive a share of the damages awarded.” Id., at 264. We noted the similarities of purpose between criminal penalties and punitive damages and distinguished the two on the basis of their differing levels of state involvement. See id., at 275.
19 Nagel, Structuring Sentencing Discretion: The New Federal Sentencing Guidelines, 80 J. Crim. L. & C. 883, 895–899 (1990) (citing studies and congressional hearings).
20 There are State counterparts of these federal statutes. See, e.g., Conn. Gen. Stat. §52–560 (2007) (cutting or destroying a tree intended for use as a Christmas tree punishable by a payment to the injured party of five times the tree’s value); Mass. Gen. Laws, ch. 91, §59A (West 2006) (discharging crude oil into a lake, river, tidal water, or flats subjects a defendant to double damages in tort).
21 To the extent that JUSTICE STEVENS suggests that the very subject of remedies should be treated as congressional in light of the number of statutes dealing with remedies, see post, at 1–4 (opinion concurring in part and dissenting in part), we think modern-day maritime cases are to the contrary and support judicial action to modify a common law landscape largely of our own making. The character of maritime law as a mixture of statutes and judicial standards, “an amalgam of traditional common-law rules, modifications of those rules, and newly created rules,” East River S. S. Corp. v. Transamerica Delaval Inc., 476 U. S. 858, 865 (1986), accounts for the large part we have taken in working out the governing maritime tort principles. See, e.g., ibid.
(“recognizing products liability . . . as part of the general maritime law”); American Export Lines, Inc. v. Alvez, 446 U. S. 274 (1980) (recognizing cause of action for loss of consortium); Moragne v. States Marine Lines, Inc., 398 U. S. 375 (1970) (recognizing cause of action for wrongful
death). And for the very reason that our exercise of maritime jurisdiction has reached to creating new causes of action on more than one occasion, it follows that we have a free hand in dealing with an issue that is “entirely a remedial matter.” Id., at 382. The general observation we made in United States v. Reliable Transfer Co., 421 U. S. 397, 409 (1975), when we abrogated the admiralty rule of divided damages in favor of proportional liability, is to the point here. It is
urged “that the creation of a new rule of damages in maritime collision cases is a task for Congress and not for this Court. But the Judiciary has traditionally taken the lead in formulating flexible and fair remedies in the law maritime, and Congress has largely left to this Court the responsibility for fashioning the controlling rules of admiralty law” (internal quotation marks and footnote omitted). See also Exxon Co., U. S. A. v. Sofec, Inc., 517 U. S. 830 (1996) (holding that proportionalliability rule applies only to defendants proximately causing an injury); McDermott, Inc. v. AmClyde, 511 U. S. 202 (1994) (adopting proportionate-fault rule for calculation of nonsettling maritime tort defendants’ compensatory liability).
Indeed, the compensatory remedy sought in this case is itself entirely a judicial creation. The common law traditionally did not compensate purely economic harms, unaccompanied by injury to person or property. See K. Abraham, Forms and Functions of Tort Law 247–248 (3d ed.
2007); see, e.g., Robins Dry Dock & Repair Co. v. Dahl, 266 U. S. 449 (1925) (imposing rule in maritime context). But “[t]he courts have . . . occasionally created exceptions to the rule. Perhaps the most noteworthy involve cases in which there has been natural-resource damage for which no party seems to have a cause of action.” Abraham, supra, at 249 (discussing Union Oil Co. v. Oppen, 501 F. 2d 558 (CA9 1974) (recognizing exception for commercial fishermen)). We raise the point not to express agreement or disagreement with the Ninth Circuit rule but to illustrate the entirely judge-made nature of the landscape we are surveying.
To be sure, “Congress retains superior authority in these matters,” and “[i]n this era, an admiralty court should look primarily to these legislative enactments for policy guidance.” Miles v. Apex Marine Corp., 498 U. S. 19, 27 (1990). But we may not slough off our responsibilities
for common law remedies because Congress has not made a first move, and the absence of federal legislation constraining punitive damages does not imply a congressional decision that there should be no quantified rule, cf. Rapanos v. United States, 547 U. S. 715, 749 (2006) (plurality opinion) (noting the Court’s “oft-expressed skepticism towards reading the tea leaves of congressional inaction”). Where there is a need for a new remedial maritime rule, past precedent argues for our setting a judicially derived standard, subject of course to congressional
revision. See, e.g., Reliable Transfer, supra, at 409.
22 Although the jury heard evidence that Exxon may have felt constrained not to give Hazelwood a shoreside assignment because of a concern that such a course might open it to liabilities in personnel litigation the employee might initiate, see, e.g., App. F to Pet. for Cert. 256a, such a consideration, if indeed it existed, hardly constitutes action taken with a specific purpose to cause harm at the expense of an established duty.
23 We thus treat this case categorically as one of recklessness, for that was the jury’s finding. But by making a point of its contrast with cases falling within categories of even greater fault we do not mean to suggest that Exxon’s and Hazelwood’s failings were less than reprehensible.
24 Two of the States with 3:1 ratios do provide for slightly larger awards in actions involving this type of strategic financial wrongdoing, but the exceptions seem to apply to only a subset of those cases. See Alaska Stat. §09.17.020(g) (2006) (where the defendant’s conduct was motivated by financial gain and the adverse consequences of the conduct were actually known by the defendant or the person responsible for making policy decisions on behalf of the defendant, the normal limit is replaced by the greater of four times the compensatory damages, four times the aggregate financial gain the defendant received as a result of its misconduct, or $7 million); Fla. Stat. §§768.73(1)(b), (c) (2007) (normal limit replaced by greater of 4:1 or $2 million where defendant’s wrongful conduct was motivated solely by unreasonable financial gain and the unreasonably dangerous nature of the conduct, together with the high likelihood of injury, was actually known by the managing agent, director, officer, or other person responsible for making policy decisions on behalf of the defendant).
25 See, e.g., 15 U. S. C. §15 (antitrust); 18 U. S. C. §1964 (racketeering); 35 U. S. C. §284 (patent); 15 U. S. C. §1117 (trademark) (2000 ed. and Supp. V); 7 U. S. C. §2564 (plant variety protections); 12 U. S. C. §2607 (real estate settlement antikickback provision); 15 U. S. C. §1693f (consumer credit protection).
26 See supra, at 25, n. 14, for the spread among studies.
27 The reasons for this conclusion answer JUSTICE STEVENS’s suggestion, post, at 7–8, that there is an adequate restraint in appellate abuse-of-discretion review of a trial judge’s own review of a punitive jury award (or of a judge’s own award in nonjury cases). We cannot see much promise of a practical solution to the outlier problem in this possibility. JUSTICE STEVENS would find no abuse of discretion in allowing the $2.5 billion balance of the jury’s punitive verdict here, and yet that is about five times the size of the award that jury practice and our judgment would signal as reasonable in a case of this sort. The dissent also suggests that maritime tort law needs a quantified limit on punitive awards less than tort law generally because punitives may mitigate maritime law’s less generous scheme of compensatory damages. Post, at 4–6. But the instructions in this case did not allow the jury to set punitives on the basis of any such consideration, see Jury Instruction No. 21, App. to Brief in Opposition 12a (“The purposes for which punitive damages are awarded are: (1) to punish a wrongdoer for extraordinary misconduct; and (2) to warn defendants and others and deter them from doing the same”), and the size of the underlying compensatory damages does not bespeak economic inadequacy; the case, then, does not support an argument that maritime compensatory
awards need supplementing.
And this Court has long held that “[p]unitive damages by definition are not intended to compensate the injured party, but rather to punish the tortfeasor . . . and to deter him and others from similar extreme conduct.” Newport v. Fact Concerts, Inc., 453 U. S. 247, 266–267 (1981); see supra, at 18–19. Indeed, any argument for more generous punitive damages in maritime cases would call into question the maritime applicability of the constitutional limit on punitive damages as now understood, for we have tied that limit to a conception of punitive
damages awarded entirely for a punitive, not quasi-compensatory, purpose. See, e.g., Philip Morris USA v. Williams, 549 U. S. 346, 352 (2007) (“This Court has long made clear that ‘[p]unitive damages may properly be imposed to further a State’s legitimate interests in punishing unlawful conduct and deterring its repetition’ ” (quoting Gore, 517 U. S., at 568)); State Farm, 538 U. S., at 416 (“[P]unitive damages . . . are aimed at deterrence and retribution”); Cooper Industries, 532 U. S., at 432 (“[C]ompensatory damages and punitive damages . . . serve distinct purposes. The former are intended to redress the concrete loss that the plaintiff has suffered . . . . The latter . . . operate as ‘private fines’ intended to punish the defendant and to deter future wrongdoing”).
28 The criterion of “substantial” takes into account the role of punitive damages to induce legal action when pure compensation may not be enough to encourage suit, a concern addressed by the opportunity for a class action when large numbers of potential plaintiffs are involved: in such cases, individual awards are not the touchstone, for it is the class option that facilitates suit, and a class recovery of $500 million is substantial. In this case, then, the constitutional outer limit may well be 1:1.
A just made Tennessee Supreme Court ruling illustrates the scope of the due process problems involved in punitive damages awards and the kind of subjective non-normative chaos that still prevails in the courts - at all levels - in the awarding of exorbitant punitive damages awards in fact situations, as here, where many persons would regard the award of punitive damages to be totally false.