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An Economist Defends Against Punitive Damages

By ALM Staff | Law Journal Newsletters |

While punitive ' or exemplary ' damages are rarely imposed in product liability matters, they do sometimes occur. One strategy to minimize the risk of a punitive damages award is to present a robust defense against economic-damages claims: Punitive damages are often measured in relation to the economic harm suffered by plaintiffs. Rigorous analysis of the actual harm may be the best defense against exemplary punishment, especially in light of such recent decisions as BMW of North America v. Gore, 517 U.S. 559 (1996) and State Farm v. Campbell, 538 U.S. 408 (2003), establishing that a punitive damages award cannot be “grossly excessive” in light of, inter alia, the ratio of punitive damages to compensatory damages and the state statutory penalties for similar conduct.

Arguments Against Punitive Damages

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