SJC upholds $18M punitive verdict

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The Supreme Judicial Court has affirmed a jury award of $2,640,000 in compensatory damages and $18 million in punitive damages to a plaintiff whose wife died after the collapse of a slide into a swimming pool.

The defendant seller of the slide challenged the constitutionality of the $18 million award of punitive damages.

The SJC found, however, that the award did not enter the “zone of arbitrariness” that violates the Due Process Clause of the 14th Amendment.

The court noted that defendant Toys R Us potentially could have been subject under 15 U.S.C. section2069(a)(1) to $1,250,000 in civil fines for the importation of the slide.

In that event, the ratio of punitive damages to possible civil penalties would be $18 million to $1,250,000, or approximately 14 to one.

“This ratio may appear high,” the SJC acknowledged. “However, the United States Supreme Court has indicated that strict equivalence between punitive awards and possible civil penalties is not necessary in order for an award to meet constitutional requirements,” Justice Barbara A. Lenk pointed out for a unanimous court.

The SJC made note of the fact that courts from other jurisdictions have approved awards with higher ratios of punitive damages to possible civil penalties. “Thus, while the award in this case may be high, it is not grossly excessive,” Lenk concluded.

The 32-page decision is Aleo v. SLB Toys USA, Inc., et al., Lawyers Weekly No. 10-169-13.

Click here for the full text of Lawyers Weekly’s summary of the case.