Stephen Breyer

“ Gore did argue to the jury an economic theory based on the need to offset the totality of the harm that the defendant's conduct caused. Some theory of that general kind might have provided a significant constraint on arbitrary awards (at least where confined to the relevant harm-causing conduct, see ante, at 10-13) . Some economists, for example, have argued for a standard that would deter illegal activity causing solely economic harm through the use of punitive damages awards that, as a whole, would take from a wrongdoer the total cost of the harm caused. ”

“ In fact, consistent, cumulative inflation is a modern phenomenon. See McCusker, How Much Is That in Real Money? A Historical Price Index for Use as a Deflator of Money Values in the Economy of the United States, 101 Proceedings of American Antiquarian Society 297, 310, 323-332 (1992) . Estimates based on historical rates of valuation, while highly approximate, suggest that the ancient extraordinary awards are small compared to the $2 million here at issue, or other modern punitive damages figures. ”

“ Smaller damages would not sufficiently discourage firms from engaging in the harmful conduct, while larger damages would “over-deter” by leading potential defendants to spend more to prevent the activity that causes the economic harm, say, through employee training, than the cost of the harm itself. See Galligan, Augmented Awards: The Efficient Evolution of Punitive Damages, 51 La. L. Rev. 3, 17-20, 28-30 (1990) . Larger damages might also “double count” by including in the punitive damages award some of the compensatory, or punitive, damages that subsequent plaintiffs would also recover. ”

“ Green Oil's third factor requires “punitive damages” to “remove the profit” of the illegal activity and “be in excess of the profit, so that the defendant recognizes a loss.” Green Oil, supra, at 223. This factor has the ability to limit awards to a fixed, rational amount. But as applied, that concept's potential was not realized, for the court did not limit the award to anywhere near the $56,000 in profits evidenced in the record. Given the record's description of the conduct and its prevalence, this factor could not justify much of the $2 million award. ”

“ Requiring the application of law, rather than a decisionmaker's caprice, does more than simply provide citizens notice of what actions may subject them to punishment; it also helps to assure the uniform general treatment of similarly situated persons that is the essence of law itself. ”

“ Green Oil's fourth factor is the “financial position” of the defendant. Ibid. Since a fixed dollar award will punish a poor person more than a wealthy one, one can understand the relevance of this factor to the state's interest in retribution (though not necessarily to its interest in deterrence, given the more distant relation between a defendant's wealth and its responses to economic incentives) . ”

“ Therefore, reference to a constraining “economic” theory, which might have counseled more deferential review by this Court, is lacking in this case.
Fourth, I cannot find any community understanding or historic practice that this award might exemplify and which, therefore, would provide background standards constraining arbitrary behavior and excessive awards. A punitive damages award of $2 million for intentional misrepresentation causing $56,000 of harm is extraordinary by historical standards, and, as far as I am aware, finds no analogue until relatively recent times. Amici for Dr. ”