Last week, the Tenth Circuit issued its decision in a closely-watched punitive damages case, Lompe v. Sunridge Partners, LLC.
The case arose from a lawsuit filed by Amber Lompe, a 20-year old college student in Wyoming, who suffered carbon monoxide poisoning while living in an apartment complex. She claimed that the apartment complex’s owner, and its property manager, were negligent.
In an opinion by Judge Carolyn McHugh, the Court reduced the jury’s award of $25.5 million in punitive damages against two defendants to $1.95 million against one of them. The Court found that insufficient evidence supported any punitive award against the property’s owner, and that the award against the property management company was unconstitutionally excessive.
The Court explained that in reviewing the punitive damages award on post-judgment motions, the trial court improperly applied a deferential standard to the jury’s award, rather than the “exacting” de novo standard required by the Due Process Clause of the federal constitution.
The opinion contains a discussion of the factors that make a defendant’s conduct sufficiently reprehensible to warrant punitive damages, and also corrects the trial court’s improper calculation of the ratio of punitive to compensatory damages — the trial court erroneously compared the punitive award against each defendant to the total award of compensatory damages, rather than to each defendant’s share of compensatory damages. The Court reduced the punitive damages award against the management company to a 1:1 ratio with the compensatory damages award against it.
Judge Robert Bacharach dissented. He believed that the evidence was sufficient to support a punitive damages award against the property owner, and while he agreed that the punitive award against the management company was unconstitutional, he would have held that a 4:1 ratio of punitive to compensatory damages satisfied the constitutional standard.
