Punitive Damages in Libel Case Reduced by 75%

A jury awarded Russell Ebersole $7,500 in compensatory damages and $60,000 in punitive damages on his libel claim against Bridget Kline-Perry in the United States District Court for the Eastern District of Virginia. Ms. Kline-Perry moved for a new trial or, alternatively, a reduction of the punitive damages award, which the court treated as a motion for remittitur. Finding $60,000 to be unconstitutionally excessive, the court remitted the punitive damages to $15,000 and gave Mr. Ebersole the option of accepting the reduced amount or requesting a new trial.

The court agreed with Ms. Kline-Perry that the $60,000 award of punitive damages violated her right to due process. When faced with an excessive verdict, courts will generally order a remittitur. Remittitur is a process by which the court reduces the damages award while giving the plaintiff the option of re-trying the case in lieu of accepting the reduction. The Federal Rules of Civil Procedure do not provide specifically for remittitur, but precedent holds that a court should order remittitur when a jury award is so excessive as to result in a miscarriage of justice.

In determining whether a jury award of punitive damages violates due process, courts consider (1) the degree of reprehensibility of the defendant’s misconduct; (2) the disparity between the actual or potential harm suffered by cut-money.jpgthe plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded and the civil penalties authorized or imposed in comparable cases.

The first factor is the most important. In analyzing the reprehensibility of a defendant’s conduct, courts consider whether (1) the harm caused was physical or merely economic; (2) the tortious conduct evinced disregard of the health or safety of others; (3) the target of the conduct was financially vulnerable; (4) the conduct involved repeated actions or was an isolated incident; and (5) the harm was the result of intentional malice, trickery, or deceit.

In this case, the court found that Ms. Kline-Perry’s statements accusing Mr. Ebersole of animal cruelty involved only economic harm, did not evince disregard for the safety of others, and was an isolated incident. While Mr. Ebersole was financially vulnerable at the time of the conduct (in the midst of a bankruptcy proceeding) the court found that Ms. Kline-Perry was motivated not by malice but by a desire to protect animals. The court held that, although not extraordinarily reprehensible, Ms. Kline-Perry’s conduct was sufficiently blameworthy that the jury was justified in awarding some punitive damages.

The court found a disparity between the harm that Mr. Ebersole suffered and the punitive damages award. Mr. Ebersole recovered $7,500 in compensatory damages yet the jury awarded him eight times that in punitive damages. The court also found a disparity between the punitive damages award and the maximum criminal penalty for slander and libel which in this case would have been $2,500. Here, the punitive damages award was twenty-four times the maximum criminal penalty, an indication of a “grossly excessive” amount of punitive damages.

For these reasons, the court found the punitive damages award to violate Ms. Kline-Perry’s due process rights, and it reduced the award by 75% to $15,000. The court gave Mr. Ebersole ten days to accept the remitted amount or request a new trial. On September 5, 2012, he reluctantly accepted.

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