Insurance For Violating The Law?

Yesterday a New Haven, Connecticut, jury awared a police officer $903.84 in lost wages, and $150,000 in compensatory damages. His lawyer, Karen Torre, persuaded the jury that he had been transferred from one post to another in retaliation for making an unpopular arrest. Now for the big news: The jury also awarded $5 million in punitive damages.

The punitive damages award is certain to be remitted. But why?

Cases such as Gore v BMW teach that a ratio analysis is appropriate in analyzing puntive damages awards. It violates due process, the court reasons, when a defendant is penalized at a rate many multiples of the compensatory damages award.

But what happens when a city indemnifies a tortfeasor and steps in to pay the punitive damages? I realize the doctrine of assumption of the risk is fast becoming a dead letter in the law, but how about the common consumer doctrine, caveat emptor? If a city decides to pay punitive damages, can the city really cry poor?

The conceptual leap I just took perhaps defeats the argument I want to make. Due process says a defendant must be on notice of how badly he can get whacked. A city stepping in is entitled to the same notice, I suspect.

But there should be something constitutionally suspect about a city's decision to underwrite the intentional and/or reckless constitutional torts of its officials. How do we deter misconduct when a publicly funded insurance program essentially tells state actors we will relieve them from the financial consequences of their misdeeds? Perhaps in such cases awards should be left to stand so that a city, the entity with deep pockets, gets the deterrent messages punitive damages are supposed to send.

The plaintiff's lawyer, Karen Torre, is a friend and colleague, so I congratulate her on a great win even as I swallow my envy. She displaces me as the plaintiff's lawyer with the largest civil rights verdict in state history. But her verdict, as several of my larger verdicts, troubles me. We tell juries to award what is fair, just and reasonable, all the while lying to them about what is really going on behind the scenes.

The City of New Haven will indemnify the chief, a defendant in this case. So taxpayers will foot the bill for this misconduct. No one is deterred.

The post-trial motions in this case need to flesh out whether the city will, in fact, indemnify. When the city announces it will, the district court should deny the remittitur motion as moot. Thereafter, let the appellate court, and, perhaps, the Supreme Court consider the following question, which has not, as near as I can tell, been addressed: "Whether a city indemnifying a state actor for an award of punitive damages waives any due process claim as to the amount of those awards given that the decision to indemnify frustrates the very purpose of punitive damages."