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Baker v. National State Bank6/21/2002
nt to both punish and deter the Bank. In BMW, supra, 517 U.S. at 584, 116 S. Ct. at 1603, 134 L. Ed. 2d at 832, the Court added at the end of its discussion of other penalties that the punitive damages award could not be justified on the ground of deterrence because the lower court had not considered whether "less drastic remedies could be expected to achieve that goal." Through its remittitur, the trial court here concluded that a less drastic sanction of $1.8 million, as opposed to $4 million, was necessary. Nonetheless, the Bank still considers that amount to be excessive and argues that a smaller award would achieve the goals of deterring future misconduct, especially since the Bank is no longer in existence. The Bank merged with CoreStates in 1994, which subsequently was purchased by First Union Corporation. The Bank maintains that the award should have been no greater than $500,000, the amount awarded in Rendine v. Pantzer, supra, 141 N.J. at 292.
In support of this contention, the Bank points to this court's unabridged opinion in this case, in which we compared this case to Rendine, concluding that the "circumstances here are as egregious as those in Rendine...." Baker, supra, No. A-488-96T5 at 48. The comparison made was in response to the Bank's argument that its conduct did not support a punitive damages award, finding that because the Bank's conduct was similar to the employer's conduct in Rendine, punitive damages were justified. Because Rendine involved a punitive damages award of only $500,000 (and compensatory damages of $450,000), the Bank thus contends that only $500,000 was justified in this case. Rendine, supra, 141 N.J. at 298.
The argument is rejected. An award of punitive damages includes consideration on the financial condition of the defendant. In Rendine, a jury found that the Pantzer Management Company had intentionally discriminated against two of its employees on maternity leave. Id. at 298. The employer promised them that their positions would be available after they returned, but replaced them during their leave; upon the plaintiffs' return, they were discharged. Id. at 301-03. While the factual circumstances of Rendine are somewhat similar to this case, there is no indication that the employer in that case was of comparable financial value to the Bank. On the contrary, the facts indicate that the company was a relatively small, family-owned business, employing about twenty employees. Id. at 298-99. Here, even taking into account the disputed valuation of the Bank at the time of the misconduct, the stipulated value was $280 million whereas the Bank claims now it was only worth $25.6 million, it appears reasonable to conclude that the Bank enjoyed a vastly greater valuation than the employer in Rendine. In short, the punitive damages award in Rendine is not comparable.
In sum, the remitted punitive damages award of $1.8 million, with a ratio of roughly six to one, did not violate the Bank's substantive due process rights. The Bank's conduct was sufficiently reprehensible to justify that award. Moreover, it received fair notice that it could be liable for an award in that range because N.J.S.A. 10:5-13 provides that a LAD plaintiff may recover punitive damages, and because case law indicated that an employer sued under LAD could pay a punitive damages award in the million dollar range.
III.
The Bank argues that the $4 million punitive damages award was clearly the result of prejudice, passion or mistake, requiring a new trial, and that the trial court erred in finding otherwise.
In Baker, supra, 161 N.J. at 231, the Supreme Court's remand instructions required the trial court to not only apply the standards outline
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