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Baker v. National State Bank6/21/2002
notice of the unremitted award through case law and federal and state statutes.
In BMW, the Supreme Court held that a comparison of the punitive damages award to civil or criminal penalties that could be imposed for comparable misconduct provided a "third indicium of excessiveness." BMW, supra, 517 U.S. at 583, 116 S. Ct. at 1603, 134 L.Ed. 2d at 831. The Court looked to applicable statutes, reasoning that "substantial deference" should be given "to legislative judgments concerning appropriate sanctions for the conduct at issue." Ibid. In addition, other civil penalties were relevant because they indicated whether a defendant was given fair notice as to its potential liability for particular misconduct. Id. at 574, 116 S. Ct. at 1598, 134 L.Ed. 2d at 825-26. In BMW, the Court restricted its examination of other penalties to statutory analysis, looking only to the applicable state statute. Id. at 584, 116 S. Ct. at 1603, 134 L.Ed. 2d at 831-32.
Following BMW, some courts have looked not only to applicable statutes but also to case law, to determine whether the punitive damages award is comparable to those awarded in similar cases. See, e.g., Equal Employment Opportunity Comm'n v. Harbert-Yeargin, Inc., 266 F.3d 498, 516-17 (6th Cir. 2001). However, at least one court has concluded that while decided cases are relevant, positive law, meaning statues and regulations "are even more critical." Zimmerman, supra, 262 F.3d at 83; see also In re Exxon Valdez, 270 F.3d 1215, 1229- 30 (9th Cir. 2001) (looking only to state and federal legislative and executive penalties).
In this case, the trial court found that there were no relevant civil penalties. The court first noted that LAD, N.J.S.A. 10:5-14.1A , provides for a penalty of not more than $2000 for the first offense and not more than $5000 for the second and each subsequent offense. LAD's penalty, however, was not truly comparable because the statute merely imposed "nominal damages for technical violations."
The trial court also found Title VII's damages cap of $300,000 to be of little value because the Supreme Court had in "no way" suggested that statute to be a relevant factor. Besides, Title VII's damages cap bears little relevance because plaintiff's action was brought under LAD, which has no damages cap. Furthermore, LAD, specifically N.J.S.A. 10:5- 14.1a, is of limited guidance because those fines are levied "in addition to any other relief or affirmative action provided by law...." Therefore, the fines are not intended to be the primary means of enforcement of LAD violations. In addition, that section must be read in conjunction with the PDA, which specifically exempts LAD from the punitive damages cap. N.J.S.A. 2A:15-5.14 limits punitive damages to five times the compensatory damages award or $350,000, whichever is greater. Since the Supreme Court concluded that an analysis of other penalties for comparable misconduct was helpful, in part, because courts should defer to legislative judgments, an analysis of other penalties is not particularly helpful in LAD cases where the legislature specifically declined to place a cap on punitive damages.
However, the second reason for considering other civil penalties is to determine whether defendant was given "fair notice" of the amount of the punitive damages. In determining fair notice, it is appropriate only to consider those statutes and cases in effect at the time of the Bank's decision to terminate plaintiffs in 1991.
Consequently, as a matter of notice, the PDA's exemption of LAD is of little relevance because that statute was not in effect in 1991; it was enacted in 1995. LAD was amended in 1990 (N.J.S.A. 10:5-13) to provide that a LAD plain
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