If you or your business needs to bring a lawsuit, it’s natural to wonder whether you may be entitled to recover millions of dollars. You read about celebrities winning $115 million against magazines who published unauthorized photos, or you hear about women winning millions of dollars against fast-food chains after spilling hot coffee into their laps. Litigation sounds wonderful, doesn’t it? Short of winning the lottery, how else can someone obtain so much money is so short a time with such a small amount of effort? Well, the people you hear about who have won enormous monetary awards in court (at least those that have been upheld on appeal) generally have one thing in common: they suffered an enormous amount of harm as a result of something truly devastating that was done to them, causing them severe pain, extreme emotional distress, or vast economic hardship. In other words, those winning huge jury verdicts tend to be those who have suffered the most pain. You don’t necessarily want to be that person.
The legal term we use when referring to financial awards obtained in court is “damages,” of which there are essentially two types, compensatory and punitive. Compensatory damages are those designed to compensate a plaintiff for the loss or injury actually suffered as a result of the defendant’s conduct. It includes things like damage to property, personal injuries, physical pain, lost economic expectations, and emotional suffering. Compensatory damages are not supposed to give the plaintiff a windfall, make him rich, or punish the defendant. Rather, they are designed simply to make the plaintiff “whole,” to the extent that can be accomplished. They are designed to put the plaintiff roughly in the same position he was in before the wrong was committed.
Punitive or exemplary damages are those that are designed to punish the defendant. They warn others not to engage in similar behavior. Punitive damages are not available in all cases, and generally require a showing of misconduct, malice, or such recklessness or negligence as to evince a conscious disregard of the rights of others. This usually involves knowledge and consciousness that the defendant’s conduct will injure the plaintiff in some way.
Punitive damages are capped at $350,000 in Virginia. There is no such limitation on compensatory damages, but that doesn’t mean you should expect to hit the jackpot in your particular case. To win damages in court, you don’t just ask and receive. You need to prove you suffered harm, and give the jury the evidence from which they can make a reasonable estimate of the value of the damages. The jury will be instructed by the judge to calculate the proper amount of damages based on the facts and circumstances of the case, not just automatically award the amount the plaintiff is asking for. So when you hear that there’s a “$20 million lawsuit” against a particular business or individual, that really doesn’t tell you anything other than that the plaintiff would very much like to receive $20 million (who wouldn’t?). The jury may very well award $10,000 instead. Or nothing.
Some types of damages are easier to prove than others. Emotional distress is notoriously difficult to put a value on. The Fourth Circuit has held that emotional distress awards should be set aside when based solely on the plaintiff’s own conclusory, unsupported, subjective assertions. (See Hetzel v. County of Prince William, 89 F.3d 169, 171-72 (4th Cir. 1996) (setting aside excessive award of emotional distress damages where it was based “almost exclusively” on plaintiff’s conclusory testimony)). This is due, in part, to the fact that claims for emotional distress are “fraught with vagueness and speculation” and are “easily susceptible to fictitious and trivial claims.” (See Price v. City of Charlotte, 93 F.3d 1241, 1250 (4th Cir. 1996)).
If you’re lucky enough to convince a jury to award you a large sum of money, your next concern is about whether the judge will uphold the verdict. Juries don’t necessarily have the final say with respect to the damages to be awarded, as their verdicts are subject to judicial review. Any award of damages, compensatory or punitive, must bear a reasonable relationship to the harm sustained and proven by the plaintiff. If the judge believes the damages calculated by the jury are out of proportion to the injury actually sustained, the judge may set the verdict aside, invalidating it.
Jury verdicts must be based on competent evidence. This doesn’t require a plaintiff to present evidence of a precise dollar value of a particular injury, but it does require the presentation of relevant and credible facts by which damages can be calculated by the jury and not be left to conjecture, guess, or random judgment. If the jury can do nothing but speculate, they should not be awarding damages at all.
Grossly excessive awards of punitive damages may sound appealing, but they will usually be struck down because they violate the Due Process Clause of the Fourteenth Amendment. (See BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 568 (1996)). How do you know whether a particular sum of money will be deemed “justice” or “grossly excessive”? The United States Supreme Court has articulated three guidelines for courts to consider: “(1) the degree of reprehensibility of the defendant’s misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases.” (See State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 418 (2003)). 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. If all five factors are absent, any punitive damages the jury might have decided to give you will likely be stricken by the judge as unconstitutional.
So yes, if another business has breached a contract with your business, or committed some form of business tort, and your business lost millions of dollars as a direct result of that, your business is entitled to take the matter to court and may very well win millions of dollars if it can prove its case. For the rest of you, though, don’t get your hopes up.