Riley v. Volkswagen Group of Am., No. 20-15882 (9th Cir. October 18, 2022) (J. Gould) https://cdn.ca9.uscourts.gov/datastore/opinions/2022/10/18/20-15882.pdf
WHERE CONDUCT IS PARTICULARLY REPREHENSIBLE LARGER RATIO OF 8 TO 1 PUNITIVE DAMAGES TO COMPENSATORY IS APPROPRIATE
Plaintiffs opted out of the class action filed against Volkswagen for damages arising out of its surreptitious installation of emissions defeat devices in certain Volkswagen and Audis. These devices allowed the vehicle to produce emissions 40 times the maximum permitted by law in the United States. In a three-phase trial, plaintiffs were awarded the following compensatory damages: Riley ($1,080); Robertson ($952); Salzer ($582); and the Sanwicks ($3,133) and $25,000 each for punitive damages. Plaintiffs did not suffer personal injury. The district court found the punitive damages to be unconstitutionally high and reduced them to exactly four times each plaintiffs' compensatory awards or: Riley ($4320); Robertson ($3808); Salzer ($2328); and the Sanwicks ($12,532). The Ninth Circuit Court of Appeals vacated the district court and remanded.
The reprehensibility of the conduct of a defendant is the most important factor in evaluating whether a punitive damage award comports with due process. Likewise, a punitive damage award must be proportional to the compensatory damages. Finally, a consideration of other applicable penalties for the conduct should be considered.
The uncovering of this fraudulent scheme revealed Volkswagen's deliberate
indifference to compliance with mandatory emissions standards—Volkswagen
intentionally and fraudulently hid their vehicles' true emissions to the detriment of
their customers and the public at large. Had Volkswagen's abhorrent behavior not
been discovered by a third party, Volkswagen would have continued to defraud its
customers and allow vehicles spewing noxious emissions well above EPA's health-
based standards to operate undetected. Such regulatory standards are not a mere
formality but rather represent the conscious safeguarding of community interests by
a Congressionally-designated federal agency.
Accordingly, the jury's decision here to award $25,000 to each plaintiff (an 8 to 1 ratio) is appropriate even absent personal injury or significant compensatory damages. In some circumstances, such as these, smaller compensatory damages actually supports the larger ratio.