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New Jersey Clarifies Punitive Damages

April 1, 2008

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In <em>Tarr v. Bob Ciasulli's Mack Auto Mall,</em> the New Jersey Supreme Court clarified two thorny issues surrounding the Punitive Damages Act. First, it held that a jury can only award punitive damages as a deterrent to the defendant who committed the wrongful acts but not as a general deterrent to others. Thus, the court held that it was error for the plaintiff's attorney to argue that the amount of punitive damages provided the jury "an opportunity to send a message to deter this particular defendant and others" whether they are in the same industry or not. The court also criticized the jury charge that erroneously reinforced the argument that the deterence of third parties who were strangers to the lawsuit could be considered.
Second, the court found that the defendant's wealth at the time of the wrongdoing as well as at the time of entry of judgment could be considered when the jury calculated punitive damage.
Our advice is simple: if a case proceeds to trial with a claim for punitive damages in play, defense counsel must be alert to any argument that seeks to "send a message" to an entire industry. The focus should be limited to the defendant sued in the case at hand.
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