Punitive damages, also known as exemplary damages, are a type of monetary compensation awarded in civil lawsuits. Unlike compensatory damages, which are intended to make the plaintiff whole by covering actual losses and injuries, punitive damages are designed to punish the defendant for particularly egregious or malicious conduct and to deter similar conduct in the future. Maryland law makes punitive damages difficult so you do not see punitive damages in Maryland with the frequency you see in other jurisdictions.
The Legal Standard for Punitive Damages in Maryland
Maryland law sets a high bar – too high a bar – for awarding punitive damages. To succeed in a claim for punitive damages, the plaintiff must demonstrate that the defendant’s conduct was characterized by “actual malice.” This means that the plaintiff must prove, by clear and convincing evidence, that the defendant acted with evil intent, ill will, or a deliberate intent to harm. Negligence or even gross negligence is not sufficient to justify punitive damages in Maryland; there must be a showing of intentional wrongdoing or reckless disregard for the rights of others.
This standard was established in the landmark case of Owens-Illinois, Inc. v. Zenobia, 325 Md. 420 (1992), an opinion by Judge Chasanow, the Maryland Supreme Court ruled that punitive damages cannot be awarded unless there is clear and convincing evidence of actual malice. The court emphasized that punitive damages are not meant to compensate the victim but to punish the wrongdoer and set an example for others.
This is a tough standard.
What This Means Practically for Plaintiffs
When seeking punitive damages against a third party, such as an employer for the actions of an employee, the plaintiff must show that the employer either participated in, authorized, or ratified the malicious conduct. This is often difficult to prove, as it requires showing that the employer itself had malicious intent or was grossly negligent in its oversight, rather than merely being responsible under the doctrine of vicarious liability.
Because punitive damages are not covered by insurance, the defendant is personally liable for paying them out of their own assets. This creates a significant financial risk for defendants, which may lead them to settle cases before punitive damages are considered or vigorously contest any claims for punitive damages. As a result, plaintiffs may face additional challenges in pursuing punitive damages, especially against third parties who may not have the same level of direct involvement in the misconduct.
Burden of Proof: Clear and Convincing Evidence
The burden of proof for punitive damages in Maryland is “clear and convincing evidence.” This is a higher standard than the “preponderance of the evidence” standard used for compensatory damages. This standard is not unreasonable like the “actual malice” standard.
Clear and convincing evidence means that the plaintiff must show that it is highly probable that the defendant acted with actual malice. This is a demanding standard that requires more than just a showing of the likelihood of malice; the evidence must be strong and persuasive.
Punitive Damages in Specific Types of Cases
Punitive damages are most commonly sought in cases involving intentional torts, such as assault, fraud, defamation, and cases where the defendant’s conduct was particularly egregious. In Maryland, punitive damages are also available in some product liability cases, provided the plaintiff can meet the stringent requirement of proving actual malice.
In cases of fraud, for example, Maryland courts have awarded punitive damages where the defendant knowingly made false representations with the intent to deceive the plaintiff. Similarly, in defamation cases, punitive damages may be awarded if the plaintiff can show that the defamatory statements were made with actual malice.
However, in cases of negligence, punitive damages are rarely awarded in Maryland unless the plaintiff can prove that the defendant’s conduct was willful, wanton, or demonstrated a reckless disregard for human life or the safety of others. To our lawyers, that sounds like drunk driving. But the Maryland Supreme Court has said no, as we discuss below.
Limitations on Punitive Damages in Maryland
While Maryland does not have a statutory cap on punitive damages, the amount awarded must be proportional to the compensatory damages and the egregiousness of the defendant’s conduct. Maryland courts are guided by the principle that punitive damages should not be excessive or disproportionate to the harm caused.
The U.S. Supreme Court’s decision in State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408 (2003), provides further guidance, suggesting that punitive damages awards should generally not exceed a single-digit ratio (i.e., 9:1) to compensatory damages, except in cases where particularly reprehensible conduct warrants a higher ratio.
Jury Instructions on Punitive Damages
In Maryland, when a jury is considering the award of punitive damages, they are instructed to carefully consider the defendant’s financial condition, the reprehensibility of the defendant’s conduct, the relationship between the punitive and compensatory damages, and the potential deterrent effect of the punitive damages. The court ensures that the jury understands that punitive damages are not meant to enrich the plaintiff but to punish the defendant and deter similar conduct in the future.
Can You Get Punitive Damages Against Drunk Drivers in Maryland?
Many courts have ruled that victims can get punitive damages against drunk drivers. These courts have ruled that malicious conduct would also support the recovery of punitive damages, but a showing of malice was not necessary, or that proof of a wanton or willful conduct is sufficient.
Unfortunately, Maryland courts have disagreed, finding that punitive damages must be supported by a showing that the conduct of the intoxicated driver was malicious, or the result of evil motive, ill will, or the like.
Speaking of punitive damages, can you can recover punitive damages in an auto accident case if the other driver is intoxicated? Courts have used a variety of terms setting forth the degree of misconduct required to bring punitive damages claim against a drunk driver in a personal injury case. Plaintiffs’ lawyers in Maryland have argued that driving while intoxicated supports an award of punitive damages should be allowed to a party injured as a result of a motor vehicle accident based upon a showing that the driver’s conduct was reckless, wanton, willful, or grossly negligent.
This issue was addressed in Komornik v. Sparks, 331 Md. 720 (1993). The court in Komornik asserted that there were no facts presented from which a jury would be permitted to infer that the defendant’s conduct was characterized by evil motive, intent to injure, ill will, or fraud, the terms used to describe “actual malice” in Owens-Illinois, Inc. v. Zenobia, 325 Md. 420 (1992), Maryland’s landmark opinion on punitive damages. According to the Maryland Court of Appeals, even if defendant has actual knowledge that he/she was intoxicated, if the defendant was not acting with “actual malice” in driving while drunk, which is virtually impossible to show, punitive damages do not apply.
In an effort to overturn Komornik, House Bill 1334 was introduced in the Maryland House of Delegates. If passed, this bill would have allowed for punitive damages against “high risk” drunk drivers, defined by the bill as persons driving at a blood alcohol level of 0.16 or higher or driving on a license suspended for a drunk driving offense.
Introduced in the Maryland House of Delegates, House Bill 1334 sought to allow punitive damages in cases involving “high-risk” drunk drivers. Specifically, it targeted individuals driving with a blood alcohol concentration (BAC) of 0.16 or higher or those driving on a license suspended due to a prior drunk driving offense. This proposed legislation reflected the belief that such reckless behavior should meet the threshold for punitive damages. Despite strong support from victims’ rights groups and personal injury attorneys, the bill ultimately failed to pass.
The failure of HB 1334 highlights Maryland’s deep-rooted hesitation to expand the availability of punitive damages. This reluctance is often driven by concerns over excessive litigation and fears that more lenient standards could lead to disproportionate awards. However, critics argue that this cautious approach leaves many victims without meaningful recourse against egregiously harmful behavior, particularly in cases of corporate negligence or reckless misconduct.
Banguera v Taylor
Let’s look a key punitive damages case in Maryland. This case discusses the standard to be applied by a trial judge to determine whether a new trial should be granted because of an excessive verdict. (Interestingly, the defendant’s lawyers were the Law Office of Benjamin L. Cardin, now a soon-to-be-retiring U.S. Senator.)
Facts of Bangeura
The facts of Bangeura are disturbing to say the least. The plaintiff/appellee was raped by the defendant/appellant while babysitting in his home in Baltimore in 1983. Criminal charges of rape and assault were brought against defendant. Defendant entered a guilty plea and was sentenced to prison. Plaintiff brought a civil case against the defendant, who did not respond to Plaintiff’s complaint as required under the Maryland Rules (most likely because he was in jail).
Eventually, he got a lawyer to respond and the case went to trial and the jury awarded the Plaintiff $5,000,000, which the judge reduced to $4 million because of a pleading technicality. (Of course, the real problem is collecting a $4 million judgment from a prisoner who makes a few dollars a day on a prison salary.)
Defendant’s attorney appealed Judge Joseph Pines’ ruling regarding a pretrial motion (Judge Pines is now a mediator/arbitrator who handles a number of personal injury cases for lawyers who seek a “trial” without the time and expense of going through the judicial system — update: he recently died) and Judge Phillip Fairbanks (since retired) decision not to grant defendant’s remittitur motion.
The Court of Appeals found that Judge Pines did not err in refusing to grant a pretrial motion to set aside defendant’s earlier default, establishing liability and making the jury trial simply a question of damages.
More central to the point addressed in our response to the motion for remittitur in the Woullard case, the court reaffirmed the standard for remittitur on appeal to be applied by a trial judge in determining whether a new trial should be granted on the ground of excessiveness of the verdict: whether the verdict is “grossly excessive,” or “shocks the conscience of the court,” or is “inordinate” or “outrageously excessive,” or even simply “excessive.” Id. at 624, citing Conklin v. Schillinger, supra, 255 Md. at 69, 257 A.2d 187; Dagnello v. Long Island Railroad Co., 289 F.2d 797, 802 (2d Cir.1961). The court ruled that this same standard applies to punitive damages that were awarded in this case.
Looking at the Law that Was Applied
In this case, Judge Fairbanks refused to consider the motion for remittitur because it could potentially lead to a new trial. The judge felt he could allow for such a possibility because he had already denied defendant’s attorney’s motion for a new trial.
While the Maryland Court of Special Appeals (Maryland’s intermediate court) affirmed the trial court on appeal, Maryland’s highest court, the Court of Appeals, overturned the Court of Special Appeals and ordered the trial court consider defendant’s motion for remittitur. The Court of Appeals ruled that the trial court had an obligation to consider the motion for remittitur because it was separate and part from the earlier unrelated motion for a new trial.
While we have no evidence of what eventually happened in this case after the Court’s ruling, it is reasonable to assume two things: (1) Judge Fairbanks denied defendant’s motion for remittitur (all he was required to do was “consider” it, and (2) the convicted rapist was not able to pay a $4 million judgment (or anything close to it).
Nine years ago, the U.S. Supreme Court weighed in on the issue presented in this case from the perspective of the constitutionality of punitive damages in BWW of North America v. Gore, 517 U.S. 559 (1996). The Supreme Court found that punitive damage awards are subject to limits under the Due Process Clause (5th and 14th Amendments to the Constitution).
The Court evaluated three “guideposts” to conclude that the $ 2 million dollar punitive damage award against BMW in that case transcended constitutional limits under the Due Process Clause: (1) the degree of reprehensibility of the defendant’s conduct; (2) the disparity between the harm or potential harm suffered by the plaintiff and the punitive damage award; and (3) the difference between the punitive damage award and the civil penalties authorized or imposed in comparable cases. Id. at 574-75.
In 1998, the Maryland Court of Appeals discussed the BMW case in Bowden v. Caldor, Inc., 350 Md. 4 (1998). In Bowden, plaintiff, a sixteen year-old, alleged that fellow employees at Caldor accused him of stealing money from the store, detained him until he signed a statement, made racial slurs to him, and then had him arrested. (Interestingly, a year after this opinion Caldor – remember them? – went into bankruptcy. Of course, its problems extended well beyond this particular case).
The criminal charges against the plaintiff were dismissed by a juvenile court for lack of evidence. Plaintiff hired a lawyer and filed suit against the employer and was awarded $110,000 in compensatory damages and $350,000 in punitive damages. Defendant’s lawyer appealed the punitive damages award and it was vacated on appeal (in other words, the case was sent back to the trial court to try the case again on the issue of the amount of punitive damages).
Incredibly, after a second trial on punitive damages, the plaintiff was awarded $9 million (Caldor failed to heed the “watch what you wish for” cliché). The trial court entered a remittitur to $350,000, concluding that the award could not exceed the original award because of the successful appeal.
On appeal, the Maryland Intermediate Court held that while in criminal cases, a harsher sentence could not be imposed on retrial following a successful appeal, the purpose of that rule was to avoid a chilling effect on appeals and did not apply to civil tort actions for money damages. The court held that the trial court’s determination that the award was excessive was not necessarily error, but reversed because the logic behind the reduction was error. Like Bangeura, the plaintiff’s victory in Bowden was likely illusory in that the trial court almost certainly reduced the punitive damage award back to the original reduction.
More Resources
- Maryland Law Update
- Can You Get More Money from a Jury in Aggressive Driving Cases? The answer is yes and no.
- Looking at Brain Injury Cases
- Maryland Car Crash Attorney Help Center