How Are Punitive Damages Awarded in New Jersey?

Punitive damages, also known as exemplary damages, are awarded to plaintiffs in addition to what is needed to compensate them for harm they have suffered. In this way they differ from compensatory damages, which include amounts intended to remedy the economic and non-economic harms caused by a defendant. For example, compensatory damages may be awarded to cover medical bills, property damage, and lost income as well as pain, suffering, and emotional distress caused by an incident. Punitive damages, on the other hand, are awarded as punishment for defendants whose actions are particularly egregious. This article will discuss the types of circumstances that give rise to punitive damages in New Jersey.

The New Jersey Punitive Damages Act

The New Jersey Punitive Damages Act[1] (NJPDA) establishes the requirements for awarding punitive damages in the state. For a court to award punitive damages, the plaintiff must specifically ask for them in the complaint. The plaintiff must then prove by clear and convincing evidence that the defendant’s actions not only caused the harm they suffered but also that the defendant exhibited either actual malice or wanton and willful disregard for others who could be harmed by those actions.

These are higher standards than those applied to compensatory damages. To be awarded damages that compensate them for actual losses, plaintiffs can demonstrate that defendants were merely negligent; no malice or recklessness is needed. Additionally, they must only prove this by the preponderance of the evidence (e.g., proving a version of events is more likely than not), which is a lower bar than the clear and convincing evidence standard required for punitive damages. As a result, making a successful case for punitive damages is more challenging and complex than claiming compensatory damages.

When are punitive damages awarded?

When plaintiffs in NJ seek punitive damages, defendants can request a bifurcated trial. In this format, the first stage is concerned only with compensatory damages, and no evidence that’s related only to punitive damages may be presented at this time. If, during this first stage, the court awards compensatory damages, then it can proceed to the second stage, during which punitive damages are considered. If no compensatory damages are awarded, then punitive damages are not allowed.

The NJPDA spells out several factors a court should consider when determining whether punitive damages are appropriate. This is not an exhaustive list, as the court must consider all relevant evidence, but it highlights specific details as relevant. These include

• The likelihood that the defendant's conduct would cause serious harm
• The defendant's awareness of or reckless disregard for that likelihood
• The defendant’s behavior upon learning of that likelihood
• How long the defendant continued the conduct
• Whether and for how long the defendant attempted to conceal their harmful conduct

For example, driving while intoxicated is a situation in which punitive damages are often awarded. Because all drivers are presumed to be aware that intoxicated driving is likely to cause serious harm, meeting the basic requirements of the NJPDA can be fairly straightforward in these cases.

How much do NJ courts award for punitive damages?

If the court determines punitive damages are appropriate, they must then determine the amount. To guide courts in deciding how much to award in punitive damages, the NJPDA again provides examples of relevant factors that should be considered, including

• All factors listed above as relevant to the question of whether punitive damages should be awarded
• Whether and to what extent the defendant profited from their misconduct
• The defendant’s financial condition

In general, there are limits to how much can be awarded in punitive damages. The NJPDA caps punitive awards at either five times the amount of compensatory damages or $350,000, whichever is greater.

There are some situations, however, in which the NJPDA expressly declines to cap punitive damages. The limits described above do not apply in cases brought against defendants who violate specific laws, including

• Bias crimes (related to race, color, religion, gender, disability, sexual orientation, gender identity or expression, national origin, or ethnicity)
• The New Jersey Law Against Discrimination
• Confidentiality of HIV/AIDS information
• New Jersey’s Conscientious Employee (“whistleblower”) Protection Act
• Murder or manslaughter
• Driving while intoxicated or refusal to submit to a breathalyzer

Punitive damages are a question for the trier of fact. In jury trials, this is the function of a jury. However, the NJPDA specifies that juries are not to be informed of punitive damages caps. Instead, trial judges in New Jersey are charged with reviewing the amounts juries award in punitive damages to determine their reasonableness and justifiability in each case. Judges should make this determination in light of the purpose of punishing the defendant and deterring them from repeating the misconduct.

If a judge determines a punitive damages award is inappropriate by the terms of the NJPDA, they may reduce or eliminate it. For example, a New Jersey jury awarded plaintiffs who suffered from cancer $750 million in punitive damages in their personal injury suit against Johnson & Johnson. However, because these plaintiffs were awarded just $37.3 million in compensatory damages, the award was subsequently reduced to $186.5 million (five times the compensatory award).

Pursuing Punitive Damages

If you’ve been harmed by someone who intended to do harm or acted with reckless disregard for your safety and well-being, you may be able to collect punitive damages in addition to any amount awarded to compensate you for your losses. However, recovery of punitive damages requires careful preparation. Be sure to speak with a lawyer who is experienced in the type of case you’re pursing. For example, consult a personal injury attorney if you were involved in an accident or assault or an employment attorney for cases arising from workplace discrimination or harassment. They will be best positioned to build a persuasive case that meets the legal and evidentiary standards necessary to recover what you deserve.

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