Eleventh Circuit Upholds $3,506,000 Verdict

The Eleventh Circuit recently upheld a $3,506,000 jury verdict in a wrongful foreclosure case out of the Middle District of Georgia.  The jury awarded $6,000 for economic injury, $500,000 for emotional distress, and $3,000,000 in punitive damages.  In the decision, McGinnis v. Am. Home Mortg. Servicing, Inc., No. 17-11494, 2018 U.S. App. LEXIS 23596 (11th Cir. Aug. 22, 2018), the Court stated:

Homeward argues that the jury’s punitive damages award is excessive in violation of due process.  The Supreme Court has said that a punitive damages award violates due process when it is “grossly excessive” in relation to the State’s interest in punishment and deterrence. BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 568, 116 S. Ct. 1589, 134 L. Ed. 2d 809 (1996). The Supreme Court has instructed courts to consider three guideposts when determining whether an award violates due process: (1) the degree of reprehensibility of the defendant’s misconduct; (2) the ratio 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. Id. at 575-83. The district court concluded that under those factors the award in this case is not unconstitutionally excessive. We agree and address each factor in turn.

The reprehensibility of the defendant’s conduct is the “dominant consideration” in assessing whether a jury’s punitive damages award is excessive. Goldsmith v. Bagby Elevator Co., Inc., 513 F.3d 1261, 1283 (11th Cir. 2008). To determine reprehensibility, the Supreme Court has instructed courts to consider several sub-factors: (1) whether the harm caused was physical or economic; (2) whether the conduct evinced an indifference to or reckless disregard of the health or safety of others; (3) whether the target of the conduct was financially vulnerable; (4) whether the conduct involved repeated actions rather than an isolated event; and (5) whether the conduct involved intentional malice, trickery, or deceit rather than mere accident. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 419, 123 S. Ct. 1513, 155 L. Ed. 2d 585 (2003) (citing Gore, 517 U.S. at 576-77).

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In sum, after considering all of the Gore factors, we conclude that the jury’s punitive damages award is not grossly excessive in relation to the State’s legitimate interest in deterring Homeward’s conduct, and therefore, does not violate the due process rights of Homeward.