Lompe v. Sunridge Partners

Case Updates

Due to insufficient evidence, the Tenth Circuit deemed the amount of punitive damages awarded against defendants grossly excessive and arbitrary in violation of the Fourteenth Amendment. The Tenth Circuit held that there was insufficient evidence of willful and wanton misconduct as to the property owner defendant, while concluding that a reasonable jury could find the property management defendant engaged in willful and wanton misconduct warranting punitive damages under Wyoming law. The court concluded that the district court improperly applied a deferential standard of review to the defendant’s due process challenges, and held that a ratio of 11.5:1 for punitive damages to compensatory damages is unconstitutionally excessive. As a result, the punitive damages award against the property owner was vacated and the amount of punitive damages against the property management defendant was reduced from $22,500,000 to $1,950,000.

The U.S. Chamber filed an amicus brief urging the Tenth Circuit to reverse a district court decision upholding an award of over $25 million in punitive damages on top of $2.7 million in compensatory damages.

The brief explained that the district court erred in believing that it was required to take a “deferential” approach when reviewing the jury’s award to ensure due process. And the court further erred by assuming that an almost 10:1 ratio of punitive to compensatory damages was appropriate in a case where the compensatory damages were substantial and the defendant’s culpability was modest.

Evan M. Tager and Carl J. Summers of Mayer Brown LLP represented the U.S. Chamber of Commerce as co-counsel to the U.S. Chamber Litigation Center.