What are the guideposts for determining the amount of punitive damages in Federal Rail Safety Act cases? According to the 10th Circuit’s decision in BNSF Railway Company v. US DOL ARB [Cain], there are three guideposts whose application is informed by the text of Section 20109:
The first and most important indicator of the reasonableness of a punitive damages award is the degree of reprehensibility of defendant’s conduct. Second, courts consider the disparity in the ratio between the actual or potential harm suffered by the plaintiff and the punitive damages award. And third, courts consider the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases.
The text of Section 20109 spells out the prohibited conduct that subjects railroads to punitive damages. Such conduct includes any discipline or discrimination against employees who: report work-related injuries, refuse to violate FRA safety rules, report hazardous safety conditions, file whistleblower complaints, or follow their doctor’s medical treatment plan for injuries arising during the course of employment. And the following non-statutory standard for punitive damages conduct also applies: a “reckless or callous disregard for the employee’s rights, as well as intentional violations of federal statutes.” Compelling evidence of any such prohibited conduct by a railroad can justify imposing the statutory maximum amount of punitive damages.
The 10th Circuit Court noted “there are no rigid benchmarks that a punitive damages award may not surpass.” While a single-digit punitive-to-compensatory-damages ratio is certainly acceptable, “higher ratios” are appropriate where “a particularly egregious act has resulted in only a small amount of economic damages.”
Since Congress has authorized $250,000 as the maximum amount of punitive damages, a court should “consider this statutorily authorized amount as well as its own comparable cases awarding punitive damages in determining what amount of punitive damages are justified.”
The take away? The amount of punitive damages is not dictated by any rigid punitive-to-compensatory-damages ratio. Rather, it is driven by the nature of the conduct itself, and egregious violations call for maximum punitive damages even when the economic damages are minimal. Here is the full text of BNSF Railway Co. v. US DOL ARB [Cain]. For more on Section 20109 of the FRSA, go to the Rail Whistleblower Library.