Federal District Court Upholds 13:1 Ratio Based On Defendant’s Wealth

We have noticed a disturbing trend recently of courts upholding punitive damages awards that are high multiples of the compensatory damages.  One example is Mitri v. Walgreen Co., in which the U.S. District Court for the Eastern District of California upheld a punitive award that is thirteen times the substantial compensatory award based almost entirely on the fact that the defendant is a wealthy corporation.

In Mitri, a pharmacist alleged that he was terminated under false pretenses because he had reported Medicare fraud at his branch of the pharmacy.  The jury awarded him $88,000 for economic losses and imposed $1,155,000 in punitive damages.  Following trial, the district court vacated the punitive award, concluding that the individual who supervised Mitri's discharge was not a managing agent whose conduct could be charged to the corporation.