Across the country, there is an expanding trend of state supreme courts limits the use of class actions, punitive damages, and industry-wide liability theories. This week brought another major such ruling out of New Jersey. In Tarr v. Bob Ciasulli’s Mack Auto Mall, the court ruled that punitive damages can only be used to punish a defendant and not simply to deter others. For sexual harassment plaintiff Carol Tarr, it means a remand on the issue.
Carol Tarr alleged that she was forced from her juob as a finance and insurance manager due to sexual harassment. The jury agreed and awarded her $85,000 in punitive damages, on top of $25,000 in compensatory damages and $165,230 in legal fees against Bob Ciasulli’s Mack Auto Mall.
The justices held that the jurors must consider the defendant’s financial status at the time of the verdict and not just at the time of the incident. Here the business was defunct. IInterpreting the state law, the Court held that:
In sum, notwithstanding that the fortune of the
wrongdoing corporate defendant has dissipated, plaintiff
may proceed with a retrial on the setting of a punitive
damages amount in this matter. We hold that the court
should direct the jury that it may consider defendant’s
financial condition at the time of the wrongdoing and,
further, that it may consider subsequent events concerning
the corporation’s financial condition, including its worth
at the time of judgment. Such direction will assure that
the dual purposes of punitive damages — deterrence and
punishment — are fulfilled, while at the same time
ensuring the award’s reasonableness.