JSH Reporter Summer 2015 - Page 4

PUNITIVEDAMAGESARTICLE 004 Has Exposure to punitive damages increased in arizona? AUTHOR: David L. Stout, Jr. EMAIL: dstout@jshfirm.com BIO: jshfirm.com/davidlstoutjr Until recently, it was generally accepted that punitive damages awards are to track awards of compensatory damages on a 1:1 ratio. This ratio was convenient for defendants, as it provided some amount of certainty when evaluating potential exposure to punitive damages. But in August 2014, the Arizona Court of Appeals altered this understanding with its ruling in Arellano v. Primerica Life Ins. Co., 235 Ariz. 371, 332 P.3d 597 (App. 2014). Specifically, the Court of Appeals reduced a punitive damages award from a 13:1 ratio to a 4:1 ratio. While the reduction was welcome, it was a clear signal that the amount of punitive damages awardable in Arizona is likely to increase. Limitations on Punitive Damages An award of punitive damages is an extraordinary civil remedy that is recoverable only for the most egregious of wrongs. Punitive damages are not intended to compensate plaintiffs, but exist to punish the wrongdoer and deter future harmful conduct. Exxon Shipping Co