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Federal Judge rules punitive damages limited to 9 times actual damages

This week a Federal Judge ruled that a jury verdict of $500,000.00 in punitive damages against a credit reporting agency must be reduced, despite the agency's repeated violations of law and multiple warnings.  Since a 1997 judgment against it, the defendant, TransUnion, has been on notice of its duty to investigate information independently and to avoid simply passing on third-party content.  The Federal Judge held that despite the "reprehensibility" of TransUnion's conduct, the punitive damages awarded should be limited to 9 times the compensatory damages awarded an injured party. 

Punitive damages are not a substantial issue in Michigan, as in Michigan they are rarely recoverable, regardless of the outrageousness of a defendant's fault.  In jurisdictions where they are allowed, punitive damages are awarded to discourage inappropriate or reckless conduct.  Many people recall the McDonalds' coffee case in a Southwestern state:  in that little understood but highly criticized decision, jurors awarded an older woman substantial punitive damages to discourage McDonalds from serving its coffee at a dangerous temperature, after it failed to respond to hundreds of burn claims.

Thompson O’Neil, P.C.
309 East Front Street
Traverse City, Michigan 49684
Toll Free: 1-800-678-1307
Fax: 231-929-7262