Appeal from the Order of the Superior Court dated August 12, 1986 and Docketed to No. 2475 Philadelphia, 1983.
Nix, C.j., and Larsen, Flaherty, McDermott, Zappala, Papadakos and Stout, JJ. Flaherty, J., files a dissenting opinion.
This appeal presents us with the opportunity to determine whether punitive damages must bear a reasonable relationship to compensatory damages which are awarded. The trial court followed the Pennsylvania Suggested Standard Civil Jury Instructions and charged the jury that no reasonable relationship was necessary. On appeal, the Superior
Court reversed, 357 Pa. Super. 322, 516 A.2d 1, relying in part upon our recent plurality opinion in Martin v. Johns-Manville Corp., 508 Pa. 154, 494 A.2d 1088 (1985). Because of the confusion that has arisen due to conflicting decisions from both the Superior Court as well as this Court, we granted the petition for allowance of appeal.
The facts are rather simple. The appellants received a jury verdict for compensatory damages as well as punitive damages for injury to their land.*fn1 The damage to the appellants' property was caused by appellee's bulldozer being used to install a sewer line for the Uwchlan Township Municipal Authority of Chester County. At the conclusion of the trial, the judge instructed the jury as follows:
The amount you assess as punitive damages need not bear any relationship to the amount you choose to award as compensatory damages, and it is not necessary that you award compensatory damages to the plaintiffs in order to assess punitive damages against the defendant so long as you find in favor of the plaintiffs, as we tell you to do, on the question of liability.
R. 408a. After deliberating, the jury returned a verdict of $7,000 in compensatory damages and $70,000 in punitive damages. The appellee filed post-trial motions which were denied.
On appeal, the Superior Court reversed, holding that the trial court erred in not instructing the jury that punitive damages must be reasonable and not disproportionate to compensatory damages. In so doing, the Superior Court relied upon earlier cases from this Court, the most recent of which is Hughes v. Babcock, 349 Pa. 475, 37 A.2d 551 (1944). The Court then concluded that since we have not overruled this line of cases, in general, and most recently followed them in Martin v. Johns-Manville Corporation, supra, that the reasonable relationship requirement was still viable. Because we disagree with the Superior Court's
analysis regarding the continued viability of the reasonable relationship requirement, we reverse.
In Hughes, the plaintiff was hurled by the defendant across a 7 1/2 foot hallway resulting in the plaintiff's arm being fractured. A jury returned a verdict in favor of the plaintiff in the amount of $2,500 compensatory damages and $5,000 in punitive damages. After the plaintiff agreed to a $2,000 remittitur of the punitive damages, the judgment was entered for $5,500. We affirmed the compensatory damages but reduced the punitive damages from $3,000 to $1,000. In doing so, we stated that punitive damages must bear a reasonable relationship to compensatory damages, but gave no legal or policy reasons why. In fact, we relied upon Section 908 of the Restatement of Torts and analyzed the verdict in conjunction with the factors set forth in Section 908(2).
Section 908(1) of the Restatement of Torts states that punitive damages are damages ". . . awarded against a person to punish him for his outrageous conduct." (emphasis added). In assessing punitive damages, the trier of fact may consider the character of the tortfeasor's act, the ...