The Supreme Court of New Jersey recently held that the New Jersey Punitive Damages Act  allows punitive damages to be entered for the purposes of punishing and deterring only a specific wrongdoer, not for general deterrence.  Tarr v. Bob Ciasulli’s Mack Auto Mall, Inc., Case No. A-19-07 (March  27, 2008).  The court further held that the Act permits jury consideration, when assessing punitive damages, of a defendant’s financial condition at the time of the wrongful conduct as well as at the time of judgment.

As to the second issue, the court noted that, although it had affirmed numerous punitive damage awards for which the defendant’s wealth was assessed at the time of entry of judgment, it has also recognized that it can be appropriate to consider the financial condition of the defendant at the time of wrongful conduct.  The court rejected adopting an either-or timing choice for determination of financial condition for purposes of the ability-to-pay assessment, finding that the Act anticipates a nuanced factual examination by the jury.  Thus, the jury could consider the defendant’s financial condition at the time of the wrongdoing, and it may also consider subsequent events concerning the corporation’s financial condition, including its worth at the time of judgment.

The unanimous court affirmed the judgment of the Appellate Division and remanded the matter for a new trial to determine the amount of punitive damages to be awarded.

For a copy of the decision, please click here.