My colleagues and I generally recommend that clients confronted with claims for punitive damages seek bifurcation—so long as they can adduce evidence in the second phase to support a low award (such as evidence of post-injury remedial efforts) and not effectively cede that phase to the plaintiff, who generally is happy to harp on the defendants’ net worth and contend that a high award is necessary to get the attention of management. Occasionally, trial counsel resist this advice out of concern that giving the jury a second chance to award damages will result in a higher total award than if the jury were required to award both compensatory and punitive damages at the same time.
The parties in Kuchwara v. Williams, a personal-injury case decided by the Pennsylvania Superior Court on May 12, took this tactical debate to a new level.
In Kuchwara, it was the plaintiffs who wanted bifurcation and the defendant who not only elected to forgo seeking bifurcation, but affirmatively opposed it. The trial court granted bifurcation over the defendant’s objection, and the jury awarded compensatory damages of $9.1 million and punitive damages of just over $1 million.
The defendant argued on appeal, among other things, that in granting bifurcation the trial court “allow[ed] the ‘compensatory’ damages phase to become a punitive damages trial, even though [the defendant] had stipulated to negligence before trial.” The defendant posited that the jury was unaware that there would be a second phase to award punitive damages and therefore inflated its compensatory award to include punitive damages.
The Superior Court rejected this argument, reasoning that the trial court instructed the jury that any award of damages for pain and suffering could “not be arbitrary, speculative, or punitive” and that the components of the award for economic damages (approximately $2.6 million) were lower than the bottom of the range of damages estimated by plaintiffs’ experts, indicating that the jury had not inflated its award to include a punitive component.
In focusing on the jury’s award of economic damages, the Superior Court appears to have missed the defendant’s point, which is that the procedure employed by the trial court may have resulted in the jury awarding more damages for pain and suffering (approximately $6.5 million) than it would have awarded in a unitary trial.
In any event, I doubt that this case should be treated as evidence in support of the anti-bifurcation side of the debate. The punitive award was only a small fraction of the compensatory damages, so it is not self-evident that the total award would have been less in a unitary trial.
In addition, though the instruction given by the trial court in Kuchwara was accurate and helpful as far as it went, I think that the defendant was entitled to an additional instruction informing the jury about the bifurcated structure and that the consequence of finding that the defendant was recklessly indifferent in Phase I would be a second phase in which the jury would determine whether to impose punitive damages and, if so, in what amount. That kind of instruction would directly address the concern that a jury bent on punishing a defendant might do so through its compensatory award and then, so as not to have to admit that it violated its instructions, impose additional punitive damages during Phase II.