It was déjà vu all over again at the Court of Appeal on the issue of punitive damages.
Punitive damages are already a bit weird in the realm of civil litigation, because the purpose of the civil law is to compensate. It is not to punish: that is a purpose of the criminal law. Yet punitive damages can be awarded in a civil proceeding to (as their name implies) punish the defendant when his, her, or its conduct has been so malicious, oppressive, and high-handed that it offends the court’s sense of decency.
The Supreme Court of Canada has said that punitive damages should be rare and modest, and they usually are. I’ve only ever argued one case in which punitive damages were awarded and, even then, the punitive damages were only $25,000.00.
But sometimes, a showstopper of a case will come along where the jury makes an enormous award of punitive damages. Two Ontario cases, about twelve years apart, both featured jury awards of $1,000,000.00 for punitive damages. And yes, one of the cases involved Wal-Mart.
The first case was Whiten v Pilot Insurance. A homeowner’s house burned down. Her insurance company took the unreasonably hard-headed position of denying her claim on the basis that she had burned the house down herself, even though Pilot Insurance had no evidence of arson whatsoever. The homeowner had to sue her insurance company, and take it all the way to trial, just to get her house rebuilt. The jury was incensed by Pilot Insurance’s intransigent stance and, in addition to the compensatory damages, ordered the defendant to pay punitive damages of $1,000,000.00.
Pilot Insurance appealed and the Court of Appeal reduced the punitive damages from $1,000,000.00 to $100,000.00.
On appeal to the Supreme Court of Canada, though, the Supreme Court overturned the Court of Appeal’s ruling on punitive damages and reinstated the jury award of $1,000,000.00.
The second case was Boucher v Wal-Mart Canada Corp. Ms. Boucher, an employee at a Windsor Wal-Mart, had been really viciously bullied by her immediate supervisor. This supervisor yelled at Ms. Boucher, singled her out, screamed at her, and swore both to and about her, both in front of and behind her back. (This manager, a one Jason Pinnock, had a propensity for workplace use of the F-word which was nothing short of pathological.)
Perhaps the most disturbing part of this case of workplace bullying was the fact that Wal-Mart took Mr. Pinnock’s side and backed him up. The jury was not impressed, and ordered Wal-Mart to pay Ms. Boucher punitive damages in the amount of $1,000,000.00.
History repeated itself at the Court of Appeal. When faced with an appeal of a $1,000,000.00 jury award for punitive damages, the Ontario Court of Appeal reduced it to—you guessed it—$100,000.00.
Obviously it was not the same panel of judges at the Court of Appeal who heard Boucher as heard Whiten. Still, it seems strange that the Boucher panel did not say, “Hey, last time we slashed a jury’s $1,000,000.00 punitive damages award by 90% the Supreme Court reinstated it – maybe we shouldn’t do that again?”
In Whiten, the Supreme Court of Canada did not go so far as to say ‘the jury is always right’. They said that juries should be given enough leeway to do their job and their awards should not be overturned on appeal unless they are “irrational”. The Supreme Court went on to hold that, in that case, the jury award of $1,000,000.00, was not irrational and it should not have been overturned.
In Boucher, the Court of Appeal held that $100,000.00 was all that was rationally required to punish Wal-Mart and to denounce and deter its conduct. Which, allow me to say, is bonkers. This is Wal-Mart we are talking about. If $1,000,000.00 was not an “irrational” amount to punish, denounce, and deter a small Canadian insurance company which acted in an oppressive and high-handed manner, then how is the same amount of money, awarded for the same purpose, against one of planet earth’s largest corporations “irrational”?
The facts of the two (2) cases were different but the respective juries’ decisions on the issue of punitive damages were the same. If it was incorrect for the Court of Appeal to have reduced the first award by 90%, then I would have argued that it was similarly incorrect for the Court of Appeal to have reduced the second award by 90%.
Might history have been repeated at the Supreme Court? Would the Supreme Court have reinstated the million-dollar damages award in the Boucher case, just like it reinstated the million-dollar damages award in the Whiten case? We will never know, because Ms. Boucher did not seek leave to appeal to Canada’s top court.