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Last Thursday, the Oregon Supreme Court issued its decision in Hamlin v. Hampton Lumber regarding the proper ratio for punitive damages in light of low or nominal compensatory damages. In Hamlin, a lumber mill refused to re-hire Hamlin after he injured himself on the job—the failure to re-hire was a violation of statute. The jury awarded $6,000 in compensatory damages and $175,000 in punitives. With prejudgment interest added to the compensatory damages, it came to a 22:1 ratio of punitive to compensatory damage.

The Oregon Supreme Court upheld the award, holding that a small compensatory award allowed a larger punitive damages ratio than the “single digit ratio” that the US Sup Ct pegged as the constitutional outer limits.

This marks the third case since State Farm v Campbell, 538 US 408—where the US Supreme Court placed a “single digit ratio” limit on “typical” punitive damages awards —in which the Oregon Supreme Court has upheld a ratio greater than 9:1 (the outer limit discussed in Campbell) of punitives versus compensatory damages. Williams v. Philip Morris Inc., 340 Or 35, 39-43, 127 P3d 1165 (2006) (Williams I) (72:1 punitives against cigarette company); Bocci v. Key Pharmaceuticals, Inc., 189 Or App 349, 76 P3d 669 (2003) (44:1 punitives for doctor who was mislead to patient’s harm).

Hamlin not only means that the Oregon Supreme Court continues its willingness to depart from a single-digit ration for punitive damages, it also means that the Oregon Supreme Court is willing to depart from that ratio even in purely economic cases, like Hamlin’s. Purely economic damages (where no one was physically touched or harmed) have typically merited 3:1 or 4:1 ratios, as Justice Gillette discussed in his dissent in Hamlin. Cases involving physical harm or damage have to be seen as warranting a departure from singe digits on a somewhat frequent basis.

So, in cases like the Boy Scouts case from earlier this year, in which punitive damages were 22:1 based on conduct that resulted in a child being molested, a single digit ratio is not a true guidepost or benchmark. Truly, based on Oregon precedent, in cases where children end up being sexually abused from an organization’s bad conduct, a 22:1 ratio sounds eminently reasonable.