Sturm. Ruger & Co. v. Day - 594 P.2d 38 (Alaska 1979)

Rule:

One means of determining if an award of punitive damages is excessive is to compare it with the amount of actual damages. The punitive damages given must bear some reasonable proportion to the actual damages. As a rough working scale, this is better than nothing. Exemplary damages may exceed the actual damages, however, and no definite ratio between them is prescribed. Other important factors which bear on the question include the magnitude and flagrancy of the offense, the importance of the policy violated, and the wealth of the defendant.

Facts:

Appellee Michael James Day bought a.41 magnum single action revolver on June 1, 1972. The gun had been manufactured two years before by appellant Sturm, Ruger and Company, in August of 1970, but was purchased new by Day. On July 30, 1972, Day was sitting in the cab of his small pickup truck with two young friends when he decided to unload his gun. As he was unloading the revolver, the gun slipped out of his hands. When he grabbed for the gun it fired, the bullet striking his leg and causing serious injuries. The third page of the instruction booklet accompanying the revolver warned that the gun could be fired from the loading notch position by exerting "excessive pull on the trigger." This warning was set off from the rest of the instructions in a separate box. Day filed suit against Sturm, Ruger and Company. His second amended complaint was based on a theory of strict tort liability, and included a claim for punitive damages. The jury returned a verdict in favor of Day, finding specifically that the revolver was designed defectively and that it had a manufacturing defect as well, and granted compensatory and punitive damages. 

Issue:

Did the jury err in granting punitive damages against Sturm, Ruger & Co. that are more than the compensatory damages?

Answer:

Yes.

Conclusion:

The compensatory damages awarded to Michael Day and against Sturm, Ruger amounted to $137,750, exclusive of costs, prejudgment interest, and attorney's fees. The punitive damage award of $2,895,000 appears to be so out of proportion to the amount of actual damages as to suggest that the jury's award was the result of passion or prejudice. The jurors apparently responded to an invitation to punish Sutrm, Ruger for all wrongs committed against all purchasers and users of its products, rather than for the wrong done to this particular plaintiff. If punitive damages are awarded at a second trial, on essentially the same evidence as that presented in the first trial, they should not exceed $250,000. That amount is quite sufficient to achieve the deterrent purposes to be served, without at the same time inflicting a penalty disproportionate to the defendant's wrong.