Corporate Greed That Disregards You and Me: The Importance of Punitive Damage Awards


Corporate Greed That Disregards You and Me: The Importance of Punitive Damage Awards

Companies putting profits over people, and victims are getting seriously hurt or killed as a result. This isn’t a rare event in Indiana, or Illinois, or the rest of the country. Read local newspapers or watch the television news covering a single week to ten days, and you will find all sorts of examples where greed got the better of some corporate powers-that-be with serious and life-altering repercussions to innocent folk (for instance, see our previous post).

Government Actions to Police Company Wrongdoing

There are punishments for these bad acts, of course. Federal, state, and local authorities monitor public safety and welfare issues. These government investigators have the power to arrest and charge corporate workers as well as shutting down businesses who are hurting people. For instance:

1. Region Five of the Department of Labor’s Occupational Safety & Health Administration (OSHA) routinely inspects and cites employers for injuries to workers in Indiana. Employers here can be cited, fined, even shut down for endangering their employees.

Their site lists enforcement in our area; go here to read the thirteen reports made by OSHA in Region 5 for September 2015, for example.

2. The Department of Transportation’s National Highway and Traffic Safety Administration (NHTSA) is the agency responsible for levying the record-setting $10 Million fine against car-seat manufacturer Graco this year, after Graco allowed car seats to remain in use in Illinois, Indiana, and the rest of the United States even though the company knew that babies and toddlers could be trapped in those car seats in an accident because the buckles were flawed and difficult to open in an emergency. (Recalls are expensive.)

3. Moreover, criminal agencies have white-collar divisions that fight against company malfeasance. The Department of Justice and its Federal Bureau of Investigation (FBI) work to investigate and punish corporations who have hurt people through their placing of profits first: the huge scandal where Toyota Motor Corporation was revealed to have sold cars with defects that allowed vehicles to accelerate unintentionally, causing accidents and traffic deaths, was the result of a FBI investigation.

4.  Another FBI sting: last year’s arrests of the CEO of Chicago’s Sacred Heart Hospital along with 4 of its doctors for performing unnecessary surgeries so they could get more insurance money profits. (We reported on this earlier, read our April 2013 post for details.)

Civil Injury Lawsuits and Punitive Damage Awards

The efforts of these government regulatory agencies and criminal actions in fighting against the evildoing of greedy corporations is important. Companies can be stopped; they can be financially punished with fines; they can even be shut down. Their corporate officers can be charged with federal felonies and sent to prison to serve years behind bars.

However, what these good deeds don’t do is help the individual victim of that corporate greed.

The person who was seriously injured, the family who is reeling from the wrongful death of their loved one (and perhaps the family breadwinner): the assessed criminal fines are not paid to these victims. For justice, the system has created private civil lawsuits where they can file personal injury and wrongful death cases against the companies who are responsible for what has happened.

Compensatory Damages and Punishment Damages

State law in Indiana and Illinois allow for “compensatory damages” for these victims. Things like medical expenses, long term therapy needs, lost wages, lost earning capacity, pain and suffering, and more can be awarded under personal injury law where the defendant pays these compensatory damages to the plaintiff to cover the losses and costs of the accident and its aftermath.

However, that’s not the only way that state law works to fight corporate bad acts. Longstanding state law also provides for “punishment damages” or “punitive damages.” If the defendant company is shown to have intentionally caused harm, then these damages can be awarded to the plaintiff over and above their compensatory damages.

Why? Punitive damages exist in the law to punish the wrongdoer by speaking the language of the greedy corporate defendant: money. A large punitive damage award not only communicates to the corporation that what it has done is wrong and cannot be tolerated in our community, but it also serves to warn other companies that might be tempted to do the same thing.

Of course, punitive damages are controversial. Critics like to argue that they are just windfalls to the plaintiff (and his lawyer).

Nevertheless, there situations where companies have done such bad things that punitive damages are vital— and important in the fight against company greed. When a defendant has decided to put profits over people, having to pay a large sum of money in punitive damages may be the only thing that this defendant truly understands.

And state law is careful to allow punitive damages only in situations where some intentional bad acts have happened. In Illinois, punitive damages are only available if the plaintiff can show by a preponderance of the evidence that the defendant’s actions were the result of things like fraud or “willful gross negligence that displays a wanton disregard for the rights of others.”

Some other parameters are also applied to these punishment damages by the states. For instance, in Illinois, you can only seek and recover punitive damages in certain types of cases: Illinois law does not allow punitive damage awards in injury cases that include medical malpractice, intentional infliction of emotional distress, or claims against a local or public entity.

Punitive damages aren’t requested in every personal injury claim – the plaintiff seeks a punitive damage award only in situations where they are important both for the victim and our community to have justice against unbridled greed.

Punitive Damages Are Important in Fighting Corporations Putting Profits Over People

An OSHA citation will not help the injured worker who has been seriously injured or killed on the job. That is left to civil personal injury claims.

FBI investigations and Justice Department prosecutions of corporate officers and CEOs who have ignored risks to their customers and the public in order to make more money do not provide for people hurt and killed in car crashes or falling accidents or food poisonings. That is left to injury lawsuits filed by the victims (and their families) against these companies.

And when these corporate acts are blatantly wrong and intentionally done with a disregard of the dangers created for people, then it is through punitive damages in a personal injury lawsuit that they are made to answer to their victims for putting profits over people.

Punitive damage awards are important for justice — and with the epidemic of Profits Over People we see today, they are a vital tool in protecting victims of corporate wrongdoing.

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