Punitive damages are constrained by due process, and appellate review of the amount is independent rather than deferential.
Three guideposts. The degree of reprehensibility of the conduct; the disparity between the actual or potential harm and the punitive award; and the difference between the award and civil penalties authorised in comparable cases.
Reprehensibility is the most important, assessed by whether the harm was physical rather than economic; whether the conduct evinced indifference to health or safety; whether the target was financially vulnerable; whether the conduct was repeated; and whether the harm resulted from intentional malice rather than accident.
Ratios. Few awards exceeding a single-digit ratio to compensatory damages satisfy due process, and where compensatory damages are substantial, a ratio approaching one to one may be the outer limit.
Harm to non-parties may be considered in assessing reprehensibility but may not be punished directly.
State law limits. Many states cap punitive damages, require clear and convincing evidence, bifurcate the trial, or allocate a share to the state.
Insurance. Coverage for punitive damages is prohibited in some states and permitted in others, which affects settlement dynamics.