9.1 Damages

Updated 2013 by Peter Sleasman

Given the reluctance of the private bar to represent poor clients, it may be surprising that public interest lawyers who are not barred from doing so do not bring more litigation seeking compensatory and punitive damages. Legal services attorneys often fail to appreciate the importance of seeking and proving monetary damages because of a focus on the critical importance of obtaining broad injunctive relief. It is also easy to underestimate the monetary damages to which our clients may be entitled because they are often computed based on lost income and out-of-pocket expenses, which, by necessity, are low for poor people. However, advocates have a duty to seek for our clients all the relief to which they are entitled. Indeed, from a systemic perspective, the payment of monetary damages is often a significant deterrent of future bad acts and may prompt others to seek similar relief in future cases.

Chapters 5 and 8 of this MANUAL address the circumstances in which a claim for damages may lie under 42 U.S.C. § 1983 and the defenses to such a claim. This section reviews the law governing the recovery of compensatory and punitive damages. Although the focus here is on Section 1983 claims for damages, the rules applicable to those claims are typical of most compensatory and punitive damage litigation. There are, however, specific federal statutes such as the Truth in Lending Act1 , the Fair Labor Standards Act2 , and the Migrant and Seasonal Agricultural Worker Protection Act3 that authorize more limited damage claims for violation of their substantive provisions. Those statutes often limit the injuries for which compensatory damages4 are available or provide for the recovery of liquidated damages in lieu of, or in addition to, statutorily authorized compensatory damages. The key point to remember is to check the specific act under which you are suing to see if it contains any special damage provisions.

9.1.A. Compensatory Damages

Compensatory damages "are intended to redress the concrete loss that the plaintiff has suffered by reason of the defendant's wrongful conduct."5 A plaintiff may be compensated for intangible, psychological injuries as well as financial, property, or physical harms proximately caused by the wrongful conduct.6 Compensable losses may include medical bills, lost or diminished earnings, lost profits, property damage or loss, pain and suffering, or mental and emotional distress.

Compensatory damages are usually categorized as either general damages or special damages. General damages are those elements of injury that are the proximate and foreseeable consequence of the defendant's conduct.7 Special damages are those elements of damages that are the natural, but not the necessary or usual, consequence of the defendant's conduct and typically stem from and depend upon the particular circumstances of the case.8 In the personal injury context, general damages are those intangible losses that may be difficult to calculate, such as physical pain and suffering and emotional harm. Special damages are those that reflect specific and measurable monetary losses such as lost wages or medical expenses.9 However, "general" and "special" damages may have different meanings according to the context and the cause of action in which they are alleged.10

General damages, as opposed to special damages, need not be alleged or proven with a high degree of specificity.11 General compensatory damages "may be inferred from the circumstances as well as proved by the testimony."12 However, in accordance with Federal Rule of Civil Procedure 9(g), "[i]f an item of special damage is claimed, it must be specifically stated." This rule "is designed to inform defending parties as to the nature of the damages claimed in order to avoid surprise; and to inform the court of the substance of the complaint."13 A complaint that "set[s] out various items of damage and various elements of damage" complies with the rule.14

Another category of compensatory damages are nominal damages. "Nominal damages" are defined as "[a] trifling sum awarded when a legal injury is suffered but there is no substantial loss or injury to be compensated."15 Nominal damages are sometimes sought in cases seeking to vindicate deprivations of certain "absolute" rights that are not shown to have caused actual injury:

By making the deprivation of such rights actionable for nominal damages without proof of actual injury, the law recognizes the importance to organized society that those rights be scrupulously observed; but at the same time, it remains true to the principle that substantial damages should be awarded only to compensate actual injury or, in the case of exemplary or punitive damages, to deter or punish malicious deprivations of right.16

The U.S. Supreme Court established the law governing the recovery of compensatory damages under 42 U.S.C. § 1983 in Carey v. Piphus17 and Memphis Community School District v. Stachura.18

In Carey, a principal who observed students with marijuana suspended the students for twenty days without a hearing, in violation of their right to procedural due process. The students sued for damages but offered no evidence of emotional distress or other injury resulting from the suspension that would have been avoided had a hearing been granted before the suspension. Rather, drawing an analogy to defamation law, they argued that they were entitled to substantial presumed general damages for the denial of their right to due process independent of any proved injury.

The Court rejected this argument and allowed the plaintiffs to recover actual damages only if they produced evidence of injury. Reasoning that the students would have been suspended even after a Goss v. Lopez hearing, the Court held that proof that the suspension was justified would defeat recovery of damages for loss of educational services.19 However, because the right to due process is independent of the merits of the suspension, the Court allowed the students to recover nominal damages even if the suspension were justified.20

Although the Court rejected presumed general damages in Carey, it held that mental and emotional distress were compensable injuries under Section 1983. Carey simply established that a plaintiff seeking recovery for mental and emotional distress must offer proof of those injuries. The Court noted that, “Although essentially subjective, genuine injury in this respect may be evidenced by one’s conduct and observed by others. Juries must be guided by appropriate instructions, and an award of damages must be supported by competent evidence concerning the injury.”21

In Memphis Community School District v. Stachura, a teacher who was suspended with pay for showing seventh grade students pictures of his pregnant wife and two films concerning human growth and sexuality sued for damages under Section 1983. He claimed that his suspension denied him both liberty and property without due process of law and violated his First Amendment right to academic freedom. The district court instructed that, if the jury found for the teacher, the jury should consider any lost earnings, loss of earning capacity, out-of-pocket expenses, and any mental anguish or emotional distress that the plaintiff might have suffered as a result of the conduct by the defendants depriving him of his civil rights.22

The district court also instructed the jury to award damages based on the value or importance of the constitutional rights that were violated and to consider that the “precise value you place upon any constitutional right which you find was denied to plaintiff is within your discretion” and the “importance of the right in our system of Government, the role which this right has played in the history of our Republic and the significance of the right in the context of the activities which the plaintiff was engaged in.”23 The jury found for the teacher and awarded a total of $275,000 in compensatory damages and $46,000 in punitive damages.

The Supreme Court, however, held that the instruction authorizing the jury to award damages based upon the value of the right at issue was erroneous. The Court reiterated that Section 1983 created a “species of tort liability.”24 Section 1983 authorizes compensatory damages not only for “out-of-pocket loss and other monetary harms, but also such injuries as impairment of reputation . . . personal humiliation, and mental anguish and suffering.”25 Nevertheless, the “value of rights” instruction was flawed because it caused the jury to focus “not on compensation for provable injury, but on the jury’s subjective perception of the importance of constitutional rights as an abstract matter.”26

Therefore, proof of damages in Section 1983 litigation is analogous to proof of damages in a common-law tort action. To be compensated plaintiffs must prove out-of-pocket expenses, such as loss of wages or future earning capacity, medical expenses, and property damages. Compensable damages may also include distress, humiliation, personal indignity as well as loss of reputation or status, provided that evidence is offered to establish the extent and duration of these injuries.27

Neither Carey nor Stachura flatly ruled out presumed general damages in Section 1983 litigation. In both cases, however, the Supreme Court stated that presumed damages would be proper only when the nature of the right was such that proof of injury resulting from its deprivation would be unusually difficult to provide. The only right that the Court identified as falling within that category is the right to vote.28

Stachura teaches that the Section 1983 plaintiff’s attorney must think like a tort lawyer when proving damages. The attorney must allow the jury to see a case through the client’s eyes and present detailed testimony from the client, the client’s family, coworkers and friends, and any professionals whom the client may have consulted to document emotional distress, humiliation, or pain and suffering. Rather than focus on the abstract value or the historical importance of a right, the plaintiff’s attorney must show the importance of the right within the client’s life by showing the injuries caused by its loss. This can be done by demonstrating the impact of the injury on family associations, on the ability to live in dignified surroundings, and on the prospect of holding a job or pursuing an education. Injury is a personal experience and must be shown through the specific effect that the violation has on the specific client.

Because of potential difficulties with establishing significant economic injuries for low-income clients, alleging emotional distress damages is important to obtaining just compensation for clients. Emotional distress damages are available under many (but not all) federal civil rights statutes.29 Although emotional distress must be established by competent evidence, proof does not necessarily require expert testimony. Emotional distress damages may be proven even if the plaintiff has not sought treatment. A "plaintiff's testimony, standing alone, can support an award of compensatory damages for emotional distress based on a constitutional violation," but "the testimony must establish that the plaintiff suffered demonstrable emotional distress, which must be sufficiently articulate; neither conclusory statements that the plaintiff suffered emotional distress nor the mere fact that a constitutional violation occurred supports an award for compensatory damages."30

The common-law doctrine of avoidable consequences, or the duty to mitigate, applies in all damages litigation. A party may not recover for damages reasonably avoidable under the circumstances through mitigation. Thus, a fired plaintiff must look with reasonable diligence for other substantially comparable work and must accept such employment pending the outcome of litigation.31 The defendant bears the burden of establishing a breach of the duty to mitigate.32

Whether the collateral source rule, which precludes reduction of the plaintiff’s recovery due to receipt of payments from a third party, applies in Section 1983 damage actions is not yet clearly established and sometimes turns on the source of the collateral income. Some courts hold that it does.33 Others hold that its application is discretionary.34 Examples of common collateral source payments are insurance proceeds, unemployment benefits, workers’ compensation awards, social security benefits, and other public assistance benefits. Defendants routinely argue that receiving such benefits without a corresponding offset in the damages awarded would result in a windfall to the plaintiff. However, the rationale for the rule is that the wrongdoer should not profit from benefits that the plaintiff receives from a third party. In any case where collateral source payments are in issue, you should argue strenuously that the rule applies if the law in your circuit permits it, and that the defendant’s liability may not be reduced because of them. Because many low-income clients receive need-based public assistance benefits, you must check the specific program rules governing the receipt of damage awards and their treatment.

Many cash assistance programs continue to include a lump-sum rule patterned after the rule in the now-repealed Aid to Families with Dependent Children program.35 Others have transfer-of-assets or other rules that must be considered when a client receives a damage award.36 You must be aware of the rules that may apply to receipt of a damage award well before it is received. Only by doing so can you structure your client’s recovery, including the timing and manner in which the award is paid, to maximize the ultimate benefit. Creation of instruments like trusts may be necessary to preserve eligibility for certain benefits.  Failing to engage in such planning has been held to constitute malpractice.37

9.1.B. Punitive Damages

The purpose of punitive damages is deterrence and retribution; they punish a defedant's unlawful conduct and deter its repetition.38 In Smith v. Wade, the Supreme Court held that Section 1983 authorizes the award of punitive damages against state or local officials in their individual capacity.39 The Court suggested that punitive damages may be awarded when an official’s conduct is malicious, intentional, or recklessly or callously indifferent to protected rights.40 This test focuses on the state of mind of the defendant.41 While outrageous or egregious conduct may provide evidence of the requisite state of mind, the conduct need not be egregious or outrageous to justify an award of punitive damages.42 The determination of whether to award punitive damages once a showing of malicious or recklessly indifferent conduct is made rests within the discretion of the jury or judge (in a jury-waived case).43 When jury instructions properly require the plaintiff to prove reckless or callously indifferent conduct, they need not require a finding of “outrageous” or “extraordinary” conduct at the same time.44

Courts repeatedly have upheld punitive damage awards against public officials for discriminatory employment practices,45 police brutality,46 and unlawful searches and seizures.47 Courts have also upheld awards for prisoner mistreatment,48 including deliberate indifference to medical needs,49 violations of the right to procedural due process,50 and violations of First Amendment rights.51 Punitive damages may be awarded even when the plaintiff suffers only nominal damages from a deprivation of federal rights.52 However, if a punitive damage award is “grossly excessive” in relationship to the state’s legitimate interest in punishing and deterring unlawful conduct, it runs afoul of substantive due process and may be reduced or reversed on appeal.53

Updated 2013 by Peter Sleasman