Punitive Damages are awarded not to compensate a plaintiff, but to punish a defendant for intentional or malicious misconduct and to deter similar future misconduct. Punitive damages generally have nothing to do with making the plaintiff whole. That purpose is served by compensatory damages, which compensate tort victims for personal injuries and economic loss.

Today, punitive damages are frequently sought in a significant number of civil lawsuits. Vague and uncertain punitive damages law has a substantial and detrimental impact on American industry. It undermines confidence in the civil justice system, serves as a significant obstacle to the settlement process leading to wildly inconsistent outcomes in similar cases, and handicaps American businesses in competition with foreign enterprises.

Because juries, courts, and litigation parties are given little guidance as to how to decide whether and when punitive damages should be awarded, the present system of awarding punitive damages has become more like a state lottery system than a system of justice.

Reasonable reforms are needed to protect fundamental constitutional rights, remove barriers to interstate commerce, and promote economic growth and innovations, while at the same time providing incentives for responsible business practice.

30 states have imposed some sort of restrictions on an award of punitive damages.