The Supreme Court has decided (in the case of Philip Morris USA v. Williams) that the due process clause prohibits calculating punitive damages based upon harm caused to strangers to the litigation. The closeness of the vote reflects that there are valid arguments on both sides of this issue.
Let us assume that someone has been killed as the result of a defective tire. In the first law suit, the manufacturer learns that the tire is defective. Nonetheless, it continues to manufacture the tire and 100 more persons are killed as a result. Should not the company suffer a greater punishment with each new death? The more deaths; the more egregious the conduct to be punished. Therefore, it would be wrong not to consider harm to others so long as there was adequate proof of the prior deaths and their cause. The purpose of punitive damages is to punish past and deter future wrongful conduct. The continuance of that outrageous conduct in the face of knowledge as to its harmful consequences should certainly serve as one of the bases for calculating punitive damages. The prior conduct and record of a criminal defendant is considered in deciding the severity of punishment, even though the defendant may have already suffered punishment for those prior crimes. Why should it be any different in meting out punishment in a civil matter in which punitive damages are warranted?
But now let us assume that at several trials brought on behalf of those who have died from the defective tire, each jury is told about the 100 deaths as a basis for calculating punitive damages. Each then would be punishing the manufacture for the same 100 deaths. Therefore, it would be wrong to consider harm to others if it resulted in repetitive punitive damage awards for the same conduct and harm.
I wrestled with this very issue in 1989 in the case of Juzwin v. Amtorg Trading Co., 705 F. Supp. 1053, and concluded that multiple awards of punitive damages based upon injuries to others violated the due process clause, the only decision I ever made that was praised by the Wall Street Journal. Despite that praise, I eventually and unilaterally withdrew the decision, concluding that I did not have the power or authority to effectuate such a decision---that it required the Supreme Court or the Congress to do so. The Supreme Court has now spoken, but I continue to have the same concerns expressed above. The ability of citizens to punish others for outrageous conduct in instances in which government cannot or will not is a power worth preserving, but it is essential that guidelines be established so as to lead courts through this current quagmire.