MONETTE E. SACCAMENO, Plaintiff-Appellee, v. U.S. BANK NATIONAL ASSOCIATION, as trustee for C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES, Series 2007 RP1, and OCWEN LOAN SERVICING, LLC, Defendants-Appellants.
No. 19-1569
United States Court of Appeals For the Seventh Circuit
Argued September 16, 2019 — Decided November 27, 2019
Before BAUER, BRENNAN, and ST. EVE, Circuit Judges.
Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 1:15-cv-01164 — Joan B. Gottschall, Judge.
Ocwen, however, immediately began trying to collect money that it was not owed and threatening foreclosure. No problem, Saccameno thought, it must be a simple mistake. She sent Ocwen all the paperwork it could have needed to fix its records. When that did not work, she sent it again. Then she sent it a third and fourth time, with a request from an acquaintance, a lawyer, for an explanation why Ocwen thought she owed money. Ocwen did not explain. Ocwen did not care. Ocwen did not truly grasp how wrong its records were until almost four years later, two days into Saccameno’s jury trial when its witness was testifying.
It is little wonder, then, that the jury awarded Saccameno substantial damages for the pain, frustration, and emotional torment Ocwen put her through. The jury ordered Ocwen to pay $500,000 in compensatory damages based on three causes of action that could not support punitive damages. A fourth claim, under the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA),
I. Background
Around 2009, Saccameno fell behind on her $135,000 home mortgage and her bank, U.S. Bank National Association (nominally a defendant but irrelevant for our purposes), began foreclosure proceedings. To keep her home, she sought the protection of the bankruptcy court and, in December 2009, began a Chapter 13 plan under which she was required to cure her default over 42 months while maintaining her ongoing monthly mortgage payments. See
Saccameno first began having problems with Ocwen in October 2011, shortly after it acquired her previous servicer. Ocwen sent her a loan statement saying, inexplicably, that she owed $16,000 immediately. With her attorney’s advice, Saccameno ignored the statement and continued making payments based on her plan. Her statements continued to fluctuate: her February 2013 statement said she owed about $7500, her March statement, $9000. A month later, Ocwen now owed Saccameno about $1000 in credit, and Ocwen told her she did not need to pay again until September. Still, Saccameno continued making payments through June, the last month of her plan. At that time the bankruptcy court issued a notice of final cure,
Instead, on July 6 and 9, Ocwen sent Saccameno two letters saying it had not heard from her since its non-existent recent communication about her “severely delinquent mortgage.” The letters offered the contact information of governmental and non-profit services for people unable to make their home mortgage payments. They also warned Saccameno that failure to respond could result in fees from foreclosure, sale of the property, and eviction, and that this process could ruin her credit, making it hard for her even to find a new rental property. Saccameno understandably dubbed these the “you’ll never rent in this town again” letters.
If only that were the end of this story. With the corrected records, Ocwen’s bankruptcy department performed a reconciliation and recognized that Saccameno had made several payments in 2013, so her default was nowhere near as large as the employee had said. Nevertheless, it somehow determined that she had missed two payments during her bankruptcy, so she was still in default—albeit to a lesser extent—and the foreclosure module remained open. In August, Ocwen sent Saccameno a letter declaring that it had “waived” $1600 in fees (that had been discharged) and that it was missing two of her plan payments (which, even if true, would also have been discharged under the terms of the plan). Around this time Ocwen assigned Saccameno a “relationship manager,” Anthony Gomes, who scheduled a call with Saccameno. He was not familiar with her file or the documents she had sent, and asked Saccameno to resend them. She did, and they never spoke again. Instead Saccameno would frequently call Ocwen’s customer service line and each time was directed to a new, similarly unhelpful person.
While this was all going on, Saccameno remained optimistic and continued to make her monthly payments. Ocwen had accepted her payments for July and August 2013 but began rejecting them in September because each payment was not
Eventually, Ocwen sent Van Sky something back, though calling it a response would be generous. The form letter referred to the dates of Saccameno’s bankruptcy but otherwise mentioned nothing about her loan and did not answer any of Van Sky’s questions. Ocwen had not even updated the form with Saccameno’s name. Instead it referred to another mortgagor. Attached was a spreadsheet that supposedly explained how Saccameno was behind in her payments; Van Sky, though, could not decipher the spreadsheet, and Ocwen did not elucidate. Exhausted from the lack of progress, and no longer having time to help, Van Sky dropped out and Saccameno hired counsel.
Ocwen, meanwhile, continued to reject Saccameno’s payments. The erroneous default grew and grew as the underlying foreclosure action remained pending in the Circuit Court
Perhaps part of the reason Ocwen never did move for judgment was this suit, filed the next month. As relevant to this appeal, Saccameno sought damages under four legal theories: breach of contract, for the refused payments; the Fair Debt Collection Practices Act (FDCPA),
The jury heard all of this at trial—as well as testimony regarding the mental and emotional strain Saccameno went through because of Ocwen’s continuous errors. Ocwen had promised the jury, in its opening statement, that it would explain why it received only 40 payments during the bankruptcy. It never had the chance, though, as Saccameno’s counsel diligently walked Ocwen’s representative through its own records payment by payment. Just before lunch on the second day of trial, the representative counted to 42, confirming that Saccameno had made each payment. Ocwen never again argued otherwise. It instead focused on Marla’s mistake in July of 2013—the marking of dismissal instead of discharge. The jury evidently did not buy the story that Saccameno’s years of
The jury found in Saccameno’s favor on all counts. By the parties’ agreement, the verdict form included a single line for compensatory damages under the breach of contract, FDCPA, and RESPA claims and the jury wrote $500,000 on that line. Because only the ICFA claim could include punitive damages, and it requires that one prove economic damages before receiving other damages, see
Ocwen responded with three post-verdict motions. The first, a motion for new trial, objected to the admission of the consent decrees. The second, a request for judgment as a matter of law, challenged the sufficiency of the evidence on every count other than the FDCPA claim. As relevant here, it argued that the award of punitive damages was not supported by sufficient evidence. The third motion, to amend the judgment, argued that the punitive damage amount was excessive, in
The district court thoroughly considered and deflected Ocwen’s barrage of arguments and upheld the verdict. On the punitive damages, the district court concluded that the jury reasonably found Ocwen’s employees had been deliberately indifferent to the risk that Saccameno would be harmed, and Ocwen’s management had notice of—and ratified—its employees conduct. On the constitutional question, the court decided that the proper comparator for the punitive damages award was the total amount awarded on all four counts, as they involved related conduct. That resulted in a punitive damages ratio of roughly 5:1, which the court concluded was not unconstitutionally high given the reprehensibility of Ocwen’s conduct.
II. Sufficiency of the Evidence
We address first Ocwen’s argument that there was insufficient evidence for the jury to award punitive damages at all. We review the sufficiency of the evidence de novo and ask whether the record, viewed in the light most favorable to the prevailing party, can support the jury’s verdict. Parks v. Wells Fargo Home Mortg., Inc., 398 F.3d 937, 942 (7th Cir. 2005).
Under Illinois law, punitive damages may be awarded only if “the defendant‘s tortious conduct evinces a high degree of moral culpability, that is, when the tort is ‘committed with fraud, actual malice, deliberate violence or oppression, or when the defendant acts willfully, or with such gross
The parties first accuse each other of waiving their arguments regarding corporate complicity, but both assertions are meritless. Saccameno contends that Ocwen cannot challenge the verdict because it did not object to the jury instructions. The instructions properly tracked Illinois law and Ocwen’s arguments, so it is permitted to argue that the jury misapplied those instructions to the facts. See Jabat, Inc. v. Smith, 201 F.3d 852, 857 (7th Cir. 2000). Saccameno offers nothing else on this issue, so Ocwen responds that she has waived the chance to seek affirmance of the district court’s decision. An appellee cannot waive an argument as easily as an appellant can, though. See Thayer v. Chiczewski, 705 F.3d 237, 247 (7th Cir. 2012). Even if an appellee forgoes a brief entirely, we may still affirm. See Blackwell v. Cole Taylor Bank, 152 F.3d 666, 673 (7th Cir. 1998). We are especially unwilling to deem Saccameno’s argument waived, as it goes to the validity of the jury’s verdict, to which we are inclined to defer, e.g., Gracia v. SigmaTron Int‘l, Inc., 842 F.3d 1010, 1018–19 (7th Cir. 2016).
On the merits, Ocwen argues that the evidence could support only a finding of negligence, not a “conscious and deliberate disregard” for Saccameno’s rights. Parks, 398 F.3d at 942.
Ocwen cannot pin this case on Marla. Her error was one among a host of others, and each error was compounded by Ocwen’s obstinate refusal to correct them. If this case were truly Marla’s fault, then Saccameno’s troubles would have lasted a month—most of July 2013. That was how long it took for Saccameno to point Ocwen toward Marla’s mistake, and for Ocwen to change the dismissal to a discharge. The real problems only began at that point though, as Ocwen falsely claimed that Saccameno had missed two plan payments for the first time in August and started improperly rejecting Saccameno’s payments in September. Ocwen apparently did not discover the former until the second day of trial and likely would have continued the latter until it filed for foreclosure, had this lawsuit not gotten in the way.
Ocwen contends that the miscounting of payments was also a human error—though it does not identify a human. We are not sure how many human errors a company like Ocwen gets before a jury can reasonably infer a conscious disregard of a person’s rights, but we are certain Ocwen passed it. The record is replete with evidence that Ocwen’s servicing of Saccameno’s loan was chaos from the moment Ocwen began working on the loan in 2011 to the day of the jury’s verdict nearly seven years later. Saccameno’s successful bankruptcy should have made things easier by resetting everything to zero—“fully current as of the date of the trustee’s notice,” the plan said. With her bankruptcy papers in hand, Saccameno repeatedly attempted to inform Ocwen that it had made an obvious mistake. This was not enough, though, and when
Ocwen likens itself to the bank in Cruthis v. Firstar Bank, N.A., 822 N.E.2d 454 (Ill. App. Ct. 2004), which illegally reversed payments into the plaintiffs’ account at the behest of the payor. Id. at 458–59. Though this act was conversion, the court found punitive damages unjustified because the bank had credited the plaintiffs’ account after being confronted. Id. at 465. On seeing their account had been emptied, the plaintiffs had inquired with a bank manager; that manager helped them to challenge the withdrawal and did his own internal investigation. Id. at 459. Initially, a vice president wrongly said the withdrawal had been fine, but within two months the bank had corrected the plaintiffs’ account and waived all charges. Id. at 460. Ocwen, in contrast, never noticed most of its mistakes, even well into this case. Its “waiver” of fees was not an acceptance of responsibility but a result of the discharge. No helpful manager assisted Saccameno—though Ocwen tries to cast Gomes in this role, he is a pale imitation. He spoke with Saccameno once, knew nothing of her case, offered no assistance, and only requested that she send paperwork that Ocwen already had twice over.
Ocwen’s comparison to Parks v. Wells Fargo Home Mortgage is even further afield. There, a mortgagee failed to pay taxes on a couple’s home, allowing a tax scavenger to fraudulently obtain title. 398 F.3d at 939–40. In concluding that the defendant had not acted with conscious disregard of the Parks’ rights, we emphasized that the company, on learning of its mistakes, “set out to make matters right, and it succeeded in doing so in relatively short order.” Id. at 943. When the plaintiffs had called in, the company “immediately put two
The utter lack of explanation also supports a finding of corporate complicity. Illinois law insists on managerial involvement before punitive damages may be awarded against a corporation. See Mattyasovszky v. W. Towns Bus Co., 330 N.E.2d 509, 512 (Ill. 1975) (listing four ways this complicity can be demonstrated). Saccameno, however, interacted only with line employees and never escalated her dispute. The district court thus rightly recognized that the only plausible basis on this record for corporate complicity is that “the principal or a managerial agent of the principal ratified or approved the act” of its employees. Id.; Kemner, 576 N.E.2d at 1156. Ratification is governed by agency principles and is “the equivalent of authorization, but it occurs after the fact, when a principal gains knowledge of an unauthorized transaction but then retains the benefits or otherwise takes a position inconsistent with nonaffirmation.” Progress Printing Corp. v. Jane Byrne Political Comm., 601 N.E.2d 1055, 1067 (Ill. App. Ct. 1992).
As the district court recognized, Illinois law permits a finding of ratification based on a corporation’s litigation conduct, if that conduct is inconsistent with nonaffirmation. In Robinson v. Wieboldt Stores, Inc., 433 N.E.2d 1005 (Ill. App. Ct. 1982), a part-time security guard had falsely imprisoned a
Though a corporation need not go as far as the Checker Taxi Company to avoid a finding that it ratified its employees conduct, it must do more than Ocwen did here. We start with Marla. Even if she were to blame, Ocwen’s position regarding her could reasonably be seen as inconsistent with nonaffirmation. Much like the security director in Robinson, Ocwen’s corporate representative knew nothing about Marla (besides her first name). The representative testified that she did not speak with Marla, did not know where Marla’s office was, did not know how long Marla had been an Ocwen employee, and did
Marla’s mistake, though, was not the only problem. The jury’s ratification finding was supported further by Ocwen’s complete lack of insight into its other, unnamed employees’ errors. Ocwen corrected Marla’s mistake shortly after it occurred, and though Ocwen did not know why Marla had made it or take any steps to prevent it from recurring, the company at least acknowledged that it was a mistake (and apologized on Marla’s behalf). In contrast, Ocwen went into this litigation—and the first day of trial—with the view that Saccameno had missed two payments during her bankruptcy. Once its misconception was corrected through the testimony of its own representative, Ocwen had no explanation for how this whole ordeal happened, let alone how it might be avoided in the future. The closest it got was to blame the miscount on Saccameno’s first fax, in which she mistakenly said that she had sent three payments in May. (She sent them in March.) Ocwen’s representative suspected that this comment caused researchers to limit the scope of their review to the time before May when counting the payments. Why they thought it notable that Saccameno owed two payments, when she had two months left on her plan at the time they stopped looking, eludes us. Still, the representative admitted that this
The jury was not obligated to withhold punishment because Ocwen’s acts were not purely harmful. Ocwen contends the erroneous credit toward Saccameno in the last few months of her bankruptcy demonstrates its employees were incompetent, not malicious. Saccameno ignored this false credit, though, and did not benefit from it; if she had believed Ocwen, and waited until September to pay her mortgage, she would have defaulted during her plan, risking the real dismissal of her bankruptcy. Ocwen next points to its offers of assistance as demonstrating good faith, but we agree with the district court that the jury could have found those aggravating, not mitigating. Ocwen had pushed Saccameno towards financial assistance, but as the district court explained, “Saccameno no longer needed financial assistance; she simply needed Ocwen to correct its records.” The loan modification offers were even worse. Putting to one side their timing, the terms, especially of the second offer, were far from generous. Why would Saccameno, having then endured four years with Ocwen, want to chain herself to the company three decades more, only to owe it money at the end?
The jury, having little evidence to the contrary, concluded that Ocwen had accepted its employees’ indifference to Saccameno. Robinson, 433 N.E.2d at 1009; see also Dubey, 918 N.E.2d at 280. Ocwen insisted it had not seen errors like these before, but its representative admitted it had never bothered to look. The jury was not required to accept Ocwen’s bare assertion that this was a unique case—especially considering the consent decrees implying it was not—and could have
III. Due Process
We next turn to the amount of punitive damages awarded to Saccameno—$3,000,000. Ocwen contends that this award exceeds constitutional limits and we address its arguments on those terms. We remind litigants, though, that the Constitution is not the most relevant limit to a federal court when assessing punitive damages, as it comes into play “only after the assessment has been tested against statutory and common law principles.” Perez v. Z Frank Oldsmobile, Inc., 223 F.3d 617, 625 (7th Cir. 2000); see also Beard v. Wexford Health Sources, Inc., 900 F.3d 951, 955 (7th Cir. 2018). The Constitution is the only federal restraint on a state court’s award of punitive damages, so it takes center stage in Supreme Court review of state judgments. Perez, 223 F.3d at 625. A federal court, however, can (and should) reduce a punitive damages award sometime before it reaches the outermost limits of due process. Id.; Payne v. Jones, 711 F.3d 85, 97–100 (2d Cir. 2013).
Compensatory and punitive damages serve different purposes. Compensatory damages seek to make the plaintiff whole and to redress the wrongs committed against her, but punitive damages are retributive in nature and seek to deter wrongful acts in the first place. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 416 (2003). The risk of grossly excessive or arbitrary punishment, well beyond that necessary to deter, requires close scrutiny of the amounts of these awards. Id. at 416–17. We therefore conduct an “[e]xacting” de novo review of the jury’s award, in which we consider three guideposts: the degree of reprehensibility, the disparity between the harm suffered and the damages awarded, and the
A. Reprehensibility
The first and most important guidepost is the reprehensibility of the defendant’s conduct, which we judge based on five factors including whether
the harm caused was physical as opposed to economic; the tortious conduct evinced an indifference to or a reckless disregard of the health or safety of others; the target of the conduct had financial vulnerability; the conduct involved repeated actions or was an isolated incident; and the harm was the result of intentional malice, trickery, or deceit, or mere accident.
Campbell, 538 U.S. at 419; Green, 942 F.3d at 781. The existence of any one factor may not always be enough to sustain a punitive damages award, but “the absence of all of them renders any award suspect.” Campbell, 538 U.S. at 419. The district court considered these factors here, concluding that the first two factors were inapplicable, but that the last three were present. Though the parties challenge the district court’s analysis of all five factors, we largely agree with its reasoning, though not its result.
The district court rightly concluded that the first two factors are irrelevant to this case. Saccameno argues otherwise by framing her depression, anxiety, and panic disorders as
On the third factor, the district court concluded that Saccameno was highly vulnerable financially because she was just coming out of bankruptcy. Ocwen contends this was error, as it did not intentionally “exploit” her vulnerability. This argument is unconvincing both legally and factually. We have not required intentional exploitation to find that this factor weighs in favor of punitive damages. See Green, 942 F.3d at 781-82 (finding factor relevant because plaintiff was unemployed); EEOC v. AutoZone, Inc., 707 F.3d 824, 839 (7th Cir. 2013) (same for plaintiff who testified he needed his abusive job). Moreover, Ocwen’s conduct would have been both different and less reprehensible had Saccameno not recently come out of bankruptcy. Ocwen sent the letters based on its belief that the bankruptcy court had dismissed Saccameno’s case, reflecting her extreme vulnerability. Ocwen’s representative also explained that it would have acted differently if the 2009 foreclosure were not pending, as Ocwen ordinarily starts with a formal demand letter before filing a complaint
The fourth factor is whether “the conduct involved repeated actions or was an isolated incident.” Campbell, 538 U.S. at 419. Ocwen asks us to adopt the position of the Sixth Circuit that this factor refers exclusively to recidivism, see Bridgeport Music, Inc. v. Justin Combs Publ‘g, 507 F.3d 470, 487 (6th Cir. 2007), and thus that the factor does not apply here. We again disagree legally and factually. We have consistently found this factor met in cases involving repeated acts against the same person. See Rainey v. Taylor, 941 F.3d 243, 254 (7th Cir. 2019) (“Taylor continued to grope and expose Rainey’s most intimate body parts even after she protested, so his misconduct was both repetitious and malicious.“); Estate of Moreland v. Dieter, 395 F.3d 747, 757 (7th Cir. 2005) (“The defendants’ assault on Moreland was sustained rather than momentary, and involved a series of wrongful acts, not just a single blow ….“). We agree with the Third Circuit that recidivism may often be more reprehensible than repeated acts against the same party, but that goes to the degree and not the relevance of the factor. CGB Occupational Therapy, Inc. v. RHA Health Servs., Inc., 499 F.3d 184, 191 (3d Cir. 2007). In any event, the record contains evidence that Ocwen was a recidivist. The consent
Finally, the last factor is whether the harm was “the result of intentional malice, trickery, or deceit, or mere accident.” Campbell, 538 U.S. at 419. Ocwen continues to insist that its employees were only negligent. Like the district court, we think Ocwen’s actions were not “mere accident.” The evidence shows instead “reckless indifference,” which we have found to suffice for this factor to be relevant. Autozone, 707 F.3d at 839. Certainly, it would be worse if Ocwen had preyed on Saccameno intentionally but Ocwen does not need to be the worst to be subject to punitive damages.
Ocwen’s conduct was reprehensible, but not to an extreme degree. It caused no physical injuries and did not reflect any indifference to Saccameno’s health or safety. Ocwen was, however, indifferent to her rights, including those rights that originated from her bankruptcy. No evidence supports that Ocwen was acting maliciously, though the number of squandered chances it had to correct its mistakes comes close. These factors then point toward a substantial punitive damages award, but not one even approaching the $3,000,000 awarded here. Such an award was deemed proper in McGinnis v. Am. Home Mortgage Servicing, Inc., 901 F.3d 1282, a factually similar case, but there the jury found a specific intent to harm, and the Eleventh Circuit considered evidence supporting all five factors. Id. at 1288–91. Ocwen’s conduct was less reprehensible than that in McGinnis and thus warrants a smaller punishment.
Ocwen’s primary concern on appeal is with the second guidepost, the disparity between the harm to the plaintiff and the punitive damages awarded. Campbell, 538 U.S. at 424. This guidepost is often represented as a ratio between the compensatory and punitive damages awards. The Supreme Court, however, has been reluctant to provide strict rules regarding the calculation of this ratio and instead has offered some general points of guidance. Id. at 425. First, few awards exceeding a single-digit ratio “to a significant degree” will satisfy due process. Id. Second, the ratio is flexible. Higher ratios may be appropriate when there are only small damages, and conversely, “[w]hen compensatory damages are substantial, then a lesser ratio, perhaps only equal to compensatory damages, can reach the outermost limit.” Id. Third, the ratio should not be confined to actual harm, but also can consider potential harm. TXO Prod. Corp. v. All. Res. Corp., 509 U.S. 443, 460–61 (1993).
Ocwen argues the district court wrongly inflated this ratio by looking to the entire compensatory award instead of just the $82,000 awarded under the ICFA. We agree, not because the district court was obligated to use a certain denominator but because the choice between available denominators—and their resulting ratios—reflecting the same underlying conduct and harm should not unduly influence whether a given award is constitutional.
The district court calculated its ratio by adding the compensatory damages awarded on all counts, resulting in a roughly 5:1 ratio, which the court approved because it was a single digit. In doing so, it recognized that several courts of appeals have implied or held that courts should calculate
The Fastenal court started with the premise that “the award would be unconstitutionally excessive if the ratio is calculated on a claim-by-claim basis, but it would be appropriate under an aggregate basis.” Id. at 660. No matter which denominator we use here, though, the actual award of $3,000,000
The disparity guidepost is not a mechanical rule. The court must calculate the ratio to frame its analysis, but the ratio itself does not decide whether the award is permissible. See Williams v. ConAgra Poultry Co., 378 F.3d 790, 799 (8th Cir. 2004) (“It is not that such a ratio violates the Constitution. Rather, the mathematics alerts the courts to the need for special justification.“). The answer might be yes, despite a high ratio, if the probability of detection is low, the harms are primarily dignitary, or if there is a risk that limiting recovery to barely more than compensatory damages would allow a defendant to act with impunity. Mathias, 347 F.3d at 676–77. It might be
The district court recognized this problem. It noted that the 37:1 ratio without aggregation was high but thought it might still be constitutional. It did not go so far as to hold, in the alternative, that this ratio was constitutional, however, and it was right to hesitate. It listed several cases upholding even higher ratios on compensatory awards ranging from about $300 to $8500. Most notable is our decision in Mathias v. Accor Economy Lodging, where we upheld a 37:1 ratio on $5000 in compensatory damages. 347 F.3d 672. The compensatory damages in this case and Mathias, though, are quite different. Moreover, the acts in Mathias were incredibly reprehensible. The defendant motel company knew its rooms were infested to “farcical proportions” with bedbugs but refused to pay a small fee to have them exterminated; it instead told employees to call them ticks and avoid renting infested rooms (unless
The district court should have hesitated just as much before upholding a 5:1 ratio relative to the $582,000 compensatory award on all four claims. Campbell instructs that a “substantial” award merits a ratio closer to 1:1. 538 U.S. at 425. Ocwen correctly notes that courts have found awards of roughly this magnitude “substantial” under Campbell and imposed a 1:1 ratio. See, e.g., Jones v. United Parcel Serv., Inc., 674 F.3d 1187, 1208 (10th Cir. 2012) ($630,000); Bach v. First Union Nat. Bank, 486 F.3d 150, 156 (6th Cir. 2007) ($400,000); Williams, 378 F.3d at 799 ($600,000). But see Lompe v. Sunridge Ptrs., LLC, 818 F.3d 1041, 1069 (10th Cir. 2016) (noting that other cases draw the line at roughly $1,000,000). What counts as substantial depends on the facts of the case, and an award of this size (or larger) might not mandate a 1:1 ratio on another set of facts. See Rainey, 941 F.3d at 255 (upholding 6:1 ratio relative to $1.13 million compensatory award because defendant’s conduct was “truly egregious“). Here, though, $582,000 is a considerable compensatory award for the indifferent, not malicious, mistreatment of a single $135,000 mortgage. Moreover, nearly all this award reflects emotional distress damages that “already contain [a] punitive element.” Campbell, 538 U.S. at 426. A ratio relative to this denominator, then, should not exceed 1:1.
The final guidepost is the disparity between the award and “civil penalties authorized or imposed in comparable cases.” Campbell, 538 U.S. at 428 (quoting Gore, 517 U.S. at 575). The district court identified two civil penalties to compare to the punitive damages award. The first was the $50,000 monetary penalty authorized by the ICFA, which can be calculated per offense if there is intent to defraud.
The second civil penalty the district court considered was the possibility that Ocwen could have its license to service mortgages suspended or revoked under the Illinois Residential Mortgage License Act (RMLA),
We do not think the district court erred in considering the possibility that Ocwen could lose its license. First of all, the ICFA too, allows, the attorney general to seek “revocation,
D. Remedy
Considering all the factors together, we are convinced that the maximum permissible punitive damages award is $582,000. An award of this size punishes Ocwen’s atrocious recordkeeping and service of Saccameno’s loan without equating its indifference to intentional malice. It reflects a 1:1 ratio relative to the large total compensatory award and a roughly 7:1 ratio relative to the $82,000 awarded on the ICFA claim alone, both of which are consistent with the Supreme Court’s guidance in Campbell. It is equivalent to the maximum punishment for less than 12, not 60, intentional violations of
The final issue the parties dispute is whether the Seventh Amendment mandates an offer of a new trial after determining the constitutional limit on the punitive damages award. We have previously said, without deciding the issue, that this offer of a new trial is “a matter of sound procedure, not constitutional law.” Beard, 900 F.3d at 955. Ocwen insists that this holding was limited by the fact that no party had asked us to decide the constitutional question, and here it asks us to do so. Though we continue to emphasize that parties should focus first on procedural and statutory limits on punitive damages awards, id. at 955–56, we agree with every circuit to address this question that the constitutional limit of a punitive damage award is a question of law not within the province of the jury, and thus a court is empowered to decide the maximum permissible amount without offering a new trial. See Lompe, 818 F.3d at 1062; Cortez v. Trans Union, LLC, 617 F.3d 688, 716 (3d Cir. 2010); Bisbal-Ramos v. City of Mayaguez, 467 F.3d 16, 27 (1st Cir. 2006); Ross v. Kansas City Power & Light Co., 293 F.3d 1041, 1049–50 (8th Cir. 2002); Leatherman Tool Grp. v. Cooper Indus., 285 F.3d 1146, 1151 (9th Cir. 2002); Johansen v. Combustion Eng‘g, Inc., 170 F.3d 1320, 1330–31 (11th Cir. 1999); see also Cooper Indus. v. Leatherman Tool Grp., 532 U.S. 424, 437 (2001) (“[T]he level of punitive damages is not really a ‘fact’ ‘tried’ by the jury.“).
IV. Conclusion
We therefore remand for the district court to amend its judgment and reduce the punitive damages award to $582,000. Each party is to bear its own costs on appeal.