A federal appeals court has ruled that Virginia’s $350,000 punitive damages cap applies on a per-plaintiff basis in a case against white supremacists who organized the “Unite the Right” rally in Charlottesville in August 2017.

A Fourth Circuit Court of Appeals panel in a 3-0 vote reversed a federal district court that had limited the punitive damages that the eight plaintiffs would receive to $350,000 aggregate. The appeals court found that in a case where there are multiple plaintiffs, the $350,000 cap applies to each plaintiff, not to the group as a whole.

In the opinion written by Chief Judge Albert Diaz, the appeals court rested its decision largely on the statute’s not mentioning plaintiffs and the fact that the state did not permit multiple plaintiff actions until well after the cap statute was drafted and enacted.

As a civil jury trial in 2022 proved, the protester-defendants — who included white nationalists, white supremacists, and neo-Nazis— conspired to commit racially motivated violence to, in part, “defend Western civilization and white men against perceived enemies—specifically, Jewish persons, Black persons, and their white gentile traitor allies.” The protesters “sought violence, planned for violence, sparked violence, engaged in violence, and afterwards, glorified the violence” committed.

The jury found the defendants guilty of civil conspiracy; racial, religious, or ethnic harassment under Virginia’s hate-crime statute; assault and battery; and intentional infliction of emotional distress.

Jury Award

The jury’s damages award against the protester-defendants totaled over $26 million, split among compensatory damages which the district court assigned jointly and severally against the defendants, and a historic $24 million in punitive damages. The district court ultimately slashed the punitive damages to $350,000 by applying Virginia’s punitive damages cap across the eight plaintiffs who sought them.

Defendants Michael Hill, Michael Tubbs, League of the South, and Nathan Damigo challenged the district court’s decision to hold them jointly and severally liable for the $26 million in compensatory damages award, while the plaintiffs challenged the district court’s decision to apply Virginia’s punitive damages cap across all plaintiffs.

Because the jury found that all the defendants engaged in a conspiracy, the district court applied the collective compensatory damages. The Fourth Circuit found no error in this part of the district court’s decision.

The defendants also argued that Virginia’s punitive damages cap should apply to the jury’s punitive damages award, reducing them to $350,000, and that the damages were constitutionally excessive.

The plaintiffs’ argued that the punitive damages cap only applies in “run-of-the-mill” tort and insurance cases and not at all than in the hate-crime context. The plaintiffs’ fallback contention was that the cap applies on a per-plaintiff basis, with each plaintiff receiving $350,000.

The district court rejected the plaintiffs’ arguments that the punitive damages cap should not be applied at all and that the cap applies on a per-plaintiff basis.

The Fourth Circuit also rejected the plaintiffs’ argument that punitive damages statute does not apply to hate crimes. The court cited the plain language of the statute that says it applies to ‘all actions” and not just some actions. The court noted that Virginia passed its hate-crime statute only a year after passing its punitive damages cap. It therefore had an opportunity to exclude hate crimes from the cap’s purview but it didn’t.

However, citing history, statute language and public policy, the Fourth Circuit agreed with the plaintiffs that the cap applies per-plaintiff.

The statute says in part that the “total amount awarded for punitive damages against all defendants found to be liable shall be determined by the trier of fact. In no event shall the total amount awarded for punitive damages exceed $350,000.”

First the appeals court noted that the punitive damages statute doesn’t include similar “all plaintiffs” language as it does “all defendants” and the court believes there are good reasons for that legislative drafting. If lawmakers meant to treat defendants and plaintiffs equally under the statute, even with the “all defendants” qualifier, that would render that term superfluous.

Another reason relates to the state’s historical understanding of joinder. and the fact that when the punitive damages cap was enacted in 1987 the common law largely didn’t permit separate plaintiffs to jointly adjudicate their claims. So an “action” was typically one plaintiff prosecuting one claim. There were no multiple plaintiff actions.

Virginia adhered to this common-law approach until 1995, when the General Assembly permitted a court to join separate actions, or six or more plaintiffs to join in a single action. But these joinder principles were enacted after the punitive damages cap passed in 1987.

“As a matter of text and history then, the General Assembly could not have contemplated including a multi-plaintiff limitation in the punitive damages cap because single-plaintiff actions were the norm,” the appeals court explained.

Furthermore, the court found that a per- plaintiff reading serves public policy interests by incentivizing plaintiffs to join their claims where appropriate. “Were we to hold otherwise, any plaintiffs seeking punitive damages against a defendant (or defendants) for a single occurrence would have 350,000 reasons not to join their claims. And had that been the law here, the district court likely would have faced eight trials in a loop of repeat operative facts and players,” Judge Diaz wrote.

Photo: James Kolenich, left, attorney for Jason Kessler, speaks with the media after a jury gave a partial verdict in Sines v Kessler case Tuesday, Nov. 23, 2021, at the Federal Courthouse in Charlottesville, Va. A jury ordered white nationalist leaders and organizations to pay more than $25 million in damages Tuesday, Nov. 23, 2021, over violence that erupted during the deadly 2017 Unite the Right rally in Charlottesville. The lawsuit accused some of the country’s most well-known white nationalists of plotting the violence, including Jason Kessler. (Andrew Shurtleff/The Daily Progress via AP)

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