Pacific Mutual Life Insurance Co. v. Haslip et al.

A plaintiff who wins a judgment in a tort case is usually awarded compensatory damages, which normally cover the injury he or she has received, along with the legal costs incurred. But in cases where the plaintiff's legal counsel is able to demonstrate aggravated wrongdoing on the part of the defendant, the judge may also award punitive damages. Whereas the dollar figures for compensatory damages tend to range from the thousands to the tens of thousands, for punitive damages they often run from the hundreds of thousands to multiple millions.

Punitive damages, as their name implies, are indeed often used to punish a defendant for the negligence or intentional wrongdoing that occasioned the lawsuit. But they may also be intended as a deterrent, or to "make an example of" the defendant. For these reasons, punitive damages are a subject of controversy, and in the popular imagination sometimes become almost the stuff of urban legend, as in the 1990s when widespread outrage followed the awarding of millions of dollars to a woman who had burned herself on hot coffee purchased from a fast-food chain.