Applying Choice-of-Law Principles to Punitive Damages Claims

In 2008, the New Jersey Supreme Court established New Jersey’s adherence to the “significant relationship test” in choice-of-law determinations. The court made clear that, pursuant to that test, there is a presumption in personal injury cases that the law of the state in which the injury occurred will apply. Critically, though, the court clarified that choice-of-law analyses must occur on an issue-by-issue basis, thereby allowing for the law of the forum state to apply to certain issues and the law of the state in which the injury occurred to others.

This article addresses the application of New Jersey’s choice-of-law framework to one issue in particular—punitive damages. The first section of this article provides an overview of the “significant relationship test.” The second section sets forth the application of that test to punitive damages claims. This analysis demonstrates that the presumption in favor of applying the law of the state in which the injury occurred will often be overcome for punitive damages, because the state in which the defendant’s alleged conduct occurred will have the strongest interest in dictating whether and to what extent the conduct is punishable.

The Significant Relationship Test