Mathias v. Accor Economy Lodging, Inc.

Facts

Defendant was the owner and operator of a “Motel 6” chain and a “Red Roof Inn.” In 1998, the exterminator for the Red Roof Inn told the manager that several rooms were infested with bedbugs. He offered to treat each room for a total of $500, but the manager declined. The exterminator was hired again in 1999 to treat one room. By 2000, the number of room refunds had increased and guests were complaining of ticks and bugs. One guest was moved to three different rooms, all infested. The Inn management acknowledged the problem but would still not allow the motel to close for a thorough treatment. Instead the management flagged rooms as not to be rented until treated, but those flags were routinely ignored. Desk clerks were told to tell complaining guests that the bugs were ticks. Eventually, Plaintiffs, guests who had been bitten by bedbugs, brought suit alleging wanton and willful conduct and asking for compensatory and punitive damages. Defendant claimed that its conduct was, at most, negligent, and that punitive damages were not warranted. The jury awarded compensatory damages of approximately $5000 and punitive damages of $186,000 per plaintiff. Defendant appealed, arguing that punitive damages were not appropriate and, if appropriate, excessive. The court of appeals granted review.