## Facts

- Burl and Desiree Mathias stayed at a downtown Chicago hotel operated by defendants and were bitten by bedbugs.
- Evidence showed the hotel had notice of a bedbug infestation years earlier, including an exterminator’s proposed full-room treatment for about $500, which management declined.
- Rather than closing rooms and eradicating the problem, management continued renting rooms it knew or strongly suspected were infested.
- The hotel’s response included moving complaining guests to other rooms (often also infested) and having staff tell guests the insects were “ticks,” not bedbugs.
- Plaintiffs sued in a diversity tort action under Illinois law, alleging willful and wanton misconduct and seeking compensatory and punitive damages.
- A jury awarded each plaintiff $5,000 in compensatory damages and $186,000 in punitive damages.

## Issues

1. Whether the evidence permitted a finding of willful and wanton conduct under Illinois law sufficient to support punitive damages.
2. Whether punitive damages of $186,000 per plaintiff (relative to $5,000 compensatory damages) were unconstitutionally excessive under the Due Process Clause.

## Decision

- The Seventh Circuit affirmed the judgment.
- The court held the evidence supported a finding of willful and wanton misconduct—recklessness in the strong sense—justifying punitive damages under Illinois law.
- The court held the punitive damages awards were not unconstitutionally excessive despite the high punitive-to-compensatory ratio.

## Legal Principles

- Under Illinois law, punitive damages may be awarded for willful and wanton conduct, including an unjustifiable failure to avoid a known risk; conduct exceeding simple negligence can qualify as reckless or grossly negligent.
- Knowing exposure of customers to a serious risk while failing to warn and engaging in deception can support punitive damages and may resemble fraud (and potentially intentional tort concepts).
- Due process review of punitive damages focuses on reasonableness and proportionality to the misconduct; no rigid mathematical ratio is required.
- A high punitive-to-compensatory ratio may be permissible where compensatory damages are modest and do not fully reflect non-economic harms, and where a substantial award is needed to deter profitable wrongdoing and account for broader potential harm to others.

## Conclusion

The court upheld substantial punitive damages because the hotel knowingly exposed guests to bedbugs and misrepresented the problem, conduct the jury could deem willful and wanton under Illinois law; given the modest compensatory damages and deterrence considerations, the punitive awards did not violate due process.


Mathias v. Accor Econ. Lodging, Inc., 347 F.3d 672 (7th Cir. 2003)