In the 1982 case Smith v. Wade, the U.S. Supreme Court ruled that a plaintiff could recover punitive damages under Section 1983 of the Civil Rights Act if they can prove that the defendant's conduct was driven by evil motive or intent, or involved reckless or callous indifference to federally protected rights. The case arose when Gary Wade, an inmate at a Missouri correctional facility, sued Robert Smith and other prison officials for failing to protect him from harm inflicted by fellow inmates during his incarceration in violation of his Eighth Amendment rights against cruel and unusual punishment. The jury awarded compensatory damages but denied punitive damages as it found no malice on part of defendants which led to this appeal before Supreme Court.

In the dissenting opinion for Smith v. Wade, Justice Powell argued that the majority's decision to allow punitive damages in cases of constitutional rights violations under Section 1983 was not supported by historical or legal precedent. He contended that such an interpretation expanded the scope of Section 1983 beyond its original intent and could potentially lead to excessive financial burdens on public officials who were merely trying to perform their duties. Furthermore, he expressed concern about the potential chilling effect this might have on government employees' willingness to make difficult decisions for fear of personal liability. He also criticized the majority's reliance on common law principles rather than statutory text or legislative history in reaching their conclusion.