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Update: Lufthansa Knew the Co-Pilot Had Depression Issues

News reports indicate that Lufthansa (the owner/parent company of Germanwings) did know that Andreas Lubitz had depression problems, even during his pilot training:
Lubitz...told his Lufthansa flight training school in 2009 that he had a "previous episode of severe depression," the airline said Tuesday.
Despite this knowledge, Lufthansa allowed Lubitz to continue training to be a pilot and eventually put him in a cockpit, in a position where he could cause the mass murder of 149 people. Information like this supports a claim for negligent hiring or retention.

Damages to make victims "whole" are called compensatory damages. But could Germanwings/Lufthansa be held liable for additional damages, damages to punish them (called "punitive damages") for allowing Lubitz to complete his training and get in a cockpit, knowing he had mental health issues?

From a purely New York law perspective, probably not, because punitive damages are hard to get and usually involve only intentional, malicious conduct. Germanwings/Lufthansa did not intentionally allow Lubitz to do what he did. They were just very careless.

However, New York law has a theory of liability called "gross negligence", which can be satisfied if the offending party's conduct (here, Germanwings/Lufthansa) evinced a reckless indifference to the rights of others, or the offending party failed to exercise even slight care or slight diligence:
Gross negligence "differs in kind, not only degree, from claims of ordinary negligence". "To constitute gross negligence, a party's conduct must smack of intentional wrongdoing or evince a reckless indifference to the rights of others". "Stated differently, a party is grossly negligent when it fails to exercise even slight care or slight diligence".
Dolphin Holdings, Ltd. v. Gander & White Shipping, Inc., 122 A.D.3d 901, 902, 998 N.Y.S.2d 107 (2d Dep't 2014). 

Gross negligence has been held to justify awards of punitive-like damages. See, e.g., Fordham-Coleman v. National Fuel Gas Distrib. Corp., 42 A.D.3d 106, 113, 834 N.Y.S.2d 422 (4th Dep't 2007). Again, this is all from a New York law perspective, but let's see how this case plays out. 
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