Cases by Issue - Punitive Damages Liability

State Farm Mutual Auto Ins. Co. v. Campbell

Mon, 05 Jan 2009 17:48:28 +0000

Case Basics

Docket No.

01-1289

Petitioner

State Farm Mutual Auto Ins. Co.

Petitioner Type

Petitioner

Respondent

Campbell

Respondent Type

Respondent

Heard By

Rehnquist Court (1994-2005)

Decided By

Rehnquist Court (1994-2005)

Opinion

538 U.S. 408 (2003)

Argued

Wednesday, December 11, 2002

Decided

Monday, April 7, 2003

Advocates

Sheila L. Birnbaum (Argued the cause for the petitioner)

Laurence H. Tribe (Argued the cause for the respondents)

Facts of the Case

Although investigators concluded that Curtis Campbell caused an accident in which one person was killed and another permanently disabled, his insurer, State Farm Mutual Automobile Insurance Company, contested liability and took the case to trial. State Farm assured the Campbells that they would represent their interests. After losing in court, the Campbells sued State Farm for bad faith, fraud, and intentional infliction of emotional distress. In the first part of the trial, the jury found State Farm's decision not to settle unreasonable. In the second part, the trial court denied State Farm's renewed motion to exclude dissimilar out-of-state conduct evidence, ruling such evidence was admissible to determine whether State Farm's conduct in the Campbell case was indeed intentional and sufficiently egregious to warrant punitive damages. The jury awarded the Campbells $2.6 million in compensatory damages and $145 million in punitive damages, which the trial court reduced to $1 million and $25 million respectively. The Utah Supreme Court reinstated the $145 million punitive damages award.

Question

Is an award of $145 million in punitive damages, when full compensatory damages are $1 million, excessive and in violation of the Due Process Clause of the Fourteenth Amendment?

Conclusion

Decision: 6 votes for State Farm Mutual Auto Ins. Co., 3 vote(s) against
Legal provision: Due Process

Yes. In a 6-3 opinion delivered by Justice Anthony M. Kennedy, the Court held that the punitive award of $145 million was neither reasonable nor proportionate to the wrong committed, and it was thus an irrational, arbitrary, and unconstitutional deprivation of the property of the insurer. The Court reasoned that evidence of dissimilar out-of-state misconduct was an improper basis for punishing the insurer for the limited harm and noted, "few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process." Justices Antonin Scalia, Clarence Thomas, and Ruth Bader Ginsburg dissented. Justices Scalia and Thomas argued that the Due Process Clause provides no substantive protections against excessive or unreasonable awards of punitive damages. Justice Ginsburg noted that the decision overstepped states' traditional territory to regulate punitive damages.

Barnes v. Gorman

Mon, 05 Jan 2009 17:46:44 +0000

Case Basics

Docket No.

01-682

Petitioner

Barnes

Petitioner Type

Petitioner

Respondent

Gorman

Respondent Type

Respondent

Heard By

Rehnquist Court (1994-2005)

Decided By

Rehnquist Court (1994-2005)

Opinion

536 U.S. 181 (2002)

Argued

Tuesday, April 23, 2002

Decided

Monday, June 17, 2002

Advocates

Lawrence S. Robbins (Argued the cause for the petitioners)

Scott L. Nelson (Argued the cause for the respondent)

Gregory G. Garre (Argued the cause for the United States, as amicus curiae, supporting the petitioners)

Facts of the Case

Jeffrey Gorman is a paraplegic. After being arrested, he was transported to a Kansas City police station in a van that was not equipped to accommodate the disabled. Gorman was removed from his wheelchair and seatbelted to a bench in the van. During the ride, Gorman fell to the floor, suffering serious injuries that left him unable to work full time. Gorman sued certain Kansas police officials for discriminating against him on the basis of his disability, in violation of the Americans with Disabilities Act of 1990 (ADA) and the Rehabilitation Act of 1973, by failing to maintain appropriate policies for the arrest and transportation of persons with spinal cord injuries. A jury awarded him compensatory and punitive damages. The District Court vacated as to punitive damages, holding that they are unavailable in private suits brought under the ADA and the Rehabilitation Act. In reversing, the Court of Appeals found punitive damages available under a general rule that absent clear direction to the contrary by Congress federal courts have the power to award any appropriate relief for violation of a federal right.

Question

May punitive damages be awarded in a private cause of action brought under the Americans with Disabilities Act of 1990 and the Rehabilitation Act of 1973?

Conclusion

Decision: 9 votes for Barnes, 0 vote(s) against
Legal provision: Americans with Disabilities Act (ADA)

No. In an opinion delivered by Justice Antonin Scalia, the Court held that, because punitive damages may not be awarded in private suits brought under Title VI of the 1964 Civil Rights Act, it follows that they may not be awarded in suits brought under the ADA and the Rehabilitation Act. The Court noted that the remedies of the sections of the ADA and the Rehabilitation Act Gorman sued under are coextensive with those available in a private action under Title VI. Under a contract-law analogy, the Court reasoned because Title VI- funding recipients did not, merely by accepting funds, implicitly consent to liability for punitive damages, it followed that they could not be awarded in suits brought under the ADA and the Rehabilitation Act.

Cooper Industries v. Leatherman Tool Grp.

Mon, 05 Jan 2009 17:44:30 +0000

Case Basics

Docket No.

99-2035

Petitioner

Cooper Industries

Petitioner Type

Petitioner

Respondent

Leatherman Tool Grp.

Respondent Type

Respondent

Heard By

Rehnquist Court (1994-2005)

Decided By

Rehnquist Court (1994-2005)

Opinion

532 U.S. 424 (2001)

Argued

Monday, February 26, 2001

Decided

Monday, May 14, 2001

Advocates

Jonathan S. Massey (Argued the cause for the respondent)

William Bradford Reynolds (Argued the cause for the petitioner)

Facts of the Case

Leatherman Tool Group, Inc., manufactures a multifunction pocket tool, the Pocket Survival Tool (PST). In 1996, Cooper Industries, Inc. used photographs of a modified PST to introduce a competing tool, the ToolZall. The photographs were used in posters, packaging, and advertising materials. Subsequently, Leatherman filed an action asserting claims of trade-dress infringement, unfair competition, and false advertising under the Trademark Act of 1946 (Lanham Act). Ultimately, a trial jury awarded Leatherman $50,000 in compensatory damages and $4.5 million in punitive damages. The District Court then entered judgment, rejecting Cooper's argument that the punitive damages were grossly excessive. In affirming, the Court of Appeals, using an "abuse of discretion" standard, concluded that the District Court did not abuse its discretion in declining to reduce the award.

Question

Did the Court of Appeals review the constitutionality of the punitive damages award against Cooper Industries, Inc. under the correct standard?

Conclusion

Decision: 8 votes for Cooper Industries, 1 vote(s) against
Legal provision: Due Process

No. In an 8-1 opinion delivered by Justice John Paul Stevens, the Court held that the Courts of Appeals should apply a de novo standard when reviewing district court determinations of the constitutionality of punitive damages awards. Because the Court of Appeals applied an "abuse of discretion" standard, a less demanding standard, the Court vacated the judgment and remanded the case for a determination on whether the award was grossly excessive under the correct standard.

BMW v. Gore

Mon, 20 Jun 2011 04:06:28 +0000

Location

10th Judicial Circuit Court - Jefferson

"716 Richard Arrington**** Jr.**** Boulevard North" Birmingham AL 35203

Birmingham, AL 35203

United States

33° 31' 16.8996" N, 86° 48' 32.2632" W

See map: Google Maps

Case Basics

Docket No.

94-896

Petitioner

BMW

Petitioner Type

Petitioner

Respondent

Gore

Respondent Type

Respondent

Heard By

Rehnquist Court (1994-2005)

Decided By

Rehnquist Court (1994-2005)

Opinion

517 U.S. 559 (1996)

Argued

Wednesday, October 11, 1995

Decided

Monday, May 20, 1996

Advocates

Andrew L. Frey (Argued the cause for the petitioner)

Michael H. Gottesman (Argued the cause for the respondent)

Facts of the Case

After purchasing a new vehicle from an authorized Alabama BMW dealership, Ira Gore, Jr. discovered that his new vehicle had been repainted. He sued BMW's American distributor (BMW), alleging that it committed fraud by failing to inform him that his car had been repainted. The Alabama Circuit Court entered judgment, following a jury verdict, awarding Gore $4,000 in compensatory damages and $4 million in punitive damages. On appeal from the trial judge's denial of BMW's post-trial petition to set aside the punitive damages as 'grossly excessive,' the Alabama Supreme Court ruled that the punitive damages were not so excessive as to violate BMW's Fourteenth Amendment right to due process. Due to a jury calculation error, however, the Alabama Supreme Court reduced Gore's punitive damage award to $2 million. BMW appealed to the Supreme Court.

Question

Assuming that Gore's punitive damage award was grossly excessive, does the Fourteenth Amendment's due process clause protect BMW from paying the award?

Conclusion

Decision: 5 votes for BMW, 4 vote(s) against
Legal provision: Due Process

Yes. In a 5-to-4 decision, the Court held that while a state may impose punitive damages to further its interest in deterring unlawful conduct, the Fourteenth Amendment's due process clause prohibits states from imposing grossly excessive punishments on tort-feasors. In the present case, the punitive damage's excessive nature is indicated by the 500 to 1 ratio between the jury's punitive and actual damage awards, the relatively insignificant amount of damage, and the lack of statutory fines that remotely parallel the present award's magnitude. BMW's due process rights were also violated because it could not have possibly anticipated, nor did it receive fair notice, that it might face such a severe punishment.

Honda v. Oberg

Mon, 05 Jan 2009 16:23:49 +0000

Case Basics

Docket No.

93-644

Petitioner

Honda

Petitioner Type

Petitioner

Respondent

Oberg

Respondent Type

Respondent

Heard By

Rehnquist Court (1993-1994)

Decided By

Rehnquist Court (1993-1994)

Opinion

512 U.S. 415 (1994)

Argued

Wednesday, April 20, 1994

Decided

Friday, June 24, 1994

Advocates

Laurence H. Tribe (Argued the cause for the respondents)

Andrew L. Frey (Argued the cause for the petitioners)

Facts of the Case

Karl Oberg was driving an all-terrain vehicle when it overturned, causing him severe, permanent injuries. The jury in his trial assessed almost $1 million in compensatory damages, and an additional $5 million in punitive damages. A 1910 amendment to the Oregon state constitution prohibited judicial review of jury awards.

Question

Does the Oregon prohibition on judicial review of jury awards violate the Due Process Clause of the 14th Amendment?

Conclusion

Decision: 7 votes for Honda, 2 vote(s) against
Legal provision: Due Process

Yes. The denial of judicial review creates the possibility that juries might make arbitrary and excessive awards without offering a way to adjust them. The common-law practice of allowing judicial review for jury awards is important in ensuring that juries do not ignore guidelines.

Txo Production Corp. v. Alliance Resources Corp.

Mon, 05 Jan 2009 16:01:01 +0000

Case Basics

Docket No.

92-479

Petitioner

Txo Production Corp.

Petitioner Type

Petitioner

Respondent

Alliance Resources Corp. et al.

Respondent Type

Respondent

Heard By

Rehnquist Court (1991-1993)

Decided By

Rehnquist Court (1991-1993)

Opinion

509 U.S. 443 (1993)

Argued

Wednesday, March 31, 1993

Decided

Friday, June 25, 1993

Advocates

Laurence H. Tribe (on behalf of the Respondents)

Carter G. Phillips (on behalf of the Petitioner)

Facts of the Case

None

Question

None

Conclusion

Decision: 6 votes for Alliance Resources Corp., 3 vote(s) against
Legal provision: Due Process

None

Pacific Mutual Life Insurance Co. v. Haslip

Mon, 05 Jan 2009 16:16:30 +0000

Case Basics

Docket No.

89-1279

Petitioner

Pacific Mutual Life Insurance Co.

Petitioner Type

Petitioner

Respondent

Haslip

Respondent Type

Respondent

Heard By

Rehnquist Court (1990)

Decided By

Rehnquist Court (1990-1991)

Opinion

499 U.S. 1 (1991)

Argued

Wednesday, October 3, 1990

Decided

Monday, March 4, 1991

Advocates

Bruce J. Ennis, Jr. (on behalf of the Respondents)

Bruce A. Beckman (on behalf of the Petitioner)

Facts of the Case

None

Question

None

Conclusion

Decision: 7 votes for Haslip, 1 vote(s) against
Legal provision: Due Process

None

Browning-Ferris Industries v. Kelco Disposal

Mon, 05 Jan 2009 17:26:30 +0000

Case Basics

Docket No.

88-556

Petitioner

Browning-Ferris Industries

Petitioner Type

Petitioner

Respondent

Kelco Disposal

Respondent Type

Respondent

Heard By

Rehnquist Court (1988-1990)

Decided By

Rehnquist Court (1988-1990)

Opinion

492 U.S. 257 (1989)

Argued

Tuesday, April 18, 1989

Decided

Monday, June 26, 1989

Advocates

H. Bartow Farr, III (on behalf of Respondents)

Andrew L. Frey (on behalf of Petitioners)

Facts of the Case

None

Question

None

Conclusion

Decision: 7 votes for Kelco Disposal, 2 vote(s) against
Legal provision: Prohibition of Excessive Fines

None