holding a jury award of $145 million punitive damages for a claim that an insurance company engaged in bad faith conduct in its handling of the liability claim filed against its insured was grossly excessive for the compensatory damages award of $ 1 million and was thus reversed on the ground that it represented a grossly excessive or arbitrary punishment prohibited by the Due Process Clause of the Fourteenth Amendment of the United States Constitution
How later courts described this case
- holding a jury award of $145 million punitive damages for a claim that an insurance company engaged in bad faith conduct in its handling of the liability claim filed against its insured was grossly excessive for the compensatory damages award of $ 1 million and was thus reversed on the ground that it represented a grossly excessive or arbitrary punishment prohibited by the Due Process Clause of the Fourteenth Amendment of the United States Constitution
- concluding, somewhat surprisingly, that “[o]ur jurisprudence and the 16 IN RE: LATE FEE & OVER-LIMIT FEE LITIGATION principles it has now established demonstrate . . . that, in practice, few [punitive] awards exceeding a single-digit ratio between punitive and compensatory damages . . . will satisfy due process,” and citing a one-to-four ratio between compensatory and punitive damages as a non-binding but “instructive” constitutional line
- holding that to the extent compensatory damages are based on the infliction of emotional distress, such “[c]ompensatory damages . . . already contain this punitive element,” and citing the Restatement of Torts for the proposition that “[i]n many cases in which compensatory damages include an amount for emotional distress . . . there is no clear line of demarcation between punishment and compensation . . . .”
- concluding, somewhat surprisingly, that “[o]ur jurisprudence and the principles it has now established demonstrate ... that, in practice, few [punitive] awards exceeding a single-digit ratio between punitive and compensatory damages ... will satisfy due process,” and citing a one-to-four ratio between compensatory and punitive damages as a non-binding but “instructive” constitutional line
Written by the judges who cited it.
Distinguished
Distinguished by Desai v. Charter Commc'ns, LLC, 381 F. Supp. 3d 774 (2019)
The third State Farm guidepost, comparable civil penalties, is inapplicable here.
Distinguished by Vanderbilt Mortgage and Finance v. Terri L. Cole, 230 W. Va. 505 (2013)
538 U.S. 408, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003) ] are inapplicable, because they concern discretionary jury awards of punitive damages rather than a fixed statutory-damage provision.
Distinguished by In re Exxon Valdez, 490 F.3d 1066 (2007)
The majority suggestsState Farm is distinguishable because the dispute concerned an insurance contract rather than a toxic tort.
Distinguished by Local Union No. 38, Sheet Metal Workers' International Association, Afl-Cio v. Pelella, 350 F.3d 73 (2003)
Lee v. Edwards, 101 F.3d 805, 811 (2d Cir.1996); cf. Williams v. Kaufman County, 343 F.3d 689, 711 n. 75 (5th Cir.2003) (concluding that the Campbell ratios were inapposite where, among other things, the ratio at issue concerned nominal and punitive awards); Edwards v. Jewish Hospital of St. Louis, 855 F.2d 1345, 1352 (8th Cir.1988) (refusing to hold that punitive damages must bear a reasonable relationship to the am…
The opinion
Justice Thomas,
dissenting.
I would affirm the judgment below because “I continue to believe that the Constitution does not constrain the size of punitive damages awards.” Cooper Industries, Inc. v. Leatherman Tool Group, Inc., 532 U. S. 424, 443 (2001) (Thomas, J., concurring) (citing BMW of North America, *430 Inc. v. Gore, 517 U. S. 559, 599 (1996) (Scalia, J., joined by Thomas, J., dissenting)). Accordingly, I respectfully dissent.