Amicus Curiae Brief — State Farm Mut. Automobile Ins. Co. v. Campbell
Supreme Court brief2003
Ask Donna
What actually matters in this document.
Text
Suprecie Court, U.S.
FILED
|
|
AUG 19 2002
{ Q OFFICE OF THE CLERK
EF
a
No. 01-1289
IN THE
Supreme Court of the Anited States
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,
Petitioner,
Vv.
CURTIS CAMPBELL AND INEZ CAMPBELL,
Respondents.
On Writ of Certiorari to the
Utah Supreme Court
BRIEF OF THE PRODUCT LIABILITY
ADVISORY COUNCIL, INC. AS AMICUS
CURIAE IN SUPPORT OF PETITIONER
Hugh F. Young, Jr. Victor E. Schwartz
PRODUCT LIABILITY (Counsel of Record)
ADVISORY COUNCIL, INC. Leah Lorber
1850 Centennial Park Drive Cary Silverman
Suite 510 SHOOK, HARDY & BACON L.L.P.
Reston, Virginia 20191-1517 600 14” Street, N.W., Suite 800
(703) 264-5300 Washington, Ly.C. 20005
Of Counsel (202) 783-8400
Attorneys For Amicus Curiae
a
OT
OP
ll
TABLE OF CONTENTS
Page
TABLES OF ALT EBUIREE Ble ccccscccccccssccesssscssssssscnsssees iv
INTEREST OF AMICUS CURIAE ..........:csccsssseeesees l
SUMMARY OF ARGUMENT. ................:ccccsssesseeeees 2
TUE siceniccsinnssinsninainsicnieniintaaebipiiiammensssaainonan 4
I. THE ONGOING EXPANSION OF
PUNITIVE DAMAGES LAW IS
CREATING A LITIGATION CRISIS.......... 4
A. The Purpose of Punitive Damages. ......... 6
Punitive Damages Doctrine of 1791. ..... 7
Punitive Damages Now Are Awarded.... 10
The Explosion in Size and Frequency of
Punitive Damage Awards. ..............:000000++ 13
B.
C. The Broadened Standard By Which
D.
Il. THE UTAH SUPREME COURT'S
DECISION IMPERMISSIBLY
EXPANDS PUNITIVE DAMAGES
LAW IN VIOLATION OF THE
COMMERCE CLAUSE AND
o FRED Bs crcenccsctsccennesesneeeessemmmeneceases 17
A. The Utah Supreme Court’s Use of
Out-of-State Acts to Support The Award
Interferes With State Sovereignty and The
Commerce Clause of the United States
CI ccccccsensensnnnnsnssncenninennescimennes 18
B. The Utah Supreme Court’s Reliance on
Unrelated Conduct Violates Due Process
Protections
CONCLUSION
iv
TABLE OF AUTHORITIES
CASES
Allstate Ins. Co.. v. Hague,
449 U.S. 302 (1981).............ccccceeeeeeeeeeeeeeees
BMW of North America v. Gore,
517 U.S. 559 (1996) ............ccecceeseeeeeeeneneees
Baker v. National State Bank,
2002 WL 1343809
(N.J. Super. June 21, 2002) ..............000008
Bartkus v. Illinois,
359 U.S. 121 (1959)) .......eeeeeeetereeeenneenees
Beardmore v. Carrington,
95 Eng. Rep. 790 (C.P. 1764) ..............000+5
Benaway v. Coyne,
3 Pin. 196 (Wis. 1851) ............ccccceeeeeeeeeeees
Bender v. Darden Restaurants Inc.,
2002 WL 74441 (9th Cir. 2002) ................
Benson v. Frederick,
97 Eng. Rep. 1130 (K.B. 1764) .............0++.
Bigelow v. Virginia,
421 U.S. 809 (1975) ........ccccceeeeeeeeeeeeenneeees
Page
15
23
16
21
vi
Vv
Bradshaw v. Buchanan, Tire & Rubber Co. v. Tuckier,
cg TE . Te UE, S600 Gfien. den. 12,9008 ——~
Brown v. Allen, ; Watson,
35 Iowa 306 aa ai 8 = 200). \ )
Brown v. McBride
ll v. Colbaugh,
02 N-W-S. 620 (1898) neovorrrsernrnrrerneenene : <n
Brown-Forman Distillers Corp. v. Oo Georgia v. Six Flags Over
New York State Liquor Auth., On ae i aba 178
476 U.S. 583 (1986) oo... cccccccccscecescecseceeeees 21 (Ga. App. ieee
Bruce v. Rawlins, Manlove,
95 Eng. Rep. 934 (C.P.1770) occccccccccoceeooooe 7 a oy
Burton v. R.J. Reynolds Tobacco Co.
, Duberly v. Gunning,
2002 WL 1359316 100 Eng. Rep. 696 (K.B. 1813) ............--+e1++++
(D. Kan. Jume 21, 2002) o.oo. ooo ccccccccceecee ee. 15
. MITE Corp.,
C & A Carbone, Inc. v. Town of Clarkstown, ae et 624 (1982) ies tetleaaammmnenmssasianeant
511 U.S. 383 (1994) ooo ccccceceecceceerseceeeeees 20
Ellis v. Brockton Pub. Co.,
Clark v. Bales, 84 N.E. 1018 (Mass. 1908) ..........-.-----eeeeeeeeee
15 Arik. 452 (1855) .............cccccccecccscescccecceeseees 8
Fabrigas v. Mostyn,
Coffin v. Brown, . ny Eng. Rep. 549 (C.P. 1774) .......--c--eeeeeeeeeeens
50 A. 567 (Md. 1901) 20... eee ccccccccccecseeceeeeees 8
Fay v. Parker, 53 N.H. 342 (1872) .....-.-----0-e0-000
Continental Trend Res.. jac. v. Oxy USA, Inc.,
101 F.3d 634 (10th Cir. 1996) 2000. : 20 Ford Motor Co. v. Ammerman,
705 N.E.2d 539 (Ind. App. 1999) .............---+++-
Cooper Indus., Inc. v. Leatherman Tool
Group, Inc., 532 U.S. 424 (2001)..................... 6, 25
Vii
General Motors Corp. v. Moseley,
447 S.E.2d 302 (Ga. App. 1994) .................... 17
Gertz v. Robert Welch, Inc.
I 6
Gillham v. Admiral Corp.,
523 F.2d 102 (6th Cir. 1975),
cert. denied, 424 U.S. 913 (1976) .................... 14
Gilreath v. Allen,
32 N.C. (10 Tred.) 67 (1849) oooooeecccceccececeeeee. 8
Green v. Southern Express Co.,
ET 8
Grey v. Grant,
95 Eng. Rep. 794 (C.P. 1764) oo... ccccccccccceeee. 7
Grimshaw v. Ford Motor Co.,
119 Cal. App. 3d 757 (Cal. App. 1981) ........... 11
Gryc v. Dayton-Hudson Corp.,
297 N.W.2d 727 (Minn. 1980) ................... wee 11
Hamlin v. Spaulding,
SI na 8
Hawkins v. Allstate Ins. Co.,
733 P.2d 1073 (Ariz. 1987) ooo... oecccccccccceeeeceee. 17
Healy v. Beer Institute,
491 U.S. 324 (1989)... ccc cceeceeceeececereeeeeees passim
Heath v. Alabama,
474 U.S. 82 (1985) ........:c:ceeceeeeeeeeerereereeeeeeneenees 21, 23
Hewlett v. Cruchloy,
128 Eng. Rep. 696 (K.B. 1813) ) ....---------+00+
Huckle v. Money,
95 Eng. Rep. 768 (C.P. 1763) .....-.--.---s-seeeeeee
Huling v. Henderson,
161 Pa. 553 (1894) .0........cccccceceeeeeeeeeeeeeeeeeeeeeees
Huntley v. Bacon,
15 Comn. 267 (1842) .........ccccceeeeeeeeeeeeeneneeeeeeenes
Jackson v. American Tel. & Tel. Co.,
51 S.E. 1016 (N.C. 1905) .......ccccccceeeeeeeeeeeeeeeees
Johansen v. Combustion Eng’g, Inc.,
170 F.3d 1320 (11th Cir. 1999) ............0cc2ee000+
Juzwin v. Amtorg Trading Corp.,
705 F. Supp. 1053 (D.N.J.).,
vacated, 718 F. Supp. 1233
(D.N.J. 1989), rev'd on other
grounds sub nom., Juzwin v.
Asbestos Corp., 900 F.2d 686
(3d Cir.), cert. denied,
489 U.S. 896 (1990) ...........cceeeceeeeeeeeeeerreeeeeenenes
Lake Shore & Mich. S. RV. v. Prentice,
147 U.S. 101 (1893) .........-::sseeeereeeeeeennenneneeenees
12
ix
Leith v. Pope,
96 Eng. Rep. 777 (C.P. 1799) )
Leonen v. Johns-Manville Corp..,
717 F. Supp. 272 (D.N.J. 1989)
Linsley v. Bushnell,
15 Conn. 225 (1842) ooooooo oo cccccccccccceeccceeeeseeeee-e.
Louisville & Nashville R.R. Co. v. Ballard
85 Ky. 307 (1887)
FOOTER EH EEE HEHE EES
Lynd v. Picket,
7 Minn. 184 (1862) oo... eccccccccccecccceecseeceeseeee.
Lyon v. Hancock,
DN
Madison Chevrolet, Inc., v. Donald,
505 P.2d 1032 (Ari. 1973) ooo. eeeecccccccceleceeceece.
Mcaulay v. Birkhead,
35 N.C. 28 (1851)
Meibus v. Dodge,
38 Wis. 300 (1875)
SOOTHER EERE EEEEE
Merest v. Harvey,
128 Eng. Rep. 761 (C.P. 1814) o0....oceccccccccecees.
Moore v. Jewel Tea Co.,
253 N.E.2d 636 (Ill. App. 1969),
aff'd, 263 N.E.2d 103 (Ill. 1970) .00....-ccececceosee.
12
North v. Cates,
179 Towa 342 (1917) ......cscccrrccssccrcesssecrresssssoes
B Ky. 591 (1812) .......ccccsccessesereeseessresersseessnnsees 8
Old Chief v. United States, ™
519 U.S. 172 (1997) ......cccccceseeseeeeseseeeeeeeeseeseees
O'Neill v. Gallant Ins. Co., “
769 N.E.2d 100 (Ill. App. 2002) ...........0ceeeeeeees
Pacific Mut. Life Ins. Co. v. Haslip, |
499 U.S. 1(1991)) ....cccccccceceecessseeereeeeeeeseeeeeenees passim
Pacific Mutual Life Ins. Co. v. Haslip,
S. Ct. U.S. Oral Arguments, Vol. 3
Case No. 89-1279, (Oct. Term :
1990), available at 1990 WL 601340 .............. 4-
Parsons v. Harper, ,
B7 Var. 64 (1860) ...ccccccccccccsscccccccccsccsseverscsesessees
Phillips Petroleum Co. v. Shutts, ™
472 U.S. 797 (1985) .....ccccccccsssccrcccsscccecsessssoreses
. Pickett v. Crook, ,
20 Wis. 358 (1866) ...........cccccceeeeeeeeeeeeeeeeeeeeeeees
Porter v. Seiler, ‘
23 Pa. 424 (1BB4) .....cccccccccssccccccccssscscccecesessssees
Racich v. Celotex Corp., 887 P.2d 393 ie
(2d Cir. 1989) ...........00+ ssasensmmmandansqgnoneneneneniees
Reutkemeier v. Nolte, ,
xi
Roginsky v. Richardson-Merrell, Inc.,
378 F.2d 832 (Cir. 1967) ooo.ceeeccccccceccssocececeees..
Romo v. Ford Motor Co.,
(Cal. App. June 28, 2002) o.o..cccccccccccccecece---.,
Rubeck v. Huffman,
374 N.E.2d 411 (Ohio 1978) ...........................
Sand Hill Energy, Inc. v. Ford Motor Co.,
2002 WL 1000917
(Ky. May 16, 2002) ooo..ecccccceccceccccseececeeseeen..,
Schindel v. Schindel,
BE I BO CIID cvcccccnecsccsscswsiueseesseserssss.......
Schlencker v. Risley,
REA NS ee
Schumacher v. Shawhan Distillery Co.,
178 Mo. App. 361 (1914) oo.eeececcccccccececceceeeess.
Seals v. St. Regis Paper Co., 236
So. 2d 388 (Miss. 1970) o.o....e.ccccceccccosesecceeseeees.
Sears v. Lyons,
171 Eng. Rep. 658 (K.B. 1818) .......................
Sharpe v. Brice,
96 Eng. Rep. 557 (C.P. 1774) coecccccccccoceecee-....
Sheik v. Hobson,
64 Io ya 146 (1884) Pooerooccccoocosoocccocoococoscccococecece
13
15
10
15
10
xii
Singer Mfg. Co. v. Holdfodt,
I 8
Southern Kan. Ry. v. Rice,
EE AI ae Re ET LEAT 14
Southern Pacific Co. v. Arizona
ex rel. Sullivan,
I i iaiedin 21
St. Louis Cotton Compress Vo. v. Arkansas,
I, I hala teatatidciatel 21
State Farm v. Campbell,
2001 WL 1246676
NS at 3,17
Sturm, Ruger & Co. v. Day,
594 P.2d 38 (Alaska 1979) ..............c0cccccccccscseee 11
Taber v. Hutson,
SORES TTS ee ee ne EROS a 8
Taylor v. Giger,
I i a a a 8
Taylor v. Grand Trunk Ry. of Canada,
I 14
Toole v. Richardson-Merreil, Inc.,
251 Cal. App. 2d 689 (1967) .........ccceceeeeeeeeee 10, 11-12, 14
xiii
Treat v. Barber,
7 Conn. 274 (1828)
Trogden v. Terry,
172 N.C. 540 (1916)
Tullidge v. Wade,
TXO Prod. Corp. v. Alliance Res. Corp.,
509 U.S. 443 (1993)
United States v. Moccia, 681 F.2d 61
PUREE DIE scthicsibdatiacntaaecberidamnsceceetdeeseiistisi ca
Vunck v. Hull,
3 N.J.L. 814 (1809)
Wangen v. Ford Motor Co.,
294 N.W.2d 437 (Wis. 1980)
Ward v. Blackwood,
eae
Wheeler & Wilson Mfg. Co. v. Boyce,
ERTS IE PI ARDC
Whipple v. Walpole,
an kg ETRE TDR aN EPR TC
Wilkes v. Wood,
98 Eng. Rep. 489 (C.P. 1763) .............
Williams v. Illinois, 399 U.S. 235 (1970)
SOTO EEHE EEE EEE EEEES
SOPOT EEE TEETH EEE EHEEHE HEROES EES
hn
XIV
Williams v. Philip Morris Inc.,
2002 WL 1189763
(Or. App. June 5, 2002) ..........ecssseeeeeeeeeeeeeeeees
Wisker v. Hart,
. ie § | 2
Woodman v. Town of Nottingham,
ff 0 en
World-Wide Volkswagen Corp. v. Woodson,
i ee ericnteistnsincecninniinnininininmadainenion
Yazoo v. Mississippi Valley R.R. Co. v. Sanders,
fo 8 een
TA AND RE ATION
is fo 2 SG).
CoLo. REV. STAT. § 13-25-127(2) (2002) ..............
FLA. STAT. ANN. § 768.73 (West 2002) ................
IOWA CODE § 668A.1(1) (2002) .........:ceeseeeeeeeeeeeees
KAN. STAT. ANN. § 60-3701(e)-(f) (2001) ..............
LA. CIv.CODE ANN. 3546 (West 2002) .................
MINN. STAT. § 549.20(1)(a) (2002) ...........eeeeeeeeees
N.H. REV. STAT. ANN. § 507:16 (2002) .............-+.
XV
N.J. STAT. ANN. § 2A:15-5.14(b)
ESSE ee Oe ae
OKLA. STAT. tit. 23, § 9.1(B) (2002) .....................
OR. REV. STAT. § 18.537 (2001) ....cccccccccccccccesceeees.
TEX. CIv. PRAC. & REM. CODE ANN.
ET sasieitcliedctatietiiiaeedeptatannubhansice ascendant
TEX. Civ. PRAC. & REM. CovE ANN.
§ 41.009 (Vernon 2002) ...........cccccccesescsceseeees
FEREN AND
Mark A. Behrens, Editorial, When the Working
Well Sue, Nat’] L. J. Apr. 29, 2001..........00......
Mark A. Behrens & Barry M. Parsons,
Responsible Public Policy Demands
an End to the Hemorrhaging Ejfect
of Punitive Damages in Asbestos Cases,
6 Tex. Rev. L. & Pol. 137 (2001) ....................
Griffin B. Bell, Asbestos Litigation
and Judicial Leadership: The Courts'
Duty to Help Solve The Asbestos
Litigation Crisis, Briefly, Vol. 6,
No. 6, June 2002 (Nat’l Legal Center
for the Pub. Interest monograph) ..................
22
22
22
10
22
22
16
16
16
XVi
R. Blatt et al., Pur ‘t:ve Damages: A State
By State Guide To Law And Practice
BE Lt) ee
Borowsky & Nicolaisen, Punitive Damages
in California: The Integrity of Jury
Verdicts, 17 U.S.F. L. Rev. 147 (1983) ....
Comment, Punitive Damages Awards in
Strict Products Liability Litigation: The
Doctrine, the Debate, the Defenses,
42 Ohio St. L.J. 771 (1981) .............eeceeee
Margaret Meriwether Cordray, The Limits
of State Sovereignty and the Issue of
Multiple Punitive Damages Awards,
78 Or. L. Rev. 275 (1999) .............:.eeceeees
Dorsey D. Ellis Jr., Fairness and Efficiency
in the Law of Punitive Damages,
56 S. Cal. Rev. 1 (1982) ..........::cceeeeeeeees
Samuel Freifield, The Rationale of
Punitive Damages, 1 Ohio St.
Did. B CAGES) qccrccccseccvevccsccccccssccecsccsvescceses
J. Ghiardi & J. Kircher, Punitive
Damages Law & Practice
Fo tf: ee
Deborah Hensler et al. , Asbestos Litigation
in the U.S. A New Look at an Old Issue
50 (RAND Inst. for Civil Justice, 2001)
XVii
Peter W. Huber, LIABILITY: THE LEGAL
REVOLUTION AND ITS CONSEQUENCES
TM
John Calvin Jeffries, A Comment on The
Constitutionality of Punitive Damages,
72 Va. L. Rev. 189 (1986) o.o...eecccccccccesceseoceee.
W. Page Keeton et al., PROSSER AND
KEETON ON THE LAW OF TORTS, § 2
| Pa aA
Dennett F. Kouri, How to Settle Bad
Faith Punitive Damages Cases,
Brief 31 (Fall 1984) oo....ccccccccsccccecseccoseccecees.
Jane Mallor & Barry Roberts, Punitive
Damages: Toward a Principled
Approach, 50 HASTINGS L.J. 969
CEEIIED .ocovsconsscnsemusosiseesniniueiiiainlnnnsnnnnnnannnnnn
Theodore B. Olson, Rule of Law:
The Dangerous National Sport
of Punitive Damages, Wall St. J.,
OS
Walter K. Olson, THE LITIGATION
EXPLOSION (1991) ........ccccsccscessssscesseeceeseceeeeese.
David G. Owen, Problems in Assessing
Punitive Damages Against Manufacturers
of Defective Products, 49 U. Chi. L. Rev. 1
CETTE) .<coccocesscenesessiseenmesnseisnninunianlnnnnnn
12
16_
15
14
XViii
George L. Priest, Punitive Damages
and Enterprise Liability, 56 S. Cal.
Ee 14
Restatement (Second) of Torts § 908
EE 11
James B. Sales & Kenneth B. Cole Jr.,
Punitive Damages: A Relic That Has
Outlived Its Origins, 37 Vand. L. Rev.
ESE SELLE 7, 10, 22
James B. Sales, The Emergence of Punitive
Damages in Product Liability Actions:
A Further Assault on The Citadel,
14 St. Mary's L.J. 351 (1983) 20.0.0... eceeeeeees 9
Gary T. Schwartz, Deterrence and
Punishment in the Common Law
of Punitive Damages: A Comment,
56 S. Cal. L. Rev. 133 (1982) ...............::see0ee 13-14
Victor E. Schwartz et al., PROSSER,
WADE AND SCHWARTZ’S CASES AND
MATERIALS ON TORTS (10th ed. 2000) ............ 6
Victor E. Schwartz et al., Reining in
Punitive Damages “Run Wild”:
Proposals for Reform by Courts
and Legislatures, 65 Brook. L. Rev.
EEE LL 7
xix
Victor E. Schwartz & Liberty Magarian,
Challenging The Constitutionality of
Punitive Damages: Putting Rules of
Reason on an Unbounded Legal Remedy,
28 American Bus. L.J. 485 (1990) ..................
Richard A. Seltzer, Punitive Damages
in Mass Tort Litigation: Addressing
the Problems of Fairness, Efficiency,
and Control, 52 Fordham L. Rev. 37
CEIDIEIED) cxssccnnsascansascunsntnentensessetensensmnententineimensiaanes
Janie L. Shores, A Suggestion
for Limited Tort Reform, Allocation
of Punitive Damage Awards to
Eliminate Windfalls, 44 ALA. L.
eres ae GEIE cncntssiesnnsininttntnesenenessncanensinntinitnsass
Stephen M. Turner, et al., Punitive Damages
Explosion: Fact or Fiction? (Washington
Legal Foundation, Working Paper Series
SI Ce Is
David L. Walther & Thomas A. Plein,
Punitive Damages: A Critical Analysis;
Kink v. Combs, 49 Marga. L. Rev. 369
CRIED csccesesssecesnsccssnsssnmagennstenssiensapssnnidtansenmnesees
Malcom E. Wheeler, A Proposal for
Further Common Law Development
of the Use of Punitive Damages in
Modern Products Liability Litigation,
40 Ala. L. Rev. 919 (1989) .0............cccceseeeeeeees
12
15
16
IN THE
Supreme Court of the United States
No. 01-1289
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,
Petitioner,
Vv.
CURTIS CAMPBELL AND INEZ CAMPBELL,
Respondents.
On Writ of Certiorari to the
- Utah Supreme Court
BRIEF OF THE PRODUCT LIABILITY ADVISORY
COUNCIL, INC. AS AMICUS CURIAE
IN SUPPORT OF PETITIONER
INTEREST OF AMICUS CURIAE'
The Product Liability Advisory Council, Inc. (PLAC) is
a non-profit association with 126 corporate members repre-
senting a broad cross-section of American and international
product manufacturers. These companies seek to contribute
' Pursuant to Rule 37, a blanket letter of consent from the parties has
been filed with the Clerk of the Court. In accordance with Rule 37.6,
amicus states that no counsel for either party has authored this brief in
whole or in part, and no person or entity, other than the amicus, has made
a monetary contribution to the preparation or submission of this brief.
2
manufacturing sector. In addition, several hundred of the
leading product liability defense attorneys in the country are
Sustaining (non-voting) members of PLAC. Since 1983,
PLAC has filed over 600 briefs as amicus curiae in both
state and federal courts, including this Court, presenting the
broad perspective of product manufacturers seeking fairness
and balance in the application and development of the law as
it affects product liability. A list of PLAC’s corporate mem-
bers is attached as Appendix A.
SUMMARY OF ARGUMENT
This Court in several important rulings has correctly
placed both substantive and procedural due process limita-
tions on punitive damages. Some members of this Court,
however, have expressed concern about placing such limita-
3
tions on a practice that is said to have been in place at the
time the Bill of Rights was adopted. All members of this
Court should appreciate that the punitive damages practice of
1791 does not exist today—except in name. This case illus-
trates why.
Punitive damages were first developed and used for years
as an auxiliary to the criminal justice system in a narrow
category of cases, intentional torts. Until the late 1960s,
virtually all punitive damages cases involved a single plain-
tiff who was wronged by a single defendant. The defen-
dant’s wrongful behavior toward the plaintiff was the source
of evidence for the jury making a punitive damages award.
In the last thirty-five years, however, there have been
ever-expanding “circles of evidence” of the alleged wrongful
acts. The focus in punitive damages cases has expanded
from the conduct of the defendant toward an individual
plaintiff, to the relevant conduct of the defendant toward
others, to the extreme situation now before this Court — ir-
relevant conduct of the defendant toward numerous persons
throughout the country in many different circumstances.
The Utah Supreme Court’s decision below in State Farm
v. Campbell, No. 981564, 2001 WL 1246676 (Utah Oct. 19,
2001), is a dramatic example of the unwarranted, unconsti-
tutional expansion of punitive damages law. This expansion
of law already has turned a once-narrow remedy into a liti-
gation tactic that allows jurors in a single state court case to
regulate nationwide commerce by imposing extraordinary
punitive damages awards. Under the Utah Supreme Court’s
ruling, any act by a company, anywhere, performed at any
time can serve as a basis for punitive damages awards.
4
This Court has made clear that the Commerce and Due
Process Clauses of the United States Constitution and the
principles of »vereignty and comity require that state courts
permit punitive damages awards to be awarded based on the
relevant acts of the defendant toward the plaintiff. See Gore,
517 U.S. 559. State courts should not use in-state punitive
damages to regulate unrelated out-of-state conduct. This
Court’s constitutional mandate on this crucial distinction
should be followed by all state courts. It was ignored by the
court below.
ARGUMENT
I. THE ONGOING EXPANSION OF PUNITIVE
DAMAGES LAW IS CREATING A LITIGATION
CRISIS.
The record before this Court needs to be corrected re-
garding the nature and evolution of Punitive damages prac-
tice since passage of the Bill of Rights in 1791. In oral ar-
guments before this Court in Pacific Mutual Life Insurance
Co. v. Haslip, 499 U.S. 1 (1991), the following exchange
took place between Justice Scalia and counsel for the peti-
tioner insurance company:
QUESTION: [W]ho whispers in my ear that [the practice of
awarding punitive damages] is in violation of
due process when it's been going on since
1791 and nobody has thought so?
RESPONSE: I suggest, Justice Scalia, that the situation
here is essentially the same as it was in Wil-
liams v. Illinois (399 U.S. 235 ( 1970)], when
you have the practice which had extended
from medieval England down through the
United States from the time of the Revolution
and the adoption of the Constitution to the
5
time of that decision, of increasing penalties
of prisoners beyond the maximum allowed by
statute when they were unable to pay fines or
court costs, and there, as here, if that had been
analyzed and looked at, the Court would
probably have found that it violated due proc-
ess, just as I submit that punitive damages
[do] ....
Pacific Mutual Life Insurance Co. v. Haslip, S. Ct. U.S. Oral
Arguments, Vol. 3, Case No. 89-1279, at 22 (Oct. Term
1990), available at 1990 WL 601340.
With all due respect to the petitioner’s counsel in Haslip,
who was focused on other issues, his answer to Justice
Scalia, as shown by the instant case, was not in accord with
the content and nature of some modern punitive damages
awards. Punitive damages practice has not remained “essen-
tially the same” as it existed in medieval England and colo-
nial America. The punitive damages practice of 1791, while
existing in some circumstances, does not apply in the case
before this Court, or in many other instances in modern liti-
gation.
In the more than 200 years during which the
common law of punitive damages has evolved
in this country, only the last several have wit-
nessed a proliferation of varied expressions of
concern as to the manner in which the law has
developed and may continue to develop in the
future... . [RJecent years have resulted in a
literal explosion of punitive damage law and
practice. This is so not only as to the number
of cases in which they are sought, but also in
the variety of causes of action in which they
are claimed and in the different categories of
defendants who are exposed to the awards.
6
J. Ghiardi & J. Kircher, PUNITIVE DAMAGES LAW &
PRACTICE § 21.01, at 1 (1985) (footnotes omitted).
A. The Purpose of Punitive Damages.
Punitive damages are not ordinary civil or tort law dam-
ages.” Unlike compensatory damages, which provide pay-
_ ment for economic losses (e.g., lost wages and medical ex-
penses) and noneconomic injuries (e.g., “pain and suffer-
ing”), punitive damages are not awarded to compensate for a
harm.’ Rather, punitive damages are “quasi-criminal” in
nature and “operate as ‘private fines’ intended to punish the
defendant and deter future wrongdoing.’ Punitive damage
awards serve an important social purpose. They allow the
public to express its outrage, to punish defendants for repre-
hensible conduct, and to deter such conduct in the future,
where compensatory damages alone in some instances may
not adequately serve these objectives.°
> See Victor E. Schwartz et al., PROSSER, WADE AND SCHWARTZ’S
CASES AND MATERIALS ON TORTS, 549-50 (10th ed. 2000).
> See Gertz v. Robert Welch, Inc., 418 U.S. 323, 350 (1974) (noting
that punitive damages “are not compensation for injury ... [but] are pri-
vate fines levied by civil juries to punish reprehensible conduct and to
deter its future occurrence”); see also W. Page Keeton ef al., PROSSER
AND KEETON ON THE LAW OF TORTS, § 2, at 9 (Sth ed. 1984) (explaining
that punitive damages are awarded to punish defendant, teach defendant
not to “do it again,” and deter others from similar behavior), [hereinafter
“THE LAW OF TORTS” }.
a
Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424,
432 (2001) (quoting Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 19
(1991)).
* See Jane Mallor & Barry Roberts, Punitive Damages: Toward a
Principled Approach, 50 HASTINGS L.J. 969, 978-79 (1999).
7
B. Punitive Damages Doctrine of 1791.
Punitive, or exemplary, damages originally focused on
the relationship between one plaintiff and one defendant.
They were first recognized by the English common law in
the mid-18th century in cases involving illegal search and
seizures by officers of the Crown.° Historically, in England
and then America, punitive damages were made available
only in a narrow category of torts involving conscious and
intentional harm inflicted by one person on another.
These cases, “the traditional intentional torts,” were de-
signed to punish an individual’s purposeful bad act against ;
another.’ The causes of action included assault and battery,
6 See Huckle v. Money, 95 Eng. Rep. 768 (C.P. 1763) (first case to use
the term “exemplary damage,”); Wilkes v. Wood, 98 Eng. Rep. 489 (C.P.
1763). In these cases, English courts for the first time expressed that “the
punitive and deterrent purposes of damage awards could be separated
from their compensatory function.” Dorsey D. Ellis Jr., Fairness and
Efficiency in the Law of Punitive Damages, 56 S. Cal. Rev. 1, 14 (1982).
See also The Hon. Janie L. Shores, A Suggestion for Limited Tort Re-
form, Allocation of Punitive Damage Awards to Eliminate Windfalls, 44
ALA. L. REV. 61, 62-69 (1992) (tracing the history of punitive damages
forward from biblical times); James B. Sales & Kenneth B. Cole Jr., Pu-
nitive Damages: A Relic That Has Outlived Its Origins, 37 Vand. L. Rev.
1117, 1120 (1984); Comment, Punitive Damages Awards in Strict Prod-
ucts Liability Litigation: The Doctrine, the Debate, the Defenses, 42
Ohio St. L.J. 771, 772 (1981). See also Beardmore v. Carrington, 95
Eng. Rep. 790 (C.P. 1764) (illegal search and seizure), Bruce v. Rawlins,
95 Eng. Rep. 934 (C.P. 1770) (illegal search and seizure); Sharpe v.
Brice, 96 Eng. Rep. 557 (C.P. 1774) (illegal search and seizure).
? See Victor E. Schwartz et al., Reining in Punitive Damages “Run
Wild”: Proposals for Reform by Courts and Legislatures, 65 Brook. L.
Rev. 1003, 1006-07 (1999).
® See, e.g., Grey v. Grant, 95 Eng. Rep. 794 (C.P. 1764); Benson v.
Frederick, 97 Eng. Rep. 1130 (K.B. 1766); Corwin v. Watson, 18 Mo. 71
(1853); Porter v. Seiler, 23 Pa. 424 (1854); Lyon v. Hancock, 35 Cal. 372
(1868); Ward v. Blackwood, 41 Ark. 295 (1883); Trogden v. Terry, 172
N.C. 540 (1916).
8
libel and slander, ” malicious prosecution, '° false imprison-
ment, and intentional interferences with property such as
trespass and conversion,'* malicious attachment or destruc-
tion of property,'? private nuisance,'* and other conduct
amounting to reckless endangerment.'> The typical allega-
See, e.g., Vunck v. Hull, 3 N.J.L. 814 (1809); Gilreath v. Allen
N.C. (10 Ired.) 67 (1849); Benaway v. Coyne, 3 Pin. 196 (Wis. we Son
Sheik v. Hobson, 64 lowa 146 (1884); Louisville & Nashville R.R. Co. v.
Ballard, 85 Ky. 307 (1887); Coffin v. Brown, 50 A. 567 (Md. 1901); Ellis
v. Brockton Pub. Co., 84 N.E. 1018 (Mass. 1908).
10
See, e.g., Leith v. Pope, 96 Eng. Rep. 777 (C.P. 1799); Hewlett v.
ge a a je (K.B. 1813); Brown v. McBride, 24 Misc.
, -Y.S. ); Jackson v. American Tel. & Tel.
1016 (N.C. 1905). ities
11
See, e.g., Fabrigas v. Mostyn, 96 Eng. Rep. 549 (C.P. 1774):
Shore & Mich. S. RV. v. Prentice, 147 US. 101 ptm 7d de oma
Risley, 4 Ill. 483 (1842); Taber v. Hutson, 5 Ind. 322 (1854); Parsons v.
Harper, 57 Va. 64 (1860); Hamlin v. Spaulding, 27 Wis. 360 (1869);
Green v. Southern Express Co., 41 Ga. 515 (1871); Wheeler & Wilson
——Mfg. Co. v. Boyce, 36 Kan. 350 (1887).
12
See, e.g., Merest v. Harvey, 128 Eng. Rep. 761 (C.P. 1814); Sears v.
Lyons, 171 Eng. Rep. 658 (K.B. 1818). Punitive damages were also al-
lowed for seduction. See, e.g., Tullidge v. Wade, 95 Eng. Rep. 909 (C.P.
je —_- for — English courts permitted an award of punitive
amag or criminal conversation (i.e., adultery). See, e.g., Duberly v.
Gunning, 100 Eng. Rep. 696 (K.B. 1813). 7 a
5 See, e.g., Taylor v. Giger, 3 Ky. 586 (1803); North v. Cates, 5 Ky.
591 (1812); Treat v. Barber, 7 Conn. 274 (1828); Huntley v. Bacon, 15
Conn. 267 (1842); Clark v. Bales, 15 Ark. 452 (1855); Schindel v. Schin-
del, 12 Md. 108 (1858); Dorsey v. Manlove, 14 Cal. 553 (1860); Lynd v.
Picket, 7 Minn. 184 (1862); Brown v. Allen, 35 lowa 306 (1872); Singer
Mfg. Co. v. Holdfodt, 86 Ill. 455 (1877); Bradshaw v. Buchanan, 50 Tex
492 (1878); Huling v. Henderson, 161 Pa. 553 (1894). )
14
See, e.g., Yazoo v. Mississippi Valley R.R. Co. v. Sanders, 87 Mi
. Vv. ' ss.
road “a Schumacher v. Shawhan Distillery Co., 178 Mo. App. 361
1s
See, e.g., Whipple v. Walpole, 10 N.H. 130 (1839); Lins/
. .H. ; ey v. Bush-
nell, 15 Conn. 225 (1842); Pickett v. Crook, 20 Wis. 358 (1866); Meibus
9
tion running through these cases was that defendant's tor-
tious conduct had been motivated by a malicious or spiteful
desire to injure the specific plaintiff. Punitive damages were
allowed in these cases as an auxiliary, or “helper,” to the
criminal law system, which in its infancy “punished more
severely for infractions involving property damage than for
invasions of personal rights.” James B. Sales, The Emer-
gence of Punitive Damages in Product Liability Actions: A
Further Assault on The Citadel, 14 St. Mary's L.J. 351, 355
(1983).'°
The nature of these claims made it relatively simple for
the jurors to understand and carry out their responsibilities.
The jury had only to assess the particular
transaction before it and to determine on that
basis whether the defendant’s conduct war-
ranted a punitive award. .. . Although not
constrained by the same procedural require-
ments as other forms of punishment, punitive
darnages at least were based on a manageable
jury inquiry. In such circumstances, and de-
spite the grave questions raised by the ab-
sence of procedural safeguards and the lack of
adequate standards, it was possible to view
v. Dodge, 38 Wis. 300 (1875). As in England, punitive damages were
also permitted in cases involving seduction. See, e.g., Coryell v. Col-
baugh, 1 N.J.L. 77 (1791); Mcaulay v. Birkhead, 35 N.C. 28 (1851),
Reutkemeier v. Nolte, 179 lowa 342 (1917).
'6 See also Victor E. Schwartz & Liberty Magarian, Challenging The
Constitutionality of Punitive Damages: Putting Rules of Reason on an
Unbounded Legal Remedy, 28 American Bus. L.J. 485 (1990); David L.
Walther & Thomas A. Plein, Punitive Damages: A Critical Analysis,
Kink v. Combs, 49 Marq. L. Rev. 369, 371 (1965); Samuel Freifield, The
Rationale of Punitive Damages, | Ohio St. L.J. 5, 7 (1935). See generally
THE LAW OF TORTS § 2, at 8.
10
punitive damages as minimally consistent
with fundamental fairness.'’
C. The Broadened Standard By Which Punitive
Damages Now Are Awarded.
Beginning in the late 1960s, courts departed radically
from the historical “intentional tort” moorings of punitive
damages, i.e., the law of 1791. In what has been called an
American “legal revolution,” courts began awarding punitive
damages in so-called “mass tort litigation,” particularly in
the developing field of product liability.'* While punitive
damages remained available in the traditional one-on-one
context for a defendant’s intentional wrong to a specific
plaintiff, they were expanded to cover conduct that was not
intentional in nature, such as recklessness, willful and wan-
ton misconduct, or even gross negligence. '”
'’ See John Calvin Jeffries, A Comment on The Constitutionality of
Punitive Damages, 72 Va. L. Rev. 139, 141 (1986) (footnote omitted)
(also noting that most punitive judgments were, by today's standards,
almost trivial in amount) [hereinafter “Jeffries’”’].
‘In 1967, a California Court of Appeal held for the first time that pu-
nitive damages were recoverable in a strict product liability action. See
Toole v. Richardson-Merrell, Inc., 251 Cal. App. 2d 689 (1967). Since
— punitive damages awards in product liability cases have prolifer-
19
See e.g., TEX. CIV. PRAC. & REM. CODE ANN. § 41.003 (a)(3)
(Vernon 2001) (willful act or gross neglect in wrongful death cases);
FLA. STAT. ANN. § 768.72(2) (West 2002) (“intentional misconduct or
gross negligence” ); Wisker v. Hart, 766 P.2d 168 (Kan. 1988) (“gross
negligence”); Rubeck v. Huffman, 374 N.E.2d 411, 413 (Ohio 1978)
(“caused by intentional, reckless, wanton, willful and gross acts or by
malice inferred from conduct and surrounding circumstances”); Seals v.
St. Regis Paper Co., 236 So. 2d 388, 392 (Miss. 1970) (gross negligence
and “reckless indifference to the consequences”). See also J. Sales & K.
Cole, Punitive Damages: A Relic That has Outlived Its Origins, 37 Vill.
11
The focus of punitive damages also shifted away from
the actual plaintiff toward alleged wrongful conduct by the
defendant toward the public at large.” For example, while it
was difficult to prove a defendant manufacturer marketed
and sold a defective product with the conscious intent of in-
juring a specific plaintiff, it was much easier to establish that
the defendant did so recklessly in disregard to the possible
harm to potential consumers.”’ Similarly, particularly in
L. Rev. 1117, 1130-38 (1984) (discussing standards of conduct giving
rise to punitive damages award).
20 See, e.g., Moore v. Jewel Tea Co., 253 N.E.2d 638, 648 (Ill. App.
1969), aff'd, 263 N.E.2d 103 (Ill. 1970) (plaintiffs were properly allowed
to argue that defendant had been guilty of “gross disregard of the rights
of the public”); Madison Chevrolet, Inc., v. Donald, 505 P.2d 1032, 1042
(Ariz. 1973) (“punitive damages ... are applicable where there is a
‘reckless indifference to the interest of others”); Gryc v. Dayton-Hudson
Corp., 297 N.W.2d 727, 741 (Minn.) (manufacturer “acted in reckless
disregard of the public” in marketing non-flame retardant children’s pa-
jamas), cert. denied sub nom, Riegel Textile Corp. v. Gryc, 449 U.S. 921
(1980); Wangen v. Ford Motor Co., 294 N.W.2d 437, 442 (Wis. 1980)
(“Some commentators speak of the behavior justifying punitive damages
as ‘flagrant indifference to the public safety.””) (citing Interagency Task
Force on Product Liability, Product Liability: Final Report of the Legal
Study, vol. 5 at 137 (U.S. Dept. of Commerce 1977)); Sturm, Ruger &
Co. v. Day, 594 P.2d 38, 47 (Alaska 1979) (punitive damages available
where manufacturer has marketed known defective product in “reckless
disregard of the public’s safety”), mod. on other grounds, 615 P.2d 621
(Alaska 1980), cert. denied, 454 U.S. 894 (1981); Grimshaw v. Ford
Motor Co., 119 Cal. App. 3d 757, 810 (Cal. App. 1981) (interpreting
statutory term “malice” to encompass “callous and conscious disregard of
public safety” by manufacturer of defective product); Restatement (Sec-
ond) of Torts § 908 cmt. b (1977) (“Reckless indifference to the rights of
others and conscious action in deliberate disregard of them . . . may pro-
vide the necessary state of mind to justify punitive damages.”).
2! In Toole, the first case to find that punitive damages were recover-
able in a strict product liability action, the California Court of Appeal
ruled that the plaintiff was not required to prove that the defendant phar-
maceutical company acted with deliberate intent to injure the plaintiff.
251 Cal. App. 2d at 714. Rather, the malice in fact standard in Califor-
12
contract cases, courts accepted relevant evidence of the de-
fendant’s acts toward others to establish that the act com-
plained of was performed in bad faith or fell within a pattern
and practice of misconduct.
The advent of mass tort litigation and its expansion of
punitive damages practice meant that punitive damages now
could be imposed repeatedly for an alleged risk in a single
product line or a single decision.” This resulted in an explo-
sion of claims against manufacturers of such products as as-
bestos, formaldehyde, DES, Agent Orange, automobiles,
tampons, and the Dalkon Shield IUD.” Similarly, contract-.
based claims for punitive damages became more and more
frequent.** As Justice O'Connor pointed out in her dissent in
nia’s punitive damages statute applied, and the plaintiff merely had to
prove that the defendant acted recklessly and in wanton disregard to the
possible harm to others when it marketed, promoted and sold the anti-
cholesterol drug at issue. See id. at 715.
* As one commentator wrote, “[A] single design error, inadequate
warning or recurrent manufacturing mistake can permeate an entire prod-
uct line, resulting in tens, hundreds or thousands of personal injury law-
suits with accompanying punitive damages claims. Individual awards
that appear reasonable can aggregate to threaten the very survival of a
business entity.” See Jeffries, 72 Va. L. Rev. at 142.
°° See Richard A. Seltzer, Punitive Damages in Mass Tort Litigation:
Addressing the Problems of Fairness, Efficiency, and Control, 52 Ford-
ham L. Rev. 37, 51-52 (1983); Jeffries, 72 Va. L. Rev. at 142. Several
courts have acknowledged that due process may be implicated in “mass
tort” punitive damages awards cases. See Juzwin v. Amtorg Trading
Corp., 705 F. Supp. 1053, 1064 (D.N.J.), vacated, 718 F. Supp. 1233
(D.N.J. 1989), rev'd on other grounds sub nom., Juzwin v. Asbestos
Corp., 900 F.2d 686 (3d Cir.), cert. denied, 489 U.S. 896 (1990); Racich
v. Celotex Corp., 887 F.2d 393, 398 (2d Cir. 1989); Leonen v. Johns-
Manville Corp., 717 F. Supp. 272, 283 (D.N.J. 1989).
** See Dennett F. Kouri, How to Settle Bad Faith Punitive Damages
Cases, Brief 31 (Fall 1984) (“In bad faith jurisdictions, virtually all first
party cases dealing with a denial of insurance benefits include a charge of
13
Haslip, “Unheard of only 30 years ago, bad faith contract .
actions now account for a substantial percentage of all puni-
tive damages awards.” Haslip, 499 U.S. at 62 (O’Connor, Tue
dissenting).
Courts and commentators struggled with the theoretical
and practical problems created by the wider availability of
punitive damages awards. There was no good way to govern
the total amount of punitive awards assessed nationwide in
any set of lawsuits against a defendant. The vague standards
for awarding and assessing punitive damages gave juries lit-
tle guidance in their decisionmaking.” Judge Henry
Friendly predicted the potential problems when he wrote in
1967 of the new expansion of punitive damages law:
The legal difficulties engendered by claims
for punitive damages on the part of hundreds
of plaintiffs are staggering. ve We have the
gravest difficulty in perceiving how claims
for punitive damages in such a multiplicity of
actions throughout the nation can be so ad-
ministered as to avoid overkill.”®
D. The Explosion in Size and Frequency of
Punitive Damage Awards.
Punitive damages practice picked up momentum fol-
lowing the American “legal revolution” of the late 1960s and
1970s.2” The size and frequency of punitive damages rose
bad faith and a corollary demand for extra-contractual damages. These
will, of course, include a prayer for the recovery of punitive damages.”).
25 See Jeffries, 72 Va. L. Rev. at 142.
26 Roginsky v. Richardson-Merrell, Inc., 378 F.2d $32, 839 (2d Cir.
1967).
. nthe
2” See, e.g., T. Schwartz, Deterrence and Punishment int
Pye - barre Damages: A Comment, 56 S. Cal. L. Rev. 133,
14
drastically as plaintiffs’ lawyers became more likely to seek
such awards.”
For most of their history, punitive damages had been
“rarely assessed and [were] likely to be small in amount.”
Dorsey D. Ellis Jr., Fairness and Efficiency in the Law of
Punitive Damages, 56 S. Cal. L. Rev. 1, 2 (1982). Typically,
punitive damages only slightly exceeded the compensatory
damages awarded, if at all.” But in the late 1970s and
133 (1982) (“Punitive damages are in the air, are on the move. They are
now dramatically awarded in cases in which liability of any sort would
have been almost out of the question merely fifteen years ago.”). Before
1976, there were only three reported appellate court decisions upholding
awards of punitive damages in product liability cases, and the punitive
damages awards in each case were modest in proportion to the compen-
satory damages awarded. See Toole 251 Cal. App. 2d 689 (1967)
($175,000 compensatory, $250,000 punitive damages); Gillham v. Admi-
ral Corp., 523 F.2d 102 (6th Cir. 1975), cert. denied, 424 U.S. 913
(1976) ($125,000 compensatory damages, $50,000 attorneys’ fees,
$100,000 punitive damages); Moore, 253 N.E.2d 636 ($920,000 com-
pensatory damages, $10,000 punitive damages). In 1978 and 1979, juries
in Cook County, Illinois awarded punitive damages, respectively, in 26
and 15 cases. The average number of annual punitive damage judgments
between 1959 and 1979 was 6.1, although 4 judgments or less were
awarded in 10 of the 21 years and 3 or less each year between 1959 and
1966. See George L. Priest, Punitive Damages and Enterprise Liability,
56 S. Cal. L. Rev. 123, 123 n.1 (1982).
Ford Motor Company, for example, reported that less than 0.5% of
._ the products liability complaints filed against it prior to 1970 contained
claims for punitive damages, while 27.1% of all such complaints in 1980
sought punitive awards. See David G. Owen, Problems in Assessing Pu-
nitive Damages Against Manufacturers of Defective Prodicts, 49 U. Chi.
L. Rev. 1, 54 n.258 (1982). If only personal injury lawsuits are consid-
ered, the 1980 percentage is higher. /d
* See Southern Kan. Ry. v. Rice, 38 Kan. 898 (1888) ($35 costs and
fees, $10 injury to feelings, $71.75 punitive); Taylor v. Grand Trunk Ry.
of Canada, 48 N.H. 304 (1869) ($500 actual damages, $858.50 exem-
plary); Woodman v. Town of Nottingham, 49 N.H. 387 (1870) ($578 ac-
tual, $100 exemplary); Fay v. Parker, 53 N.H. 342 (1872) ($150 actual,
$331.67 exemplary). See also R. Blatt et al., Punitive Damages: A State
15
1980s, the size of punitive damages awards “increased dra-
matically” (George L. Priest, Punitive Damages and Enter-
prise Liability, 56 S. Cal. L. Rev. 123, 123 (1982)), and “un-
precedented numbers of punitive awards in product liability
and other mass tort situations began to surface.”*°
Now, Judge Friendly’s prediction of “overkill” from pu-
nitive damages unfortunately has come true. The explosion
of punitive damages that began in the 1970s shows no signs
of slowing down. Instead, multimillion dollar punitive dam-
age verdicts’' have become commonplace.” Numerous
By State Guide To Law And Practice § 1.2, at 5 (1991) (“[GJenerally
before 1955, even if punitive damages were awarded, the size of the pu-
nitive damage award in relation to the compensatory damage award was
relatively small, as even nominal punitive damages were considered to be
punishment in and of themselves”).
* Jeffries, 72 Va. L. Rev. at 142. See also Peter W. Huber, LIABILITY:
THE LEGAL REVOLUTION AND ITS CONSEQUENCES (1988); Walter K. Ol-
son, THE LITIGATION EXPLOSION (1991); Stephen M. Turner, et al, Pu-
nitive Damages Explosion: Fact or Fiction? (Washington Legal Founda-
tion, Working Paper Series No. 50, Nov. 1992).
>! For a sample of multimillion dollar punitive damage awards in 2002,
see, Romo v. Ford Motor Co., No. F034241, 2002 WL 1398041, at *18-
19 (Cal. App. June 28, 2002) (upholding $290 million award in single
product liability action as not grossly excessive); Baker v. National State
Bank, L-00160-93, 2002 WL 1343809 (NJ. Super. June 21, 2002) (af-
firming trial court’s remittitur of punitive damage award of $4 million to
$1.8 million in employment discrimination case); Burton v. RJ. Reynolds
Tobacco Co., No. 94-2202-JWL, 2002 WL 1359316 (D. Kan. June 21,
2002) (awarding $15 million in punitive damages in product liability
action); Williams v. Philip Morris Inc., 9705-03957; A106791, 2002 WL
1189763 (Or. App. June 5, 2002) (reversing trial court’s reduction of
punitive damages award from $79.5 million to $32 million and re-
instituting $79.5 million verdict); Sand Hill Energy, Inc. v. Ford Motor
Co., No. 1999-SC-1028-DG, 1999-SC-1029-DG, 2000-SC-0444-DG,
2002 WL 1000917 (Ky. May 16, 2002) (affirming the largest punitive
damage award in Kentucky history, a $15 million award against manu-
facturer in product liability action); O’Neill v. Gallant Ins. Co., 769
N.E.2d 100 (Ill. App. 2002) (affirming punitive damage award of $2.3
16
companies, particularly manufacturers of asbestos-containing
products, have been driven into bankruptcy as a result of ex-
cessive punitive damages awards.*°
million against insurer for acted in bad faith by refusing victim's offer to
settle for policy limits); Court gf Appeals of Georgia v. Six Flags Over
Georgia, LLC, 563 S.E.2d 178 (Ga. App. 2002) (ruling that punitive
damages award of $257 million against general partner of amusement
park for unfair and deceptive business practices was not excessive);
Bender v. Darden Restaurants Inc., No. 98-5603 1, 2002 WL 74441 (9th
Cir. Jan. 18, 2002) (reinstating punitive damages award of $1.8 million
against restaurant for denial of meal and rest breaks to workers); Cooper
Tire & Rubber Co. v. Tuckier, No. 2000-CA-00404, 2002 WL 24605
(Miss. Jan. 10, 2002) (affirming $3 million punitive damage award
ae
*? This dramatic increase has led one commentator to suggest that
“[p]unitive damages have replaced baseball as our national sport.”
Theodore B. Olson, Rule of Law: The Dangerous National Sport of Pu-
nitive Damages, Wall St. J., Oct. 5, 1994, at Al7. See also Malcom E.
Wheeler, A Proposal for Further Common Law Development of the Use
of Punitive Damages in Modern Products Liability Litigation, 40 Ala. L.
Rev. 919, 919 (1989) (“Today, hardly a month goes by without a multi-
million dollar punitive damages verdict in a product liability case.” )
(cited by O'Connor, J., dissenting in Haslip, 499 U.S. at 62); Borowsky
& Nicolaisen, Punitive Damages in California: The Integrity of Jury
Verdicts, 17 U.S.F. L. Rev. 147, 150 (1983) (noting trend of “juries . . .
{[ing] sub tod cuattine 4 with j ine fi ”),
* More than 57 companies have sought Chapter 11 protection as a
result of unrestrained punitive damages in asbestos litigation. See Mark
A. Behrens & Barry M. Parsons, Responsible Public Policy Demands an
End to the Hemorrhaging Effect of Punitive Damages in Asbestos Cases,
6 Tex. Rev. L. & Pol. 137 (2001); Mark A. Behrens, Editorial, When the
Working Well Sue, Nat’! L. J. Apr. 29, 2001. More companies will fol-
low, probably at the end of this year. See Deborah Hensler et al., Asbes-
tos Litigation in the U.S.: A New Look at an Old Issue 50 (RAND Inst.
for Civil Justice, 2001) (preliminary report) (predicting that “[a]ll of the
major asbestos defendants are likely to be in bankruptcy within 24
months.”); see also Hon. Griffin B. Bell, Asbestos Litigation and Judi-
cial Leadership: The Courts’ Duty to Help Solve The Asbestos Litigation
17
In sum, the practice of awarding punitive damages as it
existed in 1791 and through the late 1960s, confined to mod-
est penalties in a few cases of intentional harms such as as-
sault, shares only a “name” with the contemporary flood of
huge awards for unintentional alleged wrongful acts or
courses of conduct that are nationwide.
Il. THE UTAH SUPREME COURT’S DECISION
IMPERMISSIBLY EXPANDS PUNITIVE DAM-
AGES LAW IN VIOLATION OF THE COM-
MERCE CLAUSE AND DUE PROCESS.
History illustrates how punitive damages have gotten out
of control. If punitive damages law and practice were as it
existed in 1791, the constitutional problems would be un-
likely to arise. But major changes that took place in the past
thirty-five years have persuaded some courts that they can
and should use punitive damage awards to regulate a defen-
dant’s acts in many other jurisdictions.** This is what oc-
curred here.
Crisis, Briefly, Vol. 6, No. 6, June 2002 (Nat’! Legal Center for the Pub.
Interest monograph), available at http://www.nicpi.org.
** As this Court has seen, both in BMW of N. Am. v. Gore, 517 U.S.
559 (1996), end now in State Farm v. Campbell, No. 981564, 2001 WL
1246676 (Utah Oct. 19, 2001), plaintiffs in recent years have sought and
obtained punitive damages awards based on a defendant’s nationwide
conduct. See Ford Motor Co. v. Ammerman, 705 N.E.2d 539 (Ind. App.
1999) (jury complies with plaintiff's request to calculate punitive dam-
ages by multiplying the amount that it would have cost Ford to correct
the alleged defect by the number of vehicles that were sold between 1983
and 1990; award later reduced), trans. denied, 726 N.E.2d 310 (Ind.
1999), cert. denied, 529 U.S. 1021 (2000); General Motors Corp. v. Mo-
seley, 447 S.E.2d 302 (Ga. App. 1994) (jury grants plaintiff's request to
award $20 million in punitive damages for each of the five million GM
pickup trucks with side saddle fuel tanks currently in use; appeals court
reverses judgment but expressly approves use of the nationwide multi-
plier argument); Hawkins v. Allstate Ins. Co., 733 P.2d 1073 (Ariz.)
18
In the instant case, the $145 million punitive award was
predicated on evidence of a “nationwide scheme to meet
corporate fiscal goals by capping payouts on claims com-
pany wide,” which plaintiffs termed the “Performance, Plan-
ning and Review” or “PP&R scheme.” Pet. 6a; see also Pet.
18a-19a (listing examples of defendant’s allegedly reprehen-
sible conduct, including State Farm’s “cheat[ing] its custom-
ers via the PP&R scheme . . . for over two decades,” its “de-
liberate concealment and destruction of documents related to
this profit scheme,” and its use of “mad dog defense tac-
tics.”) The Utah Supreme Court glossed over State Farm’s
acts toward the Campbells and relied on the perceived effects
State Farm’s nationwide “scheme” had on policyholders and
others. See Pet. App. 22a (agreeing with trial court that
while “‘[t}he harm is mivor to the individual,’” it was “‘mas-
sive in the aggregate.””’).
A. The Utah Supreme Court’s Use of Out-of-State -
Acts to Support The Award Interferes With State
Sovereignty and The Commerce Clause of the
United States Constitution.
This Court has made clear that a state court’s effort to
regulate a defendant’s out-of-state conduct through large pu-
nitive damages awards is unconstitutional. While a jury may
consider relevant out-of-state conduct for the purpose of de-
termining the reprehensibility of the defendant’s acts toward
the plaintiff, i.e., are punitive damages appropriate, see 7XO
Prod. Corp. v. Alliance Res. Corp., 509 U.S. 443, 462 n.28
(1993), it cannot inflate the amount of a punitive award
based on out-of-state conduct. See BMW of N. Am. v. Gore,
517 U.S. 559 (1996).
(plaintiffs successfully request jury to calculate punitive damages by
multiplying the number of “total loss” claims per year by the amount
saved by deducting the allegedly fraudulent cleaning fee), cert. denied,
484 U.S. 974 (1987).
19
This Court has recognized that the Constitution has “spe-
cial concern ... with the autonomy of the individual States
within their respective spheres.” Healy v. Beer Inst., 491
U.S. 324, 335-36 (1989). “The sovereignty of each State ...
implie[s] a limitation on the sovereignty of all of its sister
States — a limitation express or implicit in both the original
scheme of the Constitution and the Fourteenth Amendment.”
World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286,
293 (1980).
In accordance with principles of state sovereignty and
comity, this Court in Gore expressly ruled that “a State may
not impose economic sanctions on violators of its laws with
the intent of changing the tortfeasors’ lawful conduct in other
States.” Gore, 517 U.S. at 572. A state can exercise its
power through an award of damages just as it can through
enforcement of statutes or regulations. /d. at 572 n.17. Asa
result, punitive damage awards must be imposed in a manner
consistent with state sovereignty and comity.
The plaintiff in Gore sued BMW for failure to disclose
his automobile had been repainted due to pre-delivery dam-
age. This was done in accordance with BMW’s nationwide
policy of not disclosing pre-delivery damage where its cost
of repair did not exceed three percent of the vehicle’s sug-
gested retail price. About 25 states had laws mandating dis-
closure of pre-sale repairs and BMW’s policy complied with
the strictest statute. The plaintiff was awarded $4,000 in
compensatory damages and $4 million in punitive damages,
an amount calculated by multiplying his compensatory dam-
ages by the number of similar sales in states nationwide.
The Alabama Supreme Court reduced the punitive award to
$2 million.
On appeal to this Court, the plaintiff argued that the large
punitive damages award was necessary to induce BMW to
change this nationwide policy. See id. at 572. The Court
20
rejected this argument, explaining that to avoid infringing on
the policy choices of other states, “the economic penalties
that States such as Alabama inflicts on those who transgress
its laws, whether the penalties take the form of legislatively
authorized fines or judicially imposed punitive damages,
must be supported by the State’s interest in protecting 1is
own consumers and its own economy.” /d. The Court reaf-
firmed the fundamental principle that while an individual
state may make policy choices for its own state, it cannot
impose those choices on another state. Jd.; see also Johan-
sen v. Combustion Eng’g, Inc., 170 F.3d 1320, 1333 (11th
Cir. 1999) (district court properly found the conduct pun-
ished occurred in a single state, Georgia, and that the state
had a strong interest in deterring environmental pollution and
enforcing the rights of property owners within its bounda-
ries), cert. denied sub nom, Combustion Eng’g, Inc. v.
McGill, 528 U.S. 931 (1999); Continental Trend Res., Inc. v.
Oxy USA, Inc., 101 F.3d 634, 637, 642 (10th Cir. 1996)
(district court properly admitted only acts of the defendant
within Oklahoma, but the $30 million punitive award “is far
more than is necessary to secure [the defendant’s] attention
and modify its behavior in Oklahoma”), cert. denied, 520
U.S. 1241 (1997).
While Gore itself focuses on improper attempts to punish
conduct that was lawful in other jurisdictions, see 517 U.S. at
572, the Commerce Clause of the United States Constitution
and principles of state sovereignty and comity cited by the
Court require the rejection of any attempts to punish out-of-
state conduct, lawful or unlawful.*®
*° On many occasions, this Court has rejected attempts by states to
regulate outside their borders. See, e.g., C & A Carbone, Inc. v. Town of
Clarkstown, 511 U.S. 383, 393 (1994) (“[s}tates and localities may not
attach restrictions to exports or imports in order to control commerce in
other states”); Healy v. Beer Inst., 491 U.S. 324 (1989) (striking down
law requiring out-of-state beer shippers to affirm competitiveness of
21
Even assuming the existence of a “nationwide scheme to
defraud State Farm policyholders” carried out through out-
of-state unlawful activity, an assumption that is contested,
the Supreme Court of Utah clearly acted outside its authority
in upholding a punitive damages award based on unrelated
extraterritorial conduct.
While states may share the goal of punishing unlawful
activity, allowing one state to punish unlawful acts in an-
other interferes with state sovereignty in at least two ways.
First, the authority to punish misconduct is “[f]oremost
among the prerogatives of sovereignty,” Heath v. Alabama,
474 U.S. 82, 93 (1985). States have widely varying re-
quirements for the imposition of punitive damages. These
highly disparate requirements include different substantive
prices for state residents); Brown-Forman Distillers Corp. v. New York
State Liquor Auth., 476 U.S. 583 (1986) (similarly ruling with regard to
New York liquor price affirmation law); Edgar v. MITE Corp., 457 U.S.
624, 644 (1982) (striking down law allowing Illinois Secretary of State to
evaluate the fairness of any takeover offer for the shares of an Illinois
company regardless of residency of shareholders; “[w]hile protecting
local investors is plainly a legitimate state objective, the State has no
legitimate interest in protecting nonresident shareholders”); Bigelow v.
Virginia, 421 U.S. 809, 824 (1975) (Virginia cannot apply anti-
procurement statute to punish newspaper editor for publishing advertise-
ment for abortion services in New York; "A State does not acquire power
or supervision over the internal affairs of another State merely because
the welfare and health of its own citizens may be affected when they
travel to that State."); Southern Pac. Co. v. Arizona ex rel. Sullivan, 325
U.S. 761 (1945) (invalidating Arizona train law governing length of
trains in state as too disruptive of interstate commerce); St. Louis Cotton
Compress Co. v. Arkansas, 260 U.S. 346, 349 (1922) ("It is true that the
State may regulate the activities of foreign corporations within the State
but it cannot regulate or interfere with what they do outside."). See gen-
erally Margaret Meriwether Cordray, The Limits of State Sovereignty and
the Issue of Multiple Punitive Damages Awards, 78 Or. L. Rev. 275
(1999).
22
standards for the imposition of punitive damages;”° different _
standards of proof:*’ and different procedures (e.g., bifurca-
tion requirements).** Some states do not allow the recovery
of punitive damages at all,°’ while others limit the amount of
punitive damages available.*° When one state uses its own
substantive and procedural laws to impose punitive damages
for acts that took place in another state, it impermissibly in-
terferes with the policy choices of the second state about
how best to punish misconduct within its borders.
Second, in light of the current punitive damages crisis,
allowing extraterritorial punitive awards is likely to interfere
with the practical ability of the state in which the misconduct
occur’«4 to punish that conduct itself — or even to compen-
*© See Sales & Cole, 37 Vill. L. Rev. at 1134 (discussing standards for
award of punitive damages).
*” See, e.g., COLO. REV. STAT. § 13-25-127(2) (2002) (requiring proof
beyond a reasonable doubt); IOwA CODE § 668A.1(1) (2002) (requiring
proof by clear and convincing evidence); MINN. STAT. § 549.20(1 Xa)
(2002) (clear and convincing evidence); OR. REV. STAT. § 18.537 (2001)
(clear and convincing evidence).
** See, e.g., OKLA. STAT. tit. 23, § 9.1(B) (2002) (where punitive dam-
ages are warranted, jury will determine their amount in a separate pro-
ceeding); TEX. CIV. PRAC. & REM. CODE ANN. § 41.009 (Vernon 2002)
(upon motion of defendant, court will order bifurcated trial, first of li-
ability and compensatory damages issues, then of amount of punitive
damages).
*° See, e.g., N.H. REV. STAT. ANN. § 507:16 (2002) (no punitive dam-
ages unless expressly provided for by statute); LA. Civ. CODE ANN. 3546
(West 2002) (no punitive damages unless authorized by law).
“See, e.g., FLA. STAT. ANN. § 768.73 (West 2002) (three times com-
pensatory damages or $500,000; may be higher upon finding of requisite
intent); KAN. STAT. ANN. § 60-3701(e)-(f) (2001) (lesser of $5 million or
the defendant’s annual gross income; may be higher if profitability of
misconduct exceeds limitation); N.J. STAT. ANN. § 2A:15-5.14(b) (West
2002) (greater of five times compensatory damages or $350,000); VA.
CODE ANN. § 8.01-38.1 (Michie 2001) ($350,000).
23
sate persons who have been harmed by the defendant’s con-
duct. Excessive extraterritorial punitive damages may bank-
rupt some defendants before compensation for harm may be
allowed or punishment can be awarded by the state in which
the other “alleged” misconduct occurred. Also, at some
point, substantive due process limits the aggregate amount of
punitive awards that can be imposed against a defendant for
its misconduct. See TXO, 509 U.S. at 453 (Due Process
Clause of the Fourteenth Amendment imposes substantive
limits “beyond which penalties may not go.”). Either way,
states outside the forum “punishing” court could be severely
and adversely impacted. Those states would lose their abil-
ity to exercise their lawful sovereign authority to punish mis-
conduct inside their borders. As this Court wrote in Heath,
“It]o deny a State its power to enforce its criminal laws be-
cause another State has won the race to the courthouse
‘would be a shocking and untoward deprivation of the his-
toric right and obligation of the States to maintain peace and
order within their confines.’” Heath, 474 U.S. at 93 (quoting
Bartkus v. Illinois, 359 U.S. 121, 137 (1959)).
In addition, the Utah Supreme Court’s ruling violates the
Constitution’s grant of power to Congress under the Com-
merce Clause “To regulate Commerce . . . among the several
States... .” U.S. Const. art. I, § 8, cl. 3. It does so by al-
lowing the State of Utah to use punitive damages to punish
the alleged commercial activities of State Farm in other
states. This Court has explained that the Commerce Clause is
violated by the application of one state’s law “to commerce
that takes place wholly outside of the State's borders.” Healy,
491 U.S. at 337. The Gore Court reaffirmed the fundamental
principle that a state that seeks to impose burdens on inter-
state markets would interfere with federal power over inter-
state commerce. See Gore, 517 U.S. at 572.
If the ruling by the Supreme Court of Utah in this case is
allowed to stand, corporations will be subject to crushing
a4
punitive damages awards based on the entire sum of their
business practices, whether lawful or wrongful, on the theory
that wide-ranging disparate acts were all part of a nationwide
“scheme” to maximize corporate profits. Thus, a court in
one state considering a product liability claim for defective
design could impose a punitive damages award on the manu-
facturer that also is based on alleged intrastate antitrust ac-
tivity halfway across the country. A punitive damages award
rendered in one state for an assault by a waiter at a local res-
taurant that is part of a nationwide chain could punish the
chain’s sales of alcohol to underage customers in another
state.
The predictability and stability of law that help compa-
nies develop good business practices will disappear, as a
business’s activity in any one state will be subject to the va-
garies of rules and decisions in 50 other jurisdictions. See,
e.g., Healy, 491 U.S. at 336 (statute’s legitimacy “must be
evaluated not only by considering the consequences of the
statute itself, but also by considering how the challenged
statute may interact with the legitimate regulatory regimes of
other States and what effect would arise if not one, but many
or every, State adopted similar legislation.”). Creativity and
innovation will be stifled if a company in one state trial has
to face vague charges about its unrelated conduct in other
jurisdictions.
The irony in this case and many other similar cases is
that if the plaintiff's allegations about bad faith as to him
were true, this course of conduct would have provided an
adequate basis for an effective punitive damage award.
Widening the circle of evidence beyond activities directed
toward the plaintiff for the sole purpose of augmenting the
award is not only unconstitutional, but unnecessary for puni-
tive damages law to achieve its purposes of punishment and
deterrence.
25
In sum, Utah simply has no legitimate interest in pun-
ishing irrelevant conduct by State Farm that took place out-
side its borders. States have no authority to apply their pu-
nitive damages laws to address disputes with which they
have no significant relationship. See Phillips Petroleum Co.
v. Shutts, 472 U.S. 797, 821-22 (1985) (even where jurisdic-
tion is proper, state may not apply its own law to disputes
unless it has “a ‘significant contact or significant aggregation
of contacts’ to the claims asserted . . . , contacts ‘creating
state interests,’ in order to ensure that the choice of [the fo-
rum state's] law is not arbitrary or unfair.”) (quoting Allstate
Ins. Co. v. Hague, 449 U.S. 302, 312-13 (1981) (plurality
opinion)).
B. The Utah Supreme Court’s Reliance on Unrelated
Conduct Violates Due Process Protections.
The constitutional problems inherent in the Utah Su-
preme Court's imposition of its own punitive damage law to
State Farm's acts outside its boundaries are heightened by the
court’s consideration of conduct entirely unrelated to Mr.
Campbell's bad faith action. A judgment based on such dis-
similar acts deviates far from the Court's mandate that there
be a relationship between the reprehensibility of the defen-
dant's conduct and the amount of the punitive damage
award. See Gore, 517 U.S. at 575. Moreover, a punitive
damage award based on conduct unrelated to the plaintiff's
harm enters the "zone of arbitrariness" that violates the Due
Process Clause of the Fourteenth Amendment. See id. at
568.
*! As Justice O’Connor recognized in Haslip, “The punitive character
of punitive damages means that there is more than just money at stake.
This factor militates in favor of strong procedural safeguards.” Has/ip,
499 U.S. at 54 (O’Connor, J., dissenting). Moreover, given that punitive
damages are a “quasi-criminal” penalty, see Cooper Indus., Inc. v.
Leatherman Tool Group, Inc., 532 U.S. 424, 432 (2001) (quoting Pacific
Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 19 (1991)), courts should admit
26
In Gore, the Court found that "[p]erhaps the most im-
portant indicium of the reasonableness of a punitive damages
award is the degree of reprehensibility of the defendant's
conduct." Jd. at 575. To be sure, the Court, in measuring the
reprehensibility of the defendant's conduct, was particularly
concerned with the harm inflicted upon the particular indi-
vidual bringing the case. See id. at 576 ("The harm BMW
inflicted on Dr. Gore was purely economic in nature.").
While the Court found a defendant who is a recidivist may
be punished more harshly than a first offender, its ruling was
based on conduct toward others of a substantially similar
nature. See id. In this case, State Farm's actions in other
states, even if assumed improper, had no relationship what-
soever to its refusal to settle for the policy limits.
evidence to show the propensity of the defendant to commit bad acts or
the defendant’s bad character with extraordinary care. For example, this
Court has recently recognized in the criminal context that “generalizing a
defendant’s earlier bad act into bad character and taking that as raising
the odds that he did the later bad act now charged” causes unfair preju-
dice to a criminal defendant. Old Chief v. United States, 519 U.S. 172,
180-81 (1997). The Court’s reasoning in Old Chief as to the inadmissi-
bility of “evidence of a defendant’s evil character” is equally applicable
in the punitive damages context. Quoting then-Judge Breyer, the Court
stated that “Although . . . ‘propensity evidence’ is relevant, the risk that
the jury will convict for crimes other than those charged—or that, uncer-
tain of guilt, it will convict anyway because a bad person deserves pun-
ishment—creates a prejudicial effect that outweighs ordinary relevance.”
Id. at 181 (quoting United States v. Moccia, 681 F.2d 61, 63 (1* Cir.
1982)). In this case, the Utah trial court admitted evidence of a host of
allegations of State Farm actions, unrelated to the decision not to settle a
claim against its insured within policy limits, that could only serve to cast
State Farm as a bad actor in the eyes of the jury. Thus, it is quite prob-
able that the jury reached its punitive damage award based on a desire to
punish State Farm not for the reprehensibility of its acts toward Mr.
Campbell, but for actions other-than those stated in Mr. Campbell’s com-
plaint. This Court should not invite the use of punitive damage awards as
a tool for punishing unpopular defendants in excess of their culpability.
27
This cases does not involve a defendant that embarked on
a common scheme of conduct across the nation. Rather, the
Utah trial court considered a plethora of “other acts” evi-
dence, such as State Farm's allegedly fraudulent practices
directed against poor racial or ethnic minorities, women, and
elderly individuals, its investigation into the personal life of
an employee, and its specification of non-original equipment
manufacturer parts in making repairs of insureds’ vehicles in
other states. Pet. App. 18a-19a. The court even went so far
as to consider activities of State Farm Fire and Casualty
Company, a separate and independent entity as evidence of
State Farm's reprehensible conduct. These activities in-
cluded State Farm Fire and Casualty Company's cancellation
of hurricane insurance coverage in Florida, and its handling
earthquake and other property damage claims in California.
The court's consideration of this information had nothing to
do with State Farm's refusal to settle the third party claim
against Mr. Campbell and, in some cases, did not even in-
volve the defendant, State Farm. The consideration of this
evidence infected the court's decision and resulted in an ar-
bitrary punitive damage award that lacks a relationship to the
reprehensibility of the defendant's conduct toward the plain-
tiff.
Furthermore, the Utah court's consideration of unrelated
alleged bad acts of defendant violates the "second and per-
haps most commonly cited indicium of an unreasonable or
excessive punitive damage award" — "its ratio to the actual
harm inflicted on the pic.atiff." Gore, 517 U.S. at 580. The
Utah court used constitutionally impermissible evidence to
justify the extraordinary award in this case, $145 million in
punitive damages. The Court's second guidepost recognizes
and incorporates the historical nature of punitive damage
awards as punishment for the harm levied by an individual
defendant upon an individual plaintiff. As discussed above,
the trial court placed undue emphasis on the defendant's con-
28
duct toward individuals other than the plaintiff. Any harm
resulting from State Farm's investigation of an employee
who was suspected of having a conflict of interest because
she received a gift from a contractor has no bearing on Mr.
Campbell's claim. Nor does State Farm's allegedly poor
treatment of minorities and women impact Mr. Campbell's
claim, as he falls into neither of these categories. The court's
consideration of such dissimilar actions * 1 the court's
punitive damage award and rendered its decision constitu-
tionally infirm. The Utah Supreme Court’s decision af-
firmed the wholesale introduction of “other acts” evidence
and must be reversed by this Court.
CONCLUSION
For the foregoing reasons, amicus requests that the Utah
Supreme Court’s reinstatement of the $145 million punitive
damages award should be reversed and the case remanded
for a new trial as to punitive damages. If a new trial is not
ordered, then, at least, a massive remittitur of the punitive
award to an amount comporting with constitutional require-
ments would be warranted.
29
Respectfully submitted,
Victor E. Schwartz
(Counsel of Record)
Leah Lorber
Cary Silverman
SHOOK, HARDY & Bacon, L.L.P.
Hamilton Square
600 14” Street, N.W., Suite 800
Washington, D.C. 20005-2004
(202) 783-8400
Attorneys for Amicus Curiae
Hugh F. Young, Jr.
PRODUCT LIABILITY
ADVISORY COUNCIL, INC.
1850 Centennial Drive
Suite 510
Reston, Virginia 20191-1517
(703) 264-5300
Of Counsel
Dated: August 19, 2002
APPENDIX A
-
SORE STS: Saree
—_ + ——-
la
PRODUCT LIABILITY ADVISORY COUNCIL, INC.
CORPORATE MEMBERS
3M
Allegiance Healthcare Corporation
Altec Industries
American Suzuki Motor Corporation
Andersen Corporation
Anheuser-Busch Companies -
Ansell Healthcare, Inc.
Appleton Papers, Inc.
Aventis Pharmaceuticals Inc.
BASF Corporation
Baxter International, Inc.
Bayer Corporation
Beretta U.S.A. Corp.
BIC Corporation
Biomet, Inc.
Biro Manufacturing Company Inc.
Black & Decker (U.S.) Inc.
BMW of North America, LLC
Bombardier Recreational Products
BP Amoco Corporation
Bridgestone/Firestone, Inc.
2a
Briggs & Stratton Corporation
Bristol-Myers Squibb Company
Brown and Williamson Tobacco
Brown-Forman Corporation
Brunswick Corporation
Caterpillar Inc.
Centerpulse USA Inc.
Chevror Corporation
Compaq
Continental Tire North America, Inc.
Cooper Tire and Rubber Company
Coors Brewing Company
Crown Equipment Corporation
DaimlerChrysler Corporation
Daria Corporation
Deere & Company
Dorel Juvenile Group, Inc.
E & J Gallo Winery
E.I. DuPont de Nemours and Company
Eaton Corporation
Eli Lilly and Company
Emerson Electric Co.
Engineered Controls International, Inc.
Estee Lauder Companies
3a
Exxon Mobil Corporation
FMC Corporation
Ford Motor Company
General Electric Company
General Motors Corporation
Georgia-Pacific Corporation
GlaxoSmithKline
GLOCK, Inc.
Great Dane Limited Partnership
Guidant Corporation
Harley-Davidson Motor Company
Harsco Corporation, Gas & Fluid Contro] Group
Honda North America, Inc.
Hyundai Motor America
International Truck and Engine Corporation
Isuzu Motors America, 'c.
Johnson & Johnson
Johnson Controls, Inc.
Joy Global, Inc.
Kawasaki Motors Corp., U.S.A.
Kia Motors America, Inc. _
Kolcraft Enterprises, Inc.
Kraft Foods North America, Inc.
Lincoln Electric Holdings, Inc.
4a
Mazda (North America), Inc.
McNeilus Truck and Manufacturing, Inc.
Medtronic, Inc.
Mercedes-Benz of North America, Inc.
Michelin North America, Inc.
Miller Brewing Company
Mitsubishi Motors R & D of America, Inc.
Monsanto Company/G.D. Searle & Co.
Niro Inc.
Nissan North America, Inc.
Novartis Pharmaceuticals Corporation
Otis Elevator Company
PACCAR Inc
Panasonic
Pentair, Inc.
Pfizer Inc.
Pharmacia Corporation
Philip Morris Companies Inc.
Polaris Industries, Inc.
Porsche Cars North America, Inc.
Purdue Pharma L.P.
Raytheon Aircraft Company
Remington Arms Company, Inc.
Rheem Manufacturing
a
Sa
RHI Refractories America
RJ Reynolds Tobacco Company
Schindler Elevator Corporation
SCM Group USA Inc
Sears, Roebuck and Co.
Shell Oil Company
Siemens Corporation
Smith & Nephew, Inc.
Snap-on Incorporated
Sofamor Danek, Medtronic Inc.
Solutia Inc.
Sturm, Ruger, & Company, Inc.
Subaru of America, Inc.
Sunbeam Corporation
Synthes (U.S.A.)
Textron Inc.
The Boeing Company
The Dow Chemical Company
The Goodyear Tire & Rubber Company
The Heil Company
The Proctor & Gamble Company
The Raymond Corporation
The Sherwin-Williams Company
6a
The Toro Company
Thomas Built Buses, Inc.
Toshiba America Incorporated
Toyota Motor Sales, USA, Inc.
TRW Inc.
UST (U.S. Tobacco)
Volkswagen of America, Inc.
Volvo Cars of North America, Inc.
Vulcan Materials Company
Water Bonnet Manufacturing, Inc.
Whirlpool Corporation
Wilbur-Ellis Company
Wyeth
Yamaha Motor Corporation, U.S.A.
Zimmer, Inc.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.