# Opposition Brief — State Farm Mutual Automobile Insurance v. Campbell

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386008_0903%3A03

## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 2004
- **Citation:** 543 U.S. 874

## Text

—— ' AUG 23 204

No. 04-116 ro
we

IN THE

Supreme Court of the Gnited States

STATE FARM MUTUAL AUTOMOBILE INS. Co.,
Petitioner,
V.

INEZ PREECE CAMPBELL AND MATTHEW C. BARNECK,
SPECIAL ADMINISTRATOR AND PERSONAL REPRESENTATIVE
OF THE ESTATE OF CURTIS B. CAMPBELL,
Respondents.

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UTAH SUPREME COURT

BRIEF IN OPPOSITION TOA
PETITION FOR WRIT OF CERTIORARI

L. RICH HUMPHERYS LAURENCE H. TRIBE
ROGER P. CHRISTENSEN Counsel of Record
KARRA J. PORTER KENNETH J. CHESEBRO
CHRISTENSEN & JENSEN 1575 Massachusetts Ave.
50 South Main St. Cambridge, MA 02138

Salt Lake City, UT 84144 (617) 495-4621

(801) 323-5000
JONATHAN S. MASSEY
JONATHAN S. MASSEY, P.C.
3920 Northampton St., N.W.
Washington, D.C. 20015
(202) 686-0457

Counsel for Respondents

BATEMAN & SLADE, INC. BOSTON, MASSACHUSETTS

RE eg ee Ne I ey Per ey ay ee Pet en ey ee ae

ee ae a oe Oe re Oe oe,

COUNTER STATEMENT
OF QUESTION PRESENTED

Whether this Court should grant review to consider
the Utah Supreme Court’s factbound application of the
guideposts prescribed by this Court BMW of N. Am., Inc. v.
Gore, 517 U.S. 559 (1996), and explicated in the
circumstances of this very case only one Term ago in State
Farm Mutual Auto. Ins. Co. v. Campbell, 538 U.S. 408
(2003).

TABLE OF CONTENTS
COUNTERSTATEMENT OF QUESTION
PRESENCE? sicsccncscthinimn pain nee 1
TABLE OF AUTHORITIES .....0.ccsessccsssesssevssscossessssseseneses iV
STATEMENT OF THE CASE ..........cccccccscssssesssessesssssesnsoes 2
I The Initial State Proceedings ...............:08 2
y This Covrt’s DeCisi@th .. mek ee

suggested that, in assessing reprehensibility, state courts are
limited to considering state statutes. E.g., BMW, 517 U.S. at
585 (“we of course accept the Alabama courts’ view”
regarding “the state interest in protecting its citizens from
deceptive trade practices”) (emphasis added). Indeed, the
day has long passed when the Constitution was thought to
distinguish the law made by state judges from that made by
state legislators. See, e.g., Cohen v. Cowles Media Co., 501
U.S. 663, 668 (1991); Shelley v. Kraemer, 334 U.S. 1, 19
(1948). It is a corollary that federal law has precious little to
say on the degree to which a state makes its law through its
courts or through its legislature. See Highland Farms Dairy,
Inc. v. Agnew, 300 U.S. 608, 612-13 (1937); see also
Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456, 480-
81 (1981) (Stevens, J., dissenting).

State Farm’s argument that including judge-made
factors in the reprehensibility analysis “produces an ad hoc,
subjective inquiry” (Pet. 19) is flatly foreclosed by this
Court’s precedents. See TXO, 509 U.S. at 465-66 (plurality
opinion) (common law rule satisfied notice component of due
process); Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 22
(1991) Gudge-made factors “impose[] a sufficiently definite
and meaningful constraint on the discretion of Alabama
factfinders in awarding punitive damages”). In any event,
State Farm fails to establish any circuit conflict on the issue
or any need for this Court’s review.

Ill. THE UTAH SUPREME COURT’S ANALYSIS
OF THE RATIO GUIDEPOST IS ENTIRELY
CONSISTENT WITH ~~ THIS COURT’S
DECISION.

In Campbell, this Court held that the Utah Supreme
Court’s prior analysis of the ratio guidepost was flawed
because it was premised on out-of-state conduct, as well as
on State Farm’s wealth and other improper factors. 538 U.S.
at 426-27. On remand, the Utah Supreme Court corrected
these errors by focusing solely on State Farm’s conduct with

23

respect to the Campbells. A.15a. State Farm nonetheless
accuses the Utah Supreme Court of “refus[ing] to follow the
mandate of this Court” with respect to the ratio guidepost.
Pet. 28. State Farm’s accusation of bad faith is as groundless
as it is insulting.

A. The Utah Court Properly Followed This
Court’s Mandate.

In Campbell, this Court opined that it has “been
reluctant to identify concrete constitutional limits on the ratio
between harm, or potential harm, to the plaintiff and the
punitive damages award.” 538 U.S. at 425. “We decline
again to impose a bright-line ratio which a punitive damages
award cannot exceed.” Jd. (emphasis added). However, the
Court’s “jurisprudence and the principles it has now
established demonstrate . . . that, in practice, few awards
exceeding a single-digit ratio between punitive and
compensatory damages, to a significant degree, will satisfy
due process.” Jd. Nonetheless, this Court emphasized that
“(t]he precise award in any case, of course, must be based
upon the facts and circumstances of the defendant's conduct
and the harm to the plaintiff.” Jd. (emphasis added).

The Utah Supreme Court faithfully followed this
Court’s opinion. The Utah court took as a given this Court’s
admonition that, “‘when compensatory damages are
substantia!, then a lesser ratio [of compensatory to punitive
damages], perhaps only equal to compensatory damages, can
reach the outermost limit of the due process guarantee.’”
A.14a (quoting 538 U.S. at 425). The Utah court treated
itself as bound by this Court’s conclusion that the Campbells”
compensatory award was “substantial,” and did not purport
to question this Court’s observation that the compensatory
damages likely had been based on a component which was
duplicated in the punitive award. A.14a.

But that binding general frame of reference did not
preclude the Utah Supreme Court’s factual determination,

24

A A pe At at iad dl

based on “the circumstances of the compensatory damages
award in this case,” that the trial judge’s remittitur of
compensatory damages ensured that they did not in fact
contain a punitive element. A.15a (emphasis added). The
jury had originally awarded the Campbells $2.6 million in
compensatory damages. State Farm argues that this award
contained a punitive element. Pet. 26 n.13. But the trial
court granted State Farm’s motion for remittitur and reduced
the award to $1 million: $600,000 for Mr. Campbell and
$400,000 for Mrs. Campbell. A.15a. The trial court engaged
in an exhaustive review of the evidence in the case and the
emotional harm suffered by the Campbells. JA 3364a-68a.
The Utah Supreme Court observed that “[t]he trial court’s
ruling was supported by extensive and detailed findings
explaining the basis for the reduced compensatory damages
award. Based on this thorough record, we conclude that the
trial court’s compensatory damages award was purged of
elements which may have been more properly placed in the
category of punitive damages.” A.15a.

The Utah Supreme Court’s analysis accurately
applied the legal framework set forth by this Court to the
particular circumstances of this case and this trial record. It
is, of course, a question purely of Utah law ‘just what
constituted the legally compensable injury to the Campbells
in this case, State Farm never having sought review in this
Court on any of the components of that definition of
compensable injury. Therefore, the question of what
“Gnjuries” the award received by the Campbells
“compensat::d” was a matter within the sole purview of the
Utah courts.

B. The Utah Supreme Court Properly
Concluded That A High Single Digit Ratio
Was Appropriate.

The Utah Supreme Court reasonably determined that
a high single-digit ratio was warranted in this case because
the Campbells suffered significant noneconomic injury in the

25

form of emotional distress and because State Farm’s conduct
toward the Campbells was highly reprehensible. A.16a. The
Campbells were forced to live in fear of financial ruin for 18
months, which is exactly the kind of hard-to-measure, non-
economic harm that this Court has noted would justify a
higher ratio than usual. See Campbell, 538 U.S. at 425;
BMW, 517 U.S. at 582. The Utah court’s conclusion is
completely consistent with this Court’s mandate, and State
Farm’s factbound challenges to that conclusion simply
recapitulate arguments already addressed in the context of the
reprehensibility guidepost. See Part II, supra.

IV. THE UTAH SUPREME COURT’S ANALYSIS
OF THE LEGISLATIVE PENALTIES
GUIDEPOST COMPORTS WITH ~ THIS
COURT?’S OPINION.

In Campbell, this Court held that the Utah Supreme
Court’s prior analysis of the legislative penalties guidepost
was improper because it rested on out-of-state conduct. See
538 U.S. at 428 (“here again [the Utah court’s] references
were to the broad fraudulent scheme drawn from evidence of
out-of-state and dissimilar conduct.”). On remand, the Utah
Supreme Court corrected this error by focusing solely on
State Farm’s conduct with respect to the Campbells, without
considering any out-of-state or dissimilar acts. A.16a-17a.

In Campbell, this Court pointed to a potential $10,000
fine for fraud as “the most relevant civil sanction” to which
State Farm was exposed for its conduct toward the
Campbells. 538 U.S. at 428; see also Utah Code Ann. §
31A-26-303 (2003). This Court did not decide the question
of State Farm’s exposure under the Utah statute — an issue
that is purely a matter of Utah law. See BMW, 517 USS. at
577 (“only state courts may authoritatively construe state
statutes”).

The Utah Supreme Court properly followed this
Court’s mandate by analyzing the statutory penalty for fraud
in relation to this case. The Utah court opined that, “while a

26

eee ee ee

$10,000 fine for fraud may appear modest in relationship to a
multi-million dollar punitive damages award, it is identical to
the maximum fine which may be imposed on a person in
Utah for the commission of a first degree felony, the
Classification assigned our most serious crimes.” A.17a
(citing Utah Code Ann. § 76-3-301 (2003)). The statutory
penalty for fraud faced by State Farm reflects the
legislature’s determination that the company’s misconduct
was very serious indeed.

The Utah Supreme Court further noted that, although
this Court rejected a $145 million punitive award as
excessive, this Court indicated at the same time that what this
Court called a “more modest” award, such as $1 million,
would be reasonable — notwithstanding the fact that, as the
Utah court observed, such an award would be “one hundred
times greater than the $10,000 fine.” A.17a. “Thus,
somewhere between $1 million and $145 million,” the Utah
Supreme Court properly inferred from this Court’s opinion,
“the difference between the $10,000 civil penalty and the
punitive damages award becomes so great that the latter
‘dwarfs’ the former.” Jd. As to State Farm’s assertion “that
[this] Court impliedly found that the civil penalty would be
dwarfed by a $17 million punitive damages award,” the Utah
court rightly refrained from offering any opinion, finding it
sufficient to express its “conviction that a punitive damages
award of $9,018,780.75 is in line with the third Gore
guidepost.” /d. Because the Utah court reached this
conclusion, it did not inquire into other potential penalties
faced by State Farm, A.18a, although the court made plain its
view — as a matter of state law obviously not reviewable by
this Court — that “State Farm’s behavior,” especially given
the company’s insistence that such behavior was nothing it
need feel remorse over and the consequent risk that it might
“become a pattern in Utah, may indeed be justification for
termination of its license, a penalty that surely would cost it
more than $10,000.” A.17a n.8 (emp.iasis added).

27

These findings are fully consistent with this Court’s
mandate. There is simply no basis for State Farm’s assertion
that the Utah court “improperly discounted the importance of
the comparable penalties” and “disparage[d]” that guidepost.
Pet. 29. To the contrary, the Utah court explained that “[t]he
nature of a civil or criminal penalty provides some useful
guidance to courts when fixing punitive damages because it
reflects ‘legislative judgments concerning appropriate
sanctions for the conduct at issue.” A.17a (quoting
Browning-Ferris Indus. v. Kelco Disposal, Inc., 492 U.S.
257, 301 (1989) (O’Connor, J., concurring in part and
dissenting in part)). The Utah court’s observation that “the
quest to reliably position any misconduct within the ranks of
criminal or civil wrongdoing based on penalties affixed by a
legislature can be quixotic,’ A.17a, far from signaling
resistance to this Court’s legislative penalties guidepost,
merely echoed this Court’s parallel observation that “(t]he
existence of a criminal penalty does have bearing on the
seriousness with which a State views the wrongful action.
When used to determine the dollar amount of the award,
however, the criminal penalty has less utility.” Campbell,
538 U.S. at 428 (emphasis added). The Utah court simply
recognized, as did this Court in Campbell, that the
excessiveness inquiry cannot be reduced to a rote arithmetic
calculation.

V. THERE IS NO BASIS FOR SUMMARILY
REVERSING THE UTAH SUPREME COURT’S
JUDGMENT.

The Petition seeks summary reversal of the Utah
Supreme Court’s judgment. There is no basis for such a
request. Principles of federa!’» counsel that the judgment
of a state’s highest court shewid not be summarily reversed
absent exceptional circumstances. Robert L. Stern & Eugene
Gressman, et al., SUPREME COURT PRACTICE 323 (8" ed.
2002). That test cannot be met here. The Utah Supreme
Court faithfully followed this Court’s mandate. State Farm’s
contrary claim rests on improper second-guessing of the state

28

A LA ANNI Oa Mlle Se Perret

court’s factual determinations, on the basis of extra-record
“non-evidence.” E.g., Pet. 15 n.7, 16 n.8. State Farm also
tries to convert this Court’s Campbell decision into a fixed
1:1 ratio rule, which is precisely the opposite of what this
Court made plain it was holdimg — rejecting, as it has
repeatedly rejected, any rigid rstaematical rule in assessing -
punitive awards. See Campbell, 538 U.S. at 425; BMW, 517
USS. at 582.

This Court’s practice supports summary reversal only
where a lower court has committed a clear error of law that
conflicts with a decision of this Court or other well-
established principle. E.g., City of Los Angeles v. David, 538
U.S. 715, 716 (2003) (per curiam) (“the Ninth Circuit’s
holding runs contrary to well-settled principles of
constitutional law”); JNS v. Ventura, 537 U.S. 12, 16 (2002)
(per curiam) (“well-established principles of administrative
law”); United States v. Bass, 536 U.S. 862, 863 (2002) (per
curiam) (lower court decision “is contrary to [United States vy.
Armstrong, 517 U.S. 456 (1996),] and threatens the
‘performance: of a core executive constitutional function””)
(citation omitted); Sao Paulo State of the Federative
Republic of Brazil v. Am. Tobacco Co., 535 U.S. 229, 232
(2002) (per curiam) (lower court -used improper legal

standard to decide recusal issue).

In this case, however, State Farm’s argument comes
down to the proposition that the Utah Supreme Court erred in
finding the pertinent facts revealed by the record in the
course of applying the BMW guideposts. Even if the Utah
court made a factual mistake — which it did not — no such
factual error could justify summary reversal. See, e.g., Major
League Baseball Players Ass'n v. Garvey, 532 U.S. 504, 513
(2001) (Stevens, J., dissenting) (“‘factbound determination[s]”
inappropriate for summary reversal). Nor has State Farm
even -attempted to argue that the Utah Supreme Court is an
outlier among the lower courts in the way in which it has
interpreted this Court’s mandate.

29

In any event, the extensive, 27,000-page record below
would make it impossible for this Court to déspose of this |
case summarily. In the previous Campbell proceeding before
this Court, the focus was on whether the Utah Supreme Court
erred in considering State Farm’s nationwide claims-
processing policies. The briefing and joint appendix were
prepared with that focus in mind. Thus, if this Court were to
review the Utah Supreme Court’s application of the BMW
guideposts to this factual record with respect to in-state Utah
conduct, the Campbells would clearly be entitled to argue all
the law and facts that support a $9 million punitive award on
this record — including evidence that was not (because it did
not have to be) identified in Campbell or included in the joint
appendix. See, e.g., Campbells’ Opening Br. on Remand in
Utah S. Ct. at 12-15 & n.12 (June 9, 2003); Reply Br. 24 &
n.13, 27-28 (July 16, 2003). In short, plenary briefing and
argument would be unavoidable.

Notably, the Petition does not contend that summary
reversal in this case would provide any appreciable guidance
to the lower courts on punitive damages issues. Nor would
such a contention be plausible. For this Court has recognized
that “[t]he precise award in any case, of course, must be
based upon the facts and circumstances of the defendant’s
conduct and the harm to the plaintiff” Campbell, 538 U.S. at
425. “[{T]here are no rigid benchmarks that a punitive
damages award may not surpass.” Jd. Accordingly, even if
this Court were to engage in an exhaustive review of the
evidentiary record to decide the reasonableness of the
punitive award, the exercise would be of little or no value to
lower courts considering different punitive awards based on
different factual records. The fact-intensive review urged by
the Petition would therefore be a singularly inappropriate use
of this Court’s necessarily finite resources. -

CONCLUSION
The petition for writ of certiorari should be denied.
Respectfully submitted.
30

L. RICH HUMPHERYS
ROGER P. CHRISTENSEN
KARRA J. PORTER
CHRISTENSEN & JENSEN
50 South Main St.

Salt Lake City, UT 84144
(801) 323-5000

LAURENCE H. TRIBE

Counsel of Record
KENNETH J. CHESEBRO
1575 Massachusetts Ave.
Cambridge, MA 02138
(617) 495-4621

JONATHAN S. MASSEY
JONATHAN S. MASSEY, P.C.
3920 Northampton St., N.W.
Washington, D.C. 20015
(202) 686-0457

Counse’ for Respondents

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386008_0903%3A03. Public record. Not legal advice.