Amicus Curiae Brief — State Farm Mutual Automobile Insurance v. Campbell

AUG 2 3 2004

No. 04-116 | OFFICE OF THE CLERK

IN THE

Supreme Court of the Gnited States

STATE FARM MUTUAL AUTOMOBILE 7

INSURANCE COMPANY,

Petitioner,

Vv.

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 AMICUS CURIAE OF

THE CHAMBER OF COMMERCE

OF THE UNITED STATES OF AMERICA

IN SUPPORT OF PETITIONER

ROBIN S. CONRAD WALTER DELLINGER

NATIONAL CHAMBER , (Counsel of Record)

LITIGATION CENTER, INC. JONATHAN D. HACKER

1615 H Street, N.W. MATTHEW D. ROBERTS

Washington, D.C. 20062 EMILY BERNING

(202) 463-5337 O’MELVENY & MYERS LLP

1625 Eye Street, N.W.

Washington, D.C. 20006

(202) 383-5300

Attorneys for Amicus Curiae

QUESTION PRESENTED

Whether the Utah Supreme Court, like many other state

and lower federal courts, has misunderstood and misapplied

the guidance on judicial review of punitive damages awards

that this Court set out in State Farm Mutual Automobile In-

surance Co. v. Campbell, 538 U.S. 408 (2003).

il

TABLE OF CONTENTS

Page

TAREE GH RIFT ee hte ciisiscasianinenan ili

INTEREST OF AMICUS CURIAE .............cccccessssscsssesosoeses l

REASONS FOR GRANTING THE WRIT ...........cceeeeeeees y

A. The Petition Should Be Granted To Ensure The

Correct And Uniform Application Of State Farm I

By The State And Lower Federal Courts....................04. 5

B. The Petition Should Be Granted To Ensure The

Integrity Of This Court’s Mandate In State Farm [......17

CII ARG nnceenninciminenonionannnnnnininnidiiaseinniuiannnialaiaaana 20

il

TABLE OF AUTHORITIES

Page(s)

CASES

Advocat, Inc. v. Sauer,

111 S.W.3d 346 (Ark. 2003), cert. denied,

SE TD. GR. Fee Gee Bicckascenetsasticnertenaomncerinatarmacdainaclal 6, 7

Austin v. Specialty Transportation Services, Inc.,

$94 S.E.2d 867 (S.C. Ct. App. ZOD4) q..ecssecersssiccnsersesses 13

Bardis v. Oates,

14 Cal. Rptr. 3d 89 (Cal. Ct. App. 2004)... 12

Blust v. Lamar Adver. Co.,

2004 Ohio App. LEXTS 2167 (2004)..0......ececeeeeeeeeeeeees 6

Bocci v. Key Pharms., Inc.,

76 P.3d 669, modified on reconsideration,

Chk $f eee Se 7

Briggs v. Penn. R.R.,

ee Uk Fe I este etsinninerninnsiceiinitanitbchimmmnaiaiaian 18

Collins Entertainment Corp. v. Coats & Coats

Rental Amusement,

SB4 S.E.26 120 (B.C. Cr. Am. BOGS) .nerinccsinsersssvenssanvons 16

Daka, Inc. v. McCrae,

BAP ABO GEE EAL... BD. DIG hi viiccnsnsnreninnminarsnannnsansninnes 6

Diamond Woodworks, Inc. v. Argonaut Ins. Co.,

135 Cal. Rptr. 2d 736 (Cal. Ct. App. 2003).......... 1% ta

DiSorbo v. Hoy,

Ae ee 8 Fe le Gy Be rr icervsnssinncneenasdiacrneenienanes 6

Eden Electrical, Ltd. v. Amana Co.,

258 F. Supp. 2d 958 (N.D. Iowa 2003),

aff'd, 370 F.3d 824 (8th Cir. 2004) .0... eee eee 6, 10

FCC v. Pottsville Broadcasting Co.,

ike Ce i cin ianstcccsicnispaesinnanalanaaenatl 18

Greenberg v. Paul Revere Life Ins. Co.,

2004 WL 74630 (9th Cir. Jan. 12, 2004) oo. 9

1V

TABLE OF AUTHORITIES

(continued)

Gulf Refining Co. v. United States,

- it Rs. 5h, enna ieumeednnalanadiiabes 18

Hangarter vy. Provident Life & Accident

Insurance Co.,

BFF ee Fe NE Be is sericsssscsccarccenassresaressessoncsne 10

Harris v. Archer,

134 §.W.3d 411 (Tex. Ct. App. 2004)... 10, 13

Henley v. Philip Morris,

9 Cal. Rptr. 3d 29 (Cal Ct. App. 2004) ................. 6, 9, 10

Hollock v. Erie Insurance Exchange,

842 A.2d 409 (Pa. Super. Ct. 2004)... eeeeeeeeees 10, 11

In re Exxon Valdez,

296 F. Supp. 2d 1071 (D. Alaska 2004).............. 7, th, &

In re Sanford Fork & Tool Co.,

ae Bee GI inccnsciniicnnascunneioesapyesiniconeraninnatanseiun 18

Interclaim Holdings Ltd. v. Ness, Motley,

Loadholt, Richardson & Poole,

2004 WL 725287 (N.D. Ill. Apr. 1, 2004)... eee 7

Johnson v. Ford Motor Co.,

2003 Cal. App. Unpub. LEXIS (Nov. 25,

2003), review granted, 2004 Cal. LEXIS

SINE, i TEI iicicsctscosencnisianisecensceevohaubinaniosnpaeenaniions 5

Marmer v. Unicco Service Co.,

2003 WL 22462053 (E.D. Pa. Oct. 2, 2003)................. 13

McClain v. Metabolife Int'l, Inc.,

259 F. Supp. 2d 1225 (N.D. Ala. 2003)... 9,12

Missouri v. Jenkins,

Be ee, SN iacicaicccannienecteennnnibsatiniiintimsentiinesanuniinn 19

Pacific Mutual Life Insurance Co. v. Haslip,

Fr FR ecacaiestn ata ncnescceanieenithennensnsintitannnsiinnnniiati 2

Vv

TABLE OF AUTHORITIES

(continued)

Phelps v. Louisville Water Co.,

ce I scenccosnchecterensersinnennennaitnaancombaes 15

Planned Parenthood, Inc. v. Am. Coalition of

Life Activists, :

300 F. Supp. 2d 1055 (D. Or. 2004) 00... eee fA

Reading Radio, Inc. v. Fink,

S35 A.28 199 HO. Supers. Ct. 2003) onsecesccsnecssercsiensees 9, 13

Rhone-Poulenc Agro, S.A. v. DeKalb Genetics Corp.,

345 F.3d 1366 (Fed. Cir. 2003), cert. denied, 124

ae IE si tsitesienicin eietinatncniasnininiicnimainaceiiii (x ee

Rogers v. Hill,

ee is, ee Ce ih ntinsinnscestnutteibesecicinntnlamaniaiia 18

Romo v. Ford Motor Co.,

6 Cal. Rptr. 3d 793 (Cal. Ct. App. 2003) ............ sees 6, 7

Roth v. Farner-Bocken Co.,

ee ee ee SY BI seein vesttectscsetantannecneennenbiian 6

S. Union Co. v. Southwest Gas Corp.,

281 F. Supp. 2d 1090 (D. Ariz. 2003)........... eee 7,15

Shiv-Ram, Inc. v. McCaleb,

2003 WL 23025586 (Ala. Dec. 30, 2003).................000 10

Simon v. San Paulo U.S. Holding Co.,

7 Cal. Rptr. 3d 367 (Cal. Ct. App. 2003),

review granted, 86 P.3d 881 (Cal. 2004)... ee 14

Southwestern Tel. & Tel. Co. v. Danaher,

yf RE gS |. , RRR eat ae ne EIT 11

State Farm Mutual Automobile Insurance

Company v. Campbell,

Se ices SIE CEP iscciniciticincninnsiiisiontinnatatinnnoecsennsinn

Stogsdill v. Healthmark Partners, L.L.C.,

2004 U.S. App. LEXIS 15276 (8th Cir.

NE Fi, BN icciatauseipscanncviciitehhetineininiciaianinnkaalbasiatis 10

vi

TABLE OF AUTHORITIES

(continued)

Page(s)

Taylor Woodrow Homes, Inc. yv. Acceptance

Ins. Cos., Inc.,

2003 WL 21224088 (Cal. Ct. App. May

SU, PIED <ssisniiiasaiiiebighiibaasabeniiietoaiaiaaiedueataapaia 7, 9,13

Textron Fin. Corp. v. Nat’l Union Fire Ins. Co.,

13 Cal. Rptr. 3d 586 (Cal. Ct. App. 2004)... ee 12

Trinity Evangelical Lutheran Church y.

Tower Insurance Co.,

661 N.W.2d 789 (Wis.), cert. denied, 124

S.C. FS Ged wieniianiniieonininichinaeniaaanmnieaiaa caine 14

IVT Records v. Island Def Jam Music Group,

279 F. Supp. 2d 413 (S.D.N.Y. 2003)..........ccsecceseeees 6, 7

Union Pac. R.R. v. Barber,

2004 WL 352525 (Ark. Feb. 26, 2004)... eeeeeeceeeseeeee 7

United States v. Bailey, -

288 F. Supp. 2d 1262 (M.D. Fla. 2003) ...........eeseeeeeeee 6

Utah Pub. Serv. Comm’n vy. El Paso Natural Gas Co.,

SOS TL. GG GPP vccivncienensnnttesiinisinaciiniaiataiiiiammmaia 18

Waits v. City of Chicago,

2003 WL 21310277 (N.D. Il. June 26, 2003)................ 6

Williams v. Conagra Poultry Co.,

2004 WL 1752583 (8th Cir. Aug. 6, 2004)... 5

Williams v. Philip Morris, Inc.,

92. P36 126 COR. Ch. Ba, DI) viesincsaihesinesicnnsintinceai 7,415

Willow Inn, Inc. v. Public Service Mutual Insurance Co.,

2003 WL 21321370 (E.D. Pa. May 30, 2003).............. 14

Yates v. Evatt,

SOD UE. Fe CI ceccsscsscannesikiesitesinnpesientiaahdiaaininilil 18

Zhang v. American Gem Seafoods, Inc.,

SSP ESE TI Ce Cae, Bee ectenieesscincansencicnininttiniitiaine 13

Vii

TABLE OF AUTHORITIES

(continued)

OTHER AUTHORITIES

Editorial, Fair Punitive Damage Limits Set,

Business Insurance, Apr. 14, 2003...................

Editorial, Punitive Damages on Trial, Chi.

UNINOE: Ray GOMOD sscsinscivsscininissrsicssninsinennssonn

Michael Hoenig, Supreme Court Limits

Punitive Awards, N.Y. Law Journal, Apr.

BE I ckivpnnssvivennnnteidl tsk nsahonantipsuoninersnicgeurbapesie

Thomas R. Newman & Steven J. Ahmuty, Jr.,

Appellate Review of Punitive Damages,

N.Y. Law Journal, Apr, 16, 2003..................06

David G. Savage, Justices Act to Restrict

Punitive Damage Awards: The Supreme

Court Ruling is a Move to Control

“Irrational and Arbitrary” Verdicts, L.A.

TEIN. Uh, GRIND sosciceaubrasveesiaceicsnnentinemnnesnia

Robert L. Stern et al, Supreme Court Practice

RRR

Lorraine Woellert & Mike France, Tort

Reform Has Friends in High Places, Bus.

EINE, dg GAPE sisnhisnsesaninobussanansenaicaanstaiones

Page(s)

i ac naor Sat

l

BRIEF AMICUS CURIAE OF THE CHAMBER OF

COMMERCE OF THE UNITED STATES OF AMERICA

IN SUPPORT OF PETITIONER

The Chamber of Commerce of the United States of Amer-

ica (the Chamber) respectfully submits this brief amicus curiae

in support of the petition for a writ of certiorari in this case.

Letters from petitioner and respondents indicating consent to

file have been filed with the Clerk.'

INTEREST OF AMICUS CURIAE

The Chamber is the nation’s largest federation of business

companies and associations. The Chamber has an underlying

membership of more than 3,000,000 businesses and profes-

sional organizations of every size and in every industry sector

and from every region of the country. An important function

of the Chamber is to represent the interests of its members by

filing amicus curiae briefs in cases involving issues of national

concern to American business.

The Chamber is filing this brief in support of the petition

for a writ of certiorari because the rational and equitable ad-

ministration of punitive damages is a matter of profound con-

cern to the Chamber’s members. The Chamber’s members

welcomed this Court’s decision in State Farm Mutual Auto-

mobile Insurance Company v. Campbell (“State Farm I’), 538

U.S. 408 (2003), which they viewed as providing much needed

guidance on judicial review of punitive damages awards. The

Chamber is concerned, however, that many state and lower

federal courts have misunderstood or failed to adhere to the

guidelines set out in State Farm I. The decision that the peti-

tion for a writ of certiorari asks this Court to review — the rul-

ing of the Utah Supreme Court on remand from this Court’s

‘ Pursuant to Rule 37.6, amicus states that no counsel for a party au-

thored this brief in whole or in part. No person or entity other than the

Chamber and its members made a monetary contribution to the preparation

and submission of this brief.

2

decision in State Farm I — is illustrative of the problem.

Unless this Court reiterates and reaffirms the principles set out

in State Farm I, the lack of uniformity in judicial review of

punitive damages awards across the nation will prevent State

Farm I from achieving its promise. American businesses will

remain subject to arbitrary and excessive punishments pre-

cluded by the Due Process Clause.

The Chamber therefore respectfully submits this brief urg-

ing the Court to grant the petition for a writ of certiorari in this

case in order to end the confusion in the state and lower fed-

eral courts and to ensure the integrity of this Court’s mandate

in State Farm I.

REASONS FOR GRANTING THE WRIT

This case presents a recurring issue of tremendous impor-

tance to American business — how to ensure the sound and fair

administration of punitive damages awards in the nation’s

courts. In response to “skyrocketing” and “wholly unpredict-

able” punitive awards, Pacific Mutual Life Insurance Co. v.

Haslip, 499 U.S. 1, 10, 12 (1991) (internal quotation marks

omitted), this Court has repeatedly grappled with the extent to

which the Constitution limits the imposition of those awards.

By the time of its most recent decision on the subject in State

Farm I, the Court had firmly established that due process im-

poses both procedural and substantive limitations on punitive

damages, and that the constitutional requirements include judi-

cial review to ensure that punitive awards are neither arbitrar-

ily imposed nor excessive in amount. See State Farm I, 538

USS. at 416-18.

In State Farm I, the Court provided detailed guidance to

state and lower federal courts on how to review punitive dam-

ages awards to ensure that they are not excessive and that the

defendants had fair notice of the potential amount of the

awards. The Court elaborated on each of the three guideposts i

that it had previously instructed reviewing courts to consider:

(1) the degree of the reprehensibility of the defendant’s mis-

\\

“4

a

&

3

conduct; (2) the ratio between the punitive damages award and

the harm suffered by the plaintiff; and (3) the difference be-

tween the punitive damages awarded by the jury and the civil

penalties authorized or imposed in comparable cases. See 538

U.S. at 418. State Farm I was widely hailed as a watershed

decision that promised at last to bring order and rationality to

judicial review of punitive damages awards.” Unfortunately,

because state and lower federal courts have neither fully un-

derstood nor correctly applied the guidance that the Court pro-

vided in State Farm I, its promise has not been realized. And,

unless this Court reiterates and reinforces that guidance, its

promise will never be realized.

The ruling that the petitioner requests this Court to review,

the opinion of the Utah Supreme Court on remand from this

Court’s decision in State Farm I, vividly illustrates that further

guidance from this Court is imperative. As explained in the

petition for a wnt of certiorari, the Utah Supreme Court has

? See, e.g., David G. Savage, Justices Act to Restrict Punitive Damage

Awards: The Supreme Court Ruling is a Move to Control “Irrational and

Arbitrary” Verdicts, L.A. Times, Apr. 8, 2003, at 1 (“The . . . ruling sends

a stern warning to state judges and juries to rein in excessive awards.”);

Editorial, Punitive Damages on Trial, Chi. Trib., April 12, 2003, at C26

(“The high court drew some badly needed guidelines on what is reasonable

when the courts award punitive damages in civil cases.”); Editorial, Fair

Punitive Damage Limits Set, Business Insurance, Apr. 14, 2003, at 8 (“[The

decision is] another welcome guidepost to the type of fair, balanced and

predictable civil justice system that the American people and businesses

both need and deserve.”); Michael Hoenig, Supreme Court Limits Punitive

Awards, N.Y. Law Journal, Apr. 14, 2003, at 3 (“[{TJhe U.S. Supreme Court

clarified the outer boundaries of punitive damages and eclipsed any hopes

... that punitive damages could continue to be unbridled windfalls given

by angry juries.”); Thomas R. Newman & Steven J. Ahmuty, Jr., Appellate

Review of Punitive Damages, N.Y. Law Joumi, Apr, 16, 2003, at 3

(“{The holding] provides the clearest guidance to date concerning the per-

missible size of punitive damages.”); Lorrame Woellert & Mike France,

Tort Reform Has Friends in High Places, Bus. Week, Apr. 21, 2003, at 78

(arguing that “[t]he ruling should inject a level of predictability mto high-

stakes litigation”).

4

misunderstood and misapplied the instructions that this Court

gave on each of the three guideposts for review of punitive

damages awards. Those mistakes are not isolated errors by a

single court that has alone failed to understand this Court’s

mandate. Examination of the 76 cases in which state and

lower federal courts have reviewed punitive damages awards

for compliance with due process in the wake of State Farm I

reveals that the Utah Court’s errors are symptomatic of wide-

spread misapplication of this Court’s decision. Although a

few courts are correctly and faithfully applying State Farm I,

many other courts are not.°

This Court should grant the petition for a wnt of certiorari

to clanfy the principles set out in State Farm I and to ensure

the correct and uniform application of that decision by the

state and lower federal courts. Granting the petition will en-

able the Court not only to reaffirm the guidance that it pro-

vided in State Farm J but also to remind state and lower fed-

eral courts that they have an obligation to adhere to tle Court’s

mandate when cases are remanded to them.

* The cases analyzed in this brief include only those cases reported in

Westlaw and Lexis in which courts, after State Farm J, reviewed punitive

damages awards for compliance with the federal due process guarantee.

We have excluded from the analysis cases that were decided under state

law or in which there was a statutory cap on punitive damages that might

have influenced the court’s due process analysis. We have also excluded

cases in which the court was imposing punitive damages in the first in-

Stance, cases reviewing arbitration awards (which are subject to a narrower

standard of review), bankruptcy cases, and wrongful death cases in Ala-

bama (because compensatory damages are not permitted in such cases). A

full list of the cases included in our analysis is reprinted in an appendix to

this bnef. See App., infra, la-18a.

5

A. The Petition Should Be Granted To Ensure The Cor-

rect And Uniform Application Of State Farm I By The

State And Lower Federal Courts

1. State Farm I has had some positive impact.

State Farm I has not been without some success in curbing

arbitrary and excessive punitive damages awards. A number of

state and federal courts appear to understand the decision and

to be committed to applying it faithfully. For example, in Wil-

liams v. Conagra Poultry Co., 2004 WL 1752583 (8th Cir.

Aug. 6, 2004), a case involving a hostile work environment in

violation of 42 U.S.C. § 1981, the court of appeals reduced a

punitive damages award of more than $6 million to $600,000 —

an amount equal to the compensatory damages. In arriving at

that figure, the court noted that the compensatory damages

were substantial and the defendant’s conduct, while sufficiently

reprehensible to justify some punitive damages, was not so

egregious that it justified an unusually large award. The court

specifically relied on this Court’s guidance in State Farm I

that, when compensatory damages are substantial, a 1-to-1 ratio

between punitive and compensatory damages will often be the

highest ratio permitted by due process. See 2004 WL 1752583

at *8.

Similarly, in Johnson v. Ford Motor Co., 2003 Cal. App.

Unpub. LEXIS (Nov. 25, 2003), review granted, 2004 Cal.

LEXIS 2549 (Mar. 24, 2004), the court reduced a punitive

damages award of $10 million to $53,435 — three times the

compensatory damages. The court explained that the conduct

was not particularly egregious because it caused only economic

injury, but the compensatory damages awarded were not large

and did not include a punitive component. Jd. at *7-*8.

In several other decisions as well, courts have carefully and

conscientiously applied this Court’s guidance in State Farm I

to the relevant facts and appropriately vacated or reduced the

punitive damages awards. Those cases demonstrate that the

guidelines set out by the Court in State Farm J can rein in puni-

6

tive damages awards if courts understand them correctly and

implement them faithfully.*

2. Many punitive awards are still excessive even after they

have been reduced on judicial review.

Several other state and federal courts have, in reliance on

State Farm I, substantially reduced the size of multi-million

dollar punitive damages awards. For example, in Romo v.

Ford Motor Co., 6 Cal. Rptr. 3d 793 (Cal. Ct. App. 2003), the

court reduced an award of $290 million to $23.7 million. In

Henley v. Philip Morris, 9 Cal. Rptr. 3d 29 (Cal Ct. App.

2004), the court reduced an award of $50 million to $9 million.

And, in this very case, the Utah Supreme Court reduced the

punitive damages award substantially — from the $145 million

award vacated by this Court to an award of slightly more than

$9 million. There have been comparable reductions in the

amount of damages in other cases. Unfortunately, however,

* See, e.g., DiSorbo v. Hoy, 343 F.3d 172 (2d Cir. 2003) (reducing

$1.275 million award - 3.2 times compensatory damages — to $75,000 -

0.3 times compensatory damages); United States v. Bailey, 288 F. Supp. 2d

1262 (M.D. Fla. 2003) (vacating $3 million award because conduct was not

sufficiently reprehensible to justify a punitive award); Waits v. City of Chi-

cago, 2003 WL 21310277 (N.D. Ill. June 26, 2003) (unpublished) (reduc-

ing $2 million award — more than 133 times compensatory damages — to

$45,000 — three times compensatory damages); Daka, Inc. v. McCrae, 839

A.2d 682 (D.C. App. 2003) (vacating $4.8 million award — 25.7 times

compensatory damages — and remanding for recalculation); Blust v. Lamar

Adver. Co., 2004 Ohio App. LEXIS 2167 (2004) (vacating $2.245 million

award — more than 70 times compensatory damages — and remanding for a

new trial); Roth v. Farner-Bocken Co., 667 N.W.2d 651 (S.D. 2003) (va-

cating $500,000 award — 20 times compensatory damages — and remanding

for new trial on punitive damages).

° See, e.g., TVT Records v. Island Def Jam Music Group, 279 F. Supp.

2d 413 (S.D.N.Y. 2003) ($108 million reduced to $29.125 million); Eden

Electrical, Ltd. v. Amana Co., 258 F. Supp. 2d 958 (N.D. Iowa 2003)

($17.875 million reduced to $10 million), aff'd, 370 F.3d 824 (8th Cir.

2004); Advocat, Inc. v. Sauer, 111 S.W.3d 346 (Ark. 2003) ($63 mullion

reduced to $21 million), cert. denied, 124 S. Ct. 535 (2003); Diamond

Woodworks, Inc. v. Argonaut Ins. Co., 135 Cal. Rptr. 2d 736 (Cal. Ct. App.

7

the awards in many of those cases (including this one) remain

excessive even after they have been reduced, in large part be-

cause the reviewing courts have not fully and faithfully applied

this Court’s instructions in State Farm I.

Of the 76 cases in which courts have reviewed punitive

damages awards since State Farm I, the awards in 35 (more

than 46%) of the cases are a million dollars or more. See App.,

infra, 1a-1la. Ten of the awards exceed even $20 million, and

one court has approved an award of $4.5 billion.®

3. Courts repeatedly misapply the State Farm I guidelines.

Even more troubling than the persistence of large awards is

the fact that many courts, like the Utah Supreme Court here,

are failing to apply State Farm I fully and faithfully. The er-

rors being made by the state and lower federal courts involve

all three of the guideposts for judicial review that the Court

elucidated in State Farm J. But the most readily apparent mis-

takes concern application of the second guidepost — the ratio of

the punitive damages award to the harm suffered by the plain-

tiff.

2003) ($14 million reduced to $1 million); Taylor Woodrow Homes, Inc. vy.

Acceptance Ins. Cos., Inc., 2003 WL 21224088 (Cal. Ct. App. May 28,

2003) (unpublished) ($5 million reduced to $1 million); Bocci v. Key

Pharms., Inc., 76 P.3d 669, modified on reconsideration, 79 P.3d 908 (Or.

Ct. App. 2003) ($22.5 million reduced to $3.5 million).

6 See In re Exxon Valdez, 296 F. Supp. 2d 1071 (D. Alaska 2004) ($4.5

billion); Planned Parenthood, Inc. v. Am. Coalition of Life Activists, 300 F.

Supp. 2d 1055 (D. Or. 2004) ($108.5 million); Williams v. Philip Morris,

Inc., 92 P.3d 126 (Or. Ct. App. 2004) ($79.5 million); S. Union Co. v.

Southwest Gas Corp., 281 F. Supp. 2d 1090 (D. Ariz. 2003) ($60 million);

Rhone-Poulenc Agro, S.A. v. DeKalb Genetics Corp., 345 F.3d 1366 (Fed.

Cir. 2003) ($50 million), cert. denied, 124 S. Ct. 1423 (2004); TVT Records

v. Island Def Jam Music Group, 279 F. Supp. 2d 413 (S.D.N-Y. 2003)

($29.125 million); Jnterclaim Holdings Ltd. v. Ness, Motley, Loadholt,

Richardson & Poole, 2004 WL 725287 (N.D. Ill. Apr. 1, 2004) ($27.7 mil-

lion); Union Pac. R.R. v. Barber, 2004 WL 352525 (Ark. Feb. 26, 2004)

($25 million); Romo, supra ($23.7 million); Advocat, Inc. v. Sauer, 111

S.W.3d 346 (Ark. 2003) ($21 million), cert. denied, 124 S. Ct. 535 (2003).

8

a. In State Farm I, this Court instructed that, “[w]hen com-

pensatory damages are substantial,” punitive damages “equal to

compensatory damages” will often “reach the outermost limit

of the due process guarantee.” 538 U.S. at 425. Applying that

principle to the facts of this case, the Court concluded that the

compensatory award received by the plaintiffs — $1 million for

a year and a half of emotional distress — was substantial. The

Court further concluded that those damages already included a

punitive component, because emotional distress damages, by

their very nature, have a punitive element. Jd. at 426. The

Court therefore concluded that “a punitive damages award at or

near the amount of compensatory damages” is likely the largest

award that would be consistent with due process in this case.

Id. at 429.

Despite that clear guidance, the Utah Supreme Court on

remand determined that due process permits a punitive award

nine times the size of the compensatory award. The Utah

Court reasoned that this Court had erred in concluding that the

compensatory award contains a punitive element, and further

determined that the emotional distress damages awarded to the

plaintiffs actually justify a higher punitive award, because con-

duct that causes emotional harm is “markedly more egregious”

than conduct that causes economic harm. Pet. App. 14a-16a.

That reasoning turns the guidance provided by this Court in

State Farm I on its head.

The Utah Court is not alone in its disregard of this Court’s

instruction that a 1-to-1 ratio of punitive to compensatory dam-

ages is the constitutional limit in cases where compensatory

damages are substantial. Reviewing courts have approved pu-

nitive damages awards with ratios of 2-to-1 or greater in over

80% of the 37 post-State Farm I cases in which compensatory

awards (or the potential harm estimated by the court) exceeded

$250,000. That statistic is sharply out of sync with the clear

message in State Farm J that, when compensatory damages are

already substantial, punitive damages in excess of compensa-

tory damages are justifiable only in extraordinary cases.

hth be

Se ee seid Asa?

9

In many of the cases in which courts have disregarded the

1-to-1 limit, the courts have not even acknowledged it. For

example, in Rhone-Poulenc Agro, S.A. v. DeKalb Genetics

Corp., 345 F.3d 1366 (Fed. Cir. 2003), cert. denied, 124 S. Ct.

1423 (2004), the court of appeals approved a $50 million puni-

tive award in a business dispute involving trade secret misap-

propriation, patent infringement, and fraudulent inducement of

a contract. Although that award was more than three times the

substantial compensatory award of $15 million, the court did

not advert to the instruction in State Farm I that a 1-to-1 ratio

is generally all that is appropriate when com;*ensatory damages

are substantial. Many other cases similarly tail to mention this

Court’s guidance.’

Some courts do acknowledge State Farm I's endorsement

of a 1-to-1 ratio but then proceed to ignore it. For example, in

Henley, the California court noted this Court’s instruction that

“lower ratios — perhaps as low as 1 to 1 — may ‘reach the out-

ermost limit of the due process guarantee’ where ‘compensa-

tory damages are substantial.”” 9 Cal Rptr. 3d at 72 (quoting

State Farm I, 538 U.S. at 425). But the court then, without ex-

planation, reinterpreted that instruction to allow a ratio as high

as 4-to-1. See id. at 73. And the court then proceeded to ap-

prove punitive damages of $9 million — six times the “ample”

” See, e.g., Greenberg v. Paul Revere Life Ins. Co., 2004 WL 74630

(9th Cir. Jan. 12, 2004) (4.4 ratio despite $547,445 in compensatory dam-

ages for insurance bad faith); McClain v. Metabolife Int'l, Inc., 259 F.

Supp. 2d 1225 (N.D. Ala. 2003) (3.6 ratio despite $711,000 in compensa-

tory damages that included emotional distress); /nterclaim Holdings Lid.,

supra (3.3 ratio despite $8.3 million in compensatory damages for breach

of fiduciary duty and contract); Diamond Woodworks, Inc., supra (3.9 ratio

despite $258,570 in compensatory damages for insurance bad faith, fraud,

and breach of contract); Taylor Woodrow Homes, Inc., supra (3.4 ratio

despite $293,000 in compensatory damages for insurance bad faith); Read-

ing Radio, Inc. v. Fink, 833 A.2d 199 (Pa. Super. Ct. 2003) (2.7 ratio de-

spite $300,000 in compensatory damages for breach of contract, civil con-

spiracy, and various economic torts).

10

compensatory award of $1.5 million. Jd. Other cases take a

similar approach.*

Still other courts follow the approach of the Utah Supreme

Court in this case and offer rationalizations for departing from

the 1-to-1 ratio. For example, in Hangarter v. Provident Life &

Accident Insurance Co., 373 F.3d 998 (9th Cir. 2004), the court

of appeals refused to reduce the punitive damages to achieve a

1-to-1 ratio in an insurance bad faith case in which the com-

pensatory damages were $1.92 million. The court explained

that, in its view, that ratio “is not binding, no matter how factu-

ally similar the cases may be.” Jd. at 1014. The court further

justified its failure to follow the 1-to-1 guideline on the ground

that only one third of the compensatory damages in the case

were for emotional distress, while the compensatory award in

State Farm I was “primarily” for emotional distress. See id. at

1015 n.11. The court did not mention, however, that the com-

pensatory award in Hangarter was twice as large as the com-

pensatory award in State Farm I, so the amount of emotional

distress damages in the two cases were not that dissimilar.

In Hollock v. Erie Insurance Exchange, 842 A.2d 409 (Pa.

Super. Ct. 2004), the court noted the State Farm I principle that

a large punitive award is not justifiable where compensatory

damages are substantial. Jd. at 421. The court nonetheless ap-

® See, e.g., Stogsdill v. Healthmark Partners, L.L.C., 2004 U.S. App.

LEXIS 15276 (8th Cir. July 23, 2004) (noting State Farm J statement about

1-to-1 ratio and acknowledging that the compensatory damages were “sub-

stantia]!” but approving a ratio of 4-io-1); Eden Electrical, Ltd. v. Amana

Co., 370 F.3d 824 (8th Cir. 2004) (noting State Farm / statement about 1-

to-] ratio and acknowledging that compensatory damages were “signifi-

cant” but approving a ratio of 4.8-to-1); Shiv-Ram, Inc. v. McCaleb, 2003

WL 23025586 (Ala. Dec. 30, 2003) (approving punitive award of 2.8 times

compensatory damages even after finding that the damages had made the

plaintiff whole for her injuries); Harvis v. Archer, 134 S.W.3d 411, 438-39,

449 (Tex. Ct. App. 2004) (approving a 4-to-1 ratio in a case involving

fraud and breach of fiduciary duty after quoting State Farm J and noting

that the case fell into the 1-to-1 ratio category) .

eal ek

11

proved a punitive damages award of more than 10 times the

compensatory damages of $278,825. Jd. at 422. The court jus-

tified its decision by reasoning that the compensatory damages,

which included attorneys’ fees, costs, and interest, had no puni-

tive element and therefore differed from the emotional distress

award in State Farm I. Contrary to that characterization, how-

ever, an award of attorneys’ fees and interest on those fees does

have a punitive element, because it is a departure from the gen-

eral rule in our judicial system that each party bears its own

litigation costs. See also In re Exxon Valdez, 296 F. Supp. 2d

1071, 1104 (D. Alaska 2004) (arguing that compensatory

award of more than $513 million was not substantial because it

was divided among many plaintiffs).

b. Another way that many state and lower federal courts

have misinterpreted State Farm J is by treating single-digit ra-

tios (especially ratios below 4-to-1) as providing a safe harbor

from due process scrutiny. In State Farm I, the Court reiter-

ated its guidance from earlier cases that a ratio of 4-to-1 will be

“close to the line of constitutional impropriety” in most cases

where compensatory damages are not substantial. 538 U.S. at

425 (citing Haslip, 499 U.S. at 23-24, and BMW of N. Am., Inc.

v. Gore, 517 U.S. 559, 581 (1996)). The Court also instructed

that, even in the most egregious cases, awards exceeding a sin-

gle-digit ratio between punitive and compensatory damages

will rarely satisfy due process. /d. A fair reading of the

Court’s analysis indicates that the Court was describing the

outer limits of constitutional propriety, not establishing any

safe harbors. No ratio, not even a 1-to-1 ratio, provides a

shield from due process scrutiny. See, e.g., Southwestern Tel.

& Tel. Co. v. Danaher, 238 U.S. 482, 490 (1915). Many

courts, however, appear to have mistakenly read State Farm I

to mean that a single-digit ratio, and particularly a ratio below

4-to-1, immunizes the punitive awards against further due

process review.

The view that a single-digit or 4-to-1 ratio is a safe harbor

manifests itself in several ways. One manifestation is that

12

courts frequently reduce awards so that the punitive-to-

compensatory ratio is just below 10-to-1 or just below 4-to-1.

This case is a good example: the Utah Court repeatedly noted

that it had reduced the award to “nine times” the amount of

compensatory and special damages. Pet. App. la, 19a; see id.

at 16a (noting 9-to-1 ratio). Similarly, in Exxon Valdez, the

district court reduced damages to a level of 8.8-to-1 after quot-

ing the statement in State Farm J that “[s]ingle-digit multipliers

are more likely to comport with due process.” 296 F. Supp. 2d

at 1106 (quoting State Farm I, 538 U.S. at 425). Later in the

opinion, the court favorably quoted a Ninth Circuit decision

stating that there is “no Supreme Court or Ninth Circuit case

disapproving of a single-digit ratio.” Jd. at 1109 (quoting

Zhang v. American Gem Seafoods, Inc., 339 F.3d 1020, 1044

(9th Cir. 2003)).

Likewise, in McClain v. Metabolife Int’l, Inc., 259 F. Supp.

2d 1225 (N.D. Ala. 2003), the court stated that “a multiplier of

9 or less means that the punitive damages presumptively passes

muster under the Due Process Clause.” Jd. at 1231. Then, af-

ter summarily approving the punitive damages awards on sev-

eral claims because they “easily pass[] the single digit multi-

plier test,” id., the court reduced the punitive award on another

claim to 9-to-1, stating that the court hoped it had “found the

exact number that will not give [the plaintiff] a dime more than

the Fourteenth Amendment allows, and not a dime less.” Jd. at

1237. See also Bardis v. Oates, 14 Cal. Rptr. 3d 89, 108 (Cal.

Ct. App. 2004) (reducing punitive award to 9.1-to-1 in order to

achieve an award “within the single-digit threshold set out in”

State Farm I).

° Other cases treat 4-to-] ratios in a similar fashion, reducing awards to

4-to-1 or just below that ratio. See, e.g., Textron Fin. Corp. v. Nat’l Union

Fire Ins. Co., 13 Cal. Rptr. 3d 586, 604 (Cal. Ct. App. 2004) (citing Dia-

mond Woodworks and reducing punitive award to achieve a 4-to-1 ratio);

Diamond Woodworks, supra, at 762 (reducing punitive damages to 3.9-to-1

ratio after noting that “in the usual case . . . the outer constitutional limit on

13

The McClain case also illustrates another manifestation of

the view that single-digit ratios are a safe harbor. Many courts

reject due process challenges to punitive awards by doing no

more than noting that the ratio of punitive to compensatory

damages is within single digits or is less than 4-to-1. For ex-

ample, in Marmer v. Unicco Service Co., 2003 WL 22462053

(E.D. Pa. Oct. 2, 2003), the court disposed of the claim that the

punitive damages award was excessive by citing State Farm I

and stating that “[a]n award of punitive damages in an amount

that is exactly double the award of compensatory damages, is

not improper under settled legal standards.” Jd. at *6. Simi-

larly, in Reading Radio, Inc. vy. Fink, 833 A.2d 199 (Pa. Super.

Ct. 2003), the court addressed the due process claim in a foot-

note that did no more than quote the statement in State Farm I

that few awards exceeding a single-digit ratio will satisfy due

process and state that “[t]he ratio between punitive damages

and compensatory damages in this case is slightly greater than

a 2 to 1 ratio.” Jd. at 215 n.3. And, in Austin v. Specialty

Transportation Services, Inc., 594 $.E.2d 867 (S.C. Ct. App.

2004), the court likewise quoted the ratio discussion in State

Farm I and then declared, without further analysis, that ratios

of between 2-to-1 and 3-to-1 were not excessive. Jd. at 877.

Even cases that uphold awards after slightly more analysis

appear to reflect the belief that ratios below 10-to-1 are im-

mune from challenge. See, e.g., Zhang, 339 F.3d at 1044 (“We

are aware of no Supreme Court or Ninth Circuit case disap-

proving of a single-digit ratio between punitive and compensa-

tory damages, and we decline to extend the law in this case.”);

Rhone-Poulenc Agro, 345 F.3d at 1372 (noting that “the pro-

the amount of punitive damages is approximately four times the amount of

compensatory damages”); Taylor Woodrow Homes, supra, at *4 (reducing

punitive award to “somewhat less than four times the compensatories”);

Harris v. Archer, 134 S.W.3d 411, 440 (Tex. Ct. App. 2004) (reducing pu-

nitive damages to achieve a ratio of 4-to-1); see also cases cited in note 8,

supra.

14

portion of punitive damages to compensatory damages does not

even approach the possible threshold of constitutional impro- —

priety” because it is “barely above three times the compensa-

tory award of $15 million”).

Another manifestation of the view that a single-digit ratio is

a safe harbor is that some courts are inflating the denominator

in order to bring the ratio within the single-digit range. For

example, in Willow Inn, Inc. v. Public Service Mutual Insur-

ance Co., 2003 WL 21321370 (E.D. Pa. May 30, 2003), an in-

surance bad faith case, the court did not compare the punitive

award of $150,000 to the compensatory award of $2,000. In-

stead, the court calculated the ratio by comparing the punitive

damages to the value of the plaintiff insured’s claim under the

policy, despite the fact that the insurance company had, albeit

belatedly, paid the claim. The court then stated that the result-

ing ratio of 1-to-1 did not “raise a suspicious judicial eye-

brow.” /d. at *3 (quoting Gore, 517 U.S. at 583).

Similarly, in Trinity Evangelical Lutheran Church v. Tower

Insurance Co., 661 N.W.2d 789 (Wis.), cert. denied, 124 S. Ct.

925 (2003), another insurance bad faith case, the court upheld a

punitive award of $3.5 million by comparing it, not to the

$17,570 in compensatory damages, but instead to $490,000, the

amount the insurer paid to discharge the insured’s liability in

the underlying accident suit involving the insured and a third

party. The dissenting justice noted that there was never any

possibility that the insured would have been required to pay

that liability, and she charged the court with “manipulation of

the ratio for purposes of due process scrutiny.” See id. at 379

(Sykes, J., dissenting). Similarly, in Simon v. San Paulo U.S.

Holding Co., 7 Cal. Rptr. 3d 367 (Cal. Ct. App. 2003), review

granted, 86 P.3d 881 (Cal. 2004), a breach of contract and

fraud case, the court calculated the punitive-to-compensatory

ratio using its own estimate of the plaintiff's expectation dam-

ages rather than the jury’s compensatory award of $5,000 for

out-of-pocket damages. The court then noted with approval

that the ratio was just over 4-to-1. See id. at 390.

15

c. A final way that state and lower courts have been disre-

garding the State Farm J guidance on ratios is by approving

awards with double-digit ratios of punitive to compensatory

damages. Seventeen (more than 20%) of the 76 post-State

Farm I cases have upheld awards with ratios of 10-to-1 or

greater. Although many of those cases involve small compen-

satory awards that might be thought to justify higher ratios, a

significant number of the cases involve compensatory awards

of several hundreds of thousands of dollars.

For example, in Southern Union Co. v. Southwest Gas

Corp., 281 F. Supp. 2d 1090 (D. Ariz. 2003), a case involving

illegal interference with a merger by a state government offi-

cial, the district court upheld a $60 million punitive damages

award that was almost 154 times the compensatory award of

approximately $390,000. In Planned Parenthood v. American

Coalition of Life Activists, 300 F. Supp. 2d 1055 (D. Or. 2004),

a case in which anti-abortion activists were found to have

threatened abortion providers by publishing their names and

addresses on posters and Internet websites, the court upheld

$108 million in punitive damages, more than 206 times the

compensatory damages of approximately $526,000. And, in

Williams y. Philip Morris, Inc., 92 P.3d 126 (Or. Ct. App.

2004), the court upheld a punitive damages award of $79.5 mil-

lion, almost 97 times the compensatory damages of approxi-

mately $821,000. Although this Court noted in State Farm I

that double-digit ratios might conceivably comply with due

process where a particularly egregious act results in only a

small amount of damages, 538 U.S. at 425, these cases, in

which the economic damages totaled hundreds of thousands of

dollars, plainly do not fall into that category. '°

' See also Phelps v. Louisville Water Co., 103 S.W.3d 46 (Ky. 2003)

(approving ratio of 11.3-to-1 with punitive damages of $2 million and

compensatory damages of $176,262); Hollock, supra (upholding ratio of

more than 10-to-1 with punitive damages of $2.8 million and compensatory

damages of $278,825); Collins Entertainment Corp. v. Coats & Coats

16

4. The divergence in how state and lower federal courts

are applying State Farm I thwarts the due process pro-

tection that the decision seeks to provide.

Substantial variation in how federal law is applied in dif-

ferent courts across the county is always a concern, but the lack

of uniformity in the application of State Farm I is especially

troubling. The absence of uniformity directly undermines the

due process safeguards that this Court sought to provide when

it established guidelines for judicial review of punitive dam-

ages awards.

Judicial review of punitive damages serves two primary

functions under the Due Process Clause. First, it aims to en-

sure that defendants have fair notice of the penalties to which

they are exposed. As this Court has explained, “elementary

notions of fairness enshrined in our constitutional jurispru-

dence dictate that a person receive fair notice not only of the

conduct that will subject him to punishment, but also of the se-

verity of the penalty that a State may impose.” State Farm I,

538 U.S. at 417 (quoting Gore, 517 U.S. at 574). Second, judi-

cial review seeks to eliminate grossly excessive awards. “To

the extent an award is grossly excessive, it furthers no legiti-

mate purpose and constitutes an arbitrary deprivation of prop-

erty.” Jd. Neither of the goals of judicial review can be effec-

tively achieved if different courts are applying the standards for

review of punitive damages in materially different ways.

Many defendants in suits in which punitive damages are

imposed operate nationwide businesses and are therefore sub-

ject to suit in multiple states and federal judicial districts. Be-

cause plaintiffs can frequently choose the forum in which they

sue those defendants, the current lack of uniformity among dif-

Rental Amusement, 584 S.E.2d 120 (S.C. Ct. App. 2003) (approving ratio

of 10-to-1 with punitive damages of $1.569 million and compensatory

damages of $157,450).

17

ferent courts makes it virtually impossible for the defendants to

predict the penalties to which they may be exposed.

In addition, unless all courts adhere to the judicial review

guidelines that State Farm I prescribes, the guidelines cannot

effectively curb grossly excessive awards. Plaintiffs can

choose to file their suits in those forums that do not rigorously

apply the guidelines to curb excessive awards. Even apart

from forum shopping, political pressures may prevent the

guidelines from curbing excessive awards unless this Court

sends a signal that the guidelines must be followed in all juris-

dictions. As long as courts in some jurisdictions are applying

the guidelines in a manner that does not prevent excessive

awards, there may be political pressures on judges in states

with elected judiciaries to follow suit.

It is thus imperative for this Court to provide further clarifi-

cation of the standards that it set out in State Farm I and to

send a strong message that the Court expects all state and fed-

eral courts to adhere to those standards. Otherwise, not only

will federal law continue be applied differently in different ju-

risdictions, but American businesses and other defendants will

continue to face arbitrary and excessive punishments that de-

prive them of their federal due process rights. The Court

should grant the petition for a writ of certiorari.

B. The Petition Should Be Granted To Ensure The Integ-

rity Of This Court’s Mandate In State Farm I

The Court should grant the petition in this case, rather than

await additional developments in the state and lower federal

courts, because, as the above discussion illustrates, further

guidance on the standards for judicial review of punitive dam-

ages awards is needed as soon as possible. But an equally

compelling reason for the Court to grant this petition rather

than await a future case is that reversal of the decision of the

Utah Supreme Court is necessary to preserve the integrity of

the Court’s mandate in State Farm I.

18

When a case is remanded to a state or lower federal court

for further proceedings, that court is obligated to conduct those

proceedings im accordance with the mandate of this Court. See

Briggs v. Penn. R.R., 334 U.S. 304, 306 (1948); FCC v. Potts-

ville Broadcasting Co., 309 U.S. 134, 140 (1940). The opin-

ion of this Court is a part of its mandate, and the lower court is

not free to disregard the guidance in the opinion or to reinter-

pret the opinion to suit its own purposes. See Rogers v. Hill,

289 U.S. 582, 587 (1933); Gulf Refining Co. v. United States,

269 U.S. 125, 135 (1925). When a lower court has failed to

adhere to this Court’s mandate, this Court has not hesitated to

review the case again in order to ensure that its mandate is re-

spected. See, e.g., Yates v. Evatt, 500 U.S. 391 (1991) (revers-

ing the judgment of the South Carolina Supreme Court after

granting certiorari three times in the same case); Utah Pub.

Serv. Comm'n v. El Paso Natural Gas Co., 395 U.S. 464, 469

(1969) (vacating district court order and remanding where or-

der entered settlement that did not comply with this Court’s

mandate); Jn re Sanford Fork & Tool Co., 160 U.S. 247, 255

(1895) (“If the Circuit Court mistakes or misconstrues the de-

cree of this court, and does not give full effect to the mandate,

its action may be controlled, either upon a new appeal (if in-

volving a sufficient amount) or by a wnt of mandamus to exe-

cute the mandate of this court.”). That course of action is war-

ranted here.

The Utah Supreme Court’s decision on remand in this case

does not adhere to the mandate of State Farm J. This Court’s

opinion in State Farm J instructed that “(a]n application of the

[three] guideposts [for review of punitive damages] to the facts

of this case . . . likely would justify a punitive damages award

at or near the amount of compensatory damages.” 538 U.S. at

429. The Court remanded for the Utah courts to calculate the

precise amount of punitive damages to be awarded. Jd. But

that remand did not give the Utah Supreme Court license to

disregard entirely this Court’s assessment of the appropriate

penalty. The Utah Court’s imposition of punitive damages

19

equal to nine times the amount of compensatory damages can-

not be reconciled with this Court’s instruction that a 1-to-1 ra-

tio is likely the highest ratio that is permissible.

Furthermore, this Court specifically determined that the

compensatory damages that had been awarded in this case were

“substantial,” and that they “contained a punitive element.”

State Farm I, 538 U.S. at 429. In direct conflict with that de-

termination, the Utah Supreme Court held on remand that the

“compensatory damages award was purged of elements which

may have been more properly placed in the category of puni-

tive damages.” Pet. App. 15a. And the Utah Court relied on

that fact (id.) to support its refusal to apply this Court’s instruc-

tion that a 1-to-1 ratio is the “the outermost limit” consistent

with due process “[w]hen compensatory damages are substan-

tial.” State Farm I, 538 U.S. at 425.

In direct conflict with this Court’s opinion, the Utah Su-

preme Court relied on the plaintiffs’ receipt of significant dam-

ages for emotional distress to justify an unusually large puni-

tive award. The Utah Court stated that it had “no difficulty

concluding that conduct which causes $1 million of emotional

distress and humiliation is markedly more egregious than con-

duct which results in $1 million of economic harm. Further-

more, such conduct is a candidate for the imposition of puni-

tive damages in excess of a 1-to-1 ratio to compensatory dam-

ages.” Pet. App. 16a. That reasoning flies in the face of this

Court’s instruction that the large emotional distress award

weighed against a large punitive award. See State Farm I, 538

USS. at 426.

The Utah Supreme Court’s decision on remand departs so

clearly and so far from this Court’s mandate in State Farm I

that this Court cannot allow it to stand. That is particularly true

because of the high public visibility of this case. Although it is

well established that a denial of certiorari creates no legal

precedent, see, e.g., Missouri v. Jenkins, 515 U.S. 70, 85

(1995), a denial can have practical impact — particularly in case

as closely watched as this one. Cf Robert L. Stern et al, Su-

20

preme Court Practice 308-09 (8th ed. 2002) (noting improper

tendency of lower courts to attach significance to denials of

certiorari). A failure by this Court to take action here could

unfortunately be viewed by some courts as acquiescence in the

Utah Court’s decision. And it could be misinterpreted by some

courts as a signal that this Court is not committed to the princi-

ples that the Court laid down in State Farm I. The Court

should send precisely the opposite signal, by granting the peti-

tion for a writ of certiorari and reversing the judgment of the

Utah Supreme Court.

CONCLUSION

For the foregoing reasons, the Court should grant the peti-

tion and set the case for briefing and argument. In the alterna-

tive, the Court should grant the petition and summarily reverse

the decision of the Utah Supreme Court.

Respectfully submitted,

ROBIN S. CONRAD WALTER DELLINGER

NATIONAL CHAMBER (Counsel of Record)

LITIGATION CENTER, INC. JONATHAN D. HACKER

1615 H Street, N.W. MATTHEW D. ROBERTS

Washington, D.C. 20062 EMILY BERNING

(202) 463-5337 O’MELVENY & MYERS LLP

1625 Eye Street, N.W.

Washington, D.C. 20006

(202) 383-5300

Attorneys for Amicus Curiae

August 23, 2004