By Gregory A. Bibler and Robert H. Fitzgerald
This month the U.S. Supreme Court tightened constitutional constraints on the discretion of state courts to impose punitive damages in tort cases. In State Farm Mutual Automobile Insurance Co. v. Campbell,123 S.Ct. 1513 (2003), the Court reversed the Utah Supreme Court’s holding that an award of punitive damages that was 145 times the compensatory damages award passed muster under the Due Process Clause of the Fourteenth Amendment. In so doing, the Court emphasized that due process does not permit courts to award one plaintiff punitive damages based on the merits of other parties’ hypothetical claims. Evidence of a defendant’s bad behavior toward others may not be presented unless there is a clear nexus between that behavior and a compensable injury to the plaintiff. The Court also stated that few awards exceeding a single-digit ratio between punitive and compensatory damages will satisfy due process.
