U.S. Supreme Court Limits Punitive-Damage Awards

Bloomberg ^ | 4/7/3 | Greg Stohr and Laurie Asseo

[WaveThatFlag]

The U.S. Supreme Court put new limits on punitive damages, striking down a $145 million award State Farm Mutual Automobile Insurance Co. was told to pay a Utah couple in a dispute over an accident claim.

The 6-3 ruling said the U.S. Constitution in most cases limits punitive damages to 10 times the harm suffered by the plaintiff. The punitive award against State Farm was 145 times the $1 million the couple had won for mental anguish they suffered when the insurer wouldn't settle a claim against them.

[BruceS]

If you're a big company and commit an horrendous multi million dollar fraud of widows and orphans, you are protected from the persons you defrauded because the Court says the punishment has to be proportional to the actual damages.

No. You can be sued for the multi million dollars you got through fraud and made to pay every cent of that back to the widows and orphans. This decision just says that the jury can't then decide they don't like you and fine you 145 times the actual damages.

[Viva Le Dissention]

Because the government enforces the decision of the jury doesn't mean that they are an agent of the government, sorry to tell you.

They are citizens, no more, no less. The Government is not a party to such a lawsuit and has no interest in its outcome. The citizens of the State of Utah have cast judgment against the actions of the company, under the laws of Utah, and that decision is enforced by the laws of Utah. Today's Supreme Court decision undercuts the sovereignty of both state law and the jury system.

Again, the Court did not rely on the 8th Amendment, and the petitioners did not argue there was an 8th Amendment prohibition, since it simply doesn't apply here.

[hchutch]

Seems to me that all SCOTUS did was expand the protection against excessive fines and cruel and unusual punishment to include civil cases, which is quite reasonable given the fact that the standard of proof is much lower than in a criminal case.

The trial lawyers have imposed a hidden "lawyer tax" on this economy, often by running up punitive damages to an obscene amount. That's not provided for in the Constitution, by any stretch of the imagination.

So it took what some might consider judicial activism. Big deal. SCOTUS has just cut the lawyer tax on the American economy and that is a good thing. Don't look this gift horse in the mouth.

[headsonpikes]

You're just a libertarian extremist, expecting justice to be rational.

;^)

[APBaer]

"You're just a libertarian extremist, expecting justice to be rational."

LOL
Oh, *rational* is too high a standard.
I'd be pleased and more than a little surprised if those justices could just be *consistent*

[Viva Le Dissention]

No. You can be sued for the multi million dollars you got through fraud and made to pay every cent of that back to the widows and orphans. This decision just says that the jury can't then decide they don't like you and fine you 145 times the actual damages.

Ok, but what are the practical applications of this? First of all, the widows and the orphans don't get back every cent. Going to court costs money. Besides attorney's fees, which can't be considered in rendering a damage award, juries, as a rule, tend to undercompensate.

But besides this, what about the practical implications? Even though it's nothing but dicta, let's say that the 10x damage rule applies. Punitive damages, which are intended to be a disincentive to abhorant conduct, have been reduced to nothing but a chimera. What this decision tells me as a Fortune 500 Company, is that we can continue to defraud and bilk and scam and injure consumers, just as long as less than 1 out of 10 who are injured win a judgment against us. Frankly, I think those are pretty good odds. Where is the disincentive?

[CA Conservative]

The 8th Amendment prohibits excessive fines. Since punitive damages are, by definition, a form of punishment imposed on the defendant by a court (a branch of the government), this prohibition would be applicable, I would think. You might disagree, but the question is open to argument, and it appears that the majority of the USSC believes it to be a valid argument.

[Poohbah]

Because the government enforces the decision of the jury doesn't mean that they are an agent of the government, sorry to tell you.

Sorry to tell you--they effectively ARE an agent of the government.

They are citizens, no more, no less. The Government is not a party to such a lawsuit and has no interest in its outcome.

Once the outcome is in place, the government has an interest. The government DOES have an interest in preventing said outcomes from being too onerous--it might inspire the pursuit of some more...primitive...forms of "justice" by various interested parties to the case.

The citizens of the State of Utah have cast judgment against the actions of the company, under the laws of Utah, and that decision is enforced by the laws of Utah. Today's Supreme Court decision undercuts the sovereignty of both state law and the jury system.

Well, if you're putting it that way...

What is to keep the jury from imposing as punishment the mandatory dismemberment of the company's officers and their families at a Monster Truck Rally?

Oh, you mean that they aren't THAT sovereign?

Whoopsie.

Maybe they never were as sovereign as you think they are.

And kindly note your construction--you describe them as "the citizens of the State of Utah." Go read a criminal indictment; it will say "The People of Utah vs. XXX."

Semantically, you just made civil and criminal cases co-equal under the Eighth Amendment.

[APBaer]

"Seems to me that all SCOTUS did was expand the protection against excessive fines and cruel and unusual punishment to include civil cases"

No, I'm afraid you got it backwards.
Last week they said that there was no proportionality requirement in the constitution for excessive fines and cruel and unusual punishment.

[Petronski]

Ten times actual is a little high, but it's a sound principle. However, I'm not comfortable with courts that legislate, as surely this one has done. I like the result, but I hate the method.

[hchutch]

You got that right.

The trial lawyers got too big for their brtiches, and SCOTUS took `em down a few notches. I'm not going to complain just because SCOTUS did the deed.

[Dane]

You're just a libertarian extremist, expecting justice to be rational

Well you have to admit that AP had a typical Libertarian knee jerk response to this decision, just like his Liberal activist cousins.

Sheesh when I hear, "big business" has won, I automatically hear Hillary screeching.

This decision does not give justice to only big business, this decision give justice and protection for samll business also, against the trial lawyer lobby.

Oh that's right, you and APBaer only want protection for small drug pushers as perscribed by the Libertarian platform, never mind.

[hchutch]

I'm not going to complain.

We have struck a blow against the trial lawyers. One they cannot appeal, by the way.

And, if Congress decides to lower the ratio, so much the better. The trial lawyers have been hit hard.

[Theophilus]

Wonder what Scalia and Thomas were thinking when they dissented, though.

Because those guys are consistently against judicial activism no matter who benefits. 10 times the ammount of actual damages is too much in my opinion but that is a political matter not a judicial one.

[wimpycat]

Amendment VIII to the US Constitution: Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.

As I learned during Jerry Agar's "Drive-By Education" series on the Bill of Rights with guest, Constitutional attorney John Armor, a fine is not the same as a punitive damage award. A fine is imposed by the state, to be paid to the state. Punitive damages or other judgements in civil court, are paid by the defendant to the plaintiff (the injured party), not the state. It has always been understood that these Amendments regarding trials and searches and stuff apply to criminal cases, not civil cases. A Civil trial involves a plaintiff and a defendant. Criminal trials are the state vs. the defendant. For instance, the Fifth Amendment protection against self-incrimination doesn't apply in a civil trial.

[Poohbah]

Ah, but it IS a punishment by definition.

Leave it to lawyers to find a way to get past that amendment when it means more money in their pockets.

[cksharks]

Not argueing just asking? I dont think there should be any punitative damages at all.

[wimpycat]

I happen to agree with the Supreme Court decision mentioned here, but the fact is that it has already been established through precedent that the 8th amendment (and the 5th amendment) reins in the state, not the plaintiffs.

[Poohbah]

Common law holds that you have to make the injured party whole. That's the basis of compensatory damages.

The idea of PUNITIVE damages is entirely a creation of statutory law--i.e., a creation of the State.

[Huck]

I also wonder if it might not be a bad idea to start considering judicial activism on our side. That genie is out of the bottle to an extent. Judicial activism could be a LOT more fun if TWO sides of the political spectrum got involved.

No thanks.