Why Campbell Doesn’t Necessarily Mean We’re In The Soup


A. Introduction.

On April 7, 2003, the U.S. Supreme Court published State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. ___ (2003), its latest pronouncement on punitive damages as viewed through the lens of the Due Process Clause of the Fourteenth Amendment of the United States Constitution.

Campbell reversed a jury’s $145 million punitive damage award that had previously been upheld by the Utah Supreme Court. The punitive award was based in large part upon evidence of State Farm’s misconduct in not just Utah, but also across the entire United States.

Observing that the $1 million compensatory component of the jury verdict (reduced from $2.6 million by Utah’s intermediate appellate court) resulted in a compensatory/punitive damage ratio of 145-to-1, the high court applied a three-pronged analysis first announced in BMW of North America v. Gore, 517 U.S. 559 (1996).

The test required examining: (1) the degree of reprehensibility of the defendant’s misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases. Slip Op. at 7.

Writing for the 5-3 majority, Justice Kennedy found infirmities under all three Gore “guideposts.” What’s more, in reaching its holding, the majority announced, “We decline again to impose a bright-line ratio which a punitive damage award cannot exceed. Our jurisprudence and the principles it has now established demonstrate, however, that, in practice, few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process.” Slip Op. at 14.

So the question presents itself. What practical effect does Campbell present for a California product liability practitioner?

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Bill Daniels, Bill Daniels | Law Offices | Attorney Advertising

Written by:


Bill Daniels | Law Offices on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.