State Farm Mutual v. Campbell
SCOTUS - 2003 (538 U.S. 408)
- D sold P an automobile insurance policy.
- P performed an unsafe maneuver in his car and caused one person to die and another to sustain serious injury.
- D refused to settle the case for $25k even though they recognized that their client was negligent and responsible.
- Jury awarded damages to other drivers in the amount of $200k, most of which would have to paid by P.
- P sued D for not settling when they had the chance. ("bad faith" claim)
- P won in lower court, compensatory $2.6M (reduced by trial judge to $1.0M), punitive $145M (reduced by trial judge to $25M)
- Utah Supreme Court reinstated the $145M in punitive damages.
- Can a D be punished via punitive damages for conduct dissimilar and independent from the cause of action?
- Should punitive damages include consideration for harm to third parties?
- The punitive damages reinstated by the Utah Supreme Court were excessive as examined through the lens of Gore.
- Punitive damages cannot be awarded based on actions not directly related to those causing harm to the plaintiff.
- Degree of reprehensibility
- Can only look at actions that parallel those that impacted the P, not specifically at nationwide policies; thus, no recidivism
- Cannot expand scope of the case so that the D may be punished for any malfeasance
- Ratio between punitive and compensatory
- 145:1 is excessive, single-digit multipliers are more likely to comport with due process
- Double counting is bad, i.e. the compensatory damages included punitive damages in them
- Wealth of a D cannot justify higher punitive damages
- Sanctions for comparable misconduct
- $10k fine for act of fraud in Utah, dwarfed by $145M figure
- D's actions were, in fact, reprehensible to the point of justifying the punitive damages
- Actions were similar enough to actions towards P to be relevant.
- UT on remand put punitive damages at $9.9M (ratio at 9.9:1), basically eff you SCOTUS