Monday, April 07, 2003

The U.S. Supreme Court issued a horrible opinion on April 7, 2003. The Court apparently has no understanding of the purpose of punitive damages, which are meant to meaningfully punish a wrongdoer. In the case, STATE FARM MUTUAL AUTOMOBILE INSURANCE CO. v. CAMPBELL et al., State Farm negligently defended its own insured, Mr. & Mrs. Campbell, failing to settle a case against them, and instead contesting liability exposing the Campbells to an excess judgment. A Utah jury found State Farm liable to the Campbells for bad faith, fraud, and intentional infliction of emotional distress. Evidence showed that State Farm had similar out-of-state conduct. The jury awarded the Campbells $2.6 million in compensatory damages and $145 million in punitive damages, which the trial court reduced to $1 million and $25 million respectively. Applying Gore, the Utah Supreme Court reinstated the $145 million punitive damages award. Then, in its "wisdom" the U.S. Supreme Court took away all punitive damages awarded with Justices Scalia, Thomas and Ginsburg dissenting.