Case brief summary
A constitutional rule stops punishments, including court awards, from being much bigger than the actual harm caused, so they stay fair and not excessive.
Facts
Campbell's insurer refused to settle within his policy limits, causing a huge judgment against him. The Campbells sued the insurer for bad faith, using unrelated nationwide business practices to push for massive punitive damages.
Procedural history
A jury awarded 2.6 million in actual damages and 145 million in punitive damages. The trial judge lowered both amounts, but Utah's top court restored the full 145 million, so the insurer appealed further.
Issue
Does a 145 million dollar punitive damages award, compared to only 1 million dollars in compensatory damages, violate due process because it is grossly excessive?
Holding
Yes, the punitive damages award was unconstitutionally excessive and the case was sent back to the Utah courts to recalculate a proper amount.
Reasoning
Courts must weigh how bad the conduct was, the ratio of harm to punishment, and penalties for similar conduct elsewhere. Utah wrongly punished unrelated nationwide behavior, making the punishment far too large compared to the actual harm.
Opinions
Majority (Kennedy): Punitive damages must relate to the actual harm suffered by the plaintiff, and a 145 to 1 ratio here was unconstitutionally excessive under due process guideposts.
Dissent (Scalia): The Due Process Clause does not limit the size of punitive damages awards at all, so he would have upheld the Utah judgment.
Dissent (Thomas): The Constitution does not restrict how large punitive damages awards can be, so he would have affirmed the lower court's decision.
Dissent (Ginsburg): The evidence of State Farm's broader scheme was relevant and showed real harm to many people, so the Court wrongly overturned Utah's reasonable judgment.