Canadian Underwriter

Will U.S. Supreme Court decision signal limits on punitive damages?

April 14, 2003   by Canadian Underwriter

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A decision by the U.S. Supreme Court to overturn a US$145 million punitive damage award against State Farm is being hailed as a sign of the court’s willingness to limit such jury awards.
The decision, overturns a Utah jury’s award from August 2002 and subsequent upholding of that award by the Utah State Supreme Court, in State Farm Mutual Automobile Insurance Co. v. Curtis B. Campbell and Inez Preece Campbell. It calls the damages “excessive” and said they “violate fundamental principle of due process and fairness”.
The National Association of Mutual Insurance Companies (NAMIC) was among three trade associations who filed an amicus brief on the matter.
Part of its argument was that the Utah jury’s decision was based on State Farm’s practices outside of the state of Utah, and to practices that were not similar to those being disputed in the Utah case.
“The trade groups argued that the when the punitive damage case stops being about the harm done to a plaintiff and becomes an indictment of an insurer’s nationwide practices involving policyholders in other states, it essentially becomes a nationwide class action without the class and without protections afforded to class members and defendants,” states a NAMIC press release.

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