A United States Supreme Court decision today overturning a $145 million punitive damage award against State Farm could have implications for other litigation reform efforts, some say.
The decision in the case of State Farm v. Campbell held that a $145 million punitive damage award in a Utah case in which compensatory damages were assessed at $1 million was excessive and violated the Due Process Clause of the 14th Amendment.
In issuing its 6-3 opinion, the high court noted that the punitive damage award was calculated in part by presenting evidence of alleged misconduct by State Farm in other states, even though State Farm's actions may have been legal in the states where they occurred.
However, the Supreme Court said, a state cannot punish a defendant for conduct that is legal where it occurred.
