Chamber Heightens Fight Against Excessive Punitive Damages

April 28, 2004

The United States Chamber of Commerce Institute for Legal Reform (ILR) on Wednesday hosted a strategy forum with America’s top legal experts on new strategies to curb excessive punitive damage awards that threaten the vitality of U.S. businesses.

“The huge amount of money pocketed by unscrupulous trial lawyers is destroying businesses, raising consumers’ costs, and threatening the jobs of thousands of workers,” said Lisa Rickard, president of ILR. “Last year’s success calls for more work to solidify our victory, or we risk being undone by half-measures and misguided rulings.” Nearly one year to the day after a landmark U.S. Supreme Court decision limiting excessive punitive damage awards, a Utah Supreme Court decision failed to comply with the guidelines laid out by the higher court, according to many legal experts.

In State Farm Mutual Automobile Insurance Co. v. Campbell, the U.S. Supreme Court held that excessive punitive damages were unconstitutional and sent the case back to the Utah Supreme Court for further review. The Supreme Court indicated that punitive damages generally should not exceed a low multiple of compensatory damages and that double digit ratios would hardly ever pass constitutional muster, except in those few cases with small compensatory damages and highly reprehensible conduct.

The Utah Supreme Court review of the State Farm case left a punitive damage multiplier of 9:1 in place.

“Utah has shown us that last year’s victory was far from a silver bullet,” said Rickard. “That is why we have been filing amicus briefs in state and federal appellate courts around the country, expressing the business community’s views on the importance of complying with the Supreme Court’s ruling.”

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