An insurance company that already won a $136 million reduction of a punitive damage award thinks that the $9 million it was ordered to pay is still too high.
State Farm Mutual Automobile Insurance Co. has appealed the judgment to the U.S. Supreme Court.
In an April 2003 ruling, the U.S. Supreme Court held that the $145 million initially awarded to Inez Campbell of Lewiston and her late husband, Curtis, was unconstitutionally large. The high court remanded the case to the Utah Supreme Court to adjust the amount.
Five months ago, the state high court lowered the award amount to just over $9 million, significantly higher than State Farm’s suggestion of $1 million.
Curtis Campbell sued his insurance company, State Farm Mutual Automobile Insurance Co., after it refused to settle claims arising from a 1981 car accident that killed one driver and left another disabled.
A jury found Campbell at fault in the accident and ordered him to pay the victims about $136,000 in excess of his $50,000 insurance policy limit.
After the verdict, Campbell testified, he asked his State Farm-hired attorney what to do and was told to put a “For Sale” sign on his home.
State Farm eventually paid all the damages, but Campbell and his wife still sued State Farm for punitive damages, alleging bad-faith failure to settle, fraud and emotional distress. A Utah jury awarded the Campbells $1 million in compensatory damages and $145 million in punitive damages, which was later reduced to $25 million on appeal.
In 2001, the Utah Supreme Court reinstated the initial $145 million in punitive damages, taking into account State Farm’s net worth and its business behavior in other states.
The 83-year-old Campbell died of Parkinson’s Disease soon after that ruling. His wife remained a party to the lawsuit, which was appealed to the U.S. Supreme Court.
In sending the case back to Utah, the U.S. Supreme Court said punitive damages should generally be less than 10 times the amount of actual damages.
The $9 million figure falls in that range, but State Farm says Utah’s justices still “flatly refused to honor the spirit and letter” of the high court’s instructions.
The insurer claims Utah’s Supreme Court considered out-of-state conduct and ignored guidance from the U.S. Supreme Court that $1 million is the appropriate amount.
Attorneys representing Inez Campbell on Monday urged the U.S. Supreme Court not to take the case.
“The Utah Supreme Court reasonably determined that a high single-digit ratio was warranted in this case because the Campbells suffered significant non-economic injury in the form of emotional distress and because State Farm’s conduct toward the Campbells was highly reprehensible,” says the brief.
“The Campbells were forced to live in fear of financial ruin for 18 months, which is exactly the kind of hard-to-measure, non-economic harm that this court has noted would justify a higher ratio than usual.”
The National Association of Manufacturers on Monday filed a friend of the court brief with the U.S. Supreme Court in support of State Farm.
The group says its members are often the target of lawsuits seeking millions or even billions of dollars in punitive damages.
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