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State Farm Mut. Auto. Ins. Co. v. Campbell

Supreme Court of the United States

December 11, 2002, Argued ; April 7, 2003, Decided

No. 01-1289

Opinion

 [*412]   [**1517]   [***597]  JUSTICE KENNEDY delivered [****9]  the opinion of the Court.

 LEdHN[1A][] [1A]We address once again the measure of punishment, by means of punitive damages, a State may impose upon a defendant in a civil case. The question is whether, in the circumstances we shall recount, an award of $ 145 million in punitive damages, where full compensatory damages are $ 1 million, is excessive and in violation of the Due Process Clause of the Fourteenth Amendment to the Constitution of the United States.

In 1981, Curtis Campbell (Campbell) was driving with his wife, Inez Preece Campbell, in Cache County, Utah. He decided to pass six vans traveling ahead of them on a two-lane highway. Todd Ospital was driving a small car approaching from the opposite direction. To avoid a head-on collision with Campbell, who  [***598]  by then was driving on the wrong side of the highway and toward oncoming traffic, Ospital swerved onto the shoulder, lost control of his automobile, and collided  [*413]  with a vehicle driven by Robert G. Slusher. Ospital was killed, and Slusher was rendered permanently disabled. The Campbells escaped unscathed.

 In the ensuing wrongful death and tort action, Campbell insisted he was not at fault. Early investigations did support differing conclusions [****10]  as to who caused the accident, but "a consensus was reached early on by the investigators and witnesses that Mr. Campbell's unsafe pass had indeed caused the crash." 2001 UT 89, 65 P.3d 1134, 2001 Utah LEXIS 170, 2001 WL 1246676, *1 [**1518]  (Utah, Oct. 19, 2001). Campbell's insurance company, petitioner State Farm Mutual Automobile Insurance Company (State Farm), nonetheless decided to contest liability and declined offers by Slusher and Ospital's estate (Ospital) to settle the claims for the policy limit of $ 50,000 ($ 25,000 per claimant). State Farm also ignored the advice of one of its own investigators and took the case to trial, assuring the Campbells that "their assets were safe, that they had no liability for the accident, that [State Farm] would represent their interests, and that they did not need to procure separate counsel."  2001 UT 89, at    , 2001 Utah LEXIS 170, 2001 WL 1246676, at *2. To the contrary, a jury determined that Campbell was 100 percent at fault, and a judgment was returned for $ 185,849, far more than the amount offered in settlement.

At first State Farm refused to cover the $ 135,849 in excess liability. Its counsel made this clear to the Campbells: "'You may want to put for sale signs [****11]  on your property to get things moving.'" Ibid. Nor was State Farm willing to post a supersedeas bond to allow Campbell to appeal the judgment against him. Campbell obtained his own counsel to appeal the verdict. During the pendency of the appeal, in late 1984, Slusher, Ospital, and the Campbells reached an agreement whereby Slusher and Ospital agreed not to seek satisfaction of their claims against the Campbells. In exchange the Campbells agreed to pursue a bad faith action against State Farm and to be represented by Slusher's and Ospital's attorneys. The Campbells also agreed that Slusher and Ospital would have a right to play a part in all major decisions concerning [*414]  the bad faith action. No settlement could be concluded without Slusher's and Ospital's approval, and Slusher and Ospital would receive 90 percent of any verdict against State Farm.

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538 U.S. 408 *; 123 S. Ct. 1513 **; 155 L. Ed. 2d 585 ***; 2003 U.S. LEXIS 2713 ****; 71 U.S.L.W. 4282; 60 Fed. R. Evid. Serv. (Callaghan) 1349; 1 A.L.R. Fed. 2d 739; CCH Prod. Liab. Rep. P16,805; 2003 Cal. Daily Op. Service 2948; 2003 Daily Journal DAR 3783; 16 Fla. L. Weekly Fed. S 216

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, PETITIONER V. INEZ PREECE CAMPBELL AND MATTHEW C. BARNECK, SPECIAL ADMINISTRATOR AND PERSONAL REPRESENTATIVE OF THE ESTATE OF CURTIS B. CAMPBELL

Subsequent History: On remand at, Judgment entered by Campbell v. State Farm Mut. Auto. Ins. Co., 2004 UT 34, 98 P.3d 409, 2004 Utah LEXIS 62 (2004)

Prior History:  [****1]  ON WRIT OF CERTIORARI TO THE SUPREME COURT OF UTAH.

Campbell v. State Farm Mut. Auto. Ins. Co., 2001 UT 89, 65 P.3d 1134, 2001 Utah LEXIS 170 (2001)

Disposition: Reversed and remanded.

punitive damages, award of punitive damages, compensatory damages, trial court, reprehensibility, courts, punish, ratio, cases, guidepost, practices, punitive, documents, damages, out-of-state, manuals, criminal penalty, employees, payouts, awards, phase, policy limit, due process, state-court, third-party, principles, consumers, marks, emotional distress, deliberateness

Civil Procedure, Remedies, Damages, Punitive Damages, Torts, Types of Damages, Punitive Damages, General Overview, Compensatory Damages, Constitutional Law, Substantive Due Process, Scope, Measurement of Damages, Constitutional Requirements, Fundamental Rights, Procedural Due Process, Scope of Protection, Judicial Review, Appeals, Standards of Review, De Novo Review, Aggravating Circumstances, Determinative Factors, Jury Trials, Jury Instructions, Criminal Law & Procedure, Particular Instructions, Use of Particular Evidence, Governments, Police Powers, Pain & Suffering, Emotional Distress, Equal Protection, Poverty