Law School Case Brief
Honda Motor Co. v. Oberg - 512 U.S. 415, 114 S. Ct. 2331 (1994)
The U.S. Constitution imposes a substantive limit on the size of punitive damages awards.
An all-terrain vehicle overturned while plaintiff Karl L. Oberg was driving it; Oberg sustained severe and permanent injuries. Oberg filed a lawsuit in Oregon state court against Honda Motor Co. ("Honda"), which manufactured and sold the vehicle. Oberg alleged that Honda knew or should have known that the vehicle had an inherently and unreasonably dangerous design. The jury, finding Honda liable, awarded the Oberg: (1) about $ 919,000 in compensatory damages, which the court reduced by 20 percent to about $ 736,000 due to Oberg's own negligence; and (2) $ 5 million in punitive damages. On appeal, Honda argued the punitive damage award violated the due process clause of the Federal Constitution's Fourteenth Amendment because the Oregon courts lacked the power to review jury verdicts for excessiveness based on a provision of the Oregon Constitution, which provided that no fact tried by a jury could be re-examined in any Oregon court unless the court could affirmatively say that there was no evidence to support the verdict. The Court of Appeals of Oregon affirmed, holding that the punitive damage award did not violate due process and that there was evidence to support the verdict. On appeal, the Supreme Court of Oregon likewise affirmed. Honda was granted a writ of certiorari.
Did the punitive damage award violate due process?
The Supreme Court of the United States held that Oregon's denial of judicial review of the size of punitive damage awards violated the due process clause. The Court explained that in the federal courts and in every other state, consistent with practice under the common law, judges reviewed the size of punitive damage awards and Oregon had removed that procedural safeguard without providing any substitute procedure and without any indication that the danger of arbitrary awards had in any way subsided over time. The court reversed the judgment of the state supreme court and remanded the matter for further proceedings.
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