Texaco, Inc. v. Pennzoil Co.

729 S.W.2d 768 (Tex. App. 1987)

 

RULE:

The amount of exemplary or punitive damages to be awarded depends on the facts of the case and rests largely within the sound discretion of the jury. Exemplary damages must be reasonably proportioned to actual damages. Factors to be considered in determining whether an award of exemplary damages is reasonable include: (1) the nature of the wrong, (2) the character of the conduct involved, (3) the degree of culpability of the wrongdoer, (4) the situation and sensibilities of the parties concerned, and (5) the extent to which such conduct offends a public sense of justice and propriety.

FACTS:

The district court found defendant oil company guilty of tortious interference with a contract between plaintiff and a third oil company. On appeal, the defendant brought 90 points of error, all of which were denied except the assessment of exemplary damages in the amount of 3 billion dollars. The appellate court directed plaintiff to file a punitive damages remittitur of 2 billion dollars. The judgment would then be reformed to show 1 billion dollars in punitive damages and would be affirmed as reformed. Failure to file the remittitur would lead to reversal and remand of the judgment.

ISSUE:

Did the district court err in imposing exemplary damages of three billion dollars against the defendant for tortious interference with a contract?

ANSWER:

Yes.

CONCLUSION:

The imposition of exemplary damages in the amount of 3 billion dollars constituted a confiscation of assets rather than punishment for past action.

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