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Supreme Court puts state farm case to rest.

Late policyholder Curtis Campbell's 23-year-old bad-faith lawsuit against State Farm Insurance has reached its end, with the U.S. Supreme Court denying an appeal by the nation's largest personal-lines insurer of an order by the Utah Supreme Court to pay $9 million in punitive damages.

Stemming from a 1981 automobile accident in which Campbell was found liable for $186,000 in damages to two other drivers--one died and the other was permanently disabled--the Campbell case already had been the subject of an April 2003 Supreme Court decision. Written by Justice Anthony M. Kennedy, that decision struck down a previous $145 million judgment by the Utah court against the company on grounds that it violated the due-process clause of the 14th Amendment.

"While we're disappointed with the court's announcement, we certainly appreciate the time the high court had taken to review the case," State Farm spokesman Phil Supple said after the Supreme Court announced it would not hear the company's most recent appeal. "The announcement in no way diminishes the importance of the landmark decision made by the Supreme Court in April 2003. We will abide by the decision of the courts in order to bring this case to a close."

In the high court's previous decision, which remanded the case to the Utah Supreme Court, Kennedy suggested that application of a "single-digit" standard--under which punitive awards are no more than nine times the award for actual, or compensatory, damages--would be an appropriate rule of thumb for most torts.

Despite amicus briefs in support of the company's petition from the National Association of Mutual Insurance Cos., the Property Casualty Insurers Association of America, the National Association of Manufacturers and the U.S. Chamber of Commerce, among others--all claiming that a failure by the Supreme Court to address the Utah court's judgment threatened other decisions that have relied on a 9-to-1 punitive-to-compensatory ratio as a "safe harbor" threshold--State Farm's appeal was listed Oct. 5 among hundreds of cases the court declined to hear.

"The Supreme Court's decision not to review cases often doesn't shed all that much light on what they believe to be the relative merits of the case," said Walter K. Olson, a senior fellow with the Manhattan Institute's Center for Legal Policy. "In some instances, they just simply decide that they've spent as much time as is warranted on an issue and let it go at that."

Top Jury Verdicts

The following awards to punitive Damages were among the highest in 2002 and 2003:

* $28 Billion/Bullock vs. Philip Morris: Los Angeles, October 2002. Woman blamed lung cancer on years of smoking Phillip Morris cigarettes.

* $2.2 Billion/Hayes vs. Courtney & Courtney Pharmacy Inc,: Kansas City, Mo. October 2002. Pharmacist Robert Courtney was diluting cancer drugs. Courtney was sentenced to 30 years in prison.

* $931 Million/Beckman Coulter Inc. vs. Dovatron International Inc.: Orange County, Calif. September 2003. The medical equipment company sued the electronics company for breach of contract.

* $250 Million/Johnson vs. Equitable Resources Inc.: Pikeville, Ky. October 2002. Man blamed company for a gas explosion in his home. The man suffered burns on his face as a result.

* 8150 Million/Schwarz vs. Phillip Morris:. Portland, Ore. March 2002. Woman blamed her cancer on 23 years of smoking "light" cigarettes. Judgment was awarded after plaintiff died from cancer,

* $100 Million/Jernigan vs. General Motors: Union Springs, Ala. May 2002. Father of a boy injured in a car accident blamed GM's cost-cutting reduction of safety features. The boy suffered permanent brain damage and needs constant supervision.

Source: Lawyers Weekly USA, VerdictSearch, National Law Journal and Press Reports
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Article Details
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Title Annotation:Briefing
Author:Lehman, R.J.
Publication:Best's Review
Geographic Code:1USA
Date:Nov 1, 2004
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