United States Supreme Court
The U.S. Supreme Court appears to have drawn a proverbial line in the sand over the excessive punitive damages awards handed out in some state courts.
For the second time in three months on Monday, the U.S. Supreme Court (USSC) sent a lawsuit with an excessive punitive damages awards back to a lower court to review the amount.
The USSC ordered in Ford Motor Company v. Buell-Wilson (docket# 06-1068) that a San Diego Appeals Court reconsider a $55 million punitive damages award in a lawsuit against Ford. It involved an Explorer SUV rollover wreck that paralyzed its driver.
The USSC’s order granted Ford’s “writ of certiorari” and remanded the case to the Court of Appeal of California’s Fourth Appellate District, Division One “for further consideration in light of Philip Morris USA v. Williams.”
That refers to a case the USSC heard mid-February of an Oregon widow awarded $79.5 million in punitive damages against Philip Morris, LegalNewsLine reported. The USSC also sent that case back to the lower court to reconsider the size of the award.
However, the USSC didn’t do so because the damages award was unconstitutionally excessive, as many legal analysts had expected. Instead, it ruled that the jury had been given ambiguous instructions about how to calculate such awards.
Nonetheless, business groups hailed that decision as a victory against what they claim are routine abuses in some jurisdictions of the civil-law system against corporations. Monday’s reference to that case in the Ford judgement appears to support their optimism.
In the Ford suit, a jury in June 2004 awarded Buell-Wilson $368.6 million in the suit, including $246 million in punitive damages against the automaker. It was reduced twice on appeal to $27.6 million in compensatory damages and $55 million punitive.
The USSC received Ford’s petition on Jan. 30 this year after the lower appellate court handed down its most recent decision last July. In between, the California Supreme Court refused to hear Ford’s appeal.
“We believe the Supreme Court’s recent decision requires a new trial,” Ford attorney and Supreme Court veteran Theodore J. Boutros told reporters after Monday’s verdict. “We are hopeful the California courts will agree.”
Boutros had earlier criticized California’s “vague and inscrutible” standards for imposing punishment.