Punitive Damages: Criticisms and Proposals for Reform in Light of State Farm

Abstract

In State Farm Mutual Automobile Insurance Co. v. Campbell, the Supreme Court set out two limits for courts reviewing the constitutionality of punitive damages awards. First, the Court suggested that punitive damages should generally not exceed a single-digit ratio to compensatory damages. Second, the Court restricted the type of evidence that can be considered to impose and calculate punitive damages. This Comment considers State Farm's two limits in light of the Utah Supreme Court's remand decision and six other state and federal decisions issued within one year of State Farm. It concludes that State Farm has largely been unsuccessful, ignoring underlying goals of punishment and deterrence and failing to bring fairness and uniformity to this area of law. As a result, this Comment considers analogous limits in federal employment discrimination law. It argues that substantive limits focused on a defendant's condition are more consistent with the goals of punitive damages and that geographic, time period, facility and decision making evidentiary restrictions imposed in discrimination cases may serve to refine State Farm's evidentiary limits, leading to greater fairness and uniformity.