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Hastings Law Journal

Abstract

In State Farm v. Campbell, the U.S. Supreme Court held that the punitive damages awarded in a particular case must be proportional to the amount of compensatory damages awarded in that case. Although the Court refrained from setting a "bright-line ratio," many courts reviewing awards after State Farm have time and again reduced punitive damages awards, using factors between four and nine in reliance on proclamations made by the Court in State Farm. In addition, State Farm casts doubt on whether a defendant's financial condition is relevant to the issue of punitive damages. Both of these assertions-that punitive damages must be proportional to compensatory damages and that the wealth of the defendant is irrelevant-are inconsistent with California law prior to State Farm, and, as this Note argues, grossly overstated.

This Note will evaluate the impact on California law of the U.S. Supreme Court's punitive damages jurisprudence culminating in State Farm. It will critique the Court's constitutional pronouncements regarding punitive damages, and suggest judicial and legislative responses so that California may continue to pursue its legitimate interest in imposing punitive damages that aim to deter reprehensible conduct. Although many commentators have inferred bright line rules from State Farm, this Note will show that the opposite is true. The Court has merely painted broad brush strokes, leaving the states to fill in the gaps so that awards of punitive damages are scaled to the reprehensibility of a particular defendant's conduct.

By providing the utmost in procedural protections, ensuring evidentiary relevance, and recognizing that no single approach will suffice in all cases, this Note argues that California courts can justify both their continued use of evidence of the defendant's financial condition and, in appropriate cases, affirmation of awards greater than nine times compensatory damages.

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