- within Insolvency/Bankruptcy/Re-Structuring topic(s)
Originally published June 8, 2004
The times, they are a-changin'. Since last year's decision by the Supreme Court in State Farm Mutual Ins. v. Campbell (2003) 538 U.S. 408, California courts of appeal have been handing down decisions applying Campbell's limitations in particular cases. The latest – Bardis v. Oates, 04 C.D.O.S. 4710 (May 28, 2004) – strikes a classic middle ground.
In Bardis, the Court reduced a punitive damages award from $7 million to $1.5 million, approximately nine times the compensatory award. Because the "defendants' fraudulent and deceptive conduct registers high on the reprehensibility meter," the Court declined to adopt the "usual case" rule limiting punitive damages to four times the compensatory award. Yet, its 9- 1 ratio was "still within the single-digit threshold set out in Campbell."
Interestingly, after reducing the punitive damages award to pass muster under the federal Constitution, the Court briefly considered – and swiftly rejected – the defendants' argument that a further reduction was necessary because the award was "excessive" under California law.
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