Punitive Damages in Utah
| Publication year | 1988 |
| Pages | 11 |
David R. Black, J.
Recent cases in Utah have elevated the issue of punitive damages to one of primary interest to civil attorneys and their clients. In one case a jury awarded $10 million in punitive damages against a soft drink bottling company where the plaintiff sustained an eye injury from a bottle cap. While this amount was subsequently reduced by the trial judge, the amount of the verdict has raised questions in the Utah legal community about the propriety of punitive damage awards. Concerns regarding punitive damages have also been raised nationally.
The United States Supreme Court heard arguments last year that punitive damages should be declared unconstitutional on the grounds that an award of punitive damages violates the Eighth Amendment and the Due Process Clauses of the United States Constitution. The Eighth Amendment prohibits the imposition of excessive fines. The case of Bankers Life Casualty Co. v. Crenshaw, 108 S.Ct. 1645 (1988) arose out of the insurer's refusal to pay a claim filed under an accidental bodily injury policy. At trial, plaintiff was awarded $20, 000 on the insurance policy and $1.6 million in punitive damages. The Mississippi Supreme Court affirmed the verdict and defendant appealed. The U.S. Supreme Court held that the defendant did not properly raise its challenges to the size of the punitive damages award in the Mississippi Supreme Court. The Court ruled that defendant's vague appeal to constitutional principles did not preserve its Contract Clause or due process claim. "A party may not preserve a constitutional challenge by generally invoking the Constitution in state court and awaiting review in this Court to specify the constitutional provision it is relying upon." Id. at 1650.
Justice O'Conner, in a concurring opinion with Justice Scalia, offered future liti-gants a glimpse of how this issue might be treated should it come before the Supreme Court. Justice O'Conner writes: "Mississippi law gives juries discretion to award any amount of punitive damages in any tort case in which a defendant acts with a certain mental state. In my view, because of the punitive character of such awards, there is reason to think that this may violate the Due Process Clause." Id. at 1655. Justice O'Conner points out that in the past the Supreme Court has forbidden the award of punitive damages on the grounds that the punitive damages are not measured against an objective standard. Justice O'Conner cited two such instances. Punitive damages may not be awarded in defamation suits brought by private plaintiffs or in unfair representation suits brought against unions under the Railway Labor Act. Id. (citations omitted).
Mississippi law required that an award of punitive damages be made only on a finding that a common law tort be committed with a willful and intentional wrong or for such gross negligence and reckless negligence equivalent to such a wrong. Justice O'Conner faults the Mississippi standard which commits solely to the jury's discretion the determination of the amount of punitive damages and compared it to criminal sentencing.
The Concurrence concludes:
This grant of wholly standardless discretion to determine the severity of punishment appears inconsistent with due process. The Court has recognized that "vague sentencing provisions may pose constitutional questions if they do not state with sufficient clarity the consequence of violating a given criminal statute."
quoting United States v. Batchelder, 442 U.S. 114, 123, Id. at 1656 (1979). These constitutional concerns were raised in Bankers Life because nothing in Mississippi law warned appellant that by committing a tort that caused $20, 000 of actual damages, it could expect to incur a $1.6 million punitive damage award. Bankers Life at 1656. Locally, both houses of the Utah legislature reviewed bills in the 1988 General Session which sought to cap the amount of punitive damages, as well as narrow the legal standard by which the damages could be awarded. Senate Bill No. 115 and House Bill No. 230 would have limited an award of punitive damages to $500, 000 or $800, 000, respectively. In each bill the sponsors provided that some or all of the punitive damages, after...
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