Appeals to review punitives: Court

Business Insurance
Monday, May 21, 2001

Federal appeals courts should scrutinize large punitive damage awards handed down by trial courts, the U.S. Supreme Court ruled.…Writing for the majority, Justice John Paul Stevens noted that while states have broad discretion in levying both criminal sanctions and punitive damages, the due process clause of the 14th Amendment ''imposes substantial limits'' on that discretion. Associate Justice Ruth Bader Ginsburg dissented.

The Alliance of American Insurers praised the ruling. Consumer groups took a different view of the decision, though. Joanne Doroshow, executive director of the New York-based Center for Justice & Democracy, wrote in a statement that the justices had ''sided with the interests of the business community by giving appellate judges extremely broad powers to scale back punitive damage awards they deem 'excessive.'''

''If there were ever any doubt that the courts are perfectly capable of dealing with excessive punitive damage awards, this decision should remove all doubt. With this extraordinary decision now the law of the land, there is absolutely no reason why legislatures, awash in corporate campaign money, should interfere with the courts' authority and arbitrarily limit juries' powers to award punitive damages,'' Ms. Doroshow said.

Cooper Industries Inc. vs. Leatherman Tool Group Inc., U.S. Supreme
Court, No. 99-2035. Decided May 14, 2001.

For a copy of the complete article, contact CJ&D.

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