111 S.Ct. 1032 (1991), argued 3 Oct. 1990, decided 4 Mar. 1991 by vote of 7 to 1; Blackmun for the Court, Scalia and Kennedy concurring, O’Connor in dissent, Souter not participating. Concerned about the marked increase in the frequency and size of punitive damage awards by trial juries, the business community in the late 1980s pressed several constitutional challenges to punitive damages. In Browning-Ferris v. Kelco Disposal (1989), the Supreme Court rejected an Eighth Amendment challenge. In Pacific Mutual, an insurance company attacked an Alabama punitive damage award on due process grounds, arguing that the award bore no rational relationship to the plaintiff's actual injuries and that juries had unlimited discretion to assess punitive damages. Stressing that juries have historically determined the imposition and amount of punitive damages, Justice Harry A. Blackmun rebuffed this challenge. He reasoned that the common-law method was not so inherently unfair as to deny due process under the Fourteenth Amendment. Blackmun further concluded that the Alabama procedures at issue reasonably accommodated rational decision making and provided for adequate checks on jury discretion. He did recognize, however, that in some situations unbridled jury discretion in assessing punitive damages might violate due process norms.
Justice Antonin Scalia, in a concurring opinion, maintained that since juries historically had discretion to award punitive damages this traditional practice was not violative of due process. Dissenting, Justice Sandra Day O’Connor argued that the Alabama procedures were “so fraught with uncertainty that they defy rational implementation” (p. 1056) and encouraged inconsistent results. The justices in Pacific Mutual left open the possibility that some punitive damage procedures might transcend constitutional limits. In BMW of North America, Inc. v. Gore (1996) the justices held for the first time that a punitive damages award was excessive under the Due Process Clause. The punitive damages award was $2 million; the actual damages award for the precipitating injury was $4,000.
James W. Ely, Jr.