other claims by other insureds, the jury in addition awarded $145 million in punitive damages. Although the compensatory award was later reduced to S1 million, the punitive award was upheld by the Utah Supreme Court. The U.S. Supreme Court reversed, concluding that the punitive award was so excessive, as measured by the criteria set out in BMW m. Gore, as to violate State Farms Due Process rights Campbell presents a delicate set of issues for Federalist Society members Perhaps most fundamentally, it raises the question of whether the U.S. Supreme Court has any business invoking the vague guarantees of the Due Process Clause as a basis for second-guessing state common law. However, I wish here to consider a different aspect of the decision According to Justice Kennedy's majority opinion, the problem with the Utah Supreme Court's ruling was not that it permitted some punitive damages to be awarded to the Campbells. Based on the evidence presented at trial, the jury acted reasonably in concluding that State Farm had willfully mistreated the Campbells. Rather the problem was the magnitude of the jury award. Here is the key sentence explaining this 1nt: While we do not suggest there was error in awarding punitive damages based upon State Farm's conduct toward the Campbells, a more modest punishment for this reprehensible conduct conld have satisfied the State gitimate objectires, and the Utah courts should have gone no further. 5 3 BMW of North America, Inc V. Gore, 517 U.S. 559(1996 4 Hence Justices Scalia and Thomas have been pretty consistent in their rejection of the Gore line of See, eg, State Farm, 538 U.S., at 429( Scalia, J, dissenting); id. at 429-30(Thomas, ], dissenting); sf. Co Indus, Inc. V. Leatherman Tool Group, Inc, 532 U.S. 424, 443(2001)(Thomas, J, concurring)(noting continued objection to Gore's holding, but concurring that, in light of Gore, appellate review of punitive damage awards for constitutional excessiveness ought to be under a de noro standard id at 443-44 ( Scalia, J, concurring in the judgment)(same). The Chief Justice, by cont ms to have made his peace with this aspect of substantive due process. See State Farm, 538 U.S. at 41 1 Goining majority opinion) s State Farm, 538 U.S. at 419-20(emphasis added) 6
6 other claims by other insureds, the jury in addition awarded $145 million in punitive damages. Although the compensatory award was later reduced to $1 million, the punitive award was upheld by the Utah Supreme Court. The U.S. Supreme Court reversed, concluding that the punitive award was so excessive, as measured by the criteria set out in BMW v. Gore, 3 as to violate State Farm’s Due Process rights. Campbell presents a delicate set of issues for Federalist Society members. Perhaps most fundamentally, it raises the question of whether the U.S. Supreme Court has any business invoking the vague guarantees of the Due Process Clause as a basis for second-guessing state common law.4 However, I wish here to consider a different aspect of the decision. According to Justice Kennedy’s majority opinion, the problem with the Utah Supreme Court’s ruling was not that it permitted some punitive damages to be awarded to the Campbells. Based on the evidence presented at trial, the jury acted reasonably in concluding that State Farm had willfully mistreated the Campbells. Rather the problem was the magnitude of the jury award. Here is the key sentence explaining this point: While we do not suggest there was error in awarding punitive damages based upon State Farm’s conduct toward the Campbells, a more modest punishment for this reprehensible conduct could have satisfied the State’s legitimate objectives, and the Utah courts should have gone no further.5 3 BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996). 4 Hence Justices Scalia and Thomas have been pretty consistent in their rejection of the Gore line of cases. See, e.g., State Farm, 538 U.S., at 429 (Scalia, J., dissenting); id. at 429-30 (Thomas, J., dissenting); cf. Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 443 (2001) (Thomas, J., concurring) (noting continued objection to Gore’s holding, but concurring that, in light of Gore, appellate review of punitive damage awards for constitutional excessiveness ought to be under a de novo standard); id. at 443-44 (Scalia, J., concurring in the judgment) (same). The Chief Justice, by contrast, seems to have made his peace with this aspect of substantive due process. See State Farm, 538 U.S. at 411 (joining majority opinion). 5 State Farm, 538 U.S. at 419-20 (emphasis added)
In this one sentence resides a deep tension, a clue as to what makes modern punitive damages practices so seemingly suspect, and a suggestion for a better approach The tension resides in the evident shift of focus that takes place between the first two clauses of the sentence. In explaining why some punitive award was appropriate, the Court's focus is on the claim of the Campbells for what State Farm did to them. Yet, in assessing the size of the award, the majority opinion ceases to bo concerned with what was done to the campbells, and ask instead whether the award they stood to receive is necessary to further the interests of the State of Utah in punishing and deterring bad behavior. What is initially cast as an entitlement of the Campbells, is quickly recast as an interest of the State. What started out as a claim for private redress brought by the victim of a wrong, has become a claim brought on behalf of the public, to vindicate its interest in the maintenance of sound insurance practices. 6 I want to suggest that Campbell provides a clear example of the sort of slippage that legal academics have promoted, and that has led us into a bind in our thinking 6 The Court's focus on Utah's interest in enforcing punitive awards is driven in part by the need to paper over a serious problem that attends the constitutionalization of tort law, namely the problem of state action See redish Mathews, supra note at 25-27(noting the issue of state action raised by constitutional review of punitive damage awards). At least since New York Times Co r. Snllinan, the Court has simply assumed away the state action problem, essentially adopting the unsatisfactory position- unsatisfactory because it proves too much-that the judicial systems oversight of private litigation counts as state action. 376 U.S. 254, 265(1964) Gudicial application of state tort law counts as state action for purposes of constitutional analysis). I think it is the case that some applications of state tort law amount to state action. Suiran provides a particular striking xample of tort law as a form of state action, because there a public official was quite deliberately attempting to e state defamation law to silence his political critics. See John C. P. Goldberg, Judging Reputation: Realism an ommon Law in Justice W hite's Defamation Jurisprdence, 74 U. Col. L. Rev. 1471, 1477-78( 2003). Likewise, to the extent the result in a particular tort case suggests that the state judiciary is presiding over a system of tort law that is functioning as a regulatory scheme, and no longer functioning as a system of private law, then again the state action req may be met. Zipursky, supra note 2, at_(suggesting that the three-pronged Due Process test of Gore can be understood as a test for determining when a particular tort judgment crosses over the line between providing private redress and functioning as public regulatory law in disguise)
7 In this one sentence resides a deep tension, a clue as to what makes modern punitive damages practices so seemingly suspect, and a suggestion for a better approach. The tension resides in the evident shift of focus that takes place between the first two clauses of the sentence. In explaining why some punitive award was appropriate, the Court’s focus is on the claim of the Campbells for what State Farm did to them. Yet, in assessing the size of the award, the majority opinion ceases to be concerned with what was done to the Campbells, and ask instead whether the award they stood to receive is necessary to further the interests of the State of Utah in punishing and deterring bad behavior. What is initially cast as an entitlement of the Campbells, is quickly recast as an interest of the State. What started out as a claim for private redress brought by the victim of a wrong, has become a claim brought on behalf of the public, to vindicate its interest in the maintenance of sound insurance practices.6 I want to suggest that Campbell provides a clear example of the sort of slippage that legal academics have promoted, and that has led us into a bind in our thinking 6 The Court’s focus on Utah’s interest in enforcing punitive awards is driven in part by the need to paperover a serious problem that attends the constitutionalization of tort law, namely the problem of state action. See Redish & Mathews, supra note , at 25-27 (noting the issue of state action raised by constitutional review of punitive damage awards). At least since New York Times Co. v. Sullivan, the Court has simply assumed away the state action problem, essentially adopting the unsatisfactory position -- unsatisfactory because it proves too much -- that the judicial system’s oversight of private litigation counts as state action. 376 U.S. 254, 265 (1964) (judicial application of state tort law counts as state action for purposes of constitutional analysis). I think it is the case that some applications of state tort law amount to state action. Sullivan provides a particular striking example of tort law as a form of state action, because there a public official was quite deliberately attempting to use state defamation law to silence his political critics. See John C. P. Goldberg, Judging Reputation: Realism and Common Law in Justice White’s Defamation Jurisprudence, 74 U. Col. L. Rev. 1471, 1477-78 (2003). Likewise, to the extent the result in a particular tort case suggests that the state judiciary is presiding over a system of tort law that is functioning as a regulatory scheme, and no longer functioning as a system of private law, then again the state action requirement may be met. Cf. Zipursky, supra note 2, at __ (suggesting that the three-pronged Due Process test of Gore can be understood as a test for determining when a particular tort judgment crosses over the line between providing private redress and functioning as public regulatory law in disguise)