Supreme Court rejects limit on extra damages Justices uphold $10 million verdict

June 26, 1993|By Lyle Denniston | Lyle Denniston,Washington Bureau

WASHINGTON -- The Supreme Court sent a shudder yesterday through the ranks of doctors, product-makers, insurers and other targets of lawsuits when it upheld a jury verdict of $10 million in extra damages for $19,000 worth of actual harm.

Two of the six justices who patched together different reasons to make a loose majority said the ruling very likely would mean the Constitution will be no barrier to the "megabuck" verdicts that juries have been awarding in injury cases ranging from lung cancer to libel.

The decision appeared to be the most significant -- and potentially the most wide-ranging -- of three rulings the justices have issued over the past four years in the midst of public controversy over money payoffs for individuals who suffer or die from someone else's wrongdoing.

Those seeking huge "punitive" damages to make an example of wrongdoers have included: workers complaining of exposure to harmful products such as asbestos; patients who say they got faulty medicines or flawed medical treatment; clients who believe their cases were mishandled by attorneys; consumers who complain of injuries from products that are harmful, break or work improperly; and celebrities, politicians or ordinary citizens who complain of being libeled or having their privacy invaded by newspapers, magazines and broadcasters.

Their chances of winning -- and winning big -- have seemed to grow as more juries agree to tack on multimillion-dollar "punitive" extras to the basic amounts awarded to cover for actual harm done.

In the case before the court yesterday, a West Virginia jury awarded a local oil exploration company extra damages to punish a large Texas oil company for illegally trying to use a state court lawsuit to trick the local company into giving up oil and gas royalties.

The jury measured the local oil company's actual harm at $19,000 -- the amount it paid its lawyers to defend against the Texas company's legal strategy. The $10 million punitive award, about 526 times larger than the $19,000 award, was added on by the jury.

The battle over these "megabuck" verdicts has led to scores of appeals to the Supreme Court, seeking to make constitutional challenges, and to efforts in legislatures across the country -- including Maryland -- to impose "caps" on verdicts. The fight has figured in political controversy reaching all the way to the Clinton-Bush presidential race last year.

After yesterday's Supreme Court ruling, it appeared that the constitutional part of this controversy may have reached a major turning point with little prospect that punitive damage awards could be overturned in federal court.

Consumers Union, an advocacy group opposed to limits on punitive damages, argued the new decision "has finally put to rest the outrageous notion that guilty corporations are the victims when it comes to lawsuits over dangerous products, not the consumers harmed by those faulty products."

But Theodore J. Boutros, a Washington attorney whose law firm has sought to appeal case after case to the Supreme Court, contended that the new ruling left lawyers with many options still open for challenging big "punitive" verdicts. The ruling, he said, "did not foreclose a wide array of challenges" that lawyers could yet make.

One reason for the sharp differences in interpretation among the justices was that there was no one opinion that spoke for a clear majority. The main opinion, written by Justice John Paul Stevens, had the full support of only Chief Justice William H. Rehnquist and Justice Harry A. Blackmun.

Their opinion appeared to rule out, for most cases, any claim that a punitive damage award is unconstitutional when it runs many times higher than the measure of actual harm done. Those three said juries are not obliged to look only at actual harm done, when they are deciding on a "punitive" award; they also may look at the harm that the wrongdoer's conduct may have caused later, and to others, had it continued.

Two justices -- Antonin Scalia and Clarence Thomas -- argued that the Constitution puts no limit on punitive damages, and thus it is up to state legislatures or state courts to keep those verdicts within reasonable limits.

Justice Anthony M. Kennedy supplied a sixth majority vote. He took a narrow position, simply concluding that the punitive verdict in the case before the court had been justified.

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