California Supreme Court Both Limits and Extends Punitive Damages

The California Supreme Court has decided a pair of punitive damage cases, Simon v. Sao Paolo U.S. Holding
Co. Inc
., 2005 DJDAR 7091 (June 16, 2005) and Johnson v. Ford Motor Co., 2005 DJDAR 7101 (June 16, 2005), that are that court’s first decisions to apply the United States Supreme Court’s landmark State Farm Mut. Ins. Co. v. Campbell, 538 U.S. 408 (2003). Like that decision, these California Supreme Court decisions provide ammunition for attorneys to argue for and against limitations on punitive damages. The court held that the proper ratio between punitive awards and compensatory awards may be based only on harms actually resulting or likely to result from the defendant’s conduct—thus lowering permissible punitive awards. The court also
held that the punitive “multiplier” might be higher based on the wealth of the defendant and whether the harm to the plaintiff was an “isolated incident” or a “repeated corporate practice.” ...