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State Farm v. Campbell: Federalism and the Constitutional Limitations on Punitive Damages

Punitive damages will be back before the United States Supreme Court this fall. The Court granted certiorari in State Farm Mutual Automobile Insurance Company v. Campbell, No. 01-1289, to consider whether a Utah jury’s $145 million punitive damage award against the insurer State Farm violates the Constitution. The case presents a host of important questions concerning federalism and due process, including whether a jury in one State can punish a corporation for the way it does business in another State—and whether the jury may impose a harsher punishment on a corporation solely because it is very profitable.