April 28, 2008

"Utah AG Calls for Punitive Damages Caps"

According to LegalNewsline.com, Utah's attorney general is open to the idea of capping punitive damages in order to preserve the state's favorable legal climate. As we mentioned last week, Utah ranked 5th in the recent Harris Poll/U.S. Chamber of Commerce survey of in-house corporate counsel. The State Farm v. Campbell case apparently did little to tarnish Utah's reputation as a favorable venue for defendants, even though the Utah Supreme Court approved a $145 million punitive damages award (compared to $1 million in compensatory damages) which the U.S. Supreme Court later reversed, saying the case was "neither close nor difficult."

UPDATE (By Jeremy Rosen on 4/29 at 4:50 pm): On remand in State Farm v. Campbell, after the United States Supreme Court had made it very clear that the case (with high compensatory damages that included a punitive component) would only permit a 1:1 ratio of punitive to compensatory damages, the Utah Supreme Court nonetheless found that a 9:1 ratio would be permitted. It must not take much for a jurisdiction to be considered a favorable legal climate for business.