In June 2005, in two companion decisions, the California Supreme Court for the first time interpreted a line of recent, landmark U.S. Supreme Court opinions on punitive damages. In so doing, the California Supreme Court attempted to bring clarity to the politically charged and legally nettlesome issue of when punitive damage awards become constitutionally excessive. However, the court’s decisions may raise more questions than they answer. Instead of setting a bright-line rule for lower courts and litigants to follow (such as a fixed ratio of punitive damages to compensatory damages beyond which punitive damages must not go – something some courts of appeal attempted to do in response to the high court’s landmark opinions), the court in Lionel Simon v. San Paolo U.S. Holding Co., Inc. No. S121723 (June 16, 2005) (“Simon”), and Greg Johnson, et al., v. Ford Motor Company, No. S121933 (June 16, 2005) (“Johnson”), elected to constrain, but fundamentally preserve, the possibility of truly punishing punitive damage awards.

U.S. Supreme Court Establishes New Limits on Punitive Damages

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