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US Supreme Court Agrees to Revisit Punitive Damage Awards

October 31, 2007

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In <em>State Farm v. Campbell</em>, the United States Supreme Court suggested that, absent extraordinary circumstances, due process requires that punitive damages be limited to a “single digit multiplier” of actual or compensatory damages (that is, no more than 9 times actual).
On October 28, 2007, the Supreme Court agreed to decide whether Exxon Mobil should pay $2.5 billion in punitive damages in connection with the Exxon Valdez oil spill that fouled hundreds of miles of Alaska’s coastline. Among the questions certified was this: “Is this $2.5 billion punitive damages award, which is larger than the total of all punitive damages awards affirmed by all federal appellate courts in our history, within the limits allowed by (1) federal maritime law or (2) if maritime law could permit such an award, constitutional due process?”
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<em>Exxon Shipping Co. v. Baker </em>will afford the high court an opportunity to address again just what sort of circumstances permit a departure from the “single digit multiplier” rule in <em>State Farm v. Campbell</em>. That very issue has been the focus of virtually all punitive damage interests since <em>State Farm v. Campbell</em>.


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