Punitive damages that are excessive compared with the economic damages awarded may violate the due process clause of the U.S. Constitution, the Supreme Court ruled yesterday. Although the case, State Farm Mutual Automobile Insurance Co. v. Campbell, stems from an action against a car insurer, the court's decision has potential implications for healthcare, as well as other industries. A jury awarded Curtis Campbell and his wife $2.6 million in economic damages and $145 million in punitive damages in a suit that accused State Farm of fraud, bad faith and intentional infliction of emotional distress. Both figures were lowered later. Writing for the high court, Judge Anthony Kennedy suggested that the maximum ratio of punitive to compensatory damages should not exceed single digits. With malpractice reform legislation up in the air, the court's decision could have a significant effect on malpractice awards, a spokesman for the Health Insurance Association of America said. -- by Tony Fong
'Excessive' punitive awards may be unconstitutional
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