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Highway Case Analysis

The court’s musings about punitive damages may be insightful, but their utility in future cases is questionable. For example, it is not clear how, or even whether, a defendant’s trial tactics could be presented to a jury.

State Farm v. Campbell, 123 S.Ct. 1513 (2003), involved a bad faith action against an insurer for failing to settle a claim filed against its insured. The plaintiff introduced evidence that the defendant’s decision to take the underlying case against the insured to trial was a result of a national scheme to meet corporate fiscal goals by capping payouts on claims company-wide.

Holding this evidence improper, the Supreme Court stated, “The courts awarded punitive damages to punish and deter conduct that bore no relation to the Campbells’ harm. A defendant’s dissimilar acts, independent from the acts upon which liability was premised, may not serve as the basis for punitive damages. A defendant should be punished for the conduct that harmed the plaintiff, not for being un unsavory individual or business. Due process does not permit courts, in the calculation of punitive damages, to adjudicate the merits of other parties’ hypothetical claims against a defendant under the guise of the reprehensibility analysis.”


7th Circuit Court of Appeals

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However, the Seventh Circuit’s discussion of Motel 6’s trial tactics does just what the U.S. Supreme Court said should not be done. If such evidence was improper in Campbell, it is an even more inappropriate consideration in the case at bar. The defendant in Campbell involved an insurance company alleged to have acted in bad faith towards its own insured.

If evidence of hardline litigation tactics is not proper in an action between an insurer (an entity for whom litigation is a standard business tool) and its insureds, it certainly can’t be proper in an action against a motel.

Furthermore, in Campbell, the evidence concerned other cases, rather than the case at bar. There is no way to present to a jury scorched-Earth trial tactics used in the same case that the jury is considering.

Suppose the defendant filed frivolous motions in limine seeking to admit clearly inadmissible evidence. To present evidence of such trial tactics, the plaintiff would have to let the jury hear the very evidence that it should not hear — an unworkable result.

Thus, while the court’s discussion of a defendant’s wealth has a superficial appeal, its relevance is suspect.

– David Ziemer

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David Ziemer can be reached by email.

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