Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, March 5, 1991 TAG: 9103050234
SECTION: NATIONAL/INTERNATIONAL PAGE: A-2 EDITION: METRO
SOURCE: The Washington Post/ and The Associated Press
DATELINE: WASHINGTON LENGTH: Medium
The 7-1 ruling was a major victory for consumer advocates and a defeat for industry groups. Business repeatedly has pressed the court to limit punitive damages - those awarded to punish wrongdoers and deter future misconduct - as opposed to money given to victims to compensate them for injuries.
The court upheld a $1 million award - of which at least $840,000 constituted punitive damages - to an Alabama woman who was the victim of insurance fraud. The justices rejected claims that the system for calculating the award was so irrational that it violated the company's constitutional right to be treated fairly.
The court's action leaves the issue largely in the hands of state courts and legislatures, where business groups complaining about what they view as the skyrocketing size and increasing frequency of punitive damages awards have sought "tort reform" in recent years.
In the majority opinion Monday, Justice Harry Blackmun rejected the insurance company's argument that the jury was given so little guidance in calculating the award, and that it was so large in proportion to the harm caused, that the company's right to due process was violated.
The sole dissenter, Justice Sandra Day O'Connor - who took the unusual step of reading her dissent from the bench despite a cold that left her voice hoarse - said the Alabama procedures were the "antithesis of due process."
She said the trial judge's instruction to the jury gave "free rein to the biases and prejudices of individual jurors" and "as much permits a determination based upon the toss of a coin or the color of the defendant's skin as upon a reasoned analysis of the offensive conduct."
Business groups, which two years ago lost the argument that punitive damages run afoul of the constitutional prohibition against "excessive fines," had staked their case on the contention that the damages violate due process.
Blackmun's opinion noted the court's "concern about punitive damages that `run wild' " and said that punitive damages could violate due process in some cases.
But he said the jury had "adequate guidance" in this case, which - combined with the extensive trial and appellate court review of the award - gave the company ample constitutional protection.
Justices Antonin Scalia and Anthony Kennedy, in separate concurring opinions, said punitive damages awards did not violate the constitutional guarantee of due process because they were an established part of the American legal system at the time the due process guarantee was adopted.
Also Monday, the court sent discouraging signals to churches interested in evading city landmark ordinances that prevent them from altering their buildings.
In one case, the justices refused to let a New York City church tear down its community house and build a commercial skyscraper.
In another dispute, the justices told Washington state's highest court to reconsider its ruling that churches are exempt from a Seattle landmark ordinance.
by CNB