In
Cooper v. Leatherman, the U.S. Supreme Court ruled
that courts of appeal have de novo review of punitive damage
awards.
Justice
Stevens, writing for the 8-1 majority, said that the Seventh
Amendment does not apply to punitive damages, because they
are not a "fact" determined by the jury. Overruling Supreme
Court precedents stretching back over 150 years, Justice
Stevens stated that punitive damages have "evolved" since
the early days, when they provided compensation for intangible
harms, to the point where now they are "more purely punitive
(and therefore less factual)."
Also
contrary to precedent, the court ruled that punitive damages
are, however, subject to the 8th Amendment prohibition against
Excessive Fines, because their purpose is primarily punishment.
The Court recognized broad legislative discretion in the
area of punitive damages.
Leatherman
had won a $4.5 million punitive verdict in a state law claim
based on Cooper's appropriation of a doctored photo of Leatherman's
tool for use in Cooper's marketing of a similar tool. The
trial judge upheld the verdict and the 9th Circuit affirmed,
finding no abuse of discretion. The Supreme Court reversed,
holding that the court of appeals should have applied de
novo review of the punitive damage award.
Justice
Ginsburg dissented, arguing that de novo review violates
the Seventh Amendment. Justices Thomas and Scalia concurred
with the majority. Both reaffirmed their position that the
constitution does not limit punitive awards, but noted that,
if it did, de novo is the appropriate standard of review.
De novo
review could cut both ways. If the trial judge rules that
the jury's punitive award is constitutionally excessive,
the court of appeals is not obliged to accord deference
to the trial judge's determination. The appellate court
-- at least in the federal system -- can review the jury's
verdict based on its own view of the record and reinstate
the award. Nothing in the decision would prevent an appellate
court from increasing punitive damages.
The
Court cited AAJ's amicus brief
and expressly rejected AAJ's Seventh Amendment argument,
which was based on an unbroken line of Supreme Court precedents
stretching back over 150 years. More on AAJ's amicus brief
can be found here.
The
opinion can be found at:
http://supct.law.cornell.edu/supct/html/99-2035.ZS.aspx.
