BMW of North America v. Gore

517 U.S. 559 (1996)

Yeazell, pp. 326-328

 

Facts: BMW sold Gore a car that had been repainted due to acid rain damage.  Gore found out and sued and won compensatory damages of $4,000 and punitive damages of $4,000,000 based on the theory that there were about 1,000 other people who bought similarly repainted cars.  The Alabama Supreme Court reduced the punitive damages award to $2,000,000.  BMW appealed to the United States Supreme Court.

 

Issue: Was the punitive damage award in the case unconstitutional excessive?

 

Rule: The constitutionality of punitive damages awards will be judged by:

 

1.     The degree of reprehensibility of the defendant’s conduct

2.     The disparity between the actual harm done, as found by the jury, and the punitive damages award, and

3.     The difference between the punitive damage remedy and civil or criminal fines imposed by statute or in similar cases at trial.

 

Analysis: The Court finds that BMW’s conduct was not that reprehensible, and in fact is permissible in many other states.  The Court especially notes that BMW’s conduct did not threaten anyone’s health or safety.

 

The Court finds that a punitive damages award that is 500 times the compensatory damages award is too high, though the Court declines to draw a line saying what “multiplier” is constitutionally acceptable.

 

Finally, the Court notes that by statute, the maximum penalty for violation of Alabama’s Deceptive Trade Practices Act is $2,000.

 

Conclusion: The Court reverses the punitive damages award.

 

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