WASHINGTON, June 3 (UPI) -- The Supreme Court agreed Monday to take another look at whether big damage awards are getting too big.
The court said it would hear argument next term on a $145 million judgment against State Farm Mutual Automobile Insurance.
State Farm questioned whether the award in the case violated "fundamental principles of due process" -- fair proceedings guaranteed by the Constitution.
The insurance company also questioned whether the award -- 145 times greater than the compensatory damages in the case -- violated a 1996 Supreme Court precedent, BMW vs. Gore.
In May 1981, while driving north on a highway near Logan, Utah, Curtis Campbell "unsafely passed a car driven by Robert Slusher," according to court records. "... This unsafe maneuver forced a southbound car, driven by Todd Ospital, to veer onto the shoulder of the road and collide with Slusher's car a split second later."
Ospital was killed at the scene, and Slusher was disabled.
In September 1981, Slusher filed suit against Campbell, Ospital's estate and Kenneth Brooks, who owned the car driven by Ospital, for damages resulting from the collision.
Ospital's estate then cross-filed a suit against Campbell for wrongful death liability, and Campbell cross-filed a suit against Ospital's estate for partial liability.
Before trial, State Farm gathered evidence blaming Campbell for the accident, and Slusher and the Ospital estate continually invited the company to settle the suits for the limits of the Campbell policy.
Rejecting a report by their own investigator, State Farm officials decided not to settle. One official even ordered the investigator to change parts of his report showing Campbell's liability, according to court records.
After Ospital's estate settled with Slusher, the case against Campbell went to trial.
A jury found Campbell at fault for the accident and entered a $135,000 judgment for Slusher and a $50,849 judgment for Ospital's estate.
Campbell and his wife were told by State Farm not to hire separate lawyers and that their assets were safe, according to court records.
After the judgment, again according to court records, State Farm made it clear that it did not intend to post a bond of more than the $25,000 cap on the Campbell policy.
In 1989, the Utah Supreme Court affirmed the damages against the Campbells. State Farm then paid all of the damages, both its policy limit and the Campbells' personal liability.
A short time later, the Campbells filed suit against State Farm, alleging bad faith and intentional infliction of emotional distress, among other things.
A state judge ruled for State Farm without hearing a trial, but state appeals courts reversed.
Then a state jury awarded the Campbells $2.6 million in compensatory damages -- reduced to $1 million by the judge -- attorneys fees and $145 million in punitive damages.
Eventually, the Utah Supreme Court upheld the damages, and State Farm asked the Supreme Court of the United States for review.
The justices granted review Monday in a one-line order. Though not yet scheduled, argument should be heard next fall.
(No. 01-1289, State Farm Mutual Insurance vs. Campbells)
