State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 123 S. Ct. 1513 (2003)

Curtis and Inez Campbell sued their automobile insurance carrier (State Farm) for bad faith, fraud, and intentional infliction of emotional distress after State Farm declined to settle within the $50,000 policy limit a wrongful death and personal injury lawsuit that had been filed against Curtis Campbell. Although State Farm eventually paid the entire $185,849 judgment (even though it exceeded policy limits), the jury awarded the Campbells $2.6 million in compensatory damages (later reduced by the trial court to $1 million) and $145 million in punitive damages in their bad faith lawsuit against State Farm. The Utah Supreme Court upheld the award, but the United States Supreme Court reversed the judgment on constitutional grounds. The Supreme Court held that “few awards exceeding a single-digit ratio between punitive and compensatory damages will satisfy due process” and cited with approval its previous opinions in which it held that a punitive damages “award of more than four times the amount of compensatory damages might be close to the line of constitutional impropriety.”