Phillips Out – Award Reversed 5-4

In a Breyer opinion, the Supreme Court vacated a $79.5 million punitive damage award.  Key points at first reading:

• Punishing defendants for harm to nonparties is a due process violation.  Evidence of harm to nonparties can be relevant to determine reprehensibility, but not as a basis for a punishment increase.
• Let me say that again: harm to others cannot be a basis for punishment.  This is new, and a big deal.
• So if a state is going to allow harm to others into evidence, it also has to create procedures to ensure that it only goes to determining the risk of harm to others (= reprehensibility), but not to the amount of damages awarded.
• Because the remand on this issue will probably result in a different award, the Court doesn’t deal with whether the amount is unconstitutionally excessive.

Stevens, Thomas, Ginsburg, and Scalia dissented in a total of three opinions.