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Supreme Court of the United States




Virtually all courts accept the view that high punitive damage awards are appropriate in instances where the defendant's harmful conduct is unlikely to lead to liability. See, e.g., BMW of N. Am. Inc. v. Gore, 517 U.S. 559, 582 (1996). The Utah Supreme Court reinstated the $145 million punitive damage award in this case in part on the ground that "State Farm's actions, because of their clandestine nature, will be punished at most in one out of every 50,000 cases as a matter of statistical probability." Pet App. 30a. A central issue of this case is whether the Utah Supreme Court acted irrationally by misapplying deterrence theory in its review of the $145 million punitive damage award against State Farm.

Amicus contends that the Utah Supreme Court acted rationally and that its review of the $145 million award was consistent with basic deterrence principles. The theory of deterrence provides suitable guidelines for assessing the rationality and reasonableness of a punitive damage award. Deterrence theory, when correctly applied to the Utah Supreme Court's decision, does not suggest that the punitive damage award in this case should be reduced. Indeed, the $145 million punitive damage award is demonstrably within the range of reasonable awards suggested by the theory of deterrence applied to the facts of this case.



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