Supreme Court Punitive Ruling

Insurance and business groups are applauding yesterday’s U.S. Supreme Court decision that could serve to limit large punitive damage awards. The decision in the case of Cooper Industries v. Leatherman Tool says that federal appeals courts should engage in what is called a de novo review of punitive damage awards. A de novo review means that an appeals court must thoroughly examine the constitutionality of a punitive damage award as if the previous proceeding did not occur. In its 8-1 decision, the Supreme Court said it is not enough for an appeals court simply to review whether the trial court abused its discretion regarding the award. Business and insurance groups, which have long sought to place some limits on punitive damage awards, praised the Supreme Court’s decision requiring the higher standard of review.