OCTOBER TERM, 2000
Syllabus
COOPER INDUSTRIES, INC.
v. LEATHERMAN TOOL GROUP,
INC.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH
CIRCUIT
No. 99-2035. Argued February 26, 200l-Decided May 14,2001
Respondent Leatherman Tool Group, Inc., manufactures a
multifunction tool which improves on the classic Swiss army knife.
When petitioner Cooper Industries, Inc., used photographs of a
modified version of Leatherman's tool in posters, packaging, and
advertising materials introducing a competing tool, Leatherman
filed this action asserting,
inter alia, violations of the
Trademark Act of 1946 (Lanham Act). Ultimately, a trial jury
awarded Leatherman $50,000 in compensatory damages and $4.5 million
in punitive damages. Rejecting Cooper's arguments that the punitive
damages were grossly excessive under
BMW of North America,
Inc. v.
Gore, 517 U. S. 559, the
District Court entered judgment. As relevant here, the Ninth
Circuit affirmed the punitive damages award, concluding that the
District Court did not abuse its discretion in declining to reduce
that award.
Held: Courts of Appeals should apply a
de novo
standard when reviewing district court determinations of the
constitutionality of punitive damages awards. The Ninth Circuit
erred in applying the less demanding abuse-of-discretion standard
in this case. Pp. 432-443.
(a) Compensatory damages redress the concrete loss that a
plaintiff has suffered by reason of the defendant's wrongful
conduct, but punitive damages are private fines intended to punish
the defendant and deter future wrongdoing. A jury's assessment of
the former is essentially a factual determination, but its
imposition of the latter is an expression of its moral
condemnation. States have broad discretion in imposing criminal
penalties and punitive damages. Thus, when no constitutional issue
is raised, a federal appellate court reviews the trial court's
determination under an abuse-of-discretion standard.
Browning-Ferris Industries ofVt., Inc. v.
Kelco Disposal,
Inc., 492 U. S.
257, 279. However, the Fourteenth Amendment's Due Process
Clause imposes substantive limits on the States' discretion, making
the Eighth Amendment's prohibition against excessive fines and
cruel and unusual punishments applicable to the States,
Furman v.
Georgia, 408 U. S. 238, and
prohibiting States from imposing "grossly excessive" punishments on
tortfeasors,
e. g., Gore, 517 U. S., at 562. The cases in
which such limits
425
were enforced involved constitutional violations predicated on
judicial determinations that the punishments were grossly
disproportional to the gravity of the offense.
E. g.,
United States v.
Bajakajian, 524 U. S. 321, 334. The
relevant constitutional line is inherently imprecise, id., at 336,
but, in deciding whether that line has been crossed, this Court has
focused on the same three criteria: (1) the degree of the
defendant's reprehensibility or culpability; (2) the relationship
between the penalty and the harm to the victim caused by the
defendant's actions; and (3) the sanctions imposed in other cases
for comparable misconduct. See,
e. g.,
Gore, 517 U.
S., at 575-585;
Bajakajian, 524 U. S., at 337, 339, 340-343.
Moreover, and of greatest relevance for the instant issue, in each
case the Court has engaged in an independent examination of the
relevant criteria. See,
e. g., id., at 337-344;
Gore,
517 U. S., at 575-586. The reasons supporting the Court's holding
in
Ornelas v.
United States, 517 U. S. 690, that trial
judges' reasonable suspicion and probable cause determinations
should be reviewed de novo-that "reasonable suspicion" and
"probable cause" are fluid concepts that take their substantive
content from the particular contexts in which the standards are
being expressed; that, because such concepts acquire content only
through caseby-case application, independent review is necessary if
appellate courts are to maintain control of, and clarify, legal
principles; and that
de novo review tends to unify precedent
and stabilize the law-are equally applicable when passing on
district court determinations of the constitutionality of punitive
damages awards. Pp. 432-436.
(b) Because a jury's award of punitive damages is not a finding
of "fact," appellate review of the District Court's determination
that an award is consistent with due process does not implicate the
Seventh Amendment concerns raised by Leatherman and its
amici. Pp. 437-440.
(c) It seems likely in this case that a thorough, independent
review of the District Court's rejection of Cooper's due process
objections to the punitive damages award might have led the Ninth
Circuit to reach a different result. In fact, this Court's own
consideration of the three
Gore factors reveals questionable
conclusions by the District Court that may not survive
de
novo review and illustrates why the Ninth Circuit's answer to
the constitutional question may depend on the standard of review.
Pp.441-443.
205 F.3d
1351, vacated and remanded.
STEVENS, J., delivered the opinion of the Court, in which
REHNQUIST, C. J., and O'CONNOR, KENNEDY, SOUTER, THOMAS, and
BREYER, JJ., joined. THOMAS, J., filed a concurring opinion,
post, p. 443. SCALIA, J.,
426
filed an opinion concurring in the judgment,
post, p.
443. GINSBURG, J., filed a dissenting opinion,
post, p.
444.
William Bradford Reynolds argued the cause for
petitioner. With him on the briefs was
Bradley J.
Schlozman.
Jonathan S.
Massey argued the cause for
respondent.
With him on the brief were Laurence H. Tribe, J. Peter Staples,
and Thomas C. Goldstein. *
JUSTICE STEVENS delivered the opinion of the Court.
A jury found petitioner guilty of unfair competition and awarded
respondent $50,000 in compensatory damages and $4.5 million in
punitive damages. The District Court held that the punitive damages
award did not violate the Federal Constitution. The Court of
Appeals concluded that "the district court did not abuse its
discretion in declining to reduce the amount of punitive damages."
App. to Pet. for Cert. 4a. The issue in this case is whether the
Court of Appeals applied the wrong standard of review in
considering the constitutionality of the punitive damages
award.
*Briefs of
amici curiae urging reversal were filed for
American Home Products Corp. et al. by
Walter E. Dellinger
and
John F.
Daum; for General Dynamics Corp. by S.
Thomas Todd; and for the Product Liability Advisory Council,
Inc., by
Griffin B. Bell, Chilton Davis Varner, Paul D.
Clement, and
Jeffrey S.
Bucholtz.
Jeffrey Robert White and
Frederick M. Baron filed
a brief for the Association of Trial Lawyers of America as
amicus curiae urging affirmance.
Briefs of amici curiae were filed for the Alliance of American
Insurers et al. by Richard Hodyl, Jr.; for the American Tort Reform
Association et al. by Victor E. Schwartz, Mark A. Behrens, Leah
Lorber, Jan S. Amundson, J. V. Schwan, David F. Zoll, Donald D.
Evans, Jeffrey L. Gabardi, and Louis Saccoccio; for the Association
of American Railroads by Carter G. Phillips, Gene C. Schaerr,
Stephen B. Kinnaird, and Daniel Saphire; for the California
Employment Law Council et al. by William J. Kilberg and Thomas G.
Hungar; for the Chamber of Commerce of the United States by Andrew
L. Frey, Evan M. Tager, and Robin S. Conrad; for the Washington
Legal Foundation et al. by Arvin Maskin, Daniel J. Popeo, and Paul
D. Kamenar; and for Arthur F. McEvoy by Kenneth Chesebro and Mr.
McEvoy, pro se.
427
I
The parties are competing tool manufacturers. In the 1980's,
Leatherman Tool Group, Inc. (Leatherman or respondent), introduced
its Pocket Survival Tool (PST). The Court of Appeals described the
PST as an
"ingenious multi-function pocket tool which improves on the
classic 'Swiss army knife' in a number of respects. Not the least
of the improvements was the inclusion of pliers, which, when
unfolded, are nearly equivalent to regular full-sized pliers ....
Leatherman apparently largely created and undisputedly now
dominates the market for multi-function pocket tools which
generally resemble the PST." Leatherman Tool Group, Inc. v.
Cooper Industries, 199 F.3d
1009, 1010 (CA9 1999).
In 1995, Cooper Industries, Inc. (Cooper or petitioner), decided
to design and market a competing multifunction tool. Cooper planned
to copy the basic features of the PST, add a few features of its
own, and sell the new tool under the name "TooIZall." Cooper hoped
to capture about 5% of the multifunction tool market. The first
ToolZall was designed to be virtually identical to the PST,l but
the design was ultimately modified in response to this litigation.
The controversy to be resolved in this case involves Cooper's
improper advertising of its original ToolZall design.
Cooper introduced the original ToolZall in August 1996 at the
National Hardware Show in Chicago. At that show, it used
photographs in its posters, packaging, and advertising materials
that purported to be of a ToolZall but were actually of a modified
PST. When those materials were prepared, the first of the ToolZalls
had not yet been manufac-
1 The ToolZall was marked with a different name than the PST,
was held together with different fasteners, and, in the words of
the Court of Appeals, "included a serrated blade and certain other
small but not particularly visible differences."
Leatherman Tool
Group, Inc. v.
Cooper Industries, 199
F.3d 1009, 1010
(CA9 1999).
428
tured. A Cooper employee created a ToolZall "mock-up" by
grinding the Leatherman trademark from handles and pliers of a PST
and substituting the unique fastenings that were to be used on the
ToolZall. At least one of the photographs was retouched to remove a
curved indentation where the Leatherman trademark had been. The
photographs were used, not only at the trade show, which normally
draws an audience of over 70,000 people, but also in the marketing
materials and catalogs used by Cooper's sales force throughout the
United States. Cooper also distributed a touched-up line drawing of
a PST to its international sales representatives.2
Shortly after the trade show, Leatherman filed this action
asserting claims of trade-dress infringement, unfair competition,
and false advertising under § 43(a) of the Trademark Act of 1946
(Lanham Act), 60 Stat. 441, as amended, 15 U. S. C. § 1125(a) (1994
ed. and Supp. V), and a common-law claim of unfair competition for
advertising and selling an "imitation" of the PST. In December
1996, the District Court entered a preliminary injunction
prohibiting Cooper from marketing the ToolZall and from using
pictures of the modified PST in its advertising. Cooper withdrew
the original ToolZall from the market and developed a new model
with plastic coated handles that differed from the PST. In November
1996, it had anticipatorily sent a notice to its sales personnel
ordering a recall of all promotional materials containing pictures
of the PST, but it did not attempt to retrieve the materials it had
sent to its customers until the following April. As a result, the
offending promotional materials continued to appear in catalogs and
advertisements well into 1997.
After a trial conducted in October 1997, the jury returned a
verdict that answered several special interrogato-
2 To "create" the drawing, a Cooper manager photocopied a
line-art drawing of a PST and then "whited out" Leatherman's
trademark. App. 43-47.
429
ries. With respect to the Lanham Act infringement claims, the
jury found that Leatherman had trademark rights in the overall
appearance of the PST and that the original ToolZall infringed
those rights but that the infringement had not damaged Leatherman.
It then found that the modified ToolZall did not infringe
Leatherman's trademark rights in the PST. With respect to the
advertising claims, it found Cooper guilty of passing off, false
advertising, and unfair competition and assessed aggregate damages
of $50,000 on those claims. It then answered "Yes" to the following
interrogatory:
"Has Leatherman shown by clear and convincing evidence that by
engaging in false advertising or passing off, Cooper acted with
malice, or showed a reckless and outrageous indifference to a
highly unreasonable risk of harm and has acted with a conscious
indifference to Leatherman's rights?" App. 18.
Because it answered this question in the affirmative, the jury
was instructed to determine the "amount of punitive damages [that]
should be awarded to Leatherman."
Ibid. The jury awarded
$4.5 million.
Ibid.
After the jury returned its verdict, the District Court
considered, and rejected, arguments that the punitive damages were
"grossly excessive" under our decision in
BMW of North America,
Inc. v.
Gore, 517 U. S. 559 (1996). See
App. to Pet. for Cert. 24a. It then entered its judgment, which
provided that 60% of the punitive damages would be paid to the
Criminal Injuries Compensation Account of the State of Oregon. The
judgment also permanently enjoined Cooper from marketing its
original ToolZall in the United States or in 22 designated foreign
countries.
On appeal, Cooper challenged both the District Court's
injunction against copying the PST and the punitive damages award.
The Court of Appeals issued two opinions. In its published opinion
it set aside the injunction.
Leather-
430
man Tool Group, Inc. v.
Cooper Industries, Inc.,
supra. It held that the overall appearance of the PST was not
protected under the trademark laws because its distinguishing
features, and the combination of those features, were functional.
Accordingly, even though Cooper had deliberately copied the PST, it
acted lawfully in doing SO.3
In its unpublished opinion, the Court of Appeals affirmed the
punitive damages award. It first rejected Cooper's argument that
the Oregon Constitution, which has been interpreted to prohibit
awards of punitive damages for torts that impose liability for
speech, precluded the jury's award of such damages in this case. It
then reviewed the District Court's finding that the award "was
proportional and fair, given the nature of the conduct, the
evidence of intentional passing off, and the size of an award
necessary to create deterrence to an entity of Cooper's size" and
concluded "that the award did not violate Cooper's due process
rights" under the Federal Constitution. App. to Pet. for Cert. 3a,
judgt. order reported at
205 F.3d
1351 (CA9 1999). It noted that the "passing off" in this case
was "very unusual" because "even assuming PST is a superior
product," no superior features of the PST were perceivable in the
photographs. App. to Pet. for Cert. 3a. "Any customer who bought
based on what the photographs
showed would have received
essentially that for which he or she paid."
Ibid. Thus,
Cooper's use of the photographs of the PST did not involve "the
3 Because this holding removed the predicate for the award of
fees under the Lanham Act, see n. 2,
supra, the Court of
Appeals set aside that award and directed the District Court, on
remand, to consider whether the evidence of passing off, standing
alone, was sufficient to warrant a fee award. The Court of Appeals
noted that the jury verdict form did not distinguish between
passing off as a Lanham Act claim and passing off as a matter of
state law. Although a fee award under § 35(a) could not be
supported unless the federal statute was violated, there is no
reason to believe that any possible difference between federal and
state passing off would affect the constitutionality of the
punitive damages award.
431
same sort of potential harm to Leatherman or to customers as
that which may arise from traditional passing off."
Id., at
4a. The Court of Appeals made clear, however, that it did not
condone the passing off. "[A]t a minimum," it observed, "[the
passing off] gave Cooper an unfair advantage" by allowing it to use
Leatherman's work product "to obtain a 'mock-up' more cheaply,
easily, and quickly" than if it had waited until its own product
was ready.
Ibid. Accordingly, the Court of Appeals
concluded, "the district court did not abuse its discretion in
declining to reduce the amount of punitive damages."
Ibid.
Cooper's petition for a writ of certiorari asked us to decide
whether the Court of Appeals reviewed the constitutionality of the
punitive damages award under the correct standard and also whether
the award violated the criteria we articulated in
Gore. We
granted the petition to resolve confusion among the Courts of
Appeals on the first question.4 531 U. S. 923 (2000). We now
conclude that the constitutional issue merits de novo review.
Because the Court of Appeals applied an "abuse of discretion"
standard, we remand the case for determination of the second
question under the proper standard.
4 Respondent and its
amicus at times appear to conflate
the question of the proper standard for reviewing the District
Court's due process determination with the question of the
substantive standard for determining the jury award's conformity
with due process in the first instance. See Brief for Arthur F.
McEvoy as
Amicus Curiae 13 ("[O]n appeal the litigant's
objection to the
substance of the jury's holding-whether on
liability or damages-should be evaluated under a 'rational
factfinder' standard ... "); Brief for Respondent 13. The former is
the question we agreed to review. The latter question has already
been answered in
BMW of North America, Inc. v.
Gore,
517 U. S. 559
(1996). Thus, our rejection in
TXO Production Corp. v.
Alliance Resources Corp., 509 U. S. 443 (1993), of
"heightened scrutiny" of punitive damages awards, see id., at 456,
is not only wholly consistent with our decision today, it is
irrelevant to our resolution of the question presented.
432
II
Although compensatory damages and punitive damages are typically
awarded at the same time by the same decisionmaker, they serve
distinct purposes. The former are intended to redress the concrete
loss that the plaintiff has suffered by reason of the defendant's
wrongful conduct. See Restatement (Second) of Torts § 903, pp.
453-454 (1979);
Pacific Mut. Life Ins. Co. v.
Has
lip, 499 U. S.
1, 54 (1991) (O'CONNOR, J., dissenting). The latter, which have
been described as "quasi-criminal," id., at 19, operate as "private
fines" intended to punish the defendant and to deter future
wrongdoing. A jury's assessment of the extent of a plaintiff's
injury is essentially a factual determination, whereas its
imposition of punitive damages is an expression of its moral
condemnation. See
Gertz v.
Robert Welch, Inc., 418 U.
S. 323, 350 (1974) ("[Punitive damages] are not compensation for
injury. Instead, they are private fines levied by civil juries to
punish reprehensible conduct and to deter its future occurrence");
Has lip, 499 U. S., at 54 (O'CONNOR, J., dissenting)
("[P]unitive damages are specifically designed to exact punishment
in excess of actual harm to make clear that the defendant's
misconduct was especially reprehensible").5
Legislatures have extremely broad discretion in defining
criminal offenses,
Schall v.
Martin, 467 U. S. 253, 268-269,
n. 18 (1984), and in setting the range of permissible punishments
for each offense,
ibid.; Solem v.
Helm, 463 U. S. 277, 290
(1983). Judicial decisions that operate
within these
legislatively enacted guidelines are typically reviewed for abuse
of discretion. See,
e. g., Koon v.
United States,
518 U. S. 81, 96,
99-100 (1996); cf.
Apprendi v.
New Jersey, 530 U. S. 466, 481 (2000)
(it is permissible "for judges to exercise dis-
5 See also Sunstein, Kahneman, & Schkade, Assessing Punitive
Damages (With Notes on Cognition and Valuation in Law), 107 Yale L.
J. 2071, 2074 (1998) ("[P]unitive damages may have a retributive or
expressive function, designed to embody social outrage at the
action of serious wrongdoers").
433
cretion ... in imposing a judgment
within the range
prescribed by statute").
As in the criminal sentencing context, legislatures enjoy broad
discretion in authorizing and limiting permissible punitive damages
awards. Cf.
Gore, 517 U. S., at 568 ("States necessarily
have considerable flexibility in determining the level of punitive
damages that they will allow in different classes of cases and in
any particular case"). A good many States have enacted statutes
that place limits on the permissible size of punitive damages
awards.6 When juries make particular awards within those limits,
the role of the trial judge is "to determine whether the jury's
verdict is within the confines set by state law, and to determine,
by reference to federal standards developed under Rule 59, whether
a new trial or remittitur should be ordered."
Browning-Ferris
Industries of Vt., Inc. v.
Kelco Disposal, Inc.,
492 U. S. 257,
279 (1989). If no constitutional issue is raised, the role of the
appellate court, at least in the federal system, is merely to
review the trial court's "determination under an abuse-ofdiscretion
standard."
Ibid.7
Despite the broad discretion that States possess with respect to
the imposition of criminal penalties and punitive damages, the Due
Process Clause of the Fourteenth Amendment to the Federal
Constitution imposes substantive limits on that discretion. That
Clause makes the Eighth Amendment's prohibition against excessive
fines and cruel and
6 See
Gore, 517 U. S., at 614-619 (GINSBURG, J.,
dissenting). Since our decision in
Gore, four additional
States have added punitive damages caps:
Alabama, Alaska, North Carolina, and Ohio. See Ala. Code §
6-11-21 (Supp. 2000); Alaska Stat. Ann. § 09.17.020 (2000); N. C.
Gen. Stat. § lD-25 (1999); Ohio Rev. Code Ann. § 2315.21 (Supp.
2000).
7In
Browning-Ferris, the petitioner did argue that the
award violated the Excessive Fines Clause of the Eighth Amendment,
but we held the Clause inapplicable to punitive damages. The
petitioner's reliance on the Due Process Clause of the Fourteenth
Amendment was unavailing because that argument had not been raised
in the District Court, the Court of Appeals, or the certiorari
petition. See 492 U. S., at 276-277.
434
unusual punishments applicable to the States.
Furman v.
Georgia, 408
U. S. 238 (1972)
(per curiam). The Due Process Clause of
its own force also prohibits the States from imposing "grossly
excessive" punishments on tortfeasors,
Gore, 517 U. S., at
562;
TXO Production Corp. v.
Alliance Resources
Corp., 509 U. S.
443, 453-455 (1993) (plurality opinion).
The Court has enforced those limits in cases involving
deprivations of life,
Enmund v.
Florida, 458 U. S. 782, 787, 801
(1982) (death is not "a valid penalty under the Eighth and
Fourteenth Amendments for one who neither took life, attempted to
take life, nor intended to take life");
Coker v.
Georgia, 433
U. S. 584, 592 (1977) (opinion of White, J.) (sentence of death
is "grossly disproportionate" and excessive punishment for the
crime of rape); 8 deprivations of liberty,
Solem v.
Helm, 463 U. S., at 279, 303 (life imprisonment without the
possibility of parole for nonviolent felonies is "significantly
disproportionate"); and deprivations of property,
United
States v.
Bajakajian, 524 U. S. 321, 324 (1998)
(punitive forfeiture of $357,144 for violating reporting
requirement was "grossly disporportional" to the gravity of the
offense);
Gore, 517 U. S., at 585-586 ($2 million punitive
damages award for failing to advise customers of minor predelivery
repairs to new automobiles was "grossly excessive" and therefore
unconstitutional).
In these cases, the constitutional violations were predicated on
judicial determinations that the punishments were "grossly
disproportional to the gravity of ... defendant[s'] offense[s]."
Bajakajian, 524 U. S., at 334; see also
Gore, 517 U.
S., at 585-586;
Solem, 463 U. S., at 303;
Coker, 433
U. S., at 592 (opinion of White, J.). We have recognized that the
relevant constitutional line is "inherently imprecise,"
Ba-
8 Although disagreeing with the specific holding in
Coker, Chief Justice Burger and then-JusTIcE REHNQUIST
accepted the proposition that the "concept of disproportionality
bars the death penalty for minor crimes." 433 U. S., at 604
(Burger, C. J., dissenting).
435
jakajian, 524 U. S., at 336, rather than one "marked by a
simple mathematical formula,"
Gore, 517 U. S., at 582. But
in deciding whether that line has been crossed, we have focused on
the same general criteria: the degree of the defendant's
reprehensibility or culpability, see,
e. g.,
Bajakajian, 524 U. S., at 337;
Gore, 517 U. S., at
575-580;
Solem, 463 U. S., at 290-291;
Enmund, 458 U.
S., at 798;
Coker, 433 U. S., at 598 (opinion of White, J.);
the relationship between the penalty and the harm to the victim
caused by the defendant's actions, see,
e. g.,
Bajak aji
an, 524 U. S., at 339;
Gore, 517 U. S., at 580-583;
Solem, 463 U. S., at 293;
Enmund, 458 U. S., at 798;
Coker, 433 U. S., at 598 (opinion of White, J.); and the
sanctions imposed in other cases for comparable misconduct, see,
e. g.,
Bajakajian, 524 U. S., at 340-343;
Gore, 517 U. S., at 583-585;
Solem, 463 U. S., at
291;
Enmund, 458 U. S., at 789-796;
Coker, 433 U. S.,
at 593-597 (opinion of White, J.). Moreover, and of greatest
relevance for the issue we address today, in each of these cases we
have engaged in an independent examination of the relevant
criteria. See,
e. g.,
Bajakajian, 524 U. S., at
337-344;
Gore, 517 U. S., at
575-586; Solem, 463 U.
S., at 295-300;
Enmund, 458 U. S., at 788-801;
Coker,
433 U. S., at 592-600 (opinion of White, J.).
In
Bajakajian, we expressly noted that the courts of
appeals must review the proportionality determination
"de
novo" and specifically rejected the suggestion of the respondent,
who had prevailed in the District Court, that the trial judge's
determination of excessiveness should be reviewed only for an abuse
of discretion. "The factual findings made by the district courts in
conducting the excessiveness inquiry, of course, must be accepted
unless clearly erroneous .... But the question whether a fine is
constitutionally excessive calls for the application of a
constitutional standard to the facts of a particular case, and in
this context
de novo review of that question is
appropriate." 524 U. S., at 336-337, n. 10 (citing
Ornelas
v.
United States, 517 U. S. 690, 697
(1996)).
436
Likewise, in
Ornelas, we held that trial judges'
determinations of reasonable suspicion and probable cause should be
reviewed
de novo on appeal. The reasons we gave in support
of that holding are equally applicable in this case. First, as we
observed in
Ornelas, the precise meaning of concepts like
"reasonable suspicion" and "probable cause" cannot be articulated
with precision; they are "fluid concepts that take their
substantive content from the particular contexts in which the
standards are being assessed."
Id., at 696. That is, of
course, also a characteristic of the concept of "gross
excessiveness." Second, "the legal rules for probable cause and
reasonable suspicion acquire content only through application.
Independent review is therefore necessary if appellate courts are
to maintain control of, and to clarify, the legal principles."
Id., at 697. Again, this is also true of the general
criteria set forth in
Gore; they will acquire more
meaningful content through case-by-case application at the
appellate level. "Finally,
de novo review tends to unify
precedent" and" 'stabilize the law.'" 517 U. S., at 697698. JUSTICE
BREYER made a similar point in his concurring opinion in
Gore:
"Requiring the application of law, rather than a decisionmaker's
caprice, does more than simply provide citizens notice of what
actions may subject them to punishment; it also helps to assure the
uniform general treatment of similarly situated persons that is the
essence of law itself." 517 U. S., at 587.
Our decisions in analogous cases, together with the reasoning
that produced those decisions, thus convince us that courts of
appeals should apply a
de novo standard of review when
passing on district courts' determinations of the constitutionality
of punitive damages awards.9
9 Contrary to respondent's assertion, Brief for Respondent
12-13, our decision today is
supported by our reasoning in
Pacific Mut. Life Ins. Co. v.
Haslip, 499 U. S. 1, 20-21 (1991).
In that case, we emphasized the
437
III
"Unlike the measure of actual damages suffered, which presents a
question of historical or predictive fact, see,
e. g.,
[St. Louis, 1.
M. & S.
R. Co. v.
Craft, 237 U.
S. 648 (1915)], the level of punitive damages is not really a
'fact' 'tried' by the jury."
Gasperini v.
Center for
Humanities, Inc., 518 U. S. 415, 459 (1996)
(SCALIA, J., dissenting). Because the jury's award of punitive
damages does not constitute a finding of "fact," appellate review
of the district court's determination that an award is consistent
with due process does not implicate the Seventh Amendment concerns
raised by respondent and its
amicus.10 See Brief for
Respondent 18-24; Brief for Association of Trial Lawyers of America
as
Amicus Curiae 17-20. Our decisions in
Gasperini
and
Hetzel v.
Prince William County, 523 U. S. 208 (1998)
(per curiam), both of which concerned compensatory damages,
are not to the contrary.ll
importance of appellate review to ensuring that a jury's award
of punitive damages comports with due process. See id., at 20-21
("[A]ppellate review makes certain that the punitive damages are
reasonable in their amount and rational in light of their purpose
to punish what has occurred and to deter its repetition").
10 Respondent argues that our decision in
Honda Motor Co.
v.
Oberg, 512
U. S. 415 (1994), rests upon the assumption that punitive
damages awards are findings offact. In that case, we held that the
Oregon Constitution, which prohibits the reexamination of any "fact
tried by a jury," Ore. Const., Art. VII, § 3, violated due process
because it did not allow for any review of the constitutionality of
punitive damages awards. Respondent claims that, because we
considered this provision of the Oregon Constitution to cover
punitive damages, we implicitly held that punitive damages are a
"fact tried by a jury." Brief for Respondent 27-28. It was the
Oregon Supreme Court's interpretation of that provision, however,
and not our own, that compelled the treatment of punitive damages
as covered. See
Oberg, 512 U. S., at 427; see also
Van
Lom v.
Schneiderman, 187 Ore. 89, 93, 210 P. 2d 461, 462
(1949) (construing the Oregon Constitution).
11 Nor does the historical material upon which respondent relies
so extensively, see Brief for Respondent 19-24, conflict with our
decision to require
de novo review. Most of the sources
respondent cites merely
438
It might be argued that the deterrent function of punitive
damages suggests that the amount of such damages awarded is indeed
a "fact" found by the jury and that, as a result, the Seventh
Amendment is implicated in appellate review of that award. Some
scholars, for example, assert that punitive damages should be used
to compensate for the underdeterrence of unlawful behavior that
will result from a defendant's evasion of liability. See Polinsky
& Shavell, Punitive Damages: An Economic Analysis, 111 Harv. L.
Rev. 869, 890-891
stand for the proposition that, perhaps because it is a
fact-sensitive undertaking, determining the amount of punitive
damages should be left to the discretion of the jury. See,
e.
g., Barry v.
Edmunds, 116 U. S. 550, 565 (1886)
("[I]t is the peculiar function of the jury" to set the amount of
punitive damages);
Day v.
Woodworth, 13 How. 363, 371
(1852) (punitive damages should be "left to the discretion of the
jury"). They do not, however, indicate that the amount of punitive
damages imposed by the jury is itself a "fact" within the meaning
of the Seventh Amendment's Reexamination Clause. See
Gasperini v.
Center for Humanities, Inc., 518 U. S. 415, 432 (1996)
(distinguishing between the "Trial by Jury" Clause, which "bears
... on the allocation of trial functions between judge and jury,"
and the "Reexamination" Clause, which "controls the allocation of
authority to review verdicts"); see also id., at 447-448 (STEVENS,
J., dissenting) (same).
In any event, punitive damages have evolved somewhat since the
time of respondent's sources. Until well into the 19th century,
punitive damages frequently operated to compensate for intangible
injuries, compensation which was not otherwise available under the
narrow conception of compensatory damages prevalent at the time.
See
Has lip, 499 U. S., at 61 (O'CONNOR, J., dissenting);
see also Note, Exemplary Damages in the Law of Torts, 70 Harv. L.
Rev. 517, 520 (1957) (observing a "vacillation" in the 19th-century
cases between "compensatory" and "punitive" theories of "exemplary
damages"). As the types of compensatory damages available to
plaintiffs have broadened, see,
e. g., 1 J. Nates, C.
Kimball, D. Axelrod, & R. Goldstein, Damages in Tort Actions §
3.01[3][a] (2000) (pain and suffering are generally available as
species of compensatory damages), the theory behind punitive
damages has shifted toward a more purely punitive (and therefore
less factual) understanding. Cf. Note, 70 Harv. L. Rev., at 520
(noting a historical shift away from a compensatory-and toward a
more purely punitive-conception of punitive damages).
439
(1998) (in order to obtain optimal deterrence, "punitive damages
should equal the harm multiplied by ... the ratio of the injurer's
chance of escaping liability to his chance of being found liable");
see also
Ciraolo v.
New York, 216
F.3d 236,
244-245 (CA2 2000) (Calabresi, J.,
concurring). "The efficient deterrence theory thus regards punitive
damages as merely an augmentation of compensatory damages designed
to achieve economic efficiency." Galanter & Luban, Poetic
Justice: Punitive Damages and Legal Pluralism, 42 Am. U. L. Rev.
1393, 1449 (1993).
However attractive such an approach to punitive damages might be
as an abstract policy matter, it is clear that juries do not
normally engage in such a finely tuned exercise of deterrence
calibration when awarding punitive damages. See Sun stein, Schkade,
& Kahneman, Do People Want Optimal Deterrence?, 29 J. Legal
Studies 237, 240 (2000). After all, deterrence is not the only
purpose served by punitive damages. See
supra, at 432. And
there is no dispute that, in this case, deterrence was but one of
four concerns the jury was instructed to consider when setting the
amount of punitive damages.12 Moreover, it is not at all obvious
that even the
deterrent function of punitive damages can be
served
only by economically "optimal deterrence."
"[C]itizens and legislators may rightly insist that they are
willing to tolerate some loss in economic efficiency in order to
deter what they consider morally offensive conduct, albeit
cost-
12 The jury was instructed to consider the following factors:
(1) "The character of the defendant's conduct that is the subject
of Leatherman's unfair competition claims"; (2) "The defendant's
motive"; (3) "The sum of money that would be required to discourage
the defendant and others from engaging in such conduct in the
future"; and (4) "The defendant's income and assets." App. 14.
Although the jury's application of these instructions may have
depended on specific findings of fact, nothing in our decision
today suggests that the Seventh Amendment would permit a court, in
reviewing a punitive damages award, to disregard such jury
findings. See,
e. g.,
Gore, 517 U. S., at
579-580.
440
beneficial morally offensive conduct; efficiency is just one
consideration among many." Galanter & Luban, 42 Am. U. L. Rev.,
at 1450.13
Differences in the institutional competence of trial judges and
appellate judges are consistent with our conclusion. In
Gore, we instructed courts evaluating a punitive damages
award's consistency with due process to consider three criteria:
(1) the degree or reprehensibility of the defendant's misconduct,
(2) the disparity between the harm (or potential harm) suffered by
the plaintiff and the punitive damages award, and (3) the
difference between the punitive damages awarded by the jury and the
civil penalties authorized or imposed in comparable cases. 517 U.
S., at 574-575. Only with respect to the first
Gore inquiry
do the district courts have a somewhat superior vantage over courts
of appeals, and even then the advantage exists primarily with
respect to issues turning on witness credibility and demeanor.14
Trial courts and appellate courts seem equally capable of analyzing
the second factor. And the third
Gore criterion, which calls
for a broad legal comparison, seems more suited to the expertise of
appellate courts. Considerations of institutional competence
therefore fail to tip the balance in favor of deferential appellate
review.
13 We express no opinion on the question whether
Gasperini would govern-and
de novo review would be
inappropriate-if a State were to adopt a scheme that tied the award
of punitive damages more tightly to the jury's finding of
compensatory damages. This might be the case, for example, if the
State's scheme constrained a jury to award only the exact amount of
punitive damages it determined was necessary to obtain economically
optimal deterrence or if it defined punitive damages as a multiple
of compensatory damages (e. g., treble damages).
14 While we have determined that the Court of Appeals must
review the District Court's application of the
Gore test
de novo, it of course remains true that the Court of Appeals
should defer to the District Court's findings of fact unless they
are clearly erroneous. See
United States v.
Bajakajian, 524 U. S. 321, 336-337,
n. 10 (1998).
441
IV
It is possible that the standard of review applied by the Court
of Appeals will affect the result of the
Gore analysis in
only a relatively small number of cases. See Brief for Respondent
46-48; Brief for Association of American Railroads as
Amicus
Curiae 18; see also
Gasperini, 518 U. S., at 448
(STEVENS, J., dissenting). Nonetheless, it does seem likely that in
this case a thorough, independent review of the District Court's
rejection of petitioner's due process objections to the punitive
damages award might well have led the Court of Appeals to reach a
different result. Indeed, our own consideration of each of the
three
Gore factors reveals a series of questionable
conclusions by the District Court that may not survive
de
novo review.
When the jury assessed the reprehensibility of Cooper's
misconduct, it was guided by instructions that characterized the
deliberate copying of the PST as wrongful. The jury's selection of
a penalty to deter wrongful conduct may, therefore, have been
influenced by an intent to deter Cooper from engaging in such
copying in the future. Similarly, the District Court's belief that
Cooper acted unlawfully in deliberately copying the PST design
might have influenced its consideration of the first
Gore
factor. See App. to Pet. for Cert. 23a. But, as the Court of
Appeals correctly held, such copying of the functional features of
an unpatented product is lawful. See
TrafFix Devices, Inc.
v.
Marketing Displays, Inc., ante, p. 23. The Court of
Appeals recognized that the District Court's award of attorney's
fees could not be supported if based on the premise that the
copying was unlawful, but it did not consider whether that improper
predicate might also have undermined the basis for the jury's large
punitive damages award.
In evaluating the second
Gore factor, the ratio between
the size of the award of punitive damages and the harm caused by
Cooper's tortious conduct, the District Court
442
might have been influenced by respondent's submission that it
was not the actual injury-which the jury assessed at $50,000-that
was relevant, but rather "the potential harm Leatherman would have
suffered had Cooper succeeded in its wrongful conduct." See Brief
for Respondent 7; see also Record Doc. No. 323, p. 23. Respondent
calculated that "potential harm" by referring to the fact that
Cooper had anticipated "gross profits of approximately $3 million
during the first five years of sales." Brief for Respondent 7; see
also Record Doc. No. 323, at 23. Even if that estimate were
correct, however, it would be unrealistic to assume that all of
Cooper's sales of the ToolZall would have been attributable to its
misconduct in using a photograph of a modified PST in its initial
advertising materials. As the Court of Appeals pointed out, the
picture of the PST did not misrepresent the features of the
original ToolZall and could not have deceived potential customers
in any significant way. Its use was wrongful because it enabled
Cooper to expedite the promotion of its tool, but that wrongdoing
surely could not be treated as the principal cause of Cooper's
entire sales volume for a 5-year period.
With respect to the third
Gore factor, respondent argues
that Cooper would have been subject to a comparable sanction under
Oregon's Unlawful Trade Practices Act. Brief for Respondent 49. In
a suit brought by a State under that Act, a civil penalty of up to
$25,000 per violation may be assessed. Ore. Rev. Stat. § 646.642(3)
(1997). In respondent's view,
each of the thousands of
pieces of promotional material containing a picture of the PST that
Cooper distributed warranted the maximum fine. Brief for Respondent
49. Petitioner, on the other hand, argues that its preparation of a
single "mock-up" for use in a single distribution would have been
viewed as a single violation under the state statute. Reply Brief
for Petitioner 2-3. The Court of Appeals expressed no opinion on
this dispute. It did, however, observe that the unfairness in
Cooper's use of the picture
443
apparently had nothing to do with misleading customers but was
related to its inability to obtain a "mock-up" quickly and cheaply.
App. to Pet. for Cert. 3a. This observation is more consistent with
the single-violation theory than with the notion that the statutory
violation would have been sanctioned with a multimillion dollar
fine.
We have made these comments on issues raised by application of
the three
Gore guidelines to the facts of this case, not to
prejudge the answer to the constitutional question, but rather to
illustrate why we are persuaded that the Court of Appeals' answer
to that question may depend upon the standard of review. The
de
novo standard should govern its decision. Because the Court of
Appeals applied a less demanding standard in this case, we vacate
the judgment and remand the case for further proceedings consistent
with this opinion.
It is so ordered.
JUSTICE THOMAS, concurring.
I continue to believe that the Constitution does not constrain
the size of punitive damages awards. See
BMW of North America,
Inc. v.
Gore, 517 U. S. 559, 599 (1996)
(SCALIA, J., joined by THOMAS, J., dissenting). For this reason,
given the opportunity, I would vote to overrule
BMW This
case, however, does not present such an opportunity. The only issue
before us today is what standard should be used to review a trial
court's ruling on a
BMW challenge. Because I agree with the
Court's resolution of that issue, I join the opinion of the
Court.
JUSTICE SCALIA, concurring in the judgment.
I was (and remain) of the view that excessive punitive damages
do not violate the Due Process Clause; but the Court held
otherwise. See
BMW of North America, Inc. v.
Gore,
517 U. S. 559
(1996);
id., at 598 (SCALIA, J., dissenting). And I was of
the view that we should review for abuse
444
GINSBURG, J., dissenting
of discretion (rather than
de novo) fact-bound
constitutional issues which, in their resistance to meaningful
generalization, resemble the question of excessiveness of punitive
damages-namely, whether there exists reasonable suspicion for a
stop and probable cause for a search; but the Court held otherwise.
See
Ornelas v.
United States, 517 U. S. 690 (1996);
id., at 700 (SCALIA, J., dissenting). Finally, in a case in which I
joined a dissent that made it unnecessary for me to reach the
issue, the Court categorically stated that "the question whether a
fine is constitutionally excessive calls for ...
de novo
review."
United States v.
Bajakajian, 524 U. S. 321, 336-337,
n. 10 (1998); see id., at 344 (KENNEDY, J., joined by REHNQUIST, C.
J., and O'CONNOR and SCALIA, JJ., dissenting). Given these
precedents, I agree that
de novo review of the question of
excessive punitive damages best accords with our jurisprudence.
Accordingly, I concur in the judgment of the Court.
JUSTICE GINSBURG, dissenting.
In
Gasperini v.
Center for Humanities, Inc.,
518 U. S. 415
(1996), we held that appellate review of a federal trial court's
refusal to set aside a jury verdict as excessive is reconcilable
with the Seventh Amendment if "appellate control [is] limited to
review for 'abuse of discretion.'"
Id., at 419.
Gasperini was a diversity action in which the defendant had
challenged a compensatory damages award as excessive under New York
law. The reasoning of that case applies as well to an action
challenging a punitive damages award as excessive under the
Constitution. I would hold, therefore, that the proper standard of
appellate oversight is not
de novo review, as the Court
today concludes, but review for abuse of discretion.
"An essential characteristic of [the federal court] system is
the manner in which, in civil common-law actions, it distributes
trial functions between judge and jury and, under the influence-if
not the command-of the Seventh Amend-
445
ment, assigns the decisions of disputed questions of fact to the
jury."
Id., at 432 (citing
Byrd v.
Blue Ridge
Rural Elec. Cooperative, Inc., 356 U. S. 525, 537
(1958)). The Seventh Amendment provides: "In Suits at common law
... the right of trial by jury shall be preserved, and no fact
tried by a jury, shall be otherwise re-examined in any Court of the
United States, than according to the rules of the common law." In
Gasperini, we observed that although trial courts
traditionally had broad authority at common law to set aside jury
verdicts and to grant new trials, 518 U. S., at 432-433, "appellate
review of a federal trial court's denial of a motion to set aside a
jury's verdict as excessive is a relatively late, and less secure,
development," id., at 434. We ultimately concluded that the Seventh
Amendment does not preclude such appellate review, id., at 436, but
explained that "[w]ithin the federal system, practical reasons
combine with Seventh Amendment constraints to lodge in the district
court, not the court of appeals, primary responsibility for
application of [an excessiveness standard]," id., at 438. "Trial
judges have the unique opportunity to consider the evidence in the
living courtroom context," we said, "while appellate judges see
only the cold paper record."
Ibid. (citations and internal
quotation marks omitted). "If [courts of appeals] reverse, it must
be because of an abuse of discretion .... The very nature of the
problem counsels restraint ... [Appellate courts] must give the
benefit of every doubt to the judgment of the trial judge."
Id., at 438-439 (internal quotation marks omitted) (citing
Dagnello v.
Long Island R. Co., 289
Although
Gasperini involved compensatory damages, I see
no reason why its logic should be abandoned when punitive damages
are alleged to be excessive. At common law, as our longstanding
decisions reiterate, the task of determining the amount of punitive
damages "has [always been] left to the discretion of the jury."
Day v.
Woodworth, 13 How. 363, 371 (1852); see
Barry v.
Edmunds, 116 U. S. 550, 565
(1886)
446
GINSBURG, J., dissenting
("[N]othing is better settled than that ... it is the peculiar
function of the jury to determine the amount [of punitive damages]
by their verdict."). The commitment of this function to the jury,
we have explained, reflects the historical understanding that "the
degree of punishment to be thus inflicted must depend on the
peculiar circumstances of each case."
Day, 13 How., at 371.
The relevant factors include "the conduct and motives of the
defendant" and whether, "in committing the wrong complained of, he
acted recklessly, or wilfully and maliciously, with a design to
oppress and injure the plaintiff." 1 J. Sutherland, Law of Damages
720 (1882). Such inquiry, the Court acknowledges, "is a
factsensitive undertaking."
Ante, at 438, n. 11.
The Court nevertheless today asserts that a "jury's award of
punitive damages does not constitute a finding of 'fact'" within
the meaning of the Seventh Amendment.
Ante, at 437. An
ultimate award of punitive damages, it is true, involves more than
the resolution of matters of historical or predictive fact. See
ibid. (citing
Gasperini, 518 U. S., at 459 (SCALIA,
J., dissenting)). But there can be no question that a jury's
verdict on punitive damages is fundamentally dependent on
determinations we characterize as factfindings
e. g., the
extent of harm or potential harm caused by the defendant's
misconduct, whether the defendant acted in good faith, whether the
misconduct was an individual instance or part of a broader pattern,
whether the defendant behaved negligently, recklessly, or
maliciously. Punitive damages are thus not "[u]nlike the measure of
actual damages suffered,"
ante, at 437 (citation and
internal quotation marks omitted), in cases of intangible,
noneconomic injury. One million dollars' worth of pain and
suffering does not exist as a "fact" in the world any more or less
than one million dollars' worth of moral outrage. Both derive their
meaning from a set of underlying facts as determined by a jury. If
one exercise in quantification is properly regarded as factfinding,
see
St. Louis, 1.
M. & S.
R. Co. v.
Craft, 237
447
u. S. 648, 661 (1915) (compensation for pain and suffering
"involves only a question of fact"), it seems to me the other
should be so regarded as well.
In
Browning-Ferris Industries of Vt., Inc. v.
Kelco
Disposal, Inc., 492 U. S. 257 (1989), we
approved application of an abuse-of-discretion standard for
appellate review of a district court's ruling on a motion to set
aside a punitive damages award as excessive. See
id., at
279.
BrowningFerris reserved the question whether even such
deferential appellate review might run afoul of the Seventh
Amendment. At that time (i.
e., pre-Gasperini), the Court
"ha[d] never held expressly that the Seventh Amendment allows
appellate review of a district court's denial of a motion to set
aside an award as excessive." 492 U. S., at 279, n. 25. We found it
unnecessary to reach the Seventh Amendment question in
Browning-Ferris because the jury verdict there survived
lower court review intact.
Id., at 279, n. 25, 280.
Browning-Ferris, in short, signaled our recognition that
appellate review of punitive damages, if permissible at all, would
involve
at most abuse-of-discretion review. "[P]articularly
... because the federal courts operate under the strictures of the
Seventh Amendment," we were "reluctant to stray too far from
traditional common-law standards, or to take steps which ultimately
might interfere with the proper role of the jury."
Id., at
280, n. 26.
The Court finds no incompatibility between this case and
Browning-Ferris, observing that
Browning-Ferris
presented for our review an excessiveness challenge resting solely
on state law, not on the Constitution. See
ante, at 433, and
n. 7. It is unclear to me why this distinction should make a
difference. Of the three guideposts
BMW of North America,
Inc. v.
Gore, 517 U. S. 559 (1996),
established for assessing constitutional excessiveness, two were
derived from common-law standards that typically inform state law.
See id., at 575, n. 24 ("The principle that punishment should fit
the crime is deeply rooted and frequently repeated in
448
common-law jurisprudence." (citation and internal quotation
marks omitted)); id., at 580 ("The principle that exemplary damages
must bear a 'reasonable relationship' to compensatory damages has a
long pedigree."). The third guidepost-comparability of sanctions
for comparable misconduct-is not similarly rooted in common law,
nor is it similarly factbound. As the Court states, "the third
Gore criterion ... calls for a broad legal comparison."
Ante, at 440. But to the extent the inquiry is "legal" in
character, there is little difference between review
de novo
and review for abuse of discretion. Cf.
Gasperini, 518 U.
S., at 448 (STEVENS, J., dissenting) ("[I]t is a familiar ... maxim
that deems an error of law an abuse of discretion.").!
Apart from "Seventh Amendment constraints," an
abuseof-discretion standard also makes sense for "practical
reasons."
Id., at 438. With respect to the first
Gore
inquiry (i.
e., reprehensibility of the defendant's
conduct), district courts have an undeniably superior vantage over
courts of appeals. As earlier noted,
supra, at 445, district
courts view the evidence not on a "cold paper record," but "in the
living courtroom context,"
Gasperini, 518 U. S., at 438.
They can assess from the best seats the vital matter of witness
credibility. And "it of course remains true that [a]
1 Appellate courts, following our instruction, apply
de
novo review to trial court determinations of reasonable
suspicion, probable cause, and excessiveness of fines. See
ante, at 435-436 (citing
United States v.
Bajakajian, 524 U. S. 321, 336-337,
n. 10 (1998), and
Ornelas v.
United States, 517 U. S. 690, 696-698
(1996)). But such determinations typically are made without jury
involvement, see,
e. g., Bajakajian, 524 U. S., at
325
326; Ornelas, 517 U. S., at 694, and surely do not
implicate the Seventh Amendment. Moreover, although
Bajakajian said "the question whether a [criminal] fine is
constitutionally excessive calls for ...
de novo review,"
524 U. S., at 336-337, n. 10,
Bajakajian did not disturb our
holding in
Browning-Ferris Industries of Vt., Inc. v.
Kelco Disposal, Inc., 492 U. S. 257 (1989),
that the "Excessive Fines Clause does not apply to awards of
punitive damages in [civil] cases between private parties," id., at
260.
449
Court of Appeals should defer to the District Court's findings
of fact unless they are clearly erroneous."
Ante, at 440,
n.14.2
The Court recognizes that district courts have the edge on the
first
Gore factor,
ante, at 440, but goes on to say
that "[t]rial courts and appellate courts seem equally capable of
analyzing the second
[Gore] factor" (i.
e., whether
punitive damages bear a reasonable relationship to the actual harm
inflicted),
ibid. Only "the third
Gore criterion [i.
e., intrajurisdictional and interjurisdictional comparisons]
... seems more suited to the expertise of appellate courts."
Ibid.
To the extent the second factor requires a determination of "the
actual harm inflicted on the plaintiff,"
Gore, 517 U. S., at
580, district courts may be better positioned to conduct the
inquiry, especially in cases of intangible injury. I can demur to
the Court's assessment of relative institutional strengths,
however, for even accepting that assessment, I would disagree with
the Court's conclusion that "[c]onsiderations of institutional
competence ... fail to tip the balance in favor of deferential
appellate review,"
ante, at 440.
Gore itself assigned
particular importance to the first inquiry, characterizing "degree
of reprehensibility" as "[p]erhaps the most important indicium of
the reasonableness of a punitive damages award." 517 U. S., at 575.
District courts, as just noted,
supra, at 448 and this page,
have a superior vantage over courts of appeals in conducting that
fact-intensive inquiry. Therefore, in the typical case envisioned
by
Gore, where reasonableness is primarily tied to
reprehensibility, an appellate court should have infrequent
occasion to reverse.
This observation, I readily acknowledge, suggests that the
practical difference between the Court's approach and
2 An appellate court might be at a loss to accord such deference
to jury findings of fact absent trial court employment of either a
special verdict or a general verdict accompanied by written
interrogatories. See Fed. Rule Civ. Proc. 49.
450
my own is not large. An abuse-of-discretion standard, as I see
it, hews more closely to "the strictures of the Seventh Amendment,"
Browning-Ferris, 492 U. S., at 280, n. 26. The Court's
de
novo standard is more complex. It requires lower courts to
distinguish between ordinary common-law excessiveness and
constitutional excessiveness,
ante, at 433, and to separate
out factfindings that qualify for "clearly erroneous" review,
ante, at 440, n. 14. See also
ante, at 440, n. 13
(suggesting abuse-of-discretion review might be in order "if a
State were to adopt a scheme that tied the award of punitive
damages more tightly to the jury's finding of compensatory
damages"). The Court's approach will be challenging to administer.
Complex as it is, I suspect that approach and mine will yield
different outcomes in few cases.
The Ninth Circuit, I conclude, properly identified abuse of
discretion as the appropriate standard in reviewing the District
Court's determination that the punitive damages awarded against
Cooper were not grossly excessive. For the Seventh Amendment and
practical reasons stated, I would affirm the judgment of the Court
of Appeals.
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