Givaudan Flavors Corporation v. James J. Graham

In BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996), and State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408 (2003), this Court held that the Due Process Clause of the Fourteenth Amendment prohibits arbitrary and excessive punitive damages awards. The Court set markers beyond which punitive awards cannot constitutionally go without special justification, warning that “few awards exceeding a single-digit ratio between punitive and compensatory damages” comply with the Fourteenth Amendment; that a punitive damages award four times a compensatory award “might be close to the line of constitutional impropriety”; and that “[w]hen compensatory damages are substantial, then a lesser ratio, perhaps only equal to compensatory damages, can reach the outermost limit of the due process guarantee.” State Farm, 538 U.S. at 425. In this otherwise unremarkable product liability case, a divided Missouri jury held petitioner Givaudan Flavors Corp. liable for selling food flavoring products that allegedly caused a factory worker’s lung disease. The jury awarded substantial compensatory damages—$2 million—and $56 million more in punitive damages. The question presented is: Whether an appellate court may affirm a punitive damages award that is 28 times a large compensatory award, without finding a compelling reason to depart from the presumption that punitive damages should not exceed the amount of a substantial compensatory award, or at least the historical limit of quadruple damages.