Product Liability -- 2004



Union Pacific Railroad Co. v. Barber   (U.S. Supreme Court)

Wealth as a factor in assessing punitive damages

The NAM joined with the American Tort Reform Association in a brief 9/10/04 urging the Supreme Court to review an Arkansas Supreme Court decision that allowed the use of evidence of the wealth of the defendant to justify an enormous punitive damages award in a non-fatal personal injury railroad-crossing negligence case. In the punitive damages phase of this case, the only evidence the jury was given was evidence of the net worth of the defendant, and the state supreme court also referenced the defendant's financial position and net worth. A $25 million punitive damage award was assessed on top of a $5 million compensatory damages award. We argued that the U.S. Supreme Court should provide guidance on this issue, and not allow conduct alleged to have occurred in other states to infect an award in Arkansas. Allowing evidence of wealth innevitably arouses the passions and prejudices of a jury, and improperly takes the focus away from the wrongful act and puts in on a company that reinvests its earnings rather than distributes them to its shareholders. The Supreme Court declined to hear this appeal on 10/12/04.