"Frivolous lawsuit" opponent William Koch wins $12 million lawsuit over 24 bottles of wine

[AnotherMcIntosh]

42. Great wealth can apparently overcome the punitive-damages guidelines of the Supreme Court

which are applicable to ordinary folk.

Koch was only seeking $320,000 in compensatory damages but the jury awarded $12 million in punitive damages. The ratio greatly exceeds the 4:1 ratio which the Supreme Court has indicated as being potentially violative of the Due Process clause. Exceptions, however, are for the rich.

In response to judges and juries which award high punitive damages verdicts, the Supreme Court of the United States has made several decisions which limit awards of punitive damages through the due process of law clauses of the Fifth and Fourteenth Amendments to the United States Constitution. In a number of cases, the Court has indicated that a 4:1 ratio between punitive and compensatory damages is high enough to lead to a finding of constitutional impropriety, and that any ratio of 10:1 or higher is almost certainly unconstitutional. However, the Supreme Court carved out a notable exception to this rule of proportionality in the case of TXO Production Corp. v. Alliance Resources Corp., where it affirmed an award of $10 million in punitive damages, despite the compensatory damages being only $19,000, a punitive-to-compensatory ratio of more than 526 to 1. In this case, the Supreme Court affirmed that disproportionate punitive damages were allowed for especially egregious conduct (the trial court in the same case purportedly said "What could be more egregious than the vice president of a company saying, well, testifying and saying that he knew all along that this property belonged to Tug Fork?&quot [20]

In the case of Liebeck v. McDonald's Restaurants (1994), 79 year old Stella Liebeck spilled McDonald's coffee in her lap which resulted in second and third degree burns on her thighs, buttocks, groin and genitals. The burns were severe enough to require skin grafts. Liebeck attempted to have McDonald's pay her $20,000 medical bills as indemnity for the incident. McDonald's refused, and Liebeck sued. During the case's discovery process, internal documents from McDonald's revealed the company had received hundreds of similar complaints from customers claiming McDonald's coffee caused severe burns. At trial, this led the jury to find McDonald's knew their product was dangerous and injuring their customers, and that the company had done nothing to correct the problem. The jury decided on $200,000 in compensatory damages, but attributed 20 percent of the fault to Liebeck, reducing her compensation to $160,000. The jury also awarded Liebeck $2.7 million in punitive damages, which was at the time two days of McDonald's coffee sales revenue. The judge later reduced the punitive damages to $480,000. The case is often criticized for the very high amount of damages the jury awarded.

http://en.wikipedia.org/wiki/Punitive_damages