Lawyers argue reversal ordered by top court

Some of America's top legal talent launched verbal fireworks Monday before the Utah Supreme Court in arguments about a reversal ordered by the country's highest court. Soaring rhetoric should have been expected, as it was a matter of the U.S. Supreme Court reversing the Utah Supreme Court — and because a former chief justice of the state's high court addressed that bench.

At issue is the amount of punitive damages the Utah court ordered in favor of Curtis and Inez Campbell, a Cache County couple who sued State Farm Mutual Automobile Insurance Co. The case dates back to a 1981 multiple-car accident in Sardine Canyon that left one man dead and another permanently disabled.

State Farm, the Campbells' insurer, had refused to settle with the victims for $50,000. Later, jurors found Curtis Campbell liable and ordered him to pay the victims nearly $186,000, far above the insurance policy coverage of $50,000.

The Campbells sued State Farm, claiming the company had acted in bad faith. A Utah jury ordered State Farm to pay the Campbells $2.6 million in compensation and $145 million in punitive damages.

The trial judge reduced the awards to $1 million compen- satory damage and $25 million in punitive damage. But two years ago, the Utah Supreme Court reinstated the $145 million punitive award. It said State Farm was guilty of "reprehensible conduct" and trickery aimed at financially vulnerable people.

In approving the higher punitive damages, it noted State Farm's "massive wealth" and referred to testimony indicating the company's clandestine actions would be punished in only one out of every 50,000 cases as a statistical probability. This statement apparently referred to actions in other states.

In April, the U.S. Supreme Court reversed the Utah high court in a landmark ruling. The company's wealth had nothing to do with the amount of punitive damages to which the Campbells were entitled, the court wrote, and the Utah courts have no right to punish action taking place in other states — actions that might be legal under the laws there.

The crux of the overturn, however, concerned the amount of punitive damages. The federal court ruled the compensation itself already contained an element of punitive damages as it covered emotional distress.