538 U.S. 408 (2003)
State Farm Mutual Automobile Insurance Co. v.
Is a $145 million punitive damages award constitutionally excessive when compared to the compensatory damages awarded?
Under the Due Process Clause of the Fourteenth Amendment, punitive damages must bear a reasonable relationship to compensatory damages to be deemed constitutionally proportionate.
The Supreme Court held that the $145 million punitive damages award was unconstitutionally excessive under the Due Process Clause of the Fourteenth Amendment.
This case is significant for law students as it clarifies the standards for punitive damages, underscoring the need for proportionality and predictability. It emphasizes the importance of due process in civil penalties and serves as a guiding precedent for future cases involving punitive damages.