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Evan Tager comments on State Farm punitive damages case

December 11, 2002 - In a published Dow Jones newswire report, Mayer, Brown Rowe & Maw LLP partner Evan Tager noted that the Supreme Court has an opportunity to rein in giant punitive damage awards in the case of State Farm v. Campbell, No. 01-1289. The Court heard oral arguments in the case today which stems from a 1981 automobile accident in which one person died.

Believing Curtis Campbell's claim that he wasn't at fault in causing the accident, State Farm declined to settle the suits. At trial, however, a jury found Campbell at fault and issued judgments that exceeded Campbell's insurance policy limits.

Campbell sued State Farm in Utah state court for bad faith in its failure to settle and won $1 million in compensatory damages (after remittitur) and $145 million in punitive damages. Dozens of corporations and business groups are supporting State Farmís position in the case. "This case could have a substantial effect in reining in punitive damages," Mr. Tager told Dow Jones. He said a ruling that overturns the verdict would result in "a lot of awards reduced and maybe some rationality brought back into the process."

Dow Jones cited a study by two Harvard professors that found that 53 jury verdicts exceeded $100 million between 1985 and 2002. Mr. Tager said that now that the Supreme Court has agreed to review punitive damages cases, "it has an obligation to articulate guidelines for excessiveness."

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