Diamond Woodworks, Inc. v. Argonaut Insurance Company (2003) 109 Cal.App.4th 1020

Horvitz & Levy LLP represented appellant Argonaut Insurance Company in this appeal, in which the Court of Appeal for the Fourth Appellate District, Division Three, reduced a $5.5 million punitive damage award to $1 million, approximately 3.8 times the $258,570 compensatory tort damages.

The decision in Diamond is the first published California opinion applying the United States Supreme Court’s decision in State Farm Mut. Auto. Ins. Co. v. Campbell (2003) 538 U.S. 408 [123 S.Ct. 1513, 155 L.Ed.2d 585]. In Diamond, the court held "that in the usual case, i.e., a case in which the compensatory damages are neither exceptionally high nor low, and in which the defendant’s conduct is neither exceptionally extreme nor trivial, the outer constitutional limit on the amount of punitive damages is approximately four times the amount of compensatory damages." It appears that the Diamond decision comes closer to imposing a bright line rule limiting the size of punitive damages awards than any previous California appellate decision.

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