Cooper Industries, Inc. v. Leatherman Tool Group, Inc. (2001) 532 U.S. 424 [121 S.Ct. 1678, 149 L.Ed.2d 674].

The Supreme Court reversed a Ninth Circuit opinion that had affirmed $4.5 million in punitive damages without performing an independent review to determine if that amount exceeded the limits of due process. The Ninth Circuit had upheld the punitive award, which was 90 times the compensatory award, by stating that "the district court did not abuse its discretion in declining to reduce the amount of punitive damages." This created a split with other Circuits, which had held that appellate courts must give de novo review to a district court's ruling on the constitutionality of a punitive award.

The Supreme Court rejected the Ninth Circuit's abuse-of-discretion approach, stating that de novo review is required because the excessiveness of a punitive damage award is essentially a legal question, rather than a factual question. The Court referred to the standards set forth in BMW of North America, Inc. v. Gore (1996) 517 U.S. 559 [116 S.Ct. 1589, 134 L.Ed.2d 809], and held that appellate courts should independently apply those standards to determine whether a particular award violates due process. The Court observed that appellate courts have a special expertise with this type of legal analysis, and that the BMW criteria will become more meaningful through case-by-case application at the appellate level, thereby stabilizing this area of the law.

On remand from the Supreme Court, the Ninth Circuit cut the punitive award from $4.5 million to $500,000, using the new de novo review standard. The Ninth Circuit had previously affirmed the $4.5 million award under the old standard.

We appeared as amici curiae counsel on behalf of General Dynamics Corporation in support of petitioner.

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