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Federal Judiciary

: California Appellate Report

Amerigraphics v. Mercury Casualty Co. (Cal. Ct. App. - March 23, 2010)

By Shaun Martin

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Want to see an example of insurance bad faith? Something that even the trial court described as "really terrible," "really, really bad," "a disaster," "total disaster," and "a very, very, very solid case for punitive damages, as solid as I have ever seen in my time on the bench."


The insurance company is Mercury Insurance. Remember that when you're investigating insurers and wondering about their reputation. Apparently, Mercury Insurance is really, really bad.

The other thing that's interesting about the case, beyond Mercury's reputation, is that this is another example of the indeterminate nature of the Supreme Court's current "due process and punitive damages" jurisprudence.

The jury here awards $130,000 in compensatory damages, and adds on $3 million in punitive damages. The trial judge whacks that down to $1.7 million. Then the Court of Appeal holds that the maximum punitive damage award permitted by the Due Process Clause is a 3.8-to-1 ratio.

Why 3.8 to 1? Is it a coincidence that this makes a nice, even, round number: $500,000? I think not.

Somehow I doubt that the Constitution imposes a due process requirement that just happens to result in incredibly round numbers. And yet that's what you often see.

Not that I can necessarily come up with a better due process test myself. But sometimes the best critique of an existing test is simply the seemingly arbitrary nature of the results that it engenders. Including an interpretation of the Due Process Clause that just so happens to result in exact multiples of $100,000.

Full post as published by California Appellate Report on March 23, 2010 (boomark / email).

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