The Supreme Court held that a punitive damage award of five hundred times the amount of actual damages was “grossly excessive” and therefore contrary to the due process clause of the Fourteenth Amendment.
After Ira Gore purchased a new BMW, he found that it had been repainted by the manufacturer. Alleging fraud according to Alabama law, Gore brought suit against BMW for failure to disclose a defect. He was awarded $4,000 in compensatory damages and $2 million in punitive damages. By a 5-4 margin, the Supreme Court found that BMW’s conduct was not egregious enough to justify such an extreme sanction. Writing for the Court, Justice John Paul Stevens
Due process, substantive
Gertz v. Robert Welch