Honda Motor Company, Ltd. v. Oberg

PETITIONER: Honda Motor Company, Ltd.
RESPONDENT: Oberg
LOCATION: Pomona Police Department

DOCKET NO.: 93-644
DECIDED BY: Rehnquist Court (1993-1994)
LOWER COURT: Oregon Supreme Court

CITATION: 512 US 415 (1994)
ARGUED: Apr 20, 1994
DECIDED: Jun 24, 1994

ADVOCATES:
Mr. Andrew L. Frey - Argued the cause for the petitioners
Laurence H. Tribe - Argued the cause for the respondents

Facts of the case

Karl Oberg was driving an all-terrain vehicle when it overturned, causing him severe, permanent injuries. The jury in his trial assessed almost $1 million in compensatory damages, and an additional $5 million in punitive damages. A 1910 amendment to the Oregon state constitution prohibited judicial review of jury awards.

Question

Does the Oregon prohibition on judicial review of jury awards violate the Due Process Clause of the 14th Amendment?

Media for Honda Motor Company, Ltd. v. Oberg

Audio Transcription for Oral Argument - April 20, 1994 in Honda Motor Company, Ltd. v. Oberg

Audio Transcription for Opinion Announcement - June 24, 1994 in Honda Motor Company, Ltd. v. Oberg

William H. Rehnquist:

The opinion of the Court in No. 93-644, Honda Motor Company against Oberg will be announced by Justice Stevens.

John Paul Stevens:

This is a punitive damages case.

The petitioner manufactured and sold a three-wheeled all terrain vehicle that overturned while respondent was driving it causing him severe and permanent injuries.

Respondent brought suit alleging the petitioner knew or should have known that the vehicle had an inherently and unreasonably dangerous design.

The jury found petitioner liable and awarded respondent almost $1 million in compensatory damages and punitive damages of $5 million.

Because of a provision of the Oregon Constitution, the Oregon trial and Appellate Courts did not review the amount of punitive damages to ensure that they were not excessive or unreasonable.

Petitioner argued that our prior decisions required meaningful judicial review to prevent arbitrary impositions of large punitive damages, but the Oregon Supreme Court rejected that argument holding that judicial review was not constitutionally required and that other Oregon procedures ensured against arbitrary awards.

We now reverse and remand.

Judicial review of the amount of punitive damage awards has been a safeguard against excessive awards for as long as punitive damages have been awarded.

Punitive damages pose an acute danger of arbitrary deprivation of property.

Jury instructions typically leave the jury with wide discretion in choosing amounts in the presentation of evidence of a defendant's net worth creates the potential that juries will use their verdicts to express biases against big businesses particularly those without strong local presences.

Judicial review of the amount awarded was one of the few procedural safeguards which the common law provided against that danger.

Oregon has removed that safeguard without providing an adequate substitute and without any indication that the danger of arbitrary awards has in any way subsided over time.

For these reasons, we hold that Oregon's denial of judicial review of the size of punitive damage awards violates the Due Process Clause of the Fourteenth Amendment.

Justice Scalia has filed a concurring opinion; Justice Ginsburg has filed a dissenting opinion in which the Chief Justice has joined.