Supreme Court of the United States

Txo Production Corp. v. Alliance Resources Corp.

June 25, 1993509 U.S. 443

Summary

The Court affirmed a $10 million punitive damages award accompanying $19,000 in actual damages for slander of title, but no rationale commanded five votes. Justice Stevens, joined by Chief Justice Rehnquist and Justice Blackmun, concluded that the award was not grossly excessive given the potential financial harm, TXO's malicious conduct, its pattern of fraud, and its wealth. Justice Kennedy also joined Parts I and IV, addressing the facts and rejecting the procedural challenges. Separately, Kennedy concurred in part and in the judgment because the record supported punishment and deterrence of deliberate misconduct rather than an arbitrary deprivation of property; he rejected the plurality's potential-harm explanation. Justice Scalia, joined by Justice Thomas, concurred in the judgment because traditional procedures were satisfied and rejected substantive due process review of the award's size. Justice O'Connor dissented, joined by Justice White throughout and Justice Souter as to Parts II-B-2, II-C, III, and IV, arguing that the award reflected impermissible influences and received inadequate judicial review.

Holding

  • Constitutional excessiveness of the punitive damages award. The plurality concluded that the $10 million award was not grossly excessive despite being 526 times the actual damages.
  • Consideration of potential harm. The plurality considered potential harm to the intended victim and possible harm to other victims relevant to assessing punitive damages, rather than treating the ratio to actual damages as controlling.
  • Preservation of constitutional challenges to the jury instructions. The Stevens opinion declined to decide the constitutional challenge to the instructions because it had not been properly presented to the State's highest court.
  • Adequacy of postverdict judicial review. The Stevens opinion concluded that the review afforded by the trial court and the West Virginia Supreme Court of Appeals did not violate due process.
  • Fair notice of punitive damages liability. The Stevens opinion concluded that TXO had sufficient notice that substantial punitive damages could be imposed for its conduct.

Docket 92-479

Cited authorities

  • 44 Harv. L. Rev. 1173
  • 13 Cardozo L. Rev. 1819
  • 56 S. Cal. L. Rev. 1
  • 49 U. Chi. L. Rev. 1
  • 44 Harv. L. Rev. 1173
  • 40 Ala. L. Rev. 919
  • 69 U. Det. Mercy L. Rev. 459

Cited by

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