The Supreme Court/The Supreme Court.iso/pc/ascii/1992/92_479/92_479.zd

Text File | 1993-06-24 | 52.8 KB | 1,015 lines

SUPREME COURT OF THE UNITED STATES
--------
No. 92-479
--------
TXO PRODUCTION CORP., PETITIONER v.
ALLIANCE RESOURCES CORP., et al.
on writ of certiorari to the supreme court of
appeals of west virginia
[June 25, 1993]

  Justice O'Connor, with whom Justice White joins,
and with whom Justice Souter joins as to Parts II-B-2,
II-C, III, and IV, dissenting.
  In Pacific Mutual Life Ins. Co. v. Haslip, 499 U. S. 1
(1991), this Court held out the promise that punitive
damages awards would receive sufficient constitutional
scrutiny to restore fairness in what is rapidly becoming
an arbitrary and oppressive system.  Today the Court's
judgment renders Haslip's promise a false one.  The
procedures that converted this commercial dispute into a
$10 million punitive verdict were wholly inadequate.
Rather than producing a judgment founded on verifiable
criteria, they produced a monstrous award-526 times
actual damages and over 20 times greater than any
punitive award in West Virginia history.  Worse, the State
Supreme Court of Appeals rejected petitioner's challenge
with only cursory analysis, observing that petitioner,
rather than being -really stupid,- had been -really mean.-
187 W. Va. 457, 474-475, 419 S. E. 2d 870, 887-889
(1992).  The court similarly refused to consider the
possibility of remittitur because petitioner -and its agents
and servants failed to conduct themselves as gentlemen.-
Id., at 462, 419 S. E. 2d, at 875.  In my view, due process
does not tolerate such cavalier standards when so much
is at stake.  Because I believe that neither this award's
size nor the procedures that produced it are consistent
with the principles this Court articulated in Haslip, I
respectfully dissent.
                      I
  Our system of justice entrusts jurors-ordinary citizens
who need not have any training in the law-with
profoundly important determinations.  Jurors decide not
only civil matters, where the financial consequences may
be great, but also criminal cases, where the liberty or
perhaps life of the defendant hangs in the balance.  Our
abiding faith in the jury system is founded on
longstanding tradition reflected in constitutional text, see
U. S. Const. Art. III, 2, Amdts. 6, 7, and is supported
by sound considerations of justice and democratic theory.
The jury system long has been a guarantor of fairness, a
bulwark against tyranny, and a source of civic values.
See 3 W. Blackstone, Commentaries *379-*381; Haslip,
supra, at 40 (Kennedy, J., concurring in judgment); W.
Olson, The Litigation Explosion 175 (1991); Hyman &
Tarrant, Aspects of American Trial Jury History, in The
Jury System in America 23, 27-28 (R. Simon ed. 1975).
  But jurors are not infallible guardians of the public
good.  They are ordinary citizens whose decisions can be
shaped by influences impermissible in our system of
justice.  In fact, they are more susceptible to such
influences than judges.  See H. Kalven & H. Zeisel, The
American Jury 497-498 (1966) (-The judge very often
perceives the stimulus that moves the jury, but does not
yield to it. . . .  The perennial amateur, layman jury
cannot be so quickly domesticated to official role and
tradition; it remains accessible to stimuli which the judge
will exclude-).  Arbitrariness, caprice, passion, bias, and
even malice can replace reasoned judgment and law as the
basis for jury decisionmaking.  Modern judicial systems
therefore incorporate safeguards against such influences.
Rules of evidence limit what the parties may present to
the jury.  Careful instructions direct the jury's delibera-
tions.  Trial judges diligently supervise proceedings,
watchful for potential sources of error.  And courts of
appeals stand ready to overturn judgments when efforts
to ensure fairness have failed.
  In the usual case, this elaborate but necessary judicial
machinery functions well, ensuring that our jury system
is an engine of liberty and justice rather than a source of
oppression and arbitrary imposition.  As Justice Kennedy
has explained, -[e]lements of whim and caprice do not
predominate when the jury reaches a consensus based
upon arguments of counsel, the presentation of evidence,
and instructions from the trial judge, subject to review by
the trial and appellate courts.-  Haslip, 499 U. S., at 40
(opinion concurring in judgment).  But the risk of
prejudice, bias, and caprice remains a real one in every
case nonetheless.
  This is especially true in the area of punitive damages,
where juries sometimes receive only vague and amorphous
guidance.  Jurors may be told that punitive damages are
imposed to punish and deter, but rarely are they
instructed on how to effectuate those goals or whether any
limiting principles exist.  See, e.g., id., at 39.  Although
this Court has not held such instructions constitutionally
inadequate, it cannot be denied that the lack of clear
guidance heightens the risk that arbitrariness, passion, or
bias will replace dispassionate deliberation as the basis
for the jury's verdict.  See id., at 43, 63 (O'Connor, J.,
dissenting); id., at 41 (Kennedy, J., concurring in
judgment) (-[T]he generality of the instructions may
contribute to a certain lack of predictability-); Browning-
Ferris Industries of Vermont, Inc. v. Kelco Disposal, Inc.,
492 U. S. 257, 281 (1989) (Brennan, J., concurring) (Such
-skeletal- guidance is -scarcely better than no guidance at
all,- creating a need for more careful review); Smith v.
Wade, 461 U. S. 30, 88 (1983) (Rehnquist, J., dissenting)
(elastic standards applicable to punitive awards -giv[e] free
reign to the biases and prejudices of juries-).  As one
commentator has explained:
     -Like everyone else in the court system, juries need
and deserve objective rules for decision.  Deprived of
any fixed landmarks and guideposts, any of us can be
distracted, played on, and befuddled to the point
where our best guess is far from reliable.-  Olson,
supra, at 175.
It is therefore no surprise that, time and again, this Court
and its members have expressed concern about punitive
damages awards -`run wild,'- inexplicable on any basis
but caprice or passion.  Haslip, supra, at 9-12, 18
(discussing cases); see also Gertz v. Robert Welch, Inc., 418
U. S. 323, 350 (1974) (-[J]uries assess punitive damages
in wholly unpredictable amounts bearing no necessary
relation to the actual harm caused-).
  Influences such as caprice, passion, bias, and prejudice
are antithetical to the rule of law.  If there is a fixture
of due process, it is that a verdict based on such
influences cannot stand.  See Haslip, supra, at 41
(Kennedy, J., concurring in judgment) (-A verdict returned
by a biased or prejudiced jury no doubt violates due
process-).  Of course, determining whether a verdict
resulted from improper influences is no easy matter.  By
tradition and necessity, the circumstances in which jurors
may impeach their own verdict are quite limited.  See
Tanner v. United States, 483 U. S. 107, 117-121, 127
(1987); 11 C. Wright & A. Miller, Federal Practice and
Procedure 2810, pp. 71-72 (1973); 2 W. Tidd, Practice
of Courts of King's Bench and Common Pleas *908-*909.
But fundamental fairness requires that impermissible
influences such as bias and prejudice be discovered
nonetheless, by inference if not by direct proof.  As a
result, courts at common law in England traditionally
would strike any award that appeared so grossly
disproportionate as to evidence caprice, passion, or bias.
This practice long has been followed in this Nation as
well.  Indeed, the New Hampshire Supreme Court
emphasized its importance over a century ago, observing
that a court's duty to interfere with a disproportionate
jury verdict -is absolutely necessary to the safe
administration of justice, and ought, in all proper cases,
to be asserted and exercised.-  Belknap v. Boston & Maine
R. Co., 49 N. H. 358, 372 (1870).  Accord, Gough v. Farr,
1 Y. & J. 477, 479-480, 148 Eng. Rep. 759, 760 (Ex. 1827)
(Vaughan, B.) (-It is essential to the due administration
of justice, that the Courts should exercise a salutary
control over Juries- by requiring retrial where the amount
of the verdict indicates that the jury -acted improperly,
or upon a gross misconception of the facts-); id., at
478-479, 148 Eng. Rep., at 759-760 (Alexander, L. C. B.)
(Where damages are so excessive that -the Courts are of
opinion . . . that the Jury have acted under the influence
of undue motives, or of misconception, it is their duty to
interfere-); Travis v. Barger, 24 Barb. 614, 629 (N.Y. 1857)
(reciting Lord Ellenborough's view that, -if it appeared
from the amount of damages given, as compared with the
facts of the case laid before jury, that the jury must have
acted under the influence either of undue motives, or
some gross error or misconception of the subject, the court
would have thought it their duty to submit the question
to the consideration of a second jury-); Flannery v.
Baltimore & Ohio R. Co., 15 D. C. 111, 125 (1885) (When
the punitive damages award is disproportionate, -we feel
it our duty to interfere-).
  Judicial intervention in cases of excessive awards also
has the critical function of ensuring that another ancient
and fundamental principle of justice is observed-that the
punishment be proportionate to the offense.  As we have
observed, the requirement of proportionality is -deeply
rooted and frequently repeated in common-law
jurisprudence.-  Solem v. Helm, 463 U. S. 277, 284-285
(1983).  See, e.g., Le Gras v. Bailiff of Bishop of
Winchester, Y. B. Mich. 10 Edw. II, pl. 4 (C. P. 1316)
reprinted in 52 Selden Society 3, 5 (1934) (amercement
vacated and bailiff ordered to -take a moderate amerce-
ment proper to the magnitude and manner of that
offence-); First Statute of Westminster, 3 Edw. I, ch. 6
(1275).  Because punitive damages are designed as
punishment rather than compensation, Browning-Ferris,
492 U. S., at 297 (O'Connor, J., concurring in part and
dissenting in part) (citing cases), courts historically have
required that punitive damages awards bear a reasonable
relationship to the actual harm imposed.  This Court
similarly has recognized that the requirement of
proportionality is implicit in the notion of due process.
We therefore have held that an award that is -plainly
arbitrary and oppressive,- Southwestern Telegraph &
Telephone Co. v. Danaher, 238 U. S. 482, 491 (1915),
-grossly excessive,- Waters-Pierce Oil Co. v. Texas (No. 1),
212 U. S. 86, 111 (1909), or -so severe and oppressive as
to be wholly disproportioned to the offense and obviously
unreasonable,- St. Louis, I. M. & S. R. Co. v. Williams,
251 U. S. 63, 66-67 (1919), offends the Due Process
Clause and may not stand.

                     II
  The plurality does not retreat today from our prior
statements regarding excessive punitive damages awards.
Nor does it deny that our prior decisions have a strong
basis in historical practice and the common law.  On the
contrary, it reaffirms our precedents once again, properly
rebuffing respondents' attempt to denigrate them as
Lochner-era aberrations.  Ante, at 9-10.  It is thus
common ground that an award may be so excessive as to
violate due process.  Ante, at 10.  We part company,
however, on how to determine if this is such an award.
  In Solomonic fashion, the plurality rejects both
petitioner's and respondents' proffered approaches, instead
selecting a seemingly moderate course.  See ante, at
11-13.  But the course the plurality chooses is, in fact, no
course at all.  The plurality opinion erects not a single
guidepost to help other courts find their way through this
area.  Rather, quoting Haslip's observation that there is
no ```mathematical bright line between the constitutionally
acceptable and the constitutionally unacceptable,'- ante,
at 13 (quoting 499 U. S., at 18), the plurality abandons
all pretense of providing instruction and moves directly
into the specifics of this case.
  I believe that the plurality errs not only in its result
but also in its approach.  Our inability to discern a
mathematical formula does not liberate us altogether from
our duty to provide guidance to courts that, unlike this
one, must address jury verdicts such as this on a regular
basis.  On the contrary, the difficulty of the matter
imposes upon us a correspondingly greater obligation to
provide the most coherent explanation we can.  I agree
with the plurality that we ought not adopt TXO's or
respondents' suggested approach as a rigid formula for
determining the constitutionality of punitive damages
verdicts.  But it does not follow that, in the course of
deciding this case, we should avoid offering even a clue
as to our own.
  TXO's suggestion that this Court should rely on
objective criteria has much to commend it.  As an initial
matter, constitutional judgments -`should not be, or
appear to be, merely the subjective views of individual
Justices.'-  Rummel v. Estelle, 445 U. S. 263, 274 (1980)
(quoting Coker v. Georgia, 433 U. S. 584, 592 (1977)
(opinion of White, J.)).  Without objective criteria on
which to rely, almost any decision regarding proportion-
ality will be a matter of personal preference.  One judge's
excess very well may be another's moderation.  To avoid
that element of subjectivity, our -`judgment[s] should be
informed by objective factors to the maximum possible
extent.'-  455 U. S., at 274-275 (quoting same).  As the
plurality points out, ante, at 10-11, TXO directs our
attention to various objective indicators, including the
relationship between the punitive damages award and
compensatory damages, awards of punitive damages
upheld against other defendants in the same jurisdiction,
awards upheld for similar torts in other jurisdictions, and
legislatively designated penalties for similar misconduct.
While these factors by no means exhaust the due process
inquiry, they are quite probative.  It is to their proper
application that I now turn.

                      A
  In my view, due process at least requires judges to
engage in searching review where the verdict discloses
such great disproportions as to suggest the possibility of
bias, caprice, or passion.  As Justice Stevens observed
in a different context, -[o]ne need not use Justice
Stewart's classic definition of obscenity-`I know it when
I see it'-as an ultimate standard for judging- the
constitutionality of a punitive damages verdict -to
recognize that the dramatically irregular- size and nature
of an award -may have sufficient probative force to call
for an explanation.-  Cf. Karcher v. Daggett, 462 U. S.
725, 755 (1983) (concurring opinion) (footnotes omitted).
  This $10 million punitive award, returned in a case
involving only $19,000 in compensatory damages, is a
dramatically irregular, if not shocking, verdict by any
measure.  At the very least it should raise a suspicious
judicial eyebrow.  Not only does the punitive award
represent over 500 times actual damages, but it also
exceeds economic harm by over $9.98 million.  Thus, it
cannot be accepted as bearing the -understandable
relationship to compensatory damages,- 499 U. S., at 22,
the Court found sufficient in Haslip.  Indeed, in Haslip
the Court observed that an $840,000 punitive award,
representing four times compensatory damages, may have
been -close to the line- of -constitutional impropriety.-
Id., at 23-24.  If the quadruple damages, $840,000 award
in Haslip was -close to the line,- absent a convincing
explanation, this $10 million award-over 500 times actual
damages-surely must cross it.
  A comparison of this award and prior ones in West
Virginia confirms its unusual nature: It is 20 times larger
than the highest punitive damages award ever upheld in
West Virginia history for any misconduct.  See App. to
Brief for Petitioner 1a-3a (listing punitive damages
awards affirmed on appeal in West Virginia).  That figure
is particularly surprising if one considers the nature of the
offense at issue.  This is not a case involving grave
physical injury imposed on a helpless citizen by a callous
malefactor.  Rather, it is a business dispute between two
companies in the oil and gas industry.  TXO was accused
of slandering respondents' title to a tract of land-that is,
impugning their claim of ownership-in an attempt to win
concessions on a pre-existing contract.  Although TXO's
conduct was clearly wrongful, calculated, and improper,
the award in this case cannot be upheld as a reasoned
retributive response.  Not only is it greatly in excess of
the actual harm caused, but it is 10 times greater than
the largest punitive damages award for the same tort in
any jurisdiction, id., at 5a-8a (listing all recorded punitive
damages awards for slander of title affirmed on appeal),
and orders of magnitude larger than authorized civil and
criminal penalties for similar offenses, see Brief for
Petitioner 19, nn. 17-18, and App. to Brief for Petitioner
9a-21a (collecting statutes).  By any -objective criteria,-
Haslip, 499 U. S., at 23, the award is -grossly out of
proportion to the severity of the offense- and bears no
-understandable relationship to compensatory damages,-
id., at 22.  It is, at first blush, an -extreme resul[t] that
jar[s] one's constitutional sensibilities.-  Id., at 18.
  That these disproportions might implicate due process
concerns the plurality does not deny.  Nonetheless, it
refuses to -enshrine petitioner's comparative approach in
a `test' for assessing the constitutionality of punitive
damages awards.-  Ante, at 13.  I agree with the plurality
that, although it might be convenient to establish a
multipart test and impose it upon the States, the
principles of federalism counsel against such a course.
The States should be permitted to -experiment with
different methods- of ferreting out impermissible awards
-and to adjust these methods over time.-  Haslip, supra,
at 64 (O'Connor, J., dissenting).  Nonetheless, I see no
reason why this Court or any other would wish to
disregard such probative evidence.  For example, although
retribution is a permissible consideration in assessing
punitive damages awards, it is quite difficult to determine
whether a particular award can be attributed to that goal;
retribution resists quantification.  Nonetheless, jury
awards in similar cases and the civil and criminal
penalties created by the legislature for like conduct can
give us some idea of the limits on retribution.  Thus, a
$5,000 punitive damages award on actual damages of $1
may not seem well proportioned at first blush; but if the
legislature has seen fit to impose a $50,000 penalty for
that very same conduct, the award might be deemed a
reasoned retributive response.
  This approach, of course, has its limits.  Because no two
cases are alike, not all comparisons will be enlightening.
See ante, at 12-13 (plurality opinion).  But recognizing the
limits of an approach does not compel us to discard it
entirely.  I do not see what can be gained by blinding
ourselves to the few clear guideposts in an area so
painfully bereft of objective criteria.  Indeed, Justice
Stevens joined in proposing precisely such an approach
to punitive damages under the Eighth Amendment in
Browning-Ferris, see 492 U. S., at 301 (O'Connor, J.,
joined by Stevens, J., concurring in part and dissenting
in part).  Moreover, courts at common law engaged in
similar comparisons.  See, e.g., Travis v. Barger, 24 Barb.
614, 629 (N.Y. 1857) (comparing verdicts for similar torts);
International & Great Northern R. Co. v. Telephone &
Telegraph Co., 69 Tex. 277, 282, 5 S. W. 517, 518 (1887)
(comparing ratios).  In any event, what the comparisons
demonstrate in this case is what one might have
suspected from the beginning.  This award cannot be
justified as a reasoned retributive response, for it is
notably out of line with the punishment previously
imposed by juries or established by statute for similar
conduct.
                      B
  That, however, does not end our inquiry.  In some
cases, the unusual nature of the award will be explained
by the peculiar considerations placed before the jury.
Indeed, the plurality asserts that such an explanation
exists in this case.  The award, the plurality explains,
may have been based on the profit TXO anticipated or the
harm TXO would have imposed on respondents had its
scheme been successful.  Ante, at 13-18.
  I have no quarrel with the plurality that, in the
abstract, punitive damages may be predicated on the
potential but unrealized harm to the victim, or even on
the defendant's anticipated gain.  Linking the punitive
award to those factors not only substantially furthers the
State's weighty interests in deterrence and retribution,
but also can be traced well back in the common law.  See,
e.g., Benson v. Frederick, 3 Burr. 1846, 97 Eng. Rep. 1130
(K. B. 1766) (Wilmot, J.) (damages for ordering the
plaintiff flogged by two drummers not excessive even
though disproportionate to plaintiff's actual suffering, as
-it was rather owing to the lenity of the drummers than
of the [defendant] that the [plaintiff] did not suffer more-).
The plurality's theory, however, bears little relationship
to what actually happened in this case.

                      1
  The record demonstrates that the potential harm theory
is little more than an after-the-fact rationalization
invented by counsel to defend this startling award on
appeal.  The $5.0 to $8.3 million estimate of potential loss
that respondents proffer today appears nowhere in the
record.  No expert or lay witness testified to the jury
about any such figure.  No one directed the jury's
attention to the technical documents or scattered
testimony on which respondents now rely.  See ante, at
5, n. 10 (plurality opinion).  No one told the jury how to
pull all those numbers together to calculate such a figure.
In fact, the jury never was told that it was permitted to
do so.
  Respondents did not even present their $5.0 to $8.3
million estimate to defend the verdict before the West
Virginia Supreme Court of Appeals.  Nor did that court
rely on such an estimate.  Its opinion, which the plurality
applauds as -thorough,- ante, at 20, nowhere suggests that
the jury might have based the award on the potential
harm to respondents or on TXO's anticipated profit.
Rather, its sole reference to potential harm is the
-millions of dollars of damages- that might result if TXO
repeated its misdeeds against -other victims.-  187 W. Va.,
at 476, 419 S. E. 2d, at 889 (emphasis added).  Virtually
any tort, however, can cause millions of dollars of harm
if imposed against a sufficient number of victims.
  Respondents' $5.0 to $8.3 million estimate appeared for
the first time after this Court granted certiorari, having
been produced exclusively for our consumption.  As the
plurality notes, there is every reason to believe that the
figure, derived as it is from a series of extrapolations and
economic assumptions never presented to the jury and yet
untested by adversary presentation, is unrealistic.  See
ante, at 16.  Consequently, the plurality refuses to rely on
the figure, instead offering a series of its own estimates.
See ante, at 17.  These estimates also are speculative,
however, as the plurality does not indicate how they were
derived or where they are supported in the record.  The
little evidence regarding potential harm the record does
yield, it turns out, is so uncertain and ambiguous that the
plurality cannot rely on it, either; to the extent it
demonstrates anything at all, it shows respondents'
estimate to be exaggerated.  See Tr. 100, 103-104.

                      2
  But even if we assume that the plurality's estimates of
potential harm are plausible or supported by the evidence,
they are, on this record, entirely irrelevant.  The question
is not simply whether this Court might think the award
appropriate in light of its estimate of potential harm.  The
question is also whether the jury might have relied on
such an estimate rather than some impermissible factor,
such as a personal preference for the primarily local
plaintiffs as compared to the unsympathetic and wealthy
out-of-state defendant, as TXO contends.  After all, due
process does not simply require that a particular result
be substantively acceptable; it also requires that it be
reached on the basis of permissible considerations.  See
Haslip, 499 U. S., at 41 (Kennedy, J., concurring in
judgment).  In this case, the jury instructions precluded
the jury from relying on the potential harm theory the
plurality endorses.  As a result, that theory can neither
explain nor justify the otherwise astonishing verdict the
jury returned.
  At trial, the jury was instructed to consider numerous
factors when setting the punitive damages award,
including -`the nature of the wrongdoing, the extent of the
harm inflicted, the intent of the party committing the act,
the wealth of the perpetrator, as well as any mitigating
circumstances.'-  Ante, at 18-19, n. 29 (plurality opinion)
(citing App. 34-35).  Nowhere do the instructions mention
the alternative measure of potential harm to respondents
upon which the plurality relies today.
  Of course, the instructions do mention that the goal of
punitive damages is deterrence.  One therefore might
hypothesize that a particularly sophisticated jury would
realize that imposing damages in an amount linked to
potential harm or the defendant's expected gain might
provide appropriate deterrence.  One might even go so far
as to suppose that the jury would be daring enough to
apply that measure, even though the trial court listed
numerous factors, including actual harm, but made no
mention of potential harm.  But such speculation has no
application in this case, for the jury instructions made it
quite clear that deterrence was linked not to an
unmentioned factor like potential gain but to a factor the
trial court did mention-TXO's wealth:
```The object of [punitive damages] is to deter TXO
Production Corp. and others from committing like
offenses in the future.  Therefore the law recognizes
to in fact deter such conduct may require a larger
fine upon one of large means than it would upon one
of ordinary means under the same or similar
circumstances.'-  Ante, at 19, n. 29 (plurality opinion)
(quoting App. 35) (emphases added).
A reasonable juror hearing these instructions would not
have felt free to consider the potential harm or expected
gain measures the plurality proposes today.
  The two passages the plurality excerpts from closing
arguments, see ante, at 16-17, do not support the
plurality's theory.  Respondent Tug Fork Land Company's
closing argument does mention that TXO thought the
wells would produce -`lot[s] of money.'-  Ante, at 17
(quoting Tr. 748-749).  But that remark had nothing to
do with punitive damages.  Instead, counsel was
addressing the issue of liability: According to him, TXO's
desire to obtain all the royalties was the motive for its
bad faith conduct.  See Tr. 746-749 (TXO slandered
respondents' title to lower the value of the property so it
could exact concessions or win 100% of royalties by means
of a lawsuit).  When counsel did discuss the appropriate
measure of punitive damages, not once did he mention the
potential harm to respondents.  Instead, he relied
exclusively on TXO's vast wealth:
     -His Honor has instructed you that you may award
punitive damages and I've indicated to you what
punitive damages [are].  Now, just consider the wealth
of this corporation.  [T]he reason for putting in
[expert evidence on TXO's resources] is that's how a
jury considers the amount of punitive damages.  This
is a multi-million dollar corporation-even a billion
dollars in assets.  . . . [Think about imposing a
punitive award in the range of a] million, twelve
million dollars.  Those kinds of numbers are not out
of line when you talk about a corporation that has
assets of something like a billion dollars.-  Id., at
757-758 (emphases added).
  Counsel for respondent Alliance Resources Corp.
similarly did not argue that punitive damages should be
linked to potential harm.  He did mention that TXO
anticipated a large profit from its nefarious scheme.  See
id., at 779-780; ante, at 16 (plurality opinion).  But
counsel once again made no attempt to quantify TXO's
potential gain.  Nor did he encourage the jury to base the
punitive damages award on TXO's expected profit.
Instead, counsel argued only one measure for punitive
damages-TXO's wealth:
-A two billion dollar company.  Ha[s] earnings of
$225,000,000, average.  Last year made
$125,000,000.00 alone.  Last year.  Now, what's a
good fine for a company like that?  A hundred
thousand?  A million?  You can do that if you think
it's fair . . . .-  Tr. 781.
The portion of counsel's argument the plurality relies
upon, ante, at 16, turns out to be a transition between a
discussion of TXO's conduct and a plea for the jury to
award punitive damages based exclusively on TXO's
wealth.  Immediately after delivering the portion of the
argument the plurality reproduces-in which counsel told
the jury that the punishment should -`fit'- the scheme
and -`fit the wealth,'- ibid.-he asked rhetorically, -Now,
how much is the wealth?-  Tr. 780.  It was then that he
told the jury, in great detail, about TXO's vast resources.
At no point, however, did counsel ask rhetorically, -Now,
how much was the potential profit?-  At no point did he
answer that question.  Nor did he ever suggest that the
jury calculate potential harm or base its punitive damages
award thereon.  Instead, like cocounsel before him, he
relied exclusively on TXO's wealth.  See id., at 781-782.
  I am therefore unpersuaded by the plurality's assertion
that this award may be upheld based on the potential
harm to respondents or TXO's potential gain.  That theory
was not available to the jury under the court's
instructions.  It was not one supported by evidence on
which the jury might have relied.  And it is not one that
trial counsel chose to promote.  It was instead an after-
the-fact rationalization invented by appellate counsel who
could not otherwise explain this disproportionate award.

                      C
  There is another explanation for the verdict, but it is
not one that permits affirmance.  As I read the record in
this case, it seems quite likely that the jury in fact was
unduly influenced by the fact that TXO is a very large,
out-of-state corporation.
  In Haslip, this Court considered jury instructions that
differed from those used here in two material respects.
First, unlike the instructions in Haslip, which did not
permit the jury to consider the defendant's wealth, the
instructions in this case specifically directed the jury to
take TXO's wealth into account.  The plurality concedes
that introducing TXO's wealth into the calculus -increased
the risk that the award may have been influenced by
prejudice against large corporations, a risk that is of
special concern when the defendant is,- as here, -a non-
resident.-  Ante, at 19.  Second, the instructions directed
the jury to impose punitive damages -to provide additional
compensation for the conduct to which the injured parties
have been subjected.-  Ante, at 18, n. 29 (plurality
opinion) (quoting App. 34).  The latter instruction, of
course, is without legal meaning.  Ante, at 19 (plurality
opinion) (We do -not understand the reference . . . to
`additional compensation'-).  Plaintiffs are compensated for
injuries they have suffered; one cannot speak of
-additional compensation- unless it is linked to some
additional harm.
  To a juror, however, compensation is the money it
awards the plaintiff; -additional compensation,- if not
linked to a particular measure of harm, is simply
additional money the jury gives to the plaintiff.  As a
result, the -additional compensation- instruction,
considered together with the instruction directing the
jury's attention to TXO's massive wealth, encouraged the
jury to transfer some of TXO's impressive wealth to the
smaller and more sympathetic respondents as undifferen-
tiated -additional compensation--for any reason, or no
reason at all.  In fact, the instructions practically ensured
that this would occur.  They provided the jury with only
two objective factors on which to rely.  See supra, at 15
(citing jury instructions).  The first was actual harm, a
relatively small sum on which the jury obviously did not
rely; the second was TXO's wealth, a factor that obviously
impressed the jury a great deal.  Thus, unlike the
instructions in Haslip, these instructions did not prevent
respondents from -enjoy[ing] a windfall because they have
the good fortune to have a defendant with a deep pocket.-
499 U. S., at 22.  Instead, they ensured that a windfall
verdict would result by inviting the jury to redistribute
wealth to respondents as undifferentiated -additional
compensation,- based solely on TXO's financial position.
  That a jury might have such inclinations should come
as no surprise.  Courts long have recognized that jurors
may view large corporations with great disfavor.  See,
e.g., Illinois Central R. Co. v. Welch, 52 Ill. 183, 188
(1869) (-[J]uries may generally assess an amount of
damages against railway corporations which, in similar
cases between individuals, would be considered unjust in
the extreme.  It is lamentable that the popular prejudice
against these corporations should be so powerful as to
taint the administration of justice, but we cannot close our
eyes to the fact-).  Corporations are mere abstractions
and, as such, are unlikely to be viewed with much
sympathy.  Moreover, they often represent a large
accumulation of productive resources; jurors naturally
think little of taking an otherwise large sum of money out
of what appears to be an enormously larger pool of
wealth.  Finally, juries may feel privileged to correct
perceived social ills stemming from unequal wealth
distribution by transferring money from -wealthy-
corporations to comparatively needier plaintiffs.
Brickman, The Asbestos Litigation Crisis, 13 Cardozo. L.
Rev. 1819, 1849, n. 128 (1992); Ellis, Fairness and
Efficiency in the Law of Punitive Damages, 56 Cal. L.
Rev. 1, 61-62 (1982); Owen, Problems in Assessing
Punitive Damages Against Manufacturers of Defective
Products, 49 U. Chi. L. Rev. 1, 45-46 (1982) (jury
assessing punitive damages against multi-million dollar
corporation forced to think of an award measuring seven,
eight or nine figures); see also supra, at 4 (jurors not
accountable for their judgments); cf. Smith v. Covell, 100
Cal. App. 3d 947, 960, 161 Cal. Rptr. 377, 385 (1980)
(juror impressed with idea that plaintiffs had money and
```didn't need anymore'-).
  This is not to say that consideration of a defendant's
wealth is unconstitutional.  To be sure, there are strong
economic arguments that permitting juries to consider
wealth is unwise if not irrational, see Abraham & Jeffries,
Punitive Damages and the Rule of Law: The Role of
Defendant's Wealth, 18 J. Legal Studies 415 (1989),
especially where the defendant is a corporation, id., at
421-422; cf. Zaz- Designs v. L'Or-al, S. A., 979 F. 2d 499,
508-509 (CA7 1992) (Easterbrook, J.).  But, -[j]ust as the
Fourteenth Amendment does not enact Herbert Spencer's
Social Statics, see Lochner v. New York, 198 U. S. 45, 75
(1905) (Holmes, J., dissenting),- it does not require us to
adopt the views of the Law and Economics school either.
As a historical matter, the wealth of the perpetrator long
has been thought relevant.  See Browning-Ferris, 492
U. S., at 300 (O'Connor, J., concurring in part and
dissenting in part) (citing the Magna Carta and
Blackstone's Commentaries).  Moreover, Haslip itself
suggests that the defendant's wealth is a permissible
consideration, ante, at 17-18, n. 28, 19 (plurality opinion),
although it does so only in the context of appellate review.
See 499 U. S., at 22.
  Nonetheless, courts must have authority to recognize the
special danger of bias that such considerations create.
The plurality does just that today, ante, at 19, as this
Court, other tribunals, and numerous commentators have
before.  See, e.g., Morris, Punitive Damages in Tort Cases,
44 Harv. L. Rev. 1173, 1191 (1931) (-It is a good guess
that rich men do not fare well before juries, and the more
emphasis placed on their riches, the less well they fare.
Such evidence may do more harm than good; jurymen may
be more interested in divesting vested interests than in
attempting to fix penalties which will make for effective
working of the admonitory function-); Abraham & Jeffries,
supra, at 424; Illinois Central R. Co., supra, at 188 (bias
against railroads); McConnell v. Hampton, 12 Johns. 234,
236 (N.Y. 1815) (Thompson, C. J.) (jury unduly influenced
by defendant's great wealth); cf. Newport v. Fact Concerts,
Inc., 453 U. S. 247, 270-271 (1981) (-[E]vidence of a
[municipality's wealth, inasmuch as it has unlimited
taxing power], may have a prejudicial impact on the jury,
in effect encouraging it to impose a sizable award.  The
impact of such a windfall recovery is likely to be both
unpredictable and, at times, substantial-); see also Haslip,
499 U. S., at 43 (O'Connor, J., dissenting) (jurors, if not
properly guided, may -target unpopular defendants . . .
and redistribute wealth'').
  The risk of prejudice was especially grave here.  The
jury repeatedly was told of TXO's extraordinary resources,
which respondents estimated at $2 billion.  To make
matters worse, unlike the jurors or the primary plaintiffs,
TXO was not from West Virginia.  It was an interloper,
from the large State of Texas.  As the Supreme Court of
Appeals of West Virginia has recognized, the temptation
to transfer wealth from out-of-state corporate defendants
to in-state plaintiffs can be quite strong.  See Garnes v.
Fleming Landfill, Inc., 186 W. Va. 656, 665, 413 S. E. 2d
897, 906 (1991) (Excess jury discretion -[i]nevitably . . .
leads to increasing efforts to redistribute wealth from
without the state to within-; cases involving large awards
typically pit local plaintiffs against -out-of-state (often
faceless, publicly held) corporations-).  That court speaks
from experience.  The three highest punitive damages
awards ever affirmed in West Virginia, including this one,
were assessed against relatively wealthy out-of-state
defendants.  Jarvis v. Modern Woodmen of America, 185
W. Va. 305, 406 S. E. 2d 736 (1991); Berry v. Nationwide
Mutual Fire Ins. Co., 181 W. Va. 168, 381 S. E. 2d 367
(1989).
  Counsels' arguments, however, converted that grave risk
of prejudice into a near certainty.  Repeatedly they
reminded the jury that TXO was from another State.
Repeatedly they told the jury about TXO's massive wealth.
And repeatedly they told the jury that it could do
anything it thought -fair.-  The opening line from rebuttal
set the tone.  -Ladies and gentleman of the jury,- one
attorney began, -this greedy bunch from down in Texas
still doesn't understand this case.-  Tr. 773.  Playing on
images of Texans as overrich gamblers who profit by
chance rather than work, he referred to TXO shortly
thereafter as a bunch of -Texas high rollers, wildcatters.-
Id., at 777.  Finally, counsel drove the point home yet one
more time, comparing TXO to an obviously wealthy out-of-
town visitor who refuses to put money in the parking
meter to help pay for community service:
     -Well, what is fair? . . . If someone comes to town
and intentionally doesn't put a quarter in the meter,
stays here all day, [in this] town that needs it to pay
for the police force and the fire department, they give
[him] a fine.  And at the end of the day [he] may
have to pay a dollar.  That person reaches in his
billfold at the end of the day and maybe he's got a
hundred bucks in there.  He doesn't want to have to
pay that dollar, but he does, because he knows if he
doesn't [he'll have legal problems]. . . .  The town
didn't take everything from the individual, didn't ruin
[him], just took one percent of what that person had
in cash.  One percent.  You can fine TXO one percent
if you want, you can fine them one dollar if you want.
But I submit to you a one percent fine, the same as
John Doe on this street, would be fair.  That's twelve
and a half million dollars, based on what they had
left over.  And their earnings w[ere] $225,000,000.00
[per year].  I mean, yeah, their cash flow.  Their
surplus.  So anything between twelve and a half
million and twenty-two million is only one
percent-the same as this poor guy who just tried to
cheat a little bit.  Now that's a lot of money.  I hope,
like I said, you don't analyze this on a lot or a little,
but fair.-  Id., at 781-782 (emphases added).
Over and over respondents' lawyers reminded the jury
that there were virtually no substantive limits on its
discretion.  Time and again they told the jury of TXO's
great wealth and that it could take away any amount it
wanted, as long as it seemed -fair.-  Id., at 781 (-It isn't
really whether the verdict is too large or too small, too big
or too little.  It's whether it's fair-); ibid. (-A two billion
dollar company.  Have earnings of $225,000,000.00,
average.  Last year made $125,000,000.00 alone.  Last
year.  Now, what's a good fine for a company like that?
A hundred thousand?  A million?  You can do that if you
think it's fair . . .-).  And each time the argument found
solid support in the trial court's instructions, which not
only licensed the jury to afford respondents any
-additional compensation- they believed appropriate, but
also encouraged them to do so based on TXO's wealth
alone.
  Given the absence of another plausible explanation for
this monumentally large punitive damages award, I
believe it likely, if not inescapable, that the jury was
influenced unduly by TXO's out-of-state status and its
large resources.  The plurality acknowledges this
possibility, see ante, at 19, but refuses to address it.
TXO, the plurality contends, failed to press its objections
to the jury instructions in the state court below.  Ante, at
19-20.  I disagree.  TXO's brief specifically argued that
the jury instructions did not meet the -Haslip standards
and [were] not constitutionally permissible.-  Brief for
Appellant in No. 20281 (W. Va.), p. 48; see id., at 44-46
(jury instructions insufficient under Garnes v. Fleming
Landfill, Inc., supra, a recent West Virginia Supreme
Court of Appeals decision interpreting Haslip).  The State
Supreme Court of Appeals so understood TXO's challenge.
See 187 W. Va., at 473-477, 419 S. E. 2d, at 886-890.
  Of course, TXO did not make precisely the same
arguments it makes here.  But it was not required to.
-Once a federal claim is properly presented, a party can
make any argument in support of that claim; parties are
not limited to the precise arguments they made below.-
Yee v. Escondido, 503 U. S. ___, ___ (1992) (slip op., at
13).  There can be little doubt that TXO argued below
that the punitive damages award was excessive; there can
be little doubt that TXO identified the jury instructions
as being partially responsible.  TXO ought not be
precluded from fully presenting its arguments here.
Because those arguments demonstrate that this award
was based on considerations inconsistent with due process,
I would reverse the judgment below so the matter could
be submitted to the consideration of a second jury.

                     III
  Confronted by a $10 million verdict on damages of
$19,000, the State Supreme Court of Appeals in this case
did not engage in searching review.  Instead it added
insult to injury, applying cavalier standards in the course
of a cursory examination of the case.  Because the review
afforded TXO was insufficient to conform with the criteria
this Court approved in Haslip, the case at least should be
remanded for constitutionally adequate post-verdict review.

                      A
  Two Terms ago, this Court in Haslip upheld Alabama's
punitive damages regime against constitutional challenge.
Although the Court recognized that juries in Alabama
receive limited instructions regarding punitive damages,
see 499 U. S., at 6, n. 1, 19-20, it was reassured by the
fact that the Alabama courts subject punitive verdicts to
exacting postverdict review at two different levels.  First,
Alabama trial courts must indicate on the record their
-`reasons for interfering with a jury verdict, or refusing
to do so, on grounds of excessiveness.'-  Id., at 20
(quoting Hammond v. Gadsden, 493 So. 2d 1374, 1379
(1986)).  Second, the Alabama Supreme Court itself
provides an additional -check- by conducting comparative
analysis and applying detailed substantive standards-
seven in all-thereby -ensur[ing] that the award does not
exceed an amount that will accomplish society's goals of
punishment and deterrence.-  499 U. S., at 21 (internal
quotation marks omitted).  Specifically, the Alabama
Supreme Court examines:
-(a) whether there is a reasonable relationship
between the punitive damages award and the harm
likely to result from the defendant's conduct as well
as the harm that has occurred; (b) the degree of
reprehensibility of the defendant's conduct, the
duration of that conduct, the defendant's awareness,
any concealment, and the existence and frequency of
similar past conduct; (c) the profitability to the
defendant of the wrongful conduct and the desirability
of removing that profit and of having the defendant
also sustain a loss; (d) the `financial position' of the
defendant; (e) all the costs of litigation; (f) the
imposition of criminal sanctions on the defendant for
its conduct, these to be taken in mitigation; and (g)
the existence of other civil awards against the
defendant for the same conduct, these also to be
taken in mitigation.-  Id., at 21-22.
In Haslip, the Court concluded that application of those
standards -imposes a sufficiently definite and meaningful
constraint- on fact-finder discretion.  Id., at 22.  Because
the standards had a -real effect,- ibid., the Court upheld
Alabama's regime against constitutional challenge despite
the relatively sparse guidance it afforded juries.
  As the plurality admits, ante, at 18-19, the jury
instructions used here were not dissimilar to those
employed in Haslip.  Unlike Haslip, however, the verdict
they produced was not subjected to post-trial review
sufficient to impose a -meaningful constraint- on fact-
finder discretion.  Indeed, the post-trial review offered
here bears no resemblance to that approved in Haslip.
In contrast to the trial judge in Haslip, the trial judge
here made no written findings.  Nor did he announce why
he believed-or even if he believed-that the amount of
damages bore a reasonable or recognizable relationship to
actual damages or any other relevant measure.  Instead,
ruling from the bench, the trial judge summarily denied
TXO's motions seeking reduction or elimination of the
punitive damages award.
  More important, the Supreme Court of Appeals of West
Virginia did not do much better.  At the outset, it refused
to consider the possibility of remittitur because TXO -and
its agents and servants failed to conduct themselves as
gentlemen.-  187 W. Va., at 462, 419 S. E. 2d, at 875.
Proceeding to the question whether the award of punitive
damages should be stricken as excessive, the court
distinguished between two categories of defendants: those
who are -really stupid- and those who are -really mean.-
Id., at 474-476, 419 S. E. 2d, at 887-889.  If the
defendant is -really stupid,- the court explained, -the
outer limit of punitive damages is- generally about -five
to one.-  Id., at 476, 419 S. E. 2d, at 889.  For the -really
mean- defendant, however, -even punitive damages 500
times greater than compensatory damages are not per se
unconstitutional.-  Ibid.  TXO, it seems, was not really
stupid but -really mean.-  The Supreme Court of Appeals
affirmed the $10 million punitive award even though it
was 526 times greater than compensatory damages.
  Reference to categories like -really stupid- and -really
mean- are a caricature of the difficult task of determining
whether an award may be upheld consistent with due
process.  It is simply not enough to observe that the
conduct was malicious and conclude that, as a result, the
sky (or 500 times compensatory damages) is the limit.
But cf. ante, at 3-4 (Kennedy, J., concurring in part and
concurring in judgment) (so concluding solely because the
conduct was malicious and the defendant rich).  Instead,
post-trial review must be sufficient to -ensur[e] that
punitive damages awards are not grossly out of proportion
to the severity of the offense and have some understand-
able relationship to- some measure of harm.  Haslip,
supra, at 22.  Aside from its two-page dissertation on the
difference between -really stupid- and -really mean,-
however, the State Supreme Court of Appeals offered only
three conclusory sentences in a single paragraph to bolster
its conclusion that the damages here were not excessive.
See ante, at 8 (plurality opinion) (citing 187 W. Va., at
476, 419 S. E. 2d, at 889).  Because I believe that such
cursory review is inconsistent with this Court's decision
in Haslip, I cannot join my colleagues in affirming.

                      B
  That the Supreme Court of Appeals would engage in
such cursory review is something of a surprise.  In Garnes
v. Fleming Landfill Inc., 186 W. Va. 656, 413 S. E. 2d 897
(1991), that court demonstrated concern for the due
process implications of punitive awards.  Holding that
West Virginia's previous punitive damages regime was
constitutionally suspect in light of Haslip, it required trial
courts to instruct juries on numerous factors relevant to
the measure of punitive damages, see 186 W. Va., at
667-668, 413 S. E. 2d, at 908-909; it mandated that trial
courts conduct extensive review and articulate reasons for
their decisions on the record, id., at 668-669, 413 S. E.
2d, at 909-910; and it announced that it would apply the
factors approved in Haslip in its own review, id., at 669,
413 S. E. 2d, at 910.
  Unfortunately for TXO, Garnes was decided after TXO's
trial took place.  Although the Supreme Court of Appeals
recognized that TXO had not received the benefit of
Garnes' and Haslip's protections, it refused to remand the
case.  Instead, the court indicated that it would be
-especially diligent- in reviewing this award; it went on
to recite language from both Haslip and Garnes.  It is
therefore clear that Haslip still governs punitive damages
awards in West Virginia.  As a result, the plurality
perhaps declines to reverse because it believes that the
Supreme Court of Appeals' failure to follow Haslip here
is of little consequence to anyone but TXO.  After all, a
decision of this Court requiring more searching review
would alter only the result in this particular case and
perhaps a few like it, without changing the law, even in
West Virginia.
  If the plurality is in fact proceeding on such an
assumption, I believe it is mistaken.  While this Court
has the ultimate power to interpret the Constitution, we
grant review in only a small number of cases.  We
therefore rely primarily on state courts to fulfill the
constitutional role as primary guarantors of federal rights.
But the state courts must do more than recite the
constitutional rule.  They also must apply it, faithful to
its letter and cognizant of the principles underlying it.
Unfortunately, such review is not always forthcoming.
Amici recite case after case in which review has been
inadequate or absent altogether.  See, e.g., Brief
for Phillips Petroleum Co. et al. as Amici Curiae 20-27.
The Supreme Court of Appeals of West Virginia, at the
same time it recognized Haslip as law, itself warned:
-[W]e understand as well as the next court how to
. . . articulate the correct legal principle, and then
perversely fit into that principle a set of facts to
which the principle obviously does not apply.  [All
judges] know how to mouth the correct legal rules
with ironic solemnity while avoiding those rules'
logical consequences.-  Garnes, supra, at 666, 413
S. E. 2d, at 907.
I fear that the Supreme Court of Appeals followed such
a course in this case.  By affirming the judgment none-
theless, today's decision renders the meaningful appellate
review contemplated in Haslip illusory; courts now may
disregard the post-trial review required by due process at
whim or will, so long as they do not deny its necessity
openly or altogether.
                     IV
  As little as 30 years ago, punitive damages awards were
-rarely assessed- and usually -small in amount.-  Ellis, 56
S. Cal. L. Rev., at 2.  Recently, however, the frequency
and size of such awards have been skyrocketing.  One
commentator has observed that -hardly a month goes by
without a multimillion-dollar punitive damages verdict in
a product liability case.-  Wheeler, A Proposal for Further
Common Law Development of the Use of Punitive
Damages in Modern Product Liability Litigation, 40 Ala.
L. Rev. 919 (1989).  And it appears that the upward
trajectory continues unabated.  See Volz & Fayz, Punitive
Damages and the Due Process Clause: The Search for
Constitutional Standards, 69 Univ. Det. Mercy L. Rev.
459, 462, n. 17 (1992).  The increased frequency and size
of punitive awards, however, has not been matched by a
corresponding expansion of procedural protections or
predictability.  On the contrary, although some courts
have made genuine efforts at reform, many courts
continue to provide jurors with skeletal guidance that
permits the traditional guarantor of fairness-the jury
itself-to be converted into a source of caprice and bias.
This Court's decision in Haslip promised that, even if
juries occasionally failed to fulfill their function faithfully,
trial and appellate courts would provide meaningful review
sufficient to discern impermissible influences and
guarantee constitutional results.  In my view, today's
decision fails to make good on that promise.  I therefore
respectfully dissent.