Latest Case: Thornton v. American Interstate Insurance Co. (Labor & Employment Law)

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Thornton v. American Interstate Insurance Co.

Docket: 18-0809

Opinion Date: February 28, 2020

Judge: Brent R. Appel

Areas of Law: Labor & Employment Law, Personal Injury

The Supreme Court reversed the judgment of the district court awarding Plaintiff compensatory and punitive damages in his action for first-party bad faith in connection with a workers' compensation claim, holding that the compensatory award must be reduced and that, under the federal Due Process Clause, the maximum amount of punitive damages that may be awarded under the facts of this case was $500,000. Plaintiff, who was severely injured at work, brought this lawsuit alleging that a workers' compensation insurance carrier acted in bad faith to delay the receipt of benefits to which Plaintiff was entitled. On retrial, the jury returned a verdict in favor of Plaintiff for $382,000 in compensatory damages and $6,750,000 in punitive damages. The Supreme Court reversed, holding (1) Plaintiff failed to offer substantial evidence to support his claim that the insurance carrier engaged in bad faith in connection with an alleged delay in acquisition of a replacement wheelchair; (2) with respect to the permanently and totally disabled bad-faith claim, the evidence supported actual damages of no more than $58,452,42; and (3) the maximum amount of punitive damages that may be awarded in this case is $500,000.