Although the Supreme Court limited punitive damages in State Farm Mut. Automobile Ins. Co. v. Campbell, 123 S. Ct. 1513 (2003), and has vacated numerous cases in light of State Farm (as discussed here), the Seventh Circuit has affirmed a punitive damages award representing over 37 times the compensatory damages awarded, finding that the language in State Farm regarding single-digit ratios was discretionary.
In Mathias v. Accor Economy Lodging, Inc., No. 03-1010, 2003 WL 22389863 (7th Cir. Oct. 21, 2003), the jury awarded plaintiff $10,000 in compensatory damages and $372,000 in punitive damages, where a hotel deliberately assigned plaintiffs a room it knew was infested with bedbugs. Defendant appealed, in part arguing that the amount of punitive damages was unconstitutionally excessive under State Farm. However, the court stated that State Farm "did not lay down a . . . single-digit ratio rule – it said merely that 'there is a presumption against an award that has a 145-to-1 ratio' – and it would be unreasonable to do so." Applying various other factors from State Farm and other recent Supreme Court precedent on punitive damages, the court upheld the full award.
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