Flashback: the tort system in action in the case of Curtis Campbell

In 1981, Curtis Campbell (Campbell) was driving with his wife, Inez Preece Campbell, in Cache County, Utah. He decided to pass six vans traveling ahead of them on a two-lane highway. Todd Ospital was driving a small car approaching from the opposite direction. To avoid a head-on collision with Campbell, who by then was driving on the wrong side of the highway and toward oncoming traffic, Ospital swerved onto the shoulder, lost control of his automobile, and collided with a vehicle driven by Robert G. Slusher. Ospital was killed, and Slusher was rendered permanently disabled. The Campbells escaped unscathed.

Guess quickly: which plaintiff in the resulting twenty years of litigation won the biggest jury verdict?

How many of you say Ospital?

How many of you say Slusher?

You’re both wrong. The plaintiff with the biggest jury verdict was Curtis Campbell, whom a jury awarded an incredible $147.6 million.

You see, when Slusher and Ospital sued Campbell, they offered to settle for Campbell’s $50,000 policy limit. Campbell, however, maintained that the accident was not his fault: he completed his pass without hitting any vehicles, Ospital was driving 80 mph when he lost control of the car, and Campbell said that he had already completed his pass when Ospital lost control; one witness even said it was another vehicle attempting to pass the caravan that caused Ospital’s accident, and another witness said that Slusher had told him in the hospital that it was not Campbell’s fault. So Campbell’s insurer, State Farm, decided to litigate the case. Meanwhile Slusher, who had also sued Ospital, settled with Ospital for $65,000 on the condition that Ospital change his theory of liability and solely blame Campbell for the accident. And Campbell lost: a jury held him 100% responsible, with a verdict of $185 thousand. State Farm at first refused to pay this amount, but eventually agreed to do so; Slusher and Ospital never executed on the judgment, so Campbell’s personal assets suffered no consequence.

Instead, the two settled with Campbell: no money changed hands, but they instead agreed that Campbell would give them a piece of (and control of) a lawsuit against State Farm for “bad faith”. Campbell and his wife, represented by attorneys picked by Ospital and Slusher, sued. The trial was absent of any objective evidence of emotional or mental distress, but a jury still awarded $2.6 million in “compensatory” damages; in the punitive damages proceeding, every alleged bad act State Farm had ever done in any line of insurance or treatment of its employees was put into evidence (including practices explicitly authorized or required by state regulation, such as the use of non-original-equipment manufacturer parts or claiming comparative negligence in litigation, and practices that are completely innocuous, such as using a computer program to find the best prices for auto parts in Colorado), and a jury issued $145 million in punitives. The trial judge reduced damages to $1 million compensatory, and $25 million punitive—still a windfall—but the Utah appellate courts reinstated the $145 million punitive damages award, along with almost a million dollars in other fees and awards.

State Farm v. Campbell went on to the United States Supreme Court, which held that the 145:1 punitive damages and the punishment of legal out-of-state conduct violated the Constitution. It remanded the case for further consideration, and the Utah Supreme Court (98 P.3d 409 (Utah 2004)) reduced the punitives to a 9:1 ratio of $9 million; further appeals were rejected.

State Farm is a mutual insurance company; it is owned by its policyholders, who get rebates when State Farm has a profit. So Campbell, Ospital, Slusher, and their attorneys split $11 million; and honest State Farm policyholders are a little bit poorer; Curtis Campbell, who suffered no economic damages, had no evidence of noneconomic damages, and was found by a jury to be responsible for the death of Ospital, took home hundreds of thousands of dollars. And reform opponents have the chutzpah to say that State Farm v. Campbell is a case where plaintiffs were treated unfairly, when in fact it is an example of a gigantic shakedown of an innocent defendant being turned into a merely very large shakedown with an unjust windfall.


  • A few facts you left out:

    State Farm refused to post an appeal bond for Campbell, thus depriving him of the right to appeal the judgment.

    State Farm’s attorneys first told Campbell not to worry about the size of the judgment, as they would take care of it. When the verdict came in above $50k, they then told Campbell that to pay the verdict, he better sell his house.

    During the trial, it came out that State Farm falsified documents to make Campbell look less at fault.

    It also came out State Farm had a nationwide fraudlent scheme to avoid legitimate payouts.

    SCOTUS, no friend of punitives, wrote “we do not suggest there was error in awarding punitive damages…”

  • I insure with State Farm. One of my big disapointments with Swartzeneger was his failure to get a tax on punitive damages of 80%.

  • Justinian’s recounting is typically dishonest. Point by point:

    1) State Farm offered to pay for a supersedeas bond; Campbell’s attorney told them not to, and never asked them to. Moreover, at trial, Campbell’s expert admitted that the lack of a supersedeas bond was irrelevant, since the judgment was never executed. Justinian’s claim that Campbell was “deprived of the ability to appeal the judgment” is completely invented, since Campbell did appeal the judgment.

    2) State Farm had a legal right to refuse to pay the full judgment, as it exceeded policy limits, but did pay it in full after the appeal failed. It was Campbell’s attorney, not State Farm’s, who told Campbell to sell his house. The judgment was never executed against Campbell, so he had no need to sell his house to pay for the excess judgment.

    3) The State Farm employee who had falsified the file was fired by State Farm when State Farm learned of the misconduct; the employee, Ray Summers, sued State Farm for wrongful discharge and lost. Nevertheless, he told the same false story to the Campbell jury on behalf of Campbell, and Campbell benefited from the testimony from the person he claims acted fraudulently, even though that testimony was the same claim that State Farm had previously successfully defeated in the wrongful discharge case.

    4) There was no evidence that any of State Farm’s conduct in Campbell’s case was part of any nationwide scheme; the “scheme” in question, as I document in my post, consisted of lawful conduct.

    5) SCOTUS only took the question on the size of the punitives award; the question of liability was not briefed or argued, and SCOTUS was not permitted to redecide facts, despite the manifest unfairness of the trial below.

  • “which plaintiff in the resulting twenty years of litigation won the biggest jury verdict?”

    Sadly, I predicted it exactly.


    Do you LIKE to be shown a fool? Stuff like that probably works just fine in politically homogenous circles, but people who actually check the facts (such as Ted here) are simply going to go check the original sources and make you look like a paid hack.

  • The scariest thing is that Curtis Campbell is out on the road, unscathed, and considerably wealthier. He’s just had an additional 26 years on the road to continue terrorizing other drivers. How embarrassing that he’s from my home state.

  • Ted, your version of some of the facts doesn’t jibe with what is in the SCOTUS opinion. I’m assuming you’ve reviewed other evidence, but here is what SCOTUS had to say about several of the issues in question:

    The appeal/appeal bond: “Nor was State Farm willing to post a supersedeas bond to allow Campbell to appeal the judgment against him. Campbell obtained his own counsel to appeal the verdict ”

    The judgment: “State Farm also ignored the advice of one of its own investigators and took the case to trial, assuring the Campbells that “their assets were safe, that they had no liability for the accident, that [State Farm] would represent their interests, and that they did not need to procure separate counsel.” Id., at ___, 2001 WL 1246676, at *2. To the contrary, a jury determined that Campbell was 100 percent at fault, and a judgment was returned for $185,849, far more than the amount offered in settlement.

    At first State Farm refused to cover the $135,849 in excess liability. Its counsel made this clear to the Campbells: “ ‘You may want to put for sale signs on your property to get things moving.’ ”

    My objection to the ruling: I disagree with the single-digit ratio since that often times will not be a sufficient punishment or deterrent.

  • Because of the posture of the case, on appeal from a disingenuous Utah Supreme Court decision that misrepresented the facts, the Supreme Court assumed certain facts as true that were not true, such as identifying Campbell’s attorney as State Farm’s attorney (State Farm hired the attorney, but his client was Campbell; he was not a State Farm attorney), or the relevance of the supersedeas bond. And it serves a point in the Supreme Court opinion to make State Farm look as bad as possible, because it makes the ruling broader: the punitive damages aren’t being struck down because SCOTUS finds State Farm innocent (which it had no power to do), the punitive damages are being struck down because they are an unconstitutional punishment of the liable State Farm.

    There is no legitimate legal reason to require State Farm to listen to adopt the position of the most pessimistic of its investigators when there was other evidence that the case was defensible. (Note that one reason that the jury found Campbell 100% at fault was because Ospital and Slusher colluded at trial to contradict their earlier positions.) Campbell said it wasn’t his fault, and justice should require him to be estopped from playing “heads I win, tails don’t count” and complaining that State Farm should have known that he was lying. At worst, make State Farm liable for the excess judgment, though even that has an element of injustice. But a million dollars in additional damages when there was no injury? And punitives on top of it? Highway robbery.

    The ratio in this case was not single-digit, because compensatory damages were zero. There were a million dollars in wholly theoretical noneconomic damages for emotional distress—a figure that by itself is clearly punitive—and another 9 million in punitive damages. That’s a ten-million-dollar-to-zero ratio.

  • To be clear: Campbell was not forced to hire his own attorney with his own funds?

    Don’t you think it’s bad faith for SF to have told the plaintiff they would cover an excess judgment and then tell him to sell his house to cover the excess judgment? Isn’t it also bad faith to falsify docs, even if done to benefit Campbell?

  • I find it informative to have JL post here. It makes it so much easier to see his arguments dismantled.

  • Justinian, you’re repeating yourself, indicating that you’ve run out of arguments without addressing the ones I’ve made, and I’m not going to play Argument Clinic.

    1) To repeat, State Farm did not tell Campbell to sell his house. The lawyer representing Campbell told him to sell his house.

    2) What do you think “bad faith” means? State Farm had a contract with Campbell to pay a maximum of $25,000/claim. Campbell could have bought a more expensive insurance policy that had higher claim limits, but he did not. Campbell said he was innocent, so State Farm defended him. Why is it bad faith for an insurer to say it won’t gratuitously give Campbell $135,000 he didn’t bargain or pay for? Granted: Summers’ conduct was appalling (which is why he lost his job). But the exaggerated claim report was immaterial to the underlying case: the relevant issue is whether Ospital was speeding, not why.

    3) I’m in Austin, so can’t immediately confirm from the record what motivated Campbell’s decision to retain a new attorney; I believe that they chose to do so in response to Wendell Bennett’s callous remark.

  • For Justinian Lane:

    How does one “deter” bad-faith? One man’s bad-faith is another’s zealousness.

    I do agree with you that “single digit” dictum is a rule not of the mind but of the antipodal organ. How about using pi, the ratio of the circumference of a circle to its diameter, or, my favorite, the ratio of the square root of two to two?

    Generally, was Mr. Pearson’s multi-million dollar pant’s suit any crazier than the $145 million punitive damage award?

  • […] For a Utah example of profiting through bad driving, see June 19, 2007. […]