No. 5-99-0830 IN THE APPELLATE COURT OF ... - Appellate.net
No. 5-99-0830 IN THE APPELLATE COURT OF ... - Appellate.net
No. 5-99-0830 IN THE APPELLATE COURT OF ... - Appellate.net
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of wealth, by its very nature, would not be designed to compensate the ICFA class for any<br />
actual damages suffered. Instead, it would simply be a windfall to the ICFA class at the<br />
expense of current policyholders.<br />
IV.<br />
The $600 Million Punitive Award Should Be Reversed.<br />
Without making any specific findings or articulating any reasons for doing so, the<br />
circuit court imposed an unprecedented $600 million punitive damages award on State Farm.<br />
That award must be vacated for several reasons. First, it is unconstitutional to punish State<br />
Farm under Illinois law for transactions that occurred entirely in other states. Second, both<br />
Illinois law and the federal Due Process Clause preclude imposing punitive damages on<br />
defendants who lacked fair notice that their conduct was punishable. That principle applies<br />
here because not a single state has prohibited insurers from specifying non-OEM parts, and<br />
a majority have either authorized the practice or affirmatively encouraged it. Third, the<br />
record contains no evidence, much less clear and convincing evidence, that State Farm had<br />
the kind of “evil motive” necessary to justify the imposition of punitive damages under<br />
Illinois law. Finally, even if it were somehow permissible to impose some amount of<br />
punitive damages, the record-smashing $600 million exaction imposed by the circuit court<br />
is grossly excessive. 62/<br />
62/<br />
The circuit court’s determination that it could punish State Farm’s nationwide<br />
conduct under Illinois law is a legal one that is reviewed de novo. See note 50, supra. The<br />
question whether State Farm had fair notice that its specification of non-OEM parts could<br />
subject it to punishment is also a legal one that is reviewed de novo. The circuit court’s<br />
implicit determination that Illinois’ standard for imposing punitive damages had been met<br />
is reviewed to determine whether it is against the manifest weight of the evidence.<br />
Cornstubble, 178 Ill.App.3d at 24. The question whether the punitive award is<br />
unconstitutionally excessive is one of law that is subject to de novo review. Inter Med.<br />
Supplies, Ltd. v. EBI Med. Sys., Inc., 181 F.3d 446, 464 (3d Cir. 1<strong>99</strong>9); Johansen v.<br />
-136-