TOPIC PUNITIVE DAMAGES Supreme Court of the United States ...

"reprehensible"; the nondisclosure was profitable for thecompany; the judgment "would not have a substantialimpact upon [BM W's] financial position"; the litigationhad been expensive; no criminal sanctions had beenimposed on BMW for the same conduct; the award of nopunitive *567 damages in Yates reflected "the inherentuncertainty of the trial process"; and the punitive awardbore a "reasonable relationship" to "the harm that **1595was likely to occur from [BM W's] conduct as well as ...the harm that actually occurred." 646 So.2d, at 625-627.The Alabama Supreme Court did, however, rule inBM W's favor on one critical point: The court found thatthe jury improperly computed the amount of punitivedamages by multiplying Dr. Gore's compensatorydamages by the number of similar sales in otherjurisdictions. Id., at 627. Having found the verdicttainted, the court held that "a constitutionally reasonablepunitive damages award in this case is $2,000,000," id.,at 629, and therefore ordered a remittitur in that amount.[FN10] The court's discussion of the amount of itsremitted award expressly disclaimed any reliance on "actsthat occurred in other jurisdictions"; instead, the courtexplained that it had used a "comparative analysis" thatconsidered Alabama cases, "along with cases from otherjurisdictions, involving the sale of an automobile wherethe seller misrepresented the condition of the vehicle andthe jury awarded punitive damages to the purchaser."[FN11] Id., at 628.FN10. The Alabama Supreme Court did notindicate whether the $2 million figurerepresented the court's independent assessment ofthe appropriate level of punitive damages, or itsdetermination of the maximum amount that thejury could have awarded consistent with the DueProcess Clause.FN11. Other than Yates v. BMW of NorthAmerica, Inc., 642 So.2d 937 (Ala.1993), inwhich no punitive damages were awarded, theAlabama Supreme Court cited no such cases. Inanother portion of its opinion, 646 So.2d, at 629,the court did cite five Alabama cases, none ofwhich involved either a dispute arising out of thepurchase of an automobile or an award ofpunitive damages. G.M. Mosley Contractors,Inc. v. Phillips, 487 So.2d 876, 879 (1986);Hollis v. Wyrosdick, 508 So.2d 704 (1987);Campbell v. Burns, 512 So.2d 1341, 1343(1987); Ashbee v. Brock, 510 So.2d 214 (1987);and Jawad v. Granade, 497 So.2d 471 (1986).All of these cases support the proposition thatappellate courts in Alabama presume that juryverdicts are correct. In light of the AlabamaSupreme Court's conclusion that (1) the jury hadcomputed its award by multiplying $4,000 by thenumber of refinished vehicles sold in the UnitedStates and (2) that the award should have beenbased on Alabama conduct, respect for the errorfreeportion of the jury verdict would seem toproduce an award of $56,000 ($4,000 multipliedby 14, the number of repainted vehicles sold inAlabama).*568 Because we believed that a review of this casewould help to illuminate "the character of the standard thatwill identify unconstitutionally excessive awards" ofpunitive damages, see Honda Motor Co. v. Oberg, 512U.S. 415, 420, 114 S.Ct. 2331, 2335, 129 L.Ed.2d 336(1994), we granted certiorari, 513 U.S. 1125, 115 S.Ct.932, 130 L.Ed.2d 879 (1995).II[2][3] Punitive damages may properly be imposed tofurther a State's legitimate interests in punishing unlawfulconduct and deterring its repetition. Gertz v. RobertWelch, Inc., 418 U.S. 323, 350, 94 S.Ct. 2997, 3012, 41L.Ed.2d 789 (1974); Newport v. Fact Concerts, Inc., 453U.S. 247, 266-267, 101 S.Ct. 2748, 2759-2760, 69L.Ed.2d 616 (1981); Haslip, 499 U.S., at 22, 111 S.Ct., at1045-1046. In our federal system, States necessarily haveconsiderable flexibility in determining the level ofpunitive damages that they will allow in different classesof cases and in any particular case. Most States thatauthorize exemplary damages afford the jury similarlatitude, requiring only that the damages awarded bereasonably necessary to vindicate the State's legitimateinterests in punishment and deterrence. See TXO, 509U.S., at 456, 113 S.Ct., at 2719; Haslip, 499 U.S., at 21,22, 111 S.Ct., at 1045, 1045-1046. Only when an awardcan fairly be categorized as "grossly excessive" in relationto these interests does it enter the zone of arbitrariness thatviolates the Due Process Clause of the FourteenthAmendment. Cf. TXO, 509 U.S., at 456, 113 S.Ct., at2719. For that reason, the federal excessiveness inquiryappropriately begins with an identification of the stateinterests that a punitive award is designed to serve. Wetherefore focus our attention first on the scope ofAlabama's legitimate interests in punishing BMW anddeterring it from future misconduct.No one doubts that a State may protect its citizens byprohibiting deceptive trade practices and by requiring3