Category Archives: 5-2

Bankers Life & Casualty Co. v. Crenshaw

486 U. S. 71

May 16, 1988

After Lloyd Crenshaw lost a leg, his insurance company denied him a payout on some BS reasoning. Crenshaw prevailed in court, and was awarded punitive damages. The insurance company appealed and lost. Under Mississippi law, appellants who lost had to pay an additional 15% over the total value of money at issue. This law was made to discourage frivolous appeals. The insurance company appealed to the Supreme Court on two grounds: first, that Mississippi could not allow for unlimited punitive damages, and second, that the 15% law violated the Due Process clause.

Unanimously, the Court dismissed the punitive damages argument (Kennedy and Stevens did not participate). Marshall said that it really wasn’t properly raised below, and prudential concerns counseled against the Supreme Court dealing with the issue now. On the 15% law argument, the Court ruled 6-1 that the law comported with Due Process. Marshall said that the discouragement of frivolous appeals was a rational reason for the law. In a previous case, the Court had struck down a law requiring renters to post a bond of twice the rent before appealing, but that precedent was easily distinguished. It applied only to renters, instead of all appellants, and required that the extra money be paid before the appeal rather than after.

White concurred in judgment on the punitive damages portion. To him, it wasn’t just prudential to pass over that issue, but jurisdiction laws actively required the Court to pass over it since it hadn’t properly been raised below. O’Connor and Scalia also concurred in judgment on the punitive damages portion (they both also refused to assent to one trivial footnote). O’Connor largely agreed with Marshall’s reasoning, but noted that the punitive damages issue was certainly worth of decision in another case. Scalia both agreed with White that jurisdiction law barred consideration, and with O’Connor that the issue ought to be decided some time in the future.

Blackmun dissented from the holding about the 15% law. It violated Due Process because a great many appeals that it punished were not actually frivolous. Worse yet, the law had an exception for plaintiffs who lost in the first instance, and then appealed. Blackmun could not tolerate that kind of discrimination, since the law could only ever punish the original defendant.

These kinds of cases always leave me torn. On the one hand, the insurance company was being a jerk, and deserved some extra punitive damages. On the other hand, there very often are meritorious appeals where the appeals court simply gets it wrong, and I hate seeing a party being punished just because the court failed to rule correctly. So, it’s a dilemma.

Advertisements