Bankhead

In this asbestos personal injury case, a jury found ArvinMeritor, Inc. (ArvinMeritor), liable to Gordon and Emily Bankhead 1 for compensatory and punitive damages. On appeal, ArvinMeritor does not challenge the jury’s verdicts as to liability or the amount of compensatory damages. It contends only that the trial court erred in declining to reduce the amount of punitive damages awarded by the jury.

ArvinMeritor disputes the punitive damages award on two grounds: first, that the amount is excessive under California law in light of ArvinMeritor’s financial condition, and in particular, the evidence that ArvinMeritor has a negative net worth, and second, that the ratio of punitive to compensatory damages is so high as to violate the due process clause of the United States Constitution, under the guidelines adopted by the United States Supreme Court.

As to the first contention, we hold that there is no legal requirement that punitive damages must be measured against a defendant’s net worth. Here, there was expert testimony that ArvinMeritor’s net worth was not a reliable indicator of its ability to pay punitive damages, and that other indicators in its financial data merited…