Cooper Industries v. Leatherman Tool Group, Inc.

Cooper Industries v. Leatherman Tool Group, Inc.
Cooper Industries v. Leatherman Tool Group
Seal of the United States Supreme Court.svg
Supreme Court of the United States
Argued February 26, 2001
Decided May 14, 2001
Full case name Cooper Industries, Inc. v. Leatherman Tool Group, Inc.
Citations 532 U.S. 424 (more)
205 F.3d 1351
Holding
Courts of Appeals should apply a de novo standard when reviewing district court determinations of the constitutionality of punitive damages awards. The Ninth Circuit erred in applying the less demanding abuse-of-discretion standard in this case.
Court membership
Case opinions
Majority Stevens, joined by Rehnquist, O'Connor, Kennedy, Souter, Thomas, Breyer
Concurrence Thomas
Concurrence Scalia
Dissent Ginsburg
Laws applied
U.S. Const. amends. VIII, XIV

Cooper Industries v. Simmons, 532 U.S. 424 (2001) was a case before the United States Supreme Court, which decided the standard of review that Federal Appeal Courts should use when examining punitive damages awards. The case was decided on May 14, 2001, by a vote of 8-1.

Contents

Prior history

Leatherman Tool Group made a multifunction tool that was arguably uniquely new at the time of its introduction. In 1995, Cooper Industries, a competing toolmaker, decided to enter the same market niche with a similar tool. The competing product was originally to be nearly identical to the original, save a few cosmetic changes. When introducing the new tool at the 1996 National Hardware Show, the advertising materials, catalogs, and a mock-up were, in fact, modified versions of the original Leatherman tool.

After the trade show, Leatherman Tool Group filed a civil suit against Cooper Industries asserting claims of trade-dress infringement, unfair competition, and false advertising under the Lanham Act and a common-law claim of unfair competition for advertising and selling an imitation. In October 1997, a federal jury returned a verdict against Cooper Industries on the false advertising, imitation, and unfair competition claims and assessed damages. It awarded Leatherman Tool Group $50,000.00 in compensatory damages and $4.5 Million in punitive damages. The Ninth Circuit Court of Appeals affirmed the punitive damages on appeal, stating that the damages were not "grossly excessive" under BMW of North America, Inc. v. Gore 517 U.S. 559 (1996).

Case

The case was argued on February 26, 2001. Cooper Industries asked the Court to decide whether the Court of Appeals reviewed the constitutionality of the punitive damages award under the correct standard.

Because the Court itself has recognized that determining if a fine is grossly excessive is "inherently imprecise" Gore held that it was necessary to evaluate a number of factors.

  • The degree of the defendant's reprehensibility or culpability
  • The relationship between the penalty and the harm to the victim caused by the defendant's actions
  • The sanctions imposed in other cases for comparable misconduct

The Appeals Court has the responsibility on appeal of determining if the lower District court had evaluated these factors correctly. Instead of merely deciding whether the lower court had abused its judicial discretion, the punitive damages should be reviewed in their entirety. By doing so, the Appeals courts would ensure that the courts in its circuit applied these standards in a uniform manner and that citizens would receive uniform treatment.

Effects of the decision

In making its decision, the Court extended the holding in Furman v. Georgia 408 U.S. 238 (1972) that the Eighth Amendment applied to the states through the Fourteenth Amendment. While Furman confirmed the earlier incorporation of the 8th Amendment's Cruel and Unusual Punishment clause in Robinson v. California, 370 U.S. 660, 667 (1962) [Incorporation (Bill of Rights)] Cooper Industries v. Leatherman Tool Group incorporated the Excessive Fines clause. <-- This is incorrect, as mere dicta in Cooper Industries cannot have extended the holding in Furman to include the Excessive Fines Clause, which was not at issue in both cases. The dicta in Cooper Industries is therefore in error. The better view is that the Excessive Fines Clause is not yet incorporated. See McDonald v. City of Chicago, 561 U.S. ____, ____ , fn. 13 (2010) ("We never have decided whether the Third Amendment or the Eighth Amendment’s prohibition of excessive fines applies to the States through the Due Process Clause.").

Subsequent history

On remand to the Ninth Circuit, applying the de novo review standard the Appeals court reduced the punitive damages to $500,000.00. [citation: http://www.ca9.uscourts.gov/coa/newopinions.nsf/970AC2B13F32751B88256BAE00575CFB/$file/9835147.pdf?openelement]

See also

External links


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