John Paul Stevens

“ In defense of its disclosure policy, BMW argued that it was under no obligation to disclose repairs of minor damage to new cars and that Dr. Gore's car was as good as a car with the original factory finish. It disputed Dr. Gore's assertion that the value of the car was impaired by the repainting and argued that this good-faith belief made a punitive award inappropriate. BMW also maintained that transactions in jurisdictions other than Alabama had no relevance to Dr. Gore's claim.
The jury returned a verdict finding BMW liable for compensatory damages of $4,000. ”

“ Gore was purely economic in nature. The presale refinishing of the car had no effect on its performance or safety features, or even its appearance for at least nine months after his purchase. BMW's conduct evinced no indifference to or reckless disregard for the health and safety of others. To be sure, infliction of economic injury, especially when done intentionally through affirmative acts of misconduct, id., at 453, or when the target is financially vulnerable, can warrant a substantial penalty. ”

“ III Elementary notions of fairness enshrined in our constitutional jurisprudence dictate that a person receive fair notice not only of the conduct that will subject him to punishment but also of the severity of the penalty that a State may impose. [22] Three guideposts, each of which indicates that BMW did not receive adequate notice of the magnitude of the sanction that Alabama might impose for adhering to the nondisclosure policy adopted in 1983, lead us to the conclusion that the $2 million award against BMW is grossly excessive: the degree of reprehensibility of the nondisclosure ”

“ The fact that a multimillion dollar penalty prompted a change in policy sheds no light on the question whether a lesser deterrent would have adequately protected the interests of Alabama consumers. In the absence of a history of noncompliance with known statutory requirements, there is no basis for assuming that a more modest sanction would not have been sufficient to motivate full compliance with the disclosure requirement imposed by the Alabama Supreme Court in this case. ”

“ To avoid such encroachment, the economic penalties that a State such as Alabama inflicts on those who transgress its laws, whether the penalties take the form of legislatively authorized fines or judicially imposed punitive damages, must be supported by the State's interest in protecting its own consumers and its own economy. Alabama may insist that BMW adhere to a particular disclosure policy in that State. Alabama does not have the power, however, to punish BMW for conduct that was lawful where it occurred and that had no impact on Alabama or its residents. ”

“ The Alabama Supreme Court has held that a car may be considered “new” as a matter of law even if its finish contains minor cosmetic flaws. Wilburn v. Larry Savage Chevrolet, Inc., 477 So. 2d 384 (Ala. 1985) . We note also that at trial respondent only introduced evidence of undisclosed paint damage to new cars repaired at a cost of $300 or more. This decision suggests that respondent believed that the jury might consider some repairs too de minimis to warrant disclosure.
↑ . Before the verdict in this case, BMW had changed its policy with respect to Alabama and two other States. ”

“ Gore contends that BMW's conduct was particularly reprehensible because nondisclosure of the repairs to his car formed part of a nationwide pattern of tortious conduct. Certainly, evidence that a defendant has repeatedly engaged in prohibited conduct while knowing or suspecting that it was unlawful would provide relevant support for an argument that strong medicine is required to cure the defendant's disrespect for the law. ”

“ Williams, 251 U.S. 63, 66-67 (1919) (punitive award may not be “wholly disproportioned to the offense”) ; Browning-Ferris Industries of Vt., Inc. v. Kelco Disposal, Inc., 492 U.S. 257, 301 (1989) (O'CONNOR, J., concurring in part and dissenting in part) (reviewing court “should examine the gravity of the defendant's conduct and the harshness of the award of punitive damages”) . [24] This principle reflects the accepted view that some wrongs are more blameworthy than others. Thus, we have said that “nonviolent crimes are less serious than crimes marked by violence or the threat of violence.” ”

“ A review of the text of the statutes, however, persuades us that in the absence of a state-court determination to the contrary, a corporate executive could reasonably interpret the disclosure requirements as establishing safe harbors. In California, for example, the disclosure statute defines “material” damage to a motor vehicle as damage requiring repairs costing in excess of 3 percent of the suggested retail price or $500, whichever is greater. ”

“ Some legislatures may conclude that affirmative disclosure requirements are unnecessary because the self-interest of those involved in the automobile trade in developing and maintaining the goodwill of their customers will motivate them to make voluntary disclosures or to refrain from selling cars that do not comply with self-imposed standards. Those legislatures that do adopt affirmative disclosure obligations may take into account the cost of government regulation, choosing to draw a line exempting minor repairs from such a requirement. ”

“ The second and perhaps most commonly cited indicium of an unreasonable or excessive punitive damages award is its ratio to the actual harm inflicted on the plaintiff. See TXO, 509 U.S., at 459; Haslip, 499 U.S., at 23. The principle that exemplary damages must bear a “reasonable relationship” to compensatory damages has a long pedigree. [32] Scholars have identified a number of early English statutes authorizing the award of multiple damages for particular wrongs. ”

“ Gore's contention that BMW could not comply with Alabama's law without changing its nationwide policy.
↑ . See Bordenkircher v. Hayes, 434 U.S. 357, 363 (1978) (“To punish a person because he has done what the law plainly allows him to do is a due process violation of the most basic sort”) . Our cases concerning recidivist statutes are not to the contrary. Habitual offender statutes permit the sentencing court to enhance a defendant's punishment for a crime in light of prior convictions, including convictions in foreign jurisdictions. ”

“ Notwithstanding the evidence adduced by BMW in an effort to prove that the repainted cars conformed to the same quality standards as its other cars, we also assume that it knew, or should have known, that as time passed the repainted cars would lose their attractive appearance more rapidly than other BMW's. ”

“ None of these statutes would provide an out-of-state distributor with fair notice that the first violation—or, indeed the first 14 violations—of its provisions might subject an offender to a multimillion dollar penalty. Moreover, at the time BMW's policy was first challenged, there does not appear to have been any judicial decision in Alabama or elsewhere indicating that application of that policy might give rise to such severe punishment. ”

“ This qualifier invites line drawing of just the sort engaged in by States with disclosure statutes and by BMW. We do not think it can be disputed that there may exist minor imperfections in the finish of a new car that can be repaired (or indeed, left unrepaired) without materially affecting the car's value. ”

“ Ann. 337, 339 (1860) (punitive damages should be “commensurate to the nature of the offence”) ; Blanchard v. Morris, 15 Ill. 35, 36 (1853) (“ [W] e cannot say [the exemplary damages] are excessive under the circumstances; for the proofs show that threats, violence, and imprisonment, were accompanied by mental fear, torture, and agony of mind”) ; Louisville & Northern R. Co. v. Brown, 127 Ky. 732, 749, 106 S. W. 795, 799 (1908) (“We are not aware of any case in which the court has sustained a verdict as large as this one unless the injuries were permanent”) . ”

“ Southeast Toyota Distributors, Inc., 569 So. 2d 395 (Ala. 1990) ) .
↑ . See also Ariz. Rev. Stat. Ann. § 28-1304.03 (1989) (“ [I] f disclosure is not required under this section, a purchaser may not revoke or rescind a sales contract due solely to the fact that the new motor vehicle was damaged and repaired prior to completion of the sale”) ; Ind. Code § 9-23-4-5 (1993) (providing that “ [r] epaired damage to a customer-ordered new motor vehicle not exceeding four percent (4%) of the manufacturer's suggested retail price does not need to be disclosed at the time of sale”) ; N. C. Gen. ”

“ The question presented is whether a $2 million punitive damages award to the purchaser of one of these cars exceeds the constitutional limit.
I In January 1990, Dr. Ira Gore, Jr. (respondent) , purchased a black BMW sports sedan for $40,750.88 from an authorized BMW dealer in Birmingham, Alabama. After driving the car for approximately nine months, and without noticing any flaws in its appearance, Dr. Gore took the car to “Slick Finish,” an independent detailer, to make it look "'snazzier than it normally would appear.'" 646 So. 2d 619, 621 (Ala. 1994) . Mr. ”