Recently, we analyzed a $2.5 million jury award against State Farm Insurance Co. in Mississippi arising out of State Farm's refusal to pay a couple for damage to their home caused by Hurricane Katrina.
As we predicted, the federal court has now reduced the award of punitive damages from $2.5 million to $1 million, which is in keeping with Supreme Court guidance that punitive damages generally should not exceed four times the compensatory award in a case. (The jury awarded approx. $250,000 in compensatory damages in this case.)
In the meantime, the judge overseeing the case has asked for more detail on a broad settlement of Mississippi hurricane claims reached between State Farm and other litigants. We anticipate that the court will eventually approve the settlement after a bit of tweaking on the details.
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