Back in April we blogged about this published opinion, which affirmed a $4.5 million punitive damages award against a defendant whose audited financial statements showed a negative net worth.  The defendant, Arvinmeritor, has filed a petition for review with the California Supreme Court, raising the following issues:

1. Should a publicly traded company’s net worth be the measure of “financial condition” for purposes of evaluating its ability to pay a punitive damage award, in the absence of evidence that the company improperly manipulated the net worth number to lower it?

2. Can the factor of comparable civil or criminal penalties, the third guidepost of federal due process review established by the United States Supreme Court, be considered “essentially irrelevant” in all cases involving common-law tort duties, or in asbestos-related personal injury cases in particular?

The Supreme Court’s deadline for ruling on the petition is July 29.  You can track the status of the petition on the Supreme Court’s online docket.

Full disclosure: Horvitz & Levy filed a letter in support of the petition for review on behalf of the U.S. Chamber of Commerce, the National Association of Manufacturers, and the Motor & Equipment Manufacturers Association.