Punitive Ruling

LAST week the Supreme Court, ignoring a plea for judicial activism, declined to ``make law.'' That's precisely what conservatives have been demanding. Indeed, an intention simply to interpret the Constitution, and not to read into it new rights unimagined by the Framers, has been a primary criterion for judicial appointments under Presidents Reagan and Bush. So why are a lot of conservatives hopping mad? Because this time the justices' adherence to the Constitution's ``original meaning'' didn't work to the advantage of a major conservative constituency, the business community.

At issue was the power of juries to award ``punitive damages'' to plaintiffs in civil lawsuits. This is money beyond the amount needed to compensate plaintiffs for their injuries, and intended both to punish the defendant and to deter similar misconduct.

In the case before the court, a municipal worker in Alabama sued the issuer of a group health-insurance policy. Owing to fraud by one of the insurance company's agents, the policy had been canceled before the unknowing worker incurred about $3,600 in medical costs. In the resulting suit, the jury awarded the employee more than $1 million, most of it intended to punish the insurance company's negligence.

The insurer appealed, claiming that the punitive damages were so excessive and bore so little relation to the company's wrongdoing that the award violated the ``due process'' clause of the Constitution's 14th Amendment. But the Supreme Court upheld the award in a 7-1 vote.

The decision was, in fact, a ``conservative'' ruling. The majority noted that punitive damages have ancient roots in the law, and it deferred to the wisdom of juries, as an instrument of the people to enforce popular values, to act responsibly. Whether or not punitive damages are desirable, the court said, they aren't regulated by the Constitution.

It may well be that punitive damages need to be curbed. Though still relatively rare, they have become more common, and the amounts have skyrocketed. Multimillion-dollar punitive awards are not unheard of. Critics claim that the fear of arbitrary punitive awards by juries induces companies to withhold innovative products from the market. At the least, punitive damages probably should be restricted to cases of intentional or egregious misconduct by defendants.

But after last week's ruling, such curbs will have to be imposed by state legislatures and courts, not by the federal bench.