by Eric Boorstin
Washington Legal Foundation
January 23, 2014
U.S. Supreme Court precedents dictate that courts generally cannot impose punitive damages for extraterritorial conduct. Despite the Supreme Court’s guidance, not all courts have recognized the limits of state power to regulate extraterritorial conduct. A matter pending before the U.S. Court of appeals for the Ninth Circuit provides a striking example. In Bixby v. KBR, Inc. , a group of Oregon National Guardsmen sued a defense contractor that worked in Iraq to help the U.S. Army restore Iraq’s oil infrastructure. The guardsmen, who were responsible for protecting the contractor during its work, alleged that the contractor failed to protect them from hazardous chemicals. A federal jury in Oregon awarded $75 million in punitive damages. The Ninth Circuit should recognize the limitations on states’ power to impose punitive damages and reverse the district court. Those limitations are rooted in both the Due Process Clause and the Commerce Clause.

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