BMW of North America, Inc. v. Gore, 517 U.S. 559, 26 (1996)

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Opinion of the Court

case the $2 million economic sanction imposed on BMW is substantially greater than the statutory fines available in Alabama and elsewhere for similar malfeasance.

The maximum civil penalty authorized by the Alabama Legislature for a violation of its Deceptive Trade Practices Act is $2,000; 39 other States authorize more severe sanctions, with the maxima ranging from $5,000 to $10,000.40 Significantly, some statutes draw a distinction between first offenders and recidivists; thus, in New York the penalty is $50 for a first offense and $250 for subsequent offenses. 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.

The sanction imposed in this case cannot be justified on the ground that it was necessary to deter future misconduct without considering whether less drastic remedies could be expected to achieve that goal. 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

that invoked by the Alabama courts here may be markedly more inhibiting than the fear of prosecution under a criminal statute." Id., at 277.

39 Ala. Code 8-19-11(b) (1993).

40 See, e. g., Ark. Code Ann. 23-112-309(b) (1992) (up to $5,000 for violation of state Motor Vehicle Commission Act that would allow suspension of dealer's license; up to $10,000 for violation of Act that would allow revocation of dealer's license); Fla. Stat. 320.27(12) (1992) (up to $1,000); Ga. Code Ann. 40-1-5(g), 10-1-397(a) (1994 and Supp. 1996) (up to $2,000 administratively; up to $5,000 in superior court); Ind. Code 9-23-6-4 (1993) ($50 to $1,000); N. H. Rev. Stat. Ann. 357-C:15, 651:2 (1995 and Supp. 1995) (corporate fine of up to $20,000); N. Y. Gen. Bus. Law 396-p(6) (McKinney Supp. 1995) ($50 for first offense; $250 for subsequent offenses).

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