State Farm Mut. Automobile Ins. Co. v. Campbell, 538 U.S. 408, 9 (2003)

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416

STATE FARM MUT. AUTOMOBILE INS. CO. v. CAMPBELL

Opinion of the Court

between punitive and compensatory damages was not un-warranted. Finally, the court noted that the punitive damages award was not excessive when compared to various civil and criminal penalties State Farm could have faced, including $10,000 for each act of fraud, the suspension of its license to conduct business in Utah, the disgorgement of profits, and imprisonment. Id., at 1154-1155. We granted certiorari. 535 U. S. 1111 (2002).

II

We recognized in Cooper Industries, Inc. v. Leatherman Tool Group, Inc., 532 U. S. 424 (2001), that in our judicial system compensatory and punitive damages, although usually awarded at the same time by the same decisionmaker, serve different purposes. Id., at 432. Compensatory damages "are intended to redress the concrete loss that the plaintiff has suffered by reason of the defendant's wrongful conduct." Ibid. (citing Restatement (Second) of Torts § 903, pp. 453-454 (1979)). By contrast, punitive damages serve a broader function; they are aimed at deterrence and retribution. Cooper Industries, supra, at 432; see also Gore, supra, at 568 ("Punitive damages may properly be imposed to further a State's legitimate interests in punishing unlawful conduct and deterring its repetition"); Pacific Mut. Life Ins. Co. v. Haslip, 499 U. S. 1, 19 (1991) ("[P]unitive damages are imposed for purposes of retribution and deterrence").

While States possess discretion over the imposition of punitive damages, it is well established that there are procedural and substantive constitutional limitations on these awards. Cooper Industries, supra; Gore, supra, at 559; Honda Motor Co. v. Oberg, 512 U. S. 415 (1994); TXO Production Corp. v. Alliance Resources Corp., 509 U. S. 443 (1993); Haslip, supra. The Due Process Clause of the Fourteenth Amendment prohibits the imposition of grossly excessive or arbitrary punishments on a tortfeasor. Cooper Industries, supra, at 433; Gore, 517 U. S., at 562; see also id., at 587 (Breyer, J., concurring) ("This constitutional concern, itself

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