The case of Shirley M. Molzof v. United States in 1991 revolved around the interpretation of a federal law that limits the types and amount of damages that can be awarded against the U.S government in lawsuits. Robert E. Molzof was admitted to a Veterans Administration hospital for routine surgery, but due to negligence by medical staff, he suffered severe brain damage and later died from his injuries. His wife sued under the Federal Tort Claims Act (FTCA), which allows individuals to sue the federal government for personal injury or death caused by negligent acts committed by persons acting on behalf of the United States. However, FTCA prohibits "punitive damages," which are intended as punishment rather than compensation for actual losses incurred by plaintiffs. The lower courts ruled that Mrs.Molzof could not recover future medical expenses and loss-of-enjoyment-of-life damages because they were considered punitive under Wisconsin state law. On appeal, however, Supreme Court unanimously reversed this decision stating these compensatory damages do not qualify as 'punitive' just because they may seem large or disproportionate compared with plaintiff's out-of-pocket losses; hence should not be barred under FTCA's prohibition against punitive awards.

In the dissenting opinion for the case of Shirley M. Molzof v. United States, Justice Scalia disagreed with the majority's interpretation of "punitive damages" under federal law. He argued that Congress intended to limit all forms of non-compensatory damages when it prohibited punitive damages in cases against the government, not just those labeled as such by state law. This would include any award exceeding actual harm suffered by a plaintiff, regardless if they were called 'punitive' or something else like 'exemplary'. The majority’s decision to allow these types of awards was seen as an overreach and inconsistent with legislative intent according to Scalia's view.