In the case of Pacific Mutual Life Insurance Company v. Cleopatra Haslip et al., 1990, the U.S Supreme Court ruled that a punitive damages award did not violate due process rights under the Fourteenth Amendment. The plaintiff, Cleopatra Haslip, sued her insurance company for fraud after they failed to pay on an insurance policy following her husband's death. A jury awarded Haslip $200,000 in compensatory damages and $840,000 in punitive damages - an amount four times greater than any previous award against an insurer in Alabama history. The defendant appealed arguing that such excessive punitive damage awards violated their constitutional right to due process by being arbitrary and unfair. The Supreme Court upheld the verdict stating that while there is no explicit limit on punitive damage awards set out in Constitution or precedent law; it must be reasonable and proportionate to actual harm suffered by plaintiff as well as potential harm defendant’s conduct could have caused other victims. This decision marked a significant shift towards allowing juries more discretion when determining appropriate levels of punishment for defendants found guilty of egregious misconduct.

In the dissenting opinion for Pacific Mutual Life Insurance Company v. Cleopatra Haslip, Justice O'Connor argued that the punitive damages awarded in this case were excessive and violated due process rights. She expressed concern about the lack of clear standards or guidelines for juries to follow when determining punitive damages, which could lead to unpredictable and potentially unfair outcomes. The justice also noted that while states have a legitimate interest in deterring wrongful conduct and punishing wrongdoers, these goals should not come at the expense of constitutional protections. In her view, there needs to be a reasonable relationship between actual harm suffered by plaintiffs and any additional amount imposed as punishment.