Jan. 8 (Bloomberg) -- The billion-dollar jury verdict has disappeared from U.S. courtrooms.

For the second time in the past three years, juries in 2008 issued no awards above that amount, according to data compiled by Bloomberg News. In 2007, there was one such verdict, for $1.5 billion. In the previous 14 years there was at least one billion-dollar verdict a year and a total of 26. Six cases produced awards of more than $5 billion each.

One reason for the drop: Because of changes in legal rulings, punitive-damage verdicts can be thrown out if they far exceed actual damages. Some lawyers don’t seek amounts that clearly violate the rules. Phoenix attorney Grant Woods said when he asked for punitive damages in a contract trial in September, he urged jurors to award “not too little, not too much.”

“There’s no need to ask for huge punitives that far outstrip the compensatory damages,” Woods said. “I asked the jury, ‘Don’t come back with some crazy number, like a billion dollars.’”

The lower threat of high punitive damages has helped corporate defendants by taking away an incentive to settle out of court, said attorney Marquette Wolf of Mesquite, Texas, who won an $84 million jury verdict against U-Haul International in 2008.

“When the threat of punitives was there, the courthouse was a level playing field,” he said. “Now the threat of consequence isn’t there for billion-dollar corporations.”

Wolf’s victory, which included $63 million in punitives, was later cut to $45.7 million, half in punitive damages. It is on appeal.

Top 10

The top 10 punitive awards against companies in 2008 totaled $960 million, down 30 percent from 2007 and 63 percent from 2006. The last U.S. verdict of just punitive damages of $1 billion or more against a company occurred in February 2004.

The top verdict overall in 2008 was $606.6 million against Boeing Co. and a subsidiary, in a case involving a contract dispute. It was the lowest top verdict of the year in dollar terms since 1991, according to Bloomberg data.

State and federal limits on damages or claims, business interest campaign financing of conservative judges and U.S. Supreme Court decisions have combined to create the decline, said attorney Robert Cunningham, who represents plaintiffs in suits.

“We’re seeing the effects of a campaign that has been ongoing for the last 10 to 12 years of trying to eliminate punitive damages against corporate interests,” said Cunningham, of Cunningham Bounds Yance Crowder & Brown in Mobile, Alabama. “It appears to have worked.”

No Verdict

Woods, a former Arizona attorney general, didn’t get a billion-dollar verdict. The Phoenix jury awarded his client, Meritage Homes Corp., $269 million, including $54 million in punitives. The award to the Scottsdale, Arizona-based homebuilder was the ninth-largest in the U.S. in 2008, a year that saw a continued slide in punitive damages.

Of the 10 largest jury verdicts in U.S. history, the last to be added to the list was in 2003, for $11.9 billion against Exxon Mobil Corp. in a lawsuit by Alabama claiming fraud in the underpayment of natural-gas royalties. This was also the last for more than $2 billion.

The only billion-dollar verdict in the past three years came in 2007 in a patent suit against Microsoft Corp.

The fate of these two verdicts shows the peril of winning big. The Microsoft verdict was reversed and settled before being retried. The $11.8 billion punitive part of the Exxon verdict was erased in post-trial appeals, and Alabama wound up with about $120 million, said Exxon attorney Samuel Franklin of Lightfoot, Franklin & White in Birmingham, Alabama.

Biggest Ever

The biggest jury verdict of all time, $145 billion in a 2000 Florida tobacco case, was thrown out, and the class action fragmented into thousands of still-unresolved individual suits.

Ten of the 12 all-time biggest awards were cut or reversed. Of the others, one for $4.5 billion in a human rights case was uncollectible, and one for $5 billion was wiped out when the case settled for $2 million in available insurance.

The U.S. Supreme Court has chipped away at punitive damages for several years, most recently with its June decision in the Exxon Valdez oil-spill case where it replaced a $2.5 billion punitive judgment with one for $507 million.

Punitive damages, designed to punish, can’t legally be as much as 10 times actual damages, except in “particularly egregious” cases, the high court ruled in 2003.

Last year’s Exxon Valdez ruling moved the punitive-to-actual damages ratio so it’s “now generally one to one, with few higher than three to one,” said attorney Barry Lee, who won the verdict against Boeing.

‘We Don’t Overreach’

“It’s always in my mind, not only on punitives, but on compensatory damages,” Lee said. “We want everything our client is entitled to, but we don’t overreach.”

Lee, of Manatt Phelps & Phillips in San Francisco, asked for $949 million in punitive damages, less than three times the $370.6 million compensatory verdict he’d already won.

“We wanted to make it clear we believe we were entitled to punitives, but we were taking a reasonable approach,” he said. The jury awarded $236 million in punitive damages. Boeing said it would appeal.

In light of the Supreme Court ruling, “judges are more cautious” in upholding jury’s actions, said attorney Victor Schwartz, a partner at Shook, Hardy & Bacon in Washington and general counsel of the American Tort Reform Association, who defends companies in civil litigation.

Jurors have also become less sympathetic to plaintiffs, said Deborah Kuchler of Abbott, Simses & Kuchler, a New Orleans lawyer who represents corporations.

“Juries are much more cynical than they used to be,” said Kuchler, who won a defense verdict for DuPont Co. in June in the retrial of a case the company previously lost. “Now even insurance companies want juries.”

To contact the reporter on this story: Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net.

Last Updated: January 8, 2009 00:01 EST