532 U.S. 424 (2001), United States Supreme Court

Prior history
Leatherman Tool Group made a multifunction tool that was arguably uniquely new at the time of its introduction. In 1995, Cooper Industries, a competing toolmaker, decided to enter the same market niche with a similar tool. The competing product was originally to be nearly identical to the original, save a few cosmetic changes. When introducing the new tool at the 1996 National Hardware Show, the advertising materials, catalogs, and a mock-up were, in fact, modified versions of the original Leatherman tool.

After the trade show, Leatherman Tool Group filed a civil suit against Cooper Industries asserting claims of trade-dress infringement, unfair competition, and false advertising under the Lanham Act and a common-law claim of unfair competition for advertising and selling an imitation. In October 1997, a federal jury returned a verdict against Cooper Industries on the false advertising, imitation, and unfair competition claims and assessed damages. It awarded Leatherman Tool Group $50,000.00 in compensatory damages and $4.5 Million in punitive damages. The Ninth Circuit Court of Appeals affirmed the punitive damages on appeal, stating that the damages were not "grossly excessive" under BMW of North America, Inc. v. Gore 517 U.S. 559 (1996).

Case
The case was argued on February 26, 2001. Cooper Industries asked the Court to decide whether the Court of Appeals reviewed the constitutionality of the punitive damages award under the correct standard.

Because the Court itself has recognized that determining if a fine is grossly excessive is "inherently imprecise" Gore held that it was necessary to evaluate a number of factors:
1.The degree of the defendant's reprehensibility or culpability;
2.The relationship between the penalty and the harm to the victim caused by the defendant's actions; and 
3.The sanctions imposed in other cases for comparable misconduct.

The Appeals Court has the responsibility on appeal of determining if the lower District court had evaluated these factors correctly. Instead of merely deciding whether the lower court had abused its judicial discretion, the punitive damages should be reviewed in their entirety. By doing so, the Appeals courts would ensure that the courts in its circuit applied these standards in an uniform manner and that citizens would receive uniform treatment.

Effects of the decision
In making its decision, the Court extended the holding in Furman v. Georgia 408 U.S. 238 (1972) that the Eighth Amendment applied to the states through the Fourteenth Amendment. While the earlier decision had incorporated the Cruel and Unusual Punishments clause, Cooper Industries v. Leatherman Tool Group incorporated the Excessive Fines clause.