Catching up on unpublished 2024 California Court of Appeal decisions

I’ve been catching up on some unpublished punitive damages opinions that were issued earlier this year. Here’s a brief rundown:

Matthes v. Rodgers (May 13, 2024, Second District, Division Four):

Upholding $1.95 million in punitive damages; defendant failed to respond to subpoenas requesting financial information, and therefore waived its right to complain that trial court erred when it modified the standard CACI instructions to delete the language telling the jury to consider the defendant’s ability to pay

Soria v. Compass Group (April 16, 2024, Second District, Division Two):

Holding that trial court properly granted nonsuit on punitive damages because plaintiff failed to present evidence that two employees of defendant hospital were managing agents

Medel v. Oceanic Companies (February 22, 2024, Fourth District, Division One):

Holding that trial court properly reduced $2 million and $1 million punitive damages awards to $652,000 and $326,000 (ratios of two-to-one and one-to-one) for conduct that was “moderately to highly reprehensible”

Rudnicki v. Farmers Insurance Exchange (January 2, 2024, Second District, Division Two)

Declining to further reduce punitive damages that trial court cut from $150 million to $18.5 million (3.5-to-one ratio) in retaliation case involving “moderately reprehensible” conduct

Las Vegas jury awards $3 billion in punitive damages against maker of bottled water

The Las Vegas Review Journal reports that a jury in Las Vegas has awarded $98 million in compensatory damages and $3 billion in punitive damages against Real Water, a defunct and bankrupt bottled water company.  The plaintiffs alleged that they suffered extreme nausea and fatigue as the result of drinking bottled water that was contaminated with a toxic chemical.

The punitive damages are likely to be reduced in posttrial motions or on appeal because the award seems to bear no relation to the harm claimed by the plaintiffs. In any event, it is highly doubtful that the bankrupt defendant could pay even a fraction of the award. But awards like this are highly beneficial to plaintiffs’ lawyers, as they help make multi-billion punitive damages awards seem like a normal and accepted result of our justice system.

“PA Supreme Court Embraces ‘Per-Defendant’ Basis for Calculating Punitive-to-Compensatory Damages Ratio”

The Federalist Society’s “State Docket Watch” reports on a Pennsylvania Supreme Court decision that resolved a dispute about how to properly compute the ratio of punitive damages to compensatory damages in a case where there are multiple defendants.

In a nutshell, the question was whether to use a “per defendant” approach, under which the punitive damages awarded against each defendant would be compared to that defendant’s share of the compensatory damages, or a “per judgment” approach, under which the punitive damages awarded against each defendant would be compared to the total compensatory damages awarded against all defendants.  The Pennsylvania Supreme Court opted for the per-defendant approach, as the article explains.

California has adopted the same approach. When determining whether a punitive damages award is excessive, our courts compare the amount awarded against the defendant with that defendant’s share of the compensatory damages.  See, e.g., Bankhead v. ArvinMeritor.

Johnson & Johnson agrees to $700 million settlement to resolve talc claims

CBS News reports that Johnson & Johnson has reached an agreement with 42 states to resolve claims that it misled consumers about the safety of its talc products. Under the agreement, Johnson & Johnson will pay $700 million and will stop making and selling all talc-containing products.

The settlement is relvant to this blog because litigation over Johnson & Johnson’s talc products has produced enormous punitive damages awards in California and elsewhere. For example,  Reuters recently reported that an Oregon jury awarded $60 million in compensatory damages and $200 million in punitive damages to woman who claimed she developed mesothelioma from using Johnson & Johnson baby powder. Under Oregon’s split-recovery statute, 70 percent of the punitive damages will go to the state if the award survives posttrial and appellate review.

The settlement between Johnson & Johnson and the states will not prevent individual plaintiffs from continuing to pursue their claims.

Washington Court of Appeals reverses $135 million punitive damages award against Monsanto successor

In the Washington state court system, a group of teachers, students, and family members have filed a series of lawsuits seeking compensation from Pharmacia (a successor to Monsanto) for injuries allegedly caused by chemicals that leaked from fluorescent lights in a school. We previously reported on a big punitive damages verdict in one of these lawsuits here.

The Washington Court of Appeals has now weighed in on this litigation for the first time, reversing a judgment that awarded $185 million, including $135 million in punitive damages, to three former teachers.  The court’s published opinion concludes that the trial court committed several errors: refusing to consider a defense of Washington’s statute of repose, failure to properly apply Missouri law on punitive damages (Monsanto was headquartered in Missouri), and improperly admitting novel scientific theories offered by plaintiffs’ experts.  This case will go back to the trial court for further proceedings, and the various related cases involving the same issues are likely to be resolved in the same way.

Riverside jury awards $12 million in punitive damages for insurer’s delay in paying $140,000 claim

The San Bernardino Sun reports that a San Bernardino County jury awarded $6 million in compensatory damages and $12 million in punitive damages against American Reliable Insurance for its delay in paying a $145,000 claim.

The plaintiffs alleged that after rain water damaged their home, a contractor estimated that repairs would cost over $100,000.  They made a claim to their insurer, who initially paid them only $5,000. The insurer later paid another $140,000, the full limits of the policy, but the plaintiffs said that was only after they had been forced to live without heat in their home for five years.

In their lawsuit against the insurer for bad faith, a jury awarded them $6 million for pain and suffering plus an additional $12 million for punitive damages.  The story does not indicate whether the insurer plans to challenge the award through posttrial motions and appeal, but that seems likely given the size of the award.

L.A. jury awards $3 billion in punitive damages

Law360 reports that a jury in Los Angeles superior court has imposed $3 billion in punitive damages, on top of $7 billion in compensatory damages, against a man accused of swindling his two brothers out of their share of a real estate partnership.

When this blog launched in 2008, billion-dollar punitive damages awards were a once-in-a-decade phenomenon, at best.  Since then, juries have been increasingly willing to award billions. To date, no such award was survived posttrial and appellate review in California.  One obvious question raised by this award is whether the defendant really has the resources to support it.  California courts follow a rule of thumb that punitive damages awards generally should not exceed 10 percent of a defendant’s net worth. Can this defendant be worth $10 billion, after subtracting the $7 billion compensatory award?

Bayer ordered to pay $2 billion in punitive damages in latest Roundup verdict

Reuters reports that a Philadelphia jury has ordered Bayer to pay $250 million in compensatory damages and $2 billion in punitive damages to a man who claims he developed non-Hodgkins lymphoma from using the weedkiller Roundup.  Monsanto, which manufactured Roundup, was acquired by Bayer in 2018.

The trial judge should reduce the award, which is plainly excessive under BMW v. Gore and State Farm v. Campbellbut that doesn’t always happen, even with billion-dollar awards.

“Are the Courts Likely to Sustain the $65 Million in Punitive Damages Awarded against Trump . . .”

Professor Rick Hasen has posed this question on Election Law Blog: “Are the Courts Likely to Sustain the $65 Million in Punitive Damages Awarded Against Trump in the E. Jean Carroll Defamation Case?

Hasen’s post discusses a Manhattan jury’s decision last Friday to award $65 million in punitive damages and $18.3 million in compensatory damages against former President Donald Trump for his social media defamation of longtime advice columnist E. Jean Carroll.

Hasen concludes that the punitive damages award is “uncertain to stand,” which sounds about right to me.  If the verdict in this case had occurred in California, the outlook would be similarly cloudy.

As Hasen notes, the U.S. Supreme held in State Farm v. Campbell that the ratio of punitive damages to compensatory damages should be low, perhaps no more than one-to-one, in cases involving substantial compensatory damages.  If the Trump verdict had occurred in the few years after Campbell was decided, we could have confidently predicted that the courts would reduce the award to something in the $18 million range.  However, as the years have passed, courts have shown an increasing willingness to uphold awards where the ratio exceeds one-to-one, even in cases with very large compensatory damages awards.  For example, in the recent decision in Rudnicki v. Farmers, the California Court of Appeal affirmed an $18.4 million punitive damages award where the compensatory damages were $5.4 million.

The ratio in the Trump case is about 3.6 to one, which might be low enough to survive judicial review if the courts sidestep the one-to-one ratio language in Campbell. We shall see.

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