Orange County jury awards $53.6 million in punitive damages against toymaker MGA

Forbes reports that a federal jury in Orange County has awarded $53.6 million in punitive damages, on top of $17.8 million in compensatory damages, in a lawsuit alleging that toymaker MGA’s “O.M.G.” line of dolls violated the intellectual property rights of music group OMG Girlz.

If this award were to survive posttrial and appellate review, it would be larger than all but two awards that have survived appellate review in the California court system.

Court of Appeal affirms $15 million punitive damages award against senior care facility (Mosley v. Pacifica Bakersfield)

In this unpublished opinion, the California Court of Appeal (Fifth District) affirmed a $15 million punitive damages award and held that the defendant forfeited some of its arguments by failing to respond to the plaintiff’s demands for financial information.

The underlying facts of the case involve a patient in a memory care facility. A staffer at the facility escorted the patient to the dining area and discovered about 90 minutes later that the patient was missing from the facility. He was found lying outside the facility with injuries to knees and elbow. He ultimately underwent multiple surgeries for his injuries and died about five months after the incident.

His heirs sued the facility for negligence and elder abuse and obtained a jury verdict for $149,000 in economic damages, $8 million in noneconomic damages, and $15 million in punitive damages. Half of the noneconomic damages—$4 million—represented the decedent’s own pain and suffering. The trial court reduced that amount to $250,000 under the applicable MICRA cap, Civil Code section 3333.2, subdivision (b).

The defendant appealed and argued, among other things, that the punitive damages award should be vacated because the plaintiffs failed to introduce meaningful evidence of the defendant’s financial condition, as required under California law. The Court of Appeal rejected this argument, finding that the defendant forfeited its right to raise this issue because the defendant failed to respond adequately to the plaintiff’s request for financial information.

Prior to trial, the plaintiff served two notices on the defendant under Code of Civil Procedure section 1987, requesting that a corporate representative appear at trial and produce financial records. The defendant objected to the first notice but did not object to the second. If the defendant had objected, then the defendant would have been excused from complying with the notice unless the plaintiff filed a motion to compel and obtained a court order for the production of the records. But because the defendant failed to object, the defendant was obligated to produce the documents at trial and, having failed to make an adequate production, forfeited its right to complain that the financial condition evidence was insufficient, or that the award was excessive in relation to the evidence presented.

The defendant also argued that the $15 million award was excessive. The defendant argued that the award was 37.6 times greater than the compensatory damages as reduced by the trial court. The Court of Appeal rejected this argument too, concluding that the award should be compared to the jury’s verdict, not to the net compensatory damages award after application of the MICRA cap, because the jury’s award represented the actual harm caused by the defendant’s conduct, even if some of that harm is legally noncompensable.

New York jury awards $240 million in punitive damages against Harley-Davidson

Law 360 reports (subscription required) that a jury in Livingston County New York awarded $287 million in damages, including $240 million in punitive damages, for injuries sustained in the crash of a Harley-Davidson “trike.”

The plaintiffs alleged that the Tri Glide Ultra motorcycle contained a faulty software system that caused the motorcycle to swerve across the road an into an embankment, injuring the driver and killing his passenger. The article reports that Harley-Davison plans to appeal.

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.

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