The Florida Supreme Court issued this opinion yesterday, addressing a question that often arises in California punitive damages litigation. The case involved a punitive damages award in a wrongful death case. The $16 million award was more than 106 times greater than the compensatory damages recovered by the plaintiffs, who were the statutory heirs of the decedent. The Florida intermediate appellate court found the award was excessive, but the plaintiffs sought Supreme Court review, arguing that the award should be compared not to the magnitude of their loss, but to the loss suffered by the decedent, i.e., the value of the decedent’s life.
The Florida Supreme Court rejected the plaintiffs’ argument, agreeing with the intermediate appellate court and ruling that, for purposes of excessiveness analysis, a reviewing court should compare a wrongful death punitive damages award only to the compensatory damages recovered by the plaintiff, not to the harm suffered by the decedent.
We reported over the summer that the $45.2 million punitive damages award against Alex Jones would be capped at $750,000 under Texas law. Perhaps we spoke too soon.
According to The New York Times, the judge in that case decided not to apply the cap because the she questioned its constitutionality and viewed the claim as “a rare case” in which the emotional damage inflicted on the plaintiffs was so severe that “I believe they have no recourse.” That description of the court’s ruling doesn’t make a whole lot of sense, because it mixes up the concepts of compensatory damages (designed to provide recourse for injuries) and punitive damages (designed to punish and deter bad conduct).
In a more typical case, such a ruling would likely lead to an appeal. But that may never happen here, because NPR reports that Alex Jones has filed for bankruptcy. The bankruptcy filing was prompted not only by the Texas case, but also by a Connecticut case in which a jury awarded $965 million in compensatory damages and a judge later added $473 million in punitive damages.
A jury in Los Angeles awarded $11.3 million in punitive damages, on top of $40.8 million in compensatory damages, against cosmetics manufacturer Avon and forklift maker Hyster, according to this press release issued today by the plaintiff’s law firm. The plaintiff claims that she developed mesothelioma after using Avon products which, she contends, contained talc that was contaminated with asbestos. She also attributes her mesothelioma to exposure to asbestos fibers that her husband brought home on this clothing from his work with asbestos-containing forklift brakes and clutches.
Last month the Ninth Circuit issued this rather surprising published opinion, holding that a district court went too far when it reduced a punitive damages award to four times the compensatory damages award. The Ninth Circuit decided that the maximum constitutionally permissible ratio was actually eight to one.
The case involved the well publicized Volkswagen emissions scandal. Plaintiffs bought Volkswagens and Audis and later discovered that the vehicles had been modified so that they would pass emissions testing even though the vehicles actually produced emissions in excess of regulatory standards. It was undisputed that the plaintiffs suffered no physical harm from the increased emissions. But they sought recovery for having been duped into buying a vehicle they thought was eco-friendly but wasn’t.
The district court viewed Volkswagen’s harm as worthy of punitive damages, but found it to be relatively low on the reprehensibility scale. The Ninth Circuit disagreed, finding that Volkswagen’s conduct was “highly reprehensible,” warranting a ratio closer to the high-end of the single digit ratio scale. That conclusion is surprising, because courts ordinarily place economic torts at the low end of the spectrum. Putting this conduct at the high end of the scale does not leave much room between this economic tort and the classic punitive damages case involving someone who acts with malice or puts someone else’s life at risk. Publication of this opinion will make it easy for plaintiffs in the Ninth Circuit to argue that just about every punitive damages case warrants a ratio of eight to one.
In July we reported on the reversal of a $3 million punitive damages award in McNeal v. Whittaker, Clark & Daniels, and commented on the significance of the decision for products liability litigation in California. The Supreme Court this week denied the plaintiffs’ petition for review. But as noted on At the Lectern, Horvitz & Levy’s blog on all things related to the Supreme Court of California, Justice Goodwin Liu voted to grant the petition.
Law36o reports on yesterday’s oral arguments before the Georgia Supreme Court in a case in which the plaintiff is challenging a statutory cap that reduced a jury’s $50 million punitive damages award to $250,000. As we have reported before, such arguments have achieved mixed results, with some courts upholding the constitutionality of statutory caps and some courts striking them down.
Courtroom View News reports on a verdict in Massachusetts state court awarding $8 million in compensatory damages and $1 billion in punitive damages. As described in the story, the plaintiffs argued that Philip Morris should have switched to ultra-low nicotine versions of its cigarettes. Philip Morris argued that it tried to market those types of products, but consumers rejected them.
Philip Morris will undoubtedly challenge the award through posttrial motions and, if necessary, an appeal. Given the disparity between the compensatory damages and the punitive damages, the verdict is not likely to survive judicial review.
This unpublished opinion provides guidance about the evidentiary showing that a plaintiff must make when seeking punitive damages as part of a default judgment.
As often discussed on this blog, plaintiffs seeking punitive damages in California must present meaningful evidence of the defendant’s financial condition, so that the court can ensure that the amount of punitive damages is not disproportionate to the defendant’s ability to pay. In this case, the plaintiff obtained a judgment by default, including an award of punitive damages. To meet his burden of presenting evidence of the defendant’s financial condition, he submitted a declaration stating that the defendant owns revenue-generating websites, owns two Porsches, and lives in a house owned by his parents and therefore has no housing expenses. However, the plaintiff’s declaration did not explain how he knew any of these facts.
On appeal, the Court of Appeal (Fourth District, Division Three) struck the amount of punitive damages on the ground that the plaintiff’s declaration was not based on personal knowledge, as required by Code of Civil Procedure section 585, subdivision (d). Ordinarily, when a court reverses a punitive damages award due to insufficient evidence of the defendant’s financial condition, the court simply vacates the award and does not allow the plaintiff to try again. But in this case, because judgment was entered by default and the plaintiff did not have an opportunity to conduct discovery on the defendant’s financial condition, the court remanded the case to permit the plaintiff to conduct such discovery “should he chose to expend the fees necessary to acquire this information.”
We previously reported on the $7 billion punitive damages award against Charter Communications (dba Spectrum) in Texas state court. The plaintiffs are the family members of an 83-year-old woman who was stabbed to death by a Spectrum employee while was off duty. This Reuters story explains the plaintiffs’ theory: a spectrum technician went back to the victim’s house the day after he visited for a service call, using a company vehicle both times, and stabbed her after she found him stealing credit cards from her wallet. The plaintiffs claimed Charter was responsible for the actions of its employee during off-duty hours because the company ignored “red flags” about him, including pleas to upper management about his severe financial distress.
On Monday the trial court entered judgment for $337.5 million in compensatory damages and $750 million in punitive damages. The judgment states that the plaintiffs agreed to a voluntary reduction of the punitive damages from $7 billion to $750 billion. Reuters reports that Charter plans to appeal.
Bloomberg law reports that a jury in Cook County, Illinois has awarded $363 million, including $325 million in punitive damages, to a woman who claimed she developed breast cancer as the result of breathing chemicals emitted by a medical sterilization plant in her neighborhood. The defendant, Sterigenics, says it plans to appeal.