Page 2

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. Campbell, but 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.

Monsanto ordered to pay $784 million in punitive damages

Reuters reports that a jury in Washington state court ordered Monsanto to pay $73 million in compensatory damages and $784 million in punitive damages to plaintiffs who claimed that chemicals made by Monsanto leaked from light fixtures in a school and made them sick.

This verdict comes on the heels of a November verdict in which a San Diego jury ordered Monsanto to pay $7 million in compensatory damages and $325 million in punitive damages to a man who alleged he developed cancer from using Monsanto’s Roundup weedkiller.

When this blog was first launched in 2008, verdicts in excess of $5 million were rare even in California. A lot has changed since then, and awards of tens or even hundreds of millions of punitive damages are becoming ever more common.

San Francisco jury awards $15 million in punitive damages against Marriott Marquis hotel

Law360 reports that a jury in San Francisco County Superior Court has awarded $5 million in compensatory damages and $15 million in punitive damages to a former hotel employee who alleged that his employer failed to accommodate his disability. Marriott is likely to file a new trial motion asking the trial court to reduce the damages, which seem unusually large for a case of this nature.

Court of Appeal affirms directed verdict on punitive damages (Shenoi v. Maya)

This unpublished opinion affirms the grant of nonsuit on a plaintiff’s claim for punitive damages in a defamation case. The opinion contains a paragraph explaining the differences between the definitions of “malice” in punitive damages law versus defamation law:

With respect to “malice,” Shenoi has confused constitutional malice, or
New York Times malice – the malice a public figure plaintiff must plead and prove to
establish liability for defamation – with the malice required for punitive damages. New
York Times malice is actual falsity or reckless disregard of truth or falsity (New York
Times Co. v. Sullivan (1964) 376 U.S. 254, 279-280.) He has also confused punitive
damages malice with the malice necessary to defeat the conditional privilege of Civil
Code section 47, which is ill-will or lack of reasonable grounds for belief in the truth of
the publication. (See Sanborn v. Chronicle Publishing Co. (1976) 18 Cal.3d 406, 413.)

The opinion goes on to explain that the plaintiff identified no clear and convincing evidence to meet the definition of malice for purposes of punitive damages.

Disclosure: Horvitz & Levy represents the defendants in this matter.

Texas jury awards $1.2 billion in revenge porn case

BBC news reports that a jury in Texas has awarded $200 million in compensatory damages and $1 billion in punitive damages to a woman who sued her ex-boyfriend for posting intimate photos of her online. As the story notes, the award is uncollectible. The defendant is not a billionaire. But awards like this, and the press coverage of them, benefits plaintiffs and their attorneys in other punitive damages cases by normalizing verdicts of this size.

California Court of Appeal reverses nonsuit of punitive damages claim (Air Combat v. City of Fullerton)

This unpublished opinion reverses a trial court’s ruling that a plaintiff failed to present sufficient evidence to warrant a jury instruction on punitive damages.

A tenant at the municipal airport in Fullerton got into a dispute with the city over the extension of its lease. The tenant vacated the premises and, in the process, removed not only furniture but also cabinetry, windows, walls, sliding glass doors, a staircase, and plumbing fixtures. The city sued for conversion and sought punitive damages, but the trial court refused to instruct the jury on the issue of punitive damages, concluding that the city had failed to present any evidence of malice.

The Court of Appeal (Fourth District, Division Three) reversed, holding that even without any direct evidence of malice, a jury could infer malice from the tenant’s conduct. The court acknowledged that a jury might conclude that the tenant’s actions were the result of mere negligence or an honest mistake about the lease’s requirement to return the premises to their pre-lease condition. But the court said a jury might also infer that the tenant intentionally removed or destroyed the property with malice in retaliation for the City’s refusal to extend the lease.

The court’s analysis is in tension with published cases holding that punitive damages, because they are subject to the clear and convincing standard of proof, require evidence that is inconsistent with the possibility of mere negligence or honest mistake. See, for example, Food Pro v. Farmers Insurance Exchange. This opinion does not mention or attempt to distinguish that line of authority.

California Supreme Court adopts broad interpretation of statute that shields public entities from punitive damages (Los Angeles Unified v. Superior Court)

Last week the California Supreme Court issued this opinion adopting a broad interpretation of a California statute that exempts public entities from punitive damages.

Government Code section 818 provides that public entities cannot be held liable for damages imposed “primarily for the same of example and by way of punishing the defendant.” That statute clearly applies to punitive damages, but what about other statutory provisions that provide double or treble damages for certain types of misconduct?

Previous Supreme Court decisions had suggested that section 818 applies only to damages that are “simply and solely punitive.” Under that view, public entities could be liable for double or treble damages under a statute that is designed to punish but also to serve some other purpose, e.g., incentivize lawsuits, provide redress for otherwise uncompensated harms or expenditures, or advance some other policy goal. But the Supreme Court overruled that line of authority, concluding that section 818 bars any form of damages that is imposed primarily for punishment, even if the statute also has some other secondary purposes.

Illinois legislature votes to expand availability of punitive damages

National Law Review reports that the Illinois legislature has passed a bill, House Bill 0219, that would make punitive damages available in wrongful death actions. The articles states that under current Illinois law, punitive damages are available only to the victim and do not survive the victim’s death. Illinois Governor J.B. Pritzker has not yet signed the bill into law but is expected to do so.

California law does not permit punitive damages in wrongful death actions brought by the heirs of a decedent, but they are recoverable in a survival action on behalf of the decedent’s estate.