Judge Rex Hesseman of the Los Angeles County Superior Court has an op-ed in the Los Angeles & San Francisco Daily Journal entitled “‘Finances’ and punitive damages.”  (Subscription required.)  Judge Heeseman, who writes regularly on punitive damages and insurance law, focuses this time on Bankhead v. Arvinmeritor.  Here’s his conclusion about the potential effects of the Court of Appeal’s decision to affirm a $4.5 million punitive damages award based on expert opinion that the defendant could pay such an award, notwithstanding its negative net worth:

It can be asserted that focusing upon finances is a sort of an “end run” around the aforementioned “guidelines” of the U.S. Supreme Court.  Furthermore, the emphasis by Bullock III and ArvinMeritor on the “specific facts of each case” (admittedly echoing comments in Campbell) may bring flexibility, but also uncertainty.  . . .  And, for the “punitive damages phase” in some lawsuits, is it now advisable (required?) to have your “expert witness” ready to testify about “net worth,” “financial condition” and/or “ability to pay”?  Will there be a “dueling of experts” in that context, similar to that in some other litigation (e.g. standard of care in medical malpractice)?

We hope the California Supreme Court will provide some guidance on these questions in the furture, but as we noted in our most recent post about Bankhead, the California Supreme Court declined to wade into this area of the law in the context of that case.

Related posts:

California Supreme Court denies review in Bankhead v. Arvinmeritor

Defendant files petition for review in Bankhead v. Arvinmeritor

Published opinion affirms $4.5M punitive damages award in asbestos case (Bankhead v. ArvinMeritor)