At first glance, this published opinion appears to affirm a punitive damages award that is 33 times greater than the plaintiff’s actual harm.

The appeal arose from a bench trial on a claim for wrongful termination.  The trial judge awarded the plaintiffs $15,000 in economic damages and $500,000 in punitive damages.  In the process, the trial court made a finding that the wrongfully terminated employee, who died while the litigation was pending, suffered non-economic damages between $100,000 and $150,000.  That amount was not included in the judgment because Code of Civil Procedure section 377.34 precludes recovery for a decedent’s pain and suffering.

The defendant appealed, arguing that the 33-to-1 ratio of punitive damages was excessive.  The Court of Appeal (Second District, Division Eight) disagreed.  Citing the California Supreme Court’s opinion in Simon v. San Paolo U.S. Holding Co., the court held that the decedent’s nonrecoverable emotional distress damages should be treated as part of the actual harm caused by the defendant, when calculating the ratio between the punitive damages and the actual harm.  With those damages included, the ratio was only 3.5 to 1.

The court went on to conclude that the 3.5-to-1 ratio was not excessive because the defendant acted with a “medium high” degree of reprehensibility when it fired an employee who was seriously ill with cancer, under the false pretense of poor job performance.  The court also found that the defendant had forfeited various other challenges to the punitive damages award by failing to procure an adequate record on appeal.

In this asbestos-injury case, a jury awarded approximately $8.5 million in compensatory damages and $25.5 million in punitive damages against Ford Motor Co. The trial court ruled the punitive damages were excessive and reduced the amount to $8.7 million.

Ford appealed and the Court of Appeal (Second District, Division Two) reversed in an unpublished opinion, finding that the jury’s allocation of fault could not be squared with the evidence. The jury allocated 100% of the fault to the one defendant remaining at trial (Ford), even though the evidence showed that the plaintiff used identical asbestos-containing products made by others. Accordingly, the Court of Appeal ordered a new trial on the allocation of fault.

The Court of Appeal then concluded it should also order a new trial on the amount of punitive damages. The court reasoned that the jury in the first trial based its award of punitive damages on the assumption that Ford was 100 percent responsible for the plaintiff’s injury, but if the jury had apportioned fault based on the plaintiff’s proportional exposure to Ford products as compared to other defendants’ products, the jury would have assigned only 8 percent fault to Ford, possibly less. The court concluded that the possibility of a much smaller allocation to Ford weighed in favor of retrying the amount of punitive damages: “the potential for a jury to find that Ford’s violation is of a substantially smaller magnitude counsels in favor of letting the jury on retrial evaluate the opprobrium of Ford’s conduct in light of Ford’s proportionate fault for plaintiff’s injury rather than simply using the constitutional maximum as a back-end safety valve.”

Disclosure: Horvitz & Levy represents Ford in this case

The plaintiffs in this malicious prosecution won a judgment in their favor after a bench trial, but they were disappointed that the trial judge did not award punitive damages.  They appealed, arguing they were entitled to punitive damages as a matter of law.