The Georgia Supreme Court issued an opinion this week upholding the constitutionality of a Georgia statute that caps most punitive damages awards at $250,000. Application of the cap in this case resulted in a reduction from $50 million to $250,000. One justice dissenting, arguing that the cap violates the right to a jury trial in the Georgia Constitution.
As regular readers of this blog are well aware, no such cap exists in California.
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.
NPR reports here on the Texas jury verdict awarding $4.1 million in compensatory damages and $45.2 million in punitive damages against InfoWars founder Alex Jones, for defaming families of children killed in the Sandy Hook school shooting.
Texas’s cap on punitive damages will apparently reduce the award here to $750,000 (see section 41.008(b)(1)(b)), but counsel for the plaintiffs told Bloomberg Law he intends to challenge the constitutionality of the cap. That will be an uphill battle, as at least one Texas appellate court has already upheld the constitutionality of the cap (see Rivera v. United States, 2007 WL 1113034), but as we have previously reported courts in other jurisdictions have overturned caps as unconstitutional.
A few years ago I reported on a $700 million punitive damages award by a Wisconsin jury against an Indian company in a trade secrets case. The district court ended up reducing the punitive damages to $280 million, double the $140 million compensatory damages award. On appeal, the Seventh Circuit reduced the award further, concluding that a ratio in excess of one-to-one would violate due process.
The plaintiff, Epic Systems Corp., filed a cert. petition asking the Supreme Court to decide whether, when a statute caps punitive damages at a two-to-one ratio, the cap eliminates any due process concerns for awards falling within the cap.
Today the Supreme Court issued an order inviting the Solicitor General to file a brief in the case expressing the views of the federal government.
SCOTUSblog’s coverage of the case is available here.
The Supreme Court’s docket can be viewed here.
Anyone interested in Missouri’s recent legislation on punitive damages can find a summary in this WLF Legal Opinion Letter, written by Mark Behrens and Jennifer Artman of Shook Hardy & Bacon.
Some highlights: (1) the law limits punitive damages to cases in which a “defendant intentionally harmed the plaintiff without just cause or acted with a deliberate and flagrant disregard for the safety of others,” (2) the law codifies the requirement that plaintiffs must prove these facts by clear and convincing evidence, and (3) plaintiffs cannot seek punitive damages in their initial complaint, and can add a punitive damages claim only after presenting the judge with evidence establishing a reasonable basis for imposing punitive damages.
The Supreme Court issued a unanimous 11-page opinion today, reversing the D.C. Circuit and allowing punitive damages against the government of Sudan for its role in the 1998 bombings of the U.S. embassies in Kenya and Tanzania.
As described in our prior post about this case, the plaintiffs obtained a judgment for $6 billion in compensatory damages and $4.3 billion in punitive damages. The D.C. Circuit vacated the punitive damages award, ruling that when Congress amended the Foreign Sovereign Immunities Act (FSIA) in 2008 to create a federal cause of action against foreign governments for acts of terror, Congress did not expressly authorize recovery of punitive damages for acts committed before 2008.
The Supreme Court disagreed. Justice Gorsuch, writing for the court, explained that the National Defense Authorization Act for Fiscal Year 2008 (NDAA) created a federal cause of action for acts of terror, and expressly provided that remedies “may include economic damages . . . . and punitive damages.” Moreover, two other provisions of the act specifically authorized new claims for pre-2008 acts of terrorism. Although the latter provisions did not expressly mention punitive damages, the Supreme Court found it implausible that Congress would have authorized retroactive application of all the other features of the new cause of action except for punitive damages.
The Supreme Court also rejected Sudan’s argument that the 2008 act is equivocal because it says only that awards “may” include punitive damages. Justice Gorsuch noted that all categories of damages authorized by act are provided on equal terms, i.e., damages “may” include economic, non-economic, and punitive damages. Thus, the use of the word “may” simply indicates that district courts are given discretion to determine whether each category of damages is appropriate under the facts of the particular case.
However, the Supreme Court stopped short of reinstating the entire $4.3 billion punitive damages award. That’s because the case involved two categories of plaintiffs: (1) U. S. nationals, members of the U.S. Armed Forces, and U. S. government employees or contractors, and (2) foreign nationals who are family members of U.S government employees and contractors. The NDAA created a direct cause of action for the first category of plaintiffs, but not for the second, who were left to pursue claims under pre-existing state laws. The D.C. Circuit, after concluding that U.S. nationals could not recover punitive damages, concluded that it would be “puzzling” to allow such a remedy to foreign nationals. The Supreme Court, having concluded that U.S. nationals can recover punitive damages, asked the D.C. Circuit to revisit the availability of punitive damages for foreign nationals.
We haven’t yet written about the Ohio jury verdict awarding $33 million in punitive damages against Oberlin College, in a defamation case brought by a family-owned bakery.
For those who haven’t heard about this case, The ABA Journal summarizes the basic facts: the bakery owners “sued the college and the dean of students after a shoplifting incident led to allegations the business practiced racial profiling. The allegations prompted student protests, which the family said was supported by the college.”
We’re not going to get into the political ramifications of that case. You can find plenty of that elsewhere. Rather, we’re going to focus on a more nuts-and-bolts legal issue, namely, how Ohio’s legislative cap on punitive damages will apply to the case.
First, a little background. Ohio passed a cap on punitive damages back in the 1990s, but the Ohio Supreme Court struck that cap down as unconstitutional. The state legislature tried again in 2004 and this time, after some change in personnel on the Supreme Court, the statute was upheld.
The statute limits non-economic damages to $350,000 and limits punitive damages to three times the amount of compensatory damages. In this case, the parties dispute whether the punitive damages cap should be applied to the jury’s full award of compensatory damages, or to the compensatory damages award after it has been reduced to comply with the cap. They also dispute whether the caps apply to each individual cause of action for which relief was granted, or to the aggregate damages awarded.
The answers to these questions make a big difference in the ultimate outcome of the case. According to Oberlin College’s brief (link courtesy of Legal Insurrection), proper application of the caps results in a total award of just over $14.3 million. According to the plaintiffs’ brief, they are entitled to $25 million after the caps are applied.
However the trial judge resolves the issue, the case seems destined for appellate review.
UPDATE: (6/27/19): The plaintiffs have now filed a brief (link courtesy of Legal Insurrection again) arguing that application of the punitive damages cap in this case would be unconstitutional. As noted, the Ohio Supreme Court already rejected a constitutional challenge to the statute, but the plaintiffs here argue that the Supreme Court’s decision in that prior case held only that the statute was constitutional on its face, and left open the possibility that the statute might be still be unconstitutional as applied to a particular case.
We haven’t yet written about the Ohio jury verdict awarding $33 million in punitive damages against Oberlin College, in a defamation case brought by a family-owned bakery.
For those who haven’t heard about this case, The ABA Journal summarizes the basic facts: the bakery owners “sued the college and the dean of students after a shoplifting incident led to allegations the business practiced racial profiling. The allegations prompted student protests, which the family said was supported by the college.”
We’re not going to get into the political ramifications of that case. You can find plenty of that elsewhere. Rather, we’re going to focus on a more nuts-and-bolts legal issue, namely, how Ohio’s legislative cap on punitive damages will apply to the case.
First, a little background. Ohio passed a cap on punitive damages back in the 1990s, but the Ohio Supreme Court struck that cap down as unconstitutional. The state legislature tried again in 2004 and this time, after some change in personnel on the Supreme Court, the statute was upheld.
The statute limits non-economic damages to $350,000 and limits punitive damages to three times the amount of compensatory damages. In this case, the parties dispute whether the punitive damages cap should be applied to the jury’s full award of compensatory damages, or to the compensatory damages award after it has been reduced to comply with the cap. They also dispute whether the caps apply to each individual cause of action for which relief was granted, or to the aggregate damages awarded.
The answers to these questions make a big difference in the ultimate outcome of the case. According to Oberlin College’s brief (link courtesy of Legal Insurrection), proper application of the caps results in a total award of just over $14.3 million. According to the plaintiffs’ brief, they are entitled to $25 million after the caps are applied.
However the trial judge resolves the issue, the case seems destined for appellate review.
UPDATE: (6/27/19): The plaintiffs have now filed a brief (link courtesy of Legal Insurrection again) arguing that application of the punitive damages cap in this case would be unconstitutional. As noted, the Ohio Supreme Court already rejected a constitutional challenge to the statute, but the plaintiffs here argue that the Supreme Court’s decision in that prior case held only that the statute was constitutional on its face, and left open the possibility that the statute might be still be unconstitutional as applied to a particular case.
The National Law Review reports on a recent Sixth Circuit opinion striking down a Tennessee statute that limited punitive damages to the greater of $500,000 or two times compensatory damages. The Sixth Circuit’s opinion holds that the Tennessee constitution guarantees a right to a jury trial on the amount of punitive damages, and that a cap on the amount is inconsistent with that right.
Courts around the country have reached different results on this issue. For example, a 2018 federal district court decision rejected the same argument under North Carolina law.
The National Law Review reports on a recent Sixth Circuit opinion striking down a Tennessee statute that limited punitive damages to the greater of $500,000 or two times compensatory damages. The Sixth Circuit’s opinion holds that the Tennessee constitution guarantees a right to a jury trial on the amount of punitive damages, and that a cap on the amount is inconsistent with that right.
Courts around the country have reached different results on this issue. For example, a 2018 federal district court decision rejected the same argument under North Carolina law.