California Punitives by Horvitz & Levy

  • Supreme Court denies cert. in Epic Systems v. Tata Consultancy

    Last October we reported about this case in which the Supreme Court asked the Solicitor General to weigh in on whether the existence of a a statutory cap on punitive damages eliminates the need for due process review of punitive damages awards for excessiveness.  The SG filed a brief taking the position that the case did not merit certiorari because the petitioner did not preserve its argument below, and because there is no circuit split on the issue.  The SG adopted a compromise position on the merits, arguing that caps on punitive damages should “materially inform” a court’s due process analysis, but should not displace the BMW guideposts entirely.

    This morning, the Supreme Court denied certiorari.  Justice Barrett did not participate in the vote.

  • SCOTUS asks the Solicitor General to weigh in on a punitive damages cert. petition

    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.

  • SCOTUS denies cert. in Johnson & Johnson talc case involving $1.62 billion punitive damages award

    The Supreme Court has denied Johnson & Johnson’s cert. petition discussed in this prior post.  

    The petition drew widespread support from defense organizations, including the Atlantic Legal Foundation,  DRI, the Federal of Defense and Corporate Counsel, the International Association of Defense Counsel, the Missouri Organization of Defense Lawyers, the Product Liability Advisory Council, the U.S. Chamber of Commerce, and Washington Legal Foundation.  (You can view all those briefs through links on the Supreme Court’s docket page.)

    None of the attention managed to draw the Supreme Court’s interest.  The Court denied the petition this week, with Justices Alito and Kavanaugh recusing themselves (no reason was given for the recusal but the likely explanation is that they own stock in Johnson & Johnson).  

    Bloomberg Law posted this story on the ruling today: Justices Sticking to Punitive Damages Limits after J&J Case

  • Johnson & Johnson seeks SCOTUS review of Missouri punitive damages award

    We previously reported on this talc case in which the Missouri Court of Appeal affirmed a $1.62 billion punitive damages award against Johnson & Johnson.  

    Johnson & Johnson has filed a petition for certiorari in that case, raising the following issues:

    (1) Whether a court must assess if consolidating multiple plaintiffs for a single trial violates due process, or whether it can presume that jury instructions always cure both jury confusion and prejudice to the defendant; (2) whether a punitive-damages award violates due process when it far exceeds a substantial compensatory-damages award, and whether the ratio of punitive to compensatory damages for jointly and severally liable defendants is calculated by assuming that each defendant will pay the entire compensatory award; and (3) whether the “arise out of or relate to” requirement for specific personal jurisdiction can be met by merely showing a “link” in the chain of causation, as the Court of Appeals of Missouri held, or whether a heightened showing of relatedness is required, as the Ford Motor Company in Ford Motor Co. v. Montana Eighth Judicial District Court has argued.

    The first issue falls into a category that the Supreme Court has avoided thus far—the special concerns that arise when courts award punitive damages in mass tort situations.  The Supreme Court has repeatedly denied petitions raising these sorts of issues, but perhaps the eye-popping award here will make this the case that finally draws the court’s attention.

    The Court may feel that it has already answered “yes” to the first part of the second question, because the BMW and State Farm cases both held that a punitive damages award usually violates due process when it far exceeds a substantial compensatory damages award.  But the Court has not yet addressed the second part of that question, namely, whether in cases involving multiple defendants, courts can double-count the compensatory damages when calculating the punitive-to-compensatory ratio.  When this issue has come up in California, most courts have recognized that double-counting would result in an artificially low ratio, so our courts will generally calculate the ratio by comparing the punitive damages award against each defendant to that defendant’s proportionate share of the compensatory damages award, taking into account the jury’s allocation of fault.  It would be helpful to have a Supreme Court opinion validating that approach.

    The third question seems to be DOA, now that the Supreme Court has ruled against Ford in the Montana case referenced in the question.

    Law 360 has coverage of Johnson & Johnson’s opinion here.

  • Supreme Court grants cert in punitive damages case, but declines to consider punitive damages issue (TransUnion v. Ramirez)

    Today the Supreme Court granted a certiorari petition that raised two remedies issues, the second of which involves punitive damages:

    1. Whether either Article III or Rule 23 permits a damages class action where the vast majority of the class suffered no actual injury, let alone an injury anything like what the class representative suffered. 

    2. Whether a punitive damages award that is multiple times greater than an already-substantial classwide award of statutory damages, and is orders of magnitude larger than any actual proven injury, violates due process. 

    However, the order granting certiorari expressly limits review to the first issue.  The Supreme Court has not considered the issue of excessive punitive damages since Exxon Shipping in 2008, and the justices apparently have no interest in revisiting that issue again anytime soon.

    Hat tip: Rick Hasen  

  • Supreme Court authorizes recovery of punitive damages against Sudan for 1998 embassy bombings (Opati v. Republic of Sudan)

    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.

  • Supreme Court grants cert. to decide whether $4.3 billion punitive damages award should be reinstated (Opati v. Republic of Sudan)

    We have reported several times about huge punitive damages awards against foreign governments based on acts of state-sponsored terrorism.  (See here, here, and here.)  These awards are typically entered by default, because the defendant countries usually do not appear to defend themselves.  And to my knowledge the plaintiffs have not had any success collecting on these judgments.

    Once such award occurred in this case: a federal district court awarded $6 billion in compensatory damages and $4.3 billion in punitive damages against the government of Sudan for its complicity in the 1998 attacks on the U.S. embassies in Kenya and Tanzania that killed 224 people.  Sudan eventually appeared in the case and appealed the judgment.

    In 2017 the D.C. Circuit upheld Sudan’s liability but vacated the punitive damages.  The court ruled that the plaintiffs could not recover punitive damages under the 1976 Foreign Sovereign Immunities Act (FSIA), because when Congress amended the statute to permit claims against state sponsors of terrorism, it did not expressly authorize recovery of punitive damages in lawsuits over conduct that predated the amendment.

    The plaintiffs filed a cert. petition, which the Supreme Court granted today.  The Court’s order limits review to the second issue raised in the petition: whether the FSIA applies retroactively, permitting punitive damages against foreign states for terrorist activities occurring prior to the passage of the current version of the act.

    The decision in this case will obviously have an impact on the various other punitive damages cases involving state-sponsored terrorism, but it may not have much application outside that context.

  • Supreme Court grants cert. to decide whether $4.3 billion punitive damages award should be reinstated (Opati v. Republic of Sudan)

    We have reported several times about huge punitive damages awards against foreign governments based on acts of state-sponsored terrorism.  (See here, here, and here.)  These awards are typically entered by default, because the defendant countries usually do not appear to defend themselves.  And to my knowledge the plaintiffs have not had any success on collecting on these judgments.

    Once such award occurred in this case: a federal district court awarded $6 billion in compensatory damages and $4.3 billion in punitive damages against the government of Sudan for its complicity in the 1998 attacks on the U.S. embassies in Kenya and Tanzania that killed 224 people.  Sudan eventually appeared in the case and appealed the judgment.

    In 2017 the D.C. Circuit upheld Sudan’s liability but vacated the punitive damages.  The court ruled that the plaintiffs could not recover punitive damages under the 1976 Foreign Sovereign Immunities Act (FSIA), because when Congress amended the statute to permit claims against state sponsors of terrorism, it did not expressly authorize recovery of punitive damages in lawsuits over conduct that predated the amendment.

    The plaintiffs filed a cert. petition, which the Supreme Court granted today.  The Court’s order limits review to the second issue raised in the petition: whether the FSIA applies retroactively, permitting punitive damages against foreign states for terrorist activities occurring prior to the passage of the current version of the act.

    The decision in this case will obviously have an impact on the various other punitive damages cases involving state-sponsored terrorism, but it may not have much application outside that context.

  • Supreme Court reverses Ninth Circuit, holds that punitive damages are unavailable under maritime law for claims of unseaworthiness (Dutra Group v. Batterton)

    The Ninth Circuit created a circuit split last year when it held that punitive damages are available under general maritime law for personal-injury unseaworthiness claims (i.e., claims that a vessel owner willfully and wantonly failed to provide a vessel reasonably fit for its intended purpose, resulting in personal injury).

    Yesterday, the Supreme Court reversed the Ninth Circuit in a 6-3 decision written by Justice Alito (with Justices Ginsburg, Breyer, and Sotomayor dissenting).   

    Justice Alito based his majority opinion on two grounds: (1) “overwhelming historical evidence” indicating that punitive damages have not been available for personal-injury unseaworthiness claims, and (2) the need to preserve a parallelism between maritime common law and maritime statutory law (the Jones Act), which generally limits a seaman’s damages to pecuniary losses.

    Justice Alito had to distinguish the Court’s 2009 in Atlantic Sounding v. Townsend, which allowed recovery of punitive damages under the Jones Act and general maritime law for willful and wanton failure to provide “maintenance and cure” (a term of art referring to a vessel owner’s obligation to provide food, lodging, and medical services to injured seamen).  The majority opinion in Atlantic Sounding relied on historical evidence that punitive damages were traditionally available in maintenance and cure cases.  Justice Alito found no such evidence supporting recovery of punitive damages for unseaworthiness.  Interestingly, Justice Thomas, who wrote the majority opinion in Atlantic Sounding, signed on to Justice Alito’s opinion in Dutra.

    The opinion is not likely to have any impact outside the maritime context. 

  • Supreme Court reverses Ninth Circuit, holds that punitive damages are unavailable under maritime law for claims of unseaworthiness (Dutra Group v. Batterton)

    The Ninth Circuit created a circuit split last year when it held that punitive damages are available under general maritime law for personal-injury unseaworthiness claims (i.e., claims that a vessel owner willfully and wantonly failed to provide a vessel reasonably fit for its intended purpose, resulting in personal injury).

    Yesterday, the Supreme Court reversed the Ninth Circuit in a 6-3 decision written by Justice Alito (with Justices Ginsburg, Breyer, and Sotomayor dissenting).

    Justice Alito based his majority opinion on two grounds: (1) “overwhelming historical evidence” indicating that punitive damages have not been available for personal-injury unseaworthiness claims, and (2) the need to preserve a parallelism between maritime common law and maritime statutory law (the Jones Act), which generally limits a seaman’s damages to pecuniary losses.

    Justice Alito had to distinguish the Court’s 2009 in Atlantic Sounding v. Townsend, which allowed recovery of punitive damages under the Jones Act and general maritime law for willful and wanton failure to provide “maintenance and cure” (a term of art referring to a vessel owner’s obligation to provide food, lodging, and medical services to injured seamen).  The majority opinion in Atlantic Sounding relied on historical evidence that punitive damages were traditionally available in maintenance and cure cases.  Justice Alito found no such evidence supporting recovery of punitive damages for unseaworthiness.  Interestingly, Justice Thomas, who wrote the majority opinion in Atlantic Sounding, signed on to Justice Alito’s opinion in Dutra.

    The opinion is not likely to have any impact outside the maritime context.