A few months ago we blogged about the cert. petition in Wyeth v. Scroggin. Today, the Supreme Court denied that petition (see the order list). We’ll have to wait a while for the Supreme Court (or some other court) to tackle the problems that can arise when a new trial is limited to the issue of punitive damages.

We previously blogged about Wyeth v. Scroggin, in which a jury awarded $27 million in punitive damages—the Eighth Circuit found evidentiary error occurred during the punitive damages phase of the trial, and ordered a partial new trial limited to the issue of punitive damages. Wyeth (now owned by Pfizer) has filed a petition for certiorari, asking the U.S. Supreme Court to decide whether a new trial limited to punitive damages violates the Seventh Amendment. (See the Supreme Court’s on-line docket for this petition.)

This is an issue that is near and dear to our hearts. As appellate lawyers who routinely handle appeals involving punitive damages, we have often had occasion to explain that appellate courts should order a complete new trial if the court finds error that affected a punitive damages award, because partial new trials limited to punitive damages are usually unfair.

Case law holds that limited new trials are appropriate only in limited circumstances. For example, the U.S. Supreme Court held in Gasoline Products Co. v. Champlin Refining Co. (1931) 283 U.S. 494, 500, that courts should not order retrials limited to a single issue unless “it clearly appears that the issue to be retried is so distinct and separable from the others that a trial of it alone may be had without injustice.” Similarly, the California Supreme Court held in Torres v. Automobile Club of So. California (1997) 15 Cal.4th 771, 776 that appellate courts should not order a limited retrial on punitive damages unless punitive damages “can be separately tried without such confusion or uncertainty as would amount to denial of a fair trial.”

In practice, new trials limited to the issue of punitive damages are unworkable in most cases. A jury must base its punitive damages award on the same conduct that supported liability and supported a finding of malice, oppression or fraud; otherwise, the defendant will be improperly punished for conduct that was not tortious. Typically, the plaintiff points to a variety of conduct by the defendant to establish a tort, but the verdict form does not break down the jury’s findings in a way that shows which particular acts occurred, and which satisfied the elements of the claimed tort. Thus,there is no way for a jury in a limited retrial to know what conduct the first jury found to be tortious and/or malicious. If the second jury is told to assume that the first jury resolved every factual dispute in favor of the plaintiff’s arguments, a limited retrial creates a real risk that the second jury will impose punishment for a subset of conduct that the first jury did not find to be tortious or malicious. To avoid this unfairness, courts should resist the temptation to order limited retrials except in the rare circumstance where it can be determined from the first trial exactly what conduct the second jury should be punishing.

We’ll keep an eye on this petition and the Supreme Court’s ruling on it. We don’t yet have a link to the cert. petition, but here’s a link to an amicus brief in support of the petition, filed by The Defense Research Institute (DRI).

In the wake of Justice Stevens’ announcement that he will retire from the Supreme Court, a wide array of commentators (Jan Crawford, Dahlia Lithwick, Ilya Shapiro) are writing about his legacy. Most of the commentary focuses on his status as the most liberal justice on the current Court. Erwin Chemerinsky’s profile of Justice Stevens in today’s Daily Journal (subscription required) contains a nice summary of Justice Stevens’ greatest hits from a liberal perspective.

I won’t take issue with the characterization of Justice Stevens as the Court’s most reliable liberal in most areas, but it’s worth noting that Justice Stevens was also the author of one of the most business-friendly decisions issued by the Supreme Court in the past few decades: BMW v. Gore. That was the case in which the Supreme Court first recognized a federal constitutional limitation on excessive punitive damages. Justice Stevens also joined the majority when the Supreme Court further developed those limitations in State Farm v. Campbell. As readers of this blog are aware, the application of those two opinions in the lower courts has saved American businesses billions of dollars. The Court’s most conservative justices, Justices Scalia and Thomas, dissented from those opinions and criticized them as unprincipled judicial lawmaking (or, to use a hackneyed political buzzword, judicial “activism”).

Looking solely at the Supreme Court’s punitive damages cases, one could say that when Justice Stevens retires, the Court will lose its most prominent pro-business “activist.”

My co-bloggers have already linked to a few reports about how a Justice Sotomayor might vote in punitive damages cases. This Bloomberg.com story addresses that issue again.

As reported by Bloomberg, Judge Sotomayor struck a pro-business chord during her Senate testimony when she said that “[i]n business, the predictability of law may be the most necessary.” That statement echoes the reasoning of Justice Souter in his opinion for the majority in Exxon Shipping, in which he stated that a imposing a maximum one-to-one ratio of punitive damages to compensatory damages eliminates arbitrary and unpredictable outcomes.

The Bloomberg story goes on to note, however, that Judge Sotomayor twice voted to uphold punitive damages against arguments that the awards were unconstitutionally excessive. One of those cases was Motorola Credit Corp. v. Uzan (2d Cir. 2007) 509 F.3d 74. To our knowledge, the $1 billion punitive damages award in that case is the second largest punitive damages award ever to survive appeal in the U.S. It’s worth noting, however, that the punitive damages award in that case was only half the amount of the $2 billion compensatory damages award, so that award was well within the one-to-one limit advocated by Justice Souter.

I looked on Westlaw to find the other case referenced in the Bloomberg story and I found Moskowitz v. Coscette [2001 WL 51009]. In that case, the jury awarded $125,000 in compensatory damages and $75,000 in punitive damages. In a summary order, the 2nd Circuit upheld the award. Again, the award was below the one-to-one ratio limit.

In my view, these opinions don’t shed much light, if any, on how Justice Sotomayor might vote on punitive damages issues coming before the Supreme Court. They certainly don’t indicate how Justice Sotomayor might feel about the validity of the Supreme Court’s line of cases, starting with BMW v. Gore, that imposed restrictions on the amount of punitive damages as a matter of due process. All we can say is that Judge Sotomayor has never voted to strike down a punitive damages award as excessive, but she hasn’t voted to uphold a punitive damages award exceeding a one-to-one ratio either.

In an unusual 5-4 grouping, Justice Thomas wrote the opinion for the court with Justices Stevens, Souter, Ginsberg and Breyer joining, holding that because punitive damages have long been an accepted remedy under general maritime law, and because neither Miles v. Apex Marine Corp., nor the Jones Act altered this understanding, punitive damages for the willful and wanton disregard of the maintenance and cure obligation remain available as a matter of general maritime law. Justice Alito dissented, joined by Chief Justice Roberts and Justices Scalia and Kennedy, arguing that punitive damages are not available under maritime law. On first impression, unlike the Exxon Shipping case, it does not appear that this case will likely have much impact beyond maritime law.

Yesterday, the U.S. Supreme Court yesterday denied Daimler-Chrysler’s cert. petition in a case involving a $13.3 million punitive damages award to the parents of an 8-year-old who died in the crash of a Dodge Caravan. (See the court’s online docket and yesterday’s Order List.)

The jury originally awarded the plaintiffs compensatory damages of $5 million for wrongful death and another $2.5 million for negligent infliction of emotional distress (NIED). The jury then added nearly $98 million in punitive damages – – $65 million for wrongful death and $32.5 million for NIED. The trial court reduced the punitive damages to $13.3 million for wrongful death and $6.6 million for NIED.

The Tennessee Court of Appeals reversed the punitive damages award in its entirety, concluding that no punitive damages could be imposed based on the evidence.

The Tennessee Supreme Court, however, reinstated the wrongful death punitive damages award. Daimler-Chrysler argued under Philip Morris v. Williams that the trial court violated its due process rights by failing to instruct the jury not to punish the defendant for harm to non-parties, but the Tennessee Supreme Court rejected that argument because Daimler-Chrysler had not raised it in the Court of Appeals.

Overlawyered and Products Liability Prof Blog had posts about the Tennessee Supreme Court’s opinion back in July 2008, describing the underlying facts.

According to Business Week, a Justice Sotomayor would be a centrist on business cases, including those involving punitive damages. Business Week quotes Evan Tager of Mayer Brown for the proposition that “on the bench Sotomayor has ‘expressed unease’ about large punitive awards, yet has upheld large awards ‘when the ratio of punitive to compensatory damages is modest.’”