This story in the New York Daily News reports that a federal jury in Manhattan has awarded $2 million in compensatory damages and $16 million in punitive damages to a plaintiff who claimed that her employer sexually harassed her and then defamed her.  The plaintiff was seeking $850 million, so perhaps the jury thought they were showing restraint by awarding “only” $16 million in punitives.

A federal judge in Florida has issued an order vacating a $20 million punitive damages award against Philip Morris.

In one of the many Engle-progeny cases in Florida (see links below for more stories on this ongoing saga), the plaintiff in this case sued on theories of negligence, strict liability, fraudulent concealment, and conspiracy.  A jury awarded $6.25 million in compensatory damages, plus $20 million in punitive damages based on the fraud and conspiracy claims.

Judge James G. Carr, a senior district judge from Ohio sitting by designation in the Middle District of Florida, ruled that Philip Morris is entitled to judgment as a matter of law on the fraud and conspiracy claims because the plaintiff failed to prove that she actually relied on any misrepresentations when she decided to smoke, or when she decided to switch to “light” or filtered cigarettes.  Because the fraud and conspiracy claims were the sole basis for punitive damages, Judge Carr ordered judgment for Philip Morris on that issue.

If I’m reading the order correctly, there’s still a chance the judge may order a new trial on the plaintiffs’ negligence and strict liability claims, based on the 11th Circuit’s decision in a case called Graham v. R.J. Reynolds.  I won’t get into that here, because Graham raises preemption issues that are beyond the scope of this blog.

Related posts:

Another large verdict in Florida smoker litigation

Florida jury awards $14 million in punitive damages to smoker’s family

 Florida jury awards smoker’s family $22.5M in punitive damages

Florida appellate court reverses $79 million judgment in tobacco case
 
Florida appellate court reverses $40 million punitive damages award in tobacco case

Philip Morris wins sixth straight trial in Florida smoker litigation

Florida jury awards relatively modest punitive damages in smoker lawsuit

Another punitive damages award in Florida tobacco litigation

Florida jury awards $20 million in punitive damages to smoker’s widow

Smoker’s widow wins $12.5 million in punitive damages

Florida trial judge cuts $244 million punitive damages award

Florida jury awards $25 million in punitive damages to smoker’s widow

“Smokers, tobacco, both winners in early Engle cases”

Jury rules for plaintiff in first phase of retrial after reversal of $145 billion punitive damages award

After reversal of $145 billion class action punitive damages award, Florida smokers seek punitive damages in individual suits

The Philadelphia Inquirer reports that a jury has awarded $38.5 million in punitive damages and $8 million in compensatory damages (a 4.81-to-1 ratio) to the families of two women who were shot and killed by a disgruntled employee at a Kraft Foods plant. 

The defendant, U.S. Security Associates, Inc., provided security guards for the plant.  According to the Inquirer story, the plaintiffs presented evidence that the company’s two unarmed security guards ran away from the armed gunman and failed to alert the plant workers to the danger. 

The jury awarded punitive damages not against the individual security guards, but against their employer.  The company says it will appeal.  Based on my very limited knowledge of the case (and even more limited knowledge of Pennsylvania law), I expect the company to argue that punitive damages cannot be imposed against an employer for the misconduct of low-level employees, without some evidence of wrongdoing by corporate management.  If the plaintiffs presented evidence that this incident was the result of corporate policy, as opposed to just the rogue acts of a couple of security guards, the article doesn’t mention it.

A new post on Mayer Brown’s punitive damages blog discusses an interesting decision from the Second Circuit on the subject of punitive damages in class actions.

In a nutshell, the Second Circuit said that the district court should not have adopted a trial plan that called for the jury to decide the appropriate ratio of punitive damages to compensatory damages before the jury had determined the amount of compensatory damages.

This issue—how to resolve punitive damages claims in class actions—has been simmering for years.  Appellate decisions in other jurisdictions have approved so-called reverse bifurcation trial plans that permit a jury to decide punitive damages before compensatory damages, and sometimes even before deciding the question of liability.  The Supreme Court has had several opportunities to address the constitutionality of that practice, but so far has declined to wade into this area.

Related posts:

Cert. Denied in Chemtall v. Stern

Reverse Bifurcation of Punitive Damages Trials—”Why Not? It’s No Worse Than How We Handle Asbestos Cases?”

Cert. Denied in Philip Morris v. Accord; Petition in Chemtall v. Stern Raises the Same Issue

Philip Morris v. Accord: Cert Petition on Punitive Damages Issue Will Be Considered on February 15

Last year we blogged about the $185 million punitive damages verdict that a San Diego federal jury awarded to a single plaintiff in an employment case (Juarez v. AutoZone).  We predicted, along with pretty much everyone else, that the award would not survive judicial review.  Even the Consumer Attorneys of California, who ordinarily advocate for big punitive damage awards, went on record saying that this award is obviously excessive.

ABC10News in San Diego reported this morning that the trial judge in that case was set to hear arguments on AutoZone’s post-trial motions.

For those interested in digging into this a little further, here are links to the parties’ primary briefs on the post-trial motions:

AutoZone’s new trial motion
AutoZone’s motion for judgment as a matter of law
Plaintiff’s opposition to new trial motion
Plaintiff’s opposition to motion for judgment as a matter of law
AutoZone’s reply in support of new trial motion
AutoZone’s reply in support of motion for judgment as a matter of law

Law360 reported on January 21 (and it escaped my notice until now) that U.S. District Judge Michael P. Shea of the District of Connecticut awarded $27.5 million in punitive damages in an antitrust and trade secrets case.

According to the Law 360 article, a jury awarded $35 million in compensatory damages, which Judge Shea founded to be excessive.  He ordered a conditional new trial on the issue of compensatory damages, subject to an agreement by the plaintiff (MacDermid Printing Solutions) to reduce the award to $20 million.  But the defendant (Cortron Corp.) probably didn’t spend much time celebrating when they learned that Judge Shea also granted the plaintiff’s motion for punitive damages and awarded $27.5 million.

The Daily Report of Fulton County, Georgia is reporting that a jury there has awarded $72.8 million to a school teacher who was burned after a gas line in his apartment exploded. He sued his landlord, claiming that the explosion was caused by the landlord’s violation of building codes.  The verdict consists of $17.9 million in compensatory damages, $47.9 million in punitive damages, and $7 million in attorney fees. 

A Georgia statute limits punitive damages to $250,000 except in products liability cases, cases involving a specific intent to harm, and cases where the defendant was under the influence of drugs or alcohol.  None of those exceptions would seem to apply here.

The American Tort Reform Foundation’s released its annual “Judicial Hellholes” report yesterday.  As usual, ATRF does not have kind things to say about the administration of civil justice in California. 

The report names California as the second worst jurisdiction in the nation in terms of fairness to defendants in civil litigation (behind the New York City asbestos docket).  The report offers a variety of reasons for that assessment, most of which are beyond the scope of this blog (e.g., that our courts have made it too easy for plaintiffs to “rifle the deep pockets of corporate defendants” in public nuisance actions, asbestos lawsuits, disability-access lawsuits, etc.) 

The report intersects with the focus of this blog when discussing Izell v. Union Carbide, in which the Court of Appeal recently affirmed an $18 million punitive damages award in a published decision.  The report highlights the dissenting opinion of Justice Kitching which, as we have noted, could attract the attention of the California Supreme Court as well.  (The discussion of Izell appears on page 14 of the report.)

Yesterday, the Ninth Circuit issued its en banc opinion in Arizona v. Asarco.  As our readers may recall, that’s the sexual harassment case in which a jury awarded the plaintiff no compensatory damages, $1 in nominal damages, and nearly $900,000 in punitive damages.

The district court reduced the punitive damages to $300,000 under Title VII’s statutory cap on punitive and non-economic damages.  A three-judge panel of the Ninth Circuit then ruled, in a 2-1 decision, that the punitive damages were still excessive and should be further reduced to $125,000.

Both parties sought en banc review.  The plaintiffs argued that they are entitled to the full $300,000 permitted by the cap, because an award within the cap cannot be unconstitutional.  The defendant argued that the 125,000 ratio permitted by the three-judge panel was still excessive.  Both parties got what they wanted—the court agreed to rehear the case en banc.  But the result isn’t quite what the defendant envisioned.  It’s a unanimous 11-0 win for the plaintiffs.

The en banc opinion starts by discussing the due process test for evaluating the excessiveness of a punitive damages award, as laid out in BMW v. Gore and State Farm v. Campbell.  The opinion then states that the due process standards are “of some relevance”in Title VII cases.  In other words, it is theoretically possible that punitive damages awarded under a carefully crafted statutory scheme could nonetheless violate due process.

But the opinion goes on to say that, when punitive damages are awarded under a “robust” statutory scheme, a “rigid application of the Gore guideposts is less necessary or appropriate.” Following that logic, the court concludes that a punitive damages award under Title VII can never really violate due process, because the statute clearly states the state of mind necessary for imposition of punitive damages, and provides fair notice of the possible amount of the punitive damages (i.e., up to $300,000).

While it’s clear that the en banc court has no problem with 300,000 to 1 ratios in Title VII cases, it’s not at all clear how the court’s analysis would translate to other statutory schemes.  How is a district court supposed to determine which statutes are sufficiently robust and carefully crafted, such that a vigorous due process analysis becomes unnecessary?  And when a statute qualifies as robust and carefully crafted, how exactly does a district court perform the relaxed and non-rigid version of the BMW and Campbell analysis that this opinion seems to require?

Given the murkiness of the court’s analysis, it is a bit surprising to see that this was a unanimous opinion.  The Ninth Circuit is known as a court whose members have a wide diversity of viewpoints and aren’t afraid to share them.  And this 11-member panel includes some judges whom we’d ordinarily expect to have some discomfort with an opinion holding that lower courts can, under circumstances that are not clearly defined, choose to disregard a due process analysis mandated by the U.S. Supreme Court.

So long as the analysis of this opinion is limited to Title VII cases, it’s impact will be limited.  Because the $300,000 cap is a modest one, the Ninth Circuit wouldn’t be striking down many punitive damages awards as excessive under the BMW standards anyway, even if the court had not excepted Title VII cases from the usual BMW analysis.  But this opinion could end up being quite significant if its analysis spreads to other areas, or if the Title VII cap ever gets raised.

As a side note, nowhere in this opinion does the court ever suggest that it might have a common-law duty to analyze the punitive damages award for excessiveness, apart from whatever the constitution requires.  As our friends over at Guideposts have pointed out, other circuits have held that in cases involving claims under federal law, federal courts have supervisory authority to ensure that those awards are not excessive, and should scrutinize them more closely under that common law authority than they would under the Due Process Clause.  Most likely, the parties did not make that argument here.

 Related posts:

New punitive damages blog analyzes case pending before en banc Ninth Circuit (Arizona v. ASARCO)

Ninth Circuit reduces $300,000 punitive damages award to $125,000 in Title VII harassment case (Arizona v. ASARCO)

Ninth Circuit grants en banc rehearing to decide excessiveness of punitive damages in Title VII case (Arizona v. ASARCO)

9th Circuit hears oral arguments in punitive damages case where jury awarded no compensatory damages