It’s not often that a state supreme court affirms a blockbuster punitive damages award, but yesterday the Colorado Supreme Court affirmed a $39.6 million judgment in a personal injury action, including $18 million in punitive damages, in the case of Qwest Services Corp. v. Blood.  The plaintiff, a lineman for an electric utility, was injured during a climb on a wooden utility pole.  The 46-year-old pole was rotten and collapsed under the plaintiff’s weight.  He sued the defendant, the company that owned of the pole, for failure to implement a routine pole inspection program.

The Colorado Supreme Court’s opinion has three primary holdings:

1.  Colorado’s punitive damages statute does not violate the Due Process Clause as interpreted by the U.S. Supreme Court in Philip Morris v. Williams; the statute does not suggest that a jury can or should award punitive damages to punish the defendant for harm to nonparties.

2.  The evidence was sufficient to support a punitive damages award against the defendant, because a reasonable jury could conclude that the defendant’s failure to implement a pole inspection problem was “wilful and wanton” within the meaning of Colorado’s punitive damages statute. 

3.  The amount of the award was not excessive under the three guideposts of BMW v. Gore because the reprehensibility of the defendant’s conduct was sufficient to support a punitive damages award that was less than the amount of compensatory damages.

Related posts:

Colorado Supreme Court to consider excessive punitive damages, despite statutory cap

The Associated Press is reporting (via the Washington Post) that a jury in Mississippi awarded $322 million last week to a man who claimed he developed asbestosis as a result of working with drilling mud additives.  The defendants are Chevron and Union Carbide, who were each found 50 percent at fault for the plaintiff’s injuries.  (Brown v. Phillips 66, et al., Miss. Cir. Ct., Smith Cty.)

The AP story says the $322 million award is the largest single plaintiff’s asbestos verdict in U.S. history, according to the plaintiff’s attorney.  The AP story doesn’t say how much of that award was attributable to punitive damages, but this story in the HarrisMartin asbestos litigation reporter (subscription required) says the breakdown was as follows: $22 million in compensatory damages and $300 million in punitive damages.  That’s a ratio of 13.7 to one, which cannot possibly withstand scrutiny under BMW and Campbell.  The award also appears to violate Mississippi law, which places limits on punitive damages based on a sliding scale according to the defendant’s net worth.  The maximum award permitted under that statute (Miss. Code Ann. 11-1-65) is $20 million for a defendant with a net worth in excess of $1 billion.  Any way you slice it, this award doesn’t figure to last very long.

Reuters is reporting that Swiss biopharmaceutical firm Actelion Ltd. plans to appeal from a jury award of $547 million in compensatory damages and $30 million in punitive damages in a dispute with rival drug company Asahi Kasei Pharma Corp.  Asahi accused Actelion of intentionally interfering with Asahi’s attempts to develop a drug for the treatment of heart disease, in order to preserve Actelion’s dominant position in that market.

Ordinarily, when a jury awards tens of millions in punitive damages, that award becomes the focal point of the appeal.  But in this case the punitive damages issues will obviously take a back seat to arguments challenging the colossal compensatory award.

Asahi’s lawyers have issued this press release touting their victory.

Reuters is reporting that a federal district court jury in Virginia has awarded $12 million in compensatory damages and $200 million in punitive damages to a plaintiff who claims he suffered brain damage after receiving injections of Botox made by defendant Allergan.  This is one of the largest U.S. punitive damages awards we’ve seen in a while, but it doesn’t appear to have any chance of standing up.  The case is proceeding under Virginia law, which caps punitive damages at $350,000. 

Last December we reported on a $5 million punitive damages award in favor of two law professors against West Publishing.  The professors, as you may recall, were the authors of a West treatise on criminal procedure.  They won the big punitive award (along with $180,000 in compensatory damages) based on allegations that West wrongly identified them as the authors of shoddy updates to the treatise.

Predictably, that punitive award did not survive post-trial review.  The trial court has issued an order (link via Courthouse news) finding that the award is excessive and that the professors must choose between a new trial or a remittitur of the total punitive damages to $220,000.

UPDATE:  The original post erroneously reported that the trial court ordered a remittitur of the punitive damages to $400,000.  The correct figure is $220,000 (for a total award of $400,000 including the compensatory damages).  The text of the post has been corrected.

Bloomberg Businessweek is reporting that a jury in Los Angeles has awarded a former Marine $19 million in punitive damages and $35,000 in compensatory damages, in an insurance bad faith case against Stonebridge Life Insurance.  The plaintiff claimed that Stonebridge unreasonably refused to pay for a lengthy hospital stay, agreeing to pay only for 19 days out of a 109-day stay.

Stonebridge says it intends to appeal.  An appeal may not be necessary, however, if Stonebridge files post-trial motions asking the trial court to reduce or vacate the punitive damages.  Although there is some case law stating that a low compensatory damages award can support a higher punitive-to-compensatory ratio, nothing would support the extreme ratio here.  The trial court may conclude that the punitive is so high and so disproportionate to the actual harm that it raises a presumption that the jury acted out of passion and prejudice.

I haven’t been following this case, but apparently a former associate at the Orrick Herrington law firm is suing the firm for $100 million, including punitive damages, because they promised to make him a partner but didn’t.  This New York Law Journal story reports that the trial judge granted Orrick’s motion to strike the claim for punitive damages, on the ground that being passed over for partnership isn’t the sort of egregious misconduct that could support an award of punitive damages.  The plaintiff says he will appeal.  Good luck with that. 

The latest jury verdict in the on-going Florida tobacco litigation: $6 million in compensatory damages and $11.3 million in punitive damages to the children of a deceased smoker, per this story on the Courtroom View Network.

Related posts:

Smoker asks for $10 billion in punitive damages; jury awards $260,000

Plaintiffs break losing streak in Florida smoker lawsuits, win $72 million punitive damages award
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

Opponents of limits on punitive damages typically argue that unlimited punitive damages are necessary to deter bad corporate behavior and protect public safety.  See this recent blog post, for example.  If that reasoning is correct, states with caps on punitive damages should be experiencing a rise in corporate misconduct and a decline in public safety.  And the situation should be even worse in states that have banned punitive damages altogether.  But is there any evidence this is true?  Yes, according to these Michigan plaintiffs’ lawyers.

They argue, in this video and on this page of their website, that Michigan is suffering from a high rate of trucking accidents because that state does not allow punitive damages.  They say that trucking companies, free from the threat of punitive damages, “knowingly hire unqualified, unfit truck drivers who commit safety violations that cause accidents.”  They cite evidence that Michigan experiences more than 100 fatal truck accidents per year, and another 5,000 truck accidents causing serious personal injuries per year.

One thing seems to be missing: evidence that the rate of truck accidents in Michigan is higher than in states where punitive damages are allowed.  Without such evidence, it seems awfully difficult to argue that truck accidents in Michigan are caused by that state’s prohibition on punitive damages.

I decided to take a look at the data available on the internet to see if I could test the hypothesis that Michigan’s lack of punitive damages has resulted in more truck accidents.  According to this University of Michigan study, Texas had the most fatal truck accidents between 2003 and 2007, a total of 2,545.  Michigan had a total of 606 during the same time period.  According to the 2010 census figures, Texas has a population of  25.1 million and Michigan has a population of 9.9 million.  That means that Texas actually has a higher rate of truck accidents per capita, .0001 per person for Texas compared to .00006 per person for Michigan.  Texas, by the way, allows punitive damages (subject to a cap).   

Florida also had a very high number of fatal truck accidents during the same time period, a total of 1,894.  With a population of 18.8 million, Florida’s rate of fatal truck accidents per person is .0001, the same as Texas, and higher than Michigan.  Florida, of course, has no caps on punitive damages and is home to many of the largest punitive damages awards in the country in recent years.  Hmmm, the hypothesis isn’t looking so good.  In fact, the only correlation so far is that states that allow punitive damages have a higher rate of fatal truck accidents, but I’m certainly not confusing correlation with causation.

Let’s look at a Ohio, a state that is more economically and geographically similar to Michigan.  Ohio had 828 fatal truck accidents in 2003-2007, with a population of 11.5 million, for a rate of .00007 per person.  Again, higher than Michigan.  And Ohio law permits punitive damages (subject to a cap).

Based on this limited examination of the data, there appears to be no support whatsoever for the theory that Michigan has a higher rate of truck accidents as a result of its prohibition on punitive damages. To truly isolate the impact of punitive damages law on trucking accidents, a researcher would have to dig a lot deeper, and isolate a lot of other variables – economic, geographic, demographic.  That may be possible, but I haven’t seen any such study. If any of our readers have seen one, let us know.

Bloomberg reports that a Florida jury has awarded $260,000 in punitive damages to a smoker in a lawsuit against RJ Reynolds, rejecting the plaintiff’s request for $10 billion. The Bloomberg story quotes the disappointed plaintiffs’ lawyer: “It could have been and should have been more . . .  [b]ut this is my first tobacco trial.”

The plaintiff’s lawyer may have thought that, just by asking for $10 billion, he would get at least a few million bucks out of the jury.  After all, as our friends at Cal Biz Lit have noted, research shows that the most significant predictor for a large punitive damages award is a large request.  That principle apparently did not work in the plaintiff’s favor here, although we’ll never know how much the jury would have awarded if the plaintiff had asked for something within the realm of reason. 

Related posts:

Plaintiffs break losing streak in Florida smoker lawsuits, win $72 million punitive damages award
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