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

The Miami Herald reports that a Florida jury has awarded $91 million, including $55 million in punitive damages, to the estate of philanthropist/aviation pioneer George Batchelor in a lawsuit against accounting firm BDO Seidman.  The plaintiff claimed that BDO Sediman fraudulently concealed information about a company in which Batchelor had invested.

The California connection here is the plaintiff’s lawyer: Steven Thomas of Thomas, Alexander & Forrester in Venice.  Thomas scored an even bigger punitive damages award ($351 million) against the same defendant in another Florida case in 2009 (see this post), but that award was reversed on appeal.

Courtroom Views is reporting that an Oakland jury awarded a total of $13.5 million in punitive damages against two defendants last Friday, January 7.  The jury had previously awarded $4 million in compensatory damages.

The case, Bankhead v. Allied Packing, is a personal injury action based on exposure to asbestos.  The two defendants who got hit with punitive damages are ArvinMeritor and Pneumo Abex.

Asbestos plaintiffs rarely recover punitive damages, because their claims usually involve conduct that happened decades ago, when little information was known about the dangers of asbestos.  That makes it very difficult to prove that defendants acted with malice, or that there is some need to punish and deter.  But when plaintiffs do manage to get a punitive damages claim to a jury in these cases, they can ring up some huge numbers.  Like $200 million, for example.  That award got a lost of press coverage, but it didn’t last very long. 

The Supreme Court’s on-line docket for Wal-Mart v. Dukes indicates that oral argument will take place on March 29, 2011.

Wal-Mart’s cert. petition (via SCOTUSblog)

Related posts:


Cert. granted in Dukes v. Wal-Mart; review limited to first question plus new issue added by the Court

Wal-Mart v. Dukes cert. petition redistributed for Dec. 3 conference

Wal-Mart v. Dukes cert. petition up for consideration next week

Cert. Petition in Wal-Mart v. Dukes raises class certification issues that may impact whether punitive damages are subject to class treatment

Ninth Circuit’s Dukes v. Wal-Mart decision addresses class certification of punitive damages claims

 

The ABA Journal reports that two law professors won a large jury verdict against West Publishing, including compensatory damages of $90,000 each and punitive damages of $2.5 million each.  That’s a ratio of nearly 28 to 1.

The ABA Journal story says the professors, who authored a West treatise on criminal procedure, asked for a pay increase to continue providing the annual updates for the treatise.  They claim West refused to increase their pay but continued to list them as the authors of the updates, even though the work was performed by others and was below their standards.

If I were one of these professors, I wouldn’t be spending my millions just yet.  This doesn’t sound like the type of misconduct that could come close to supporting such a high ratio of punitive to compensatory damages.  Even if this case involves intentional misconduct (and I don’t know whether it does), it doesn’t seem to implicate the other indicia of reprehensibility such as physical harm, or preying upon a financial vulnerable victim.  It sounds more like a garden variety fraud case with purely economic damages, for which a low single-digit ratio would be the maximum.  I’d be very surprised if the punitive damages could survive post-trial and appellate review. 

Three Geeks and a Law Blog has links to the complaint, the verdict form, and the judgment.

Boston.com reports that a jury has awarded $81 million in punitive damages, on top of $50 million in compensatory damages, to the estate of Marie Evans, a lifelong smoker who began smoking at age 13.  The jury also awarded $21 million in compensatory damages to Evans’ son. 

This award tops the recent $72 million punitive damages award in the Florida smoker litigation.  The Boston.com article says the compensatory damages award alone is believed to be the largest such award ever delivered by a jury in a wrongful death lawsuit against a tobacco company, and the largest total award standing today. Prior juries have awarded much higher punitive damages awards, but none of them survived appeal.