The Sacramento Bee reports that a jury in federal district court in Nevada last week awarded not only $138.1 million to Las Vegas inventor Gilbert P. Hyatt for invasion of privacy and emotional distress, but also an additional $250 million in punitive damages against the California Franchise Tax Board. The Tax Board began investigating Hyatt in 1993 in an attempt to get him to pay a multi-million dollar California income tax bill—Hyatt apparently moved from California to Nevada, which has no income tax, right around the time he started cashing in big from a computer-related patent. Hyatt disputed the claimed tax obligation and sued the Tax Board on a variety of intentional tort theories. According to the Sacramento Bee article, Hyatt’s complaint alleged that “board auditors went through his garbage and mailbox, spread the word he was being audited to his business associates, and sent letters containing his Social Security number to third parties that included newspapers and doctors who had never treated Hyatt.”

This case has already gone up once to the US Supreme Court, which ruled Hyatt could sue the California agency in a Nevada court. If the state appeals to the Nevada Supreme Court, it’ll be interesting to see whether the unprecedented $138 million emotional distress award holds up and, if so, whether any of the justices think that award is punishment enough so as to obviate the need for any punitive damages, or at least is sufficiently “substantial” within the meaning of State Farm v. Campbell to warrant reducing the punitive damages to a 1:1 ratio. No offense to Mr. Hyatt but, as a California taxpayer, I have to hope this windfall verdict goes away—there have got to be better ways (maybe something involving the democratic process?) to punish and deter bad behavior by folks within a state agency like the FTB.

[Note: I should add that California’s Government Code section 818 provides, “Notwithstanding any other provision of law, a public entity is not liable for damages awarded under Section 3294 of the Civil Code or other damages imposed primarily for the sake of example and by way of punishing the defendant.” Nevada apparently doesn’t have a counterpart to that statute. – LP]

My co-blogger Jeremy Rosen has noted that Senator Obama won an appeal involving a modest punitive damages award. Now comes this story from the Associated Press indicating that Senator McCain also had a personal connection to a punitive damages case. According to the story, McCain and his ex-wife Carol filed a lawsuit in 1990 against a property management firm, claiming the firm had mistakenly removed some family treasures from a garage that they shared with an adjacent townhouse. The complaint asked for $1 million in punitive damages. The parties settled the case for an undisclosed amount.

According to news reports here, here, here and here, a Utah jury has awarded plaintiff $3,606,214 in compensatory damages and $60 million in punitive damages against American National Insurance Company. American National plans to appeal, and seems to have a very strong ratio argument especially given the rather substantial compensatory award.

Last month we blogged about the amicus brief that the Governor of West Virginia filed in support of Dupont’s petition for review to the West Virginia Supreme Court in a case involving a $196.2 million punitive damages award. The New York Times now reports that the governor’s brief has stirred up quite a controversy.

According to the article, questions have been raised about how Governor Manchin came to be involved in this case. He says Dupont provided him with an unsolicited draft of the amicus brief. But a spokesperson for Dupont claims that the governor contacted Dupont and requested that they prepare a draft brief for him. When questioned by plaintiffs’ counsel, the governor’s office said that correspondence between the governor and Dupont had been lost. But now they tell the Times that any correspondence of note has been preserved.

It bears mentioning that the governor’s brief did not actually take sides on the merits of the dispute, but simply asked the West Virginia Supreme Court to review the case. But even without taking a position on the merits, the govenor’s action benefitted only Dupont, since the plaintiffs had prevailed in the trial court.

UPDATE: The West Virginia Record now has a story on this issue: “Gov. Manchin a ‘Puppet’ of Dupont’s, Attorney Says“

Ted Frank has this post at Overlawyered.com, discussing a case in which a drunk driver caused a head-on collision and then managed to parlay that into a $16 million judgment against his insurance company, including $10.5 million in punitive damages. Earlier this week, the Mississippi Court of Appeals affirmed the judgment.

KansasCity.com reports that the insurer for Collective Brands (the company that owns and operates Payless Shoes) has filed a lawsuit in federal district court in Kansas to establish that Adidas’ $305 million judgment against Payless is not covered by insurance. (View our prior posts about this litigation here.) The insurer, American Guarantee & Liability Insurance Co., contends that the judgment is not covered because the policy excludes coverage for intentional acts. The lawsuit also contends that Kansas law governs, and that punitive damages are uninsurable in Kansas. (The judgment includes a $137 million punitive damages award.)

New York’s intermediate appellate court (New York Supreme Court, First Department Appellate Division) issued an opinion yesterday holding that smokers are barred from recovering punitive damages in New York. (Fabiano v. Philip Morris Inc., 2008 NY Slip Op 06353.)

In a unanimous opinion, the court reasoned that “punitive damages claims are quintessentially and exclusively public in their ultimate orientation and purpose,” and the public interest in punitive damages was “previously and appropriately represented by the State Attorney General” in a 1998 settlement brought on behalf of all of the people of the New York.

The Associated Press is reporting that a Los Angeles County jury returned a defense verdict in a case against Johnson & Johnson, in which the plaintiffs claimed that Children’s Motrin nearly killed their daughter and caused her to become blind.

The plaintiffs’ attorney, well-known L.A. lawyer Browne Greene, sought over $1 billion in damages: $14 million in actual damages, $103 million for pain and suffering and $950 million in punitive damages. The jury found that Motrin presented substantial risks, but the jury rejected the plaintiffs’ failure-to-warn claim. One of the jurors spoke to the press and said the girl’s mother failed to follow directions on the label by giving Samantha Children’s Motrin after the girl woke up with puffy eyes. “It said on the label, any new symptoms call the doctor, and she didn’t do that,” the juror said.

Today’s edition of the Daily Journal has this story (subscription required) by staff writer Laura Ernde on the California Supreme Court’s grant of review in Buell-Wilson v. Ford Motor Co.

FoxNews is reporting that federal district judge William R. Wilson of the Eastern District of Arkansas has granted a motion for judgment as a matter of law, vacating the $27 million punitive damages award against Wyeth and Upjohn in a lawsuit over hormone replacement drugs Premarin and Prempro. Wyeth says it still plans to appeal the $2.75 million compensatory damages award.