This published opinion from the Sixth Appellate District holds that Labor Code section 1102.5, which prohibits retaliation against whistleblowers, impliedly authorizes punitive damages as a remedy.
Disclosure: Horvitz & Levy represents the defendant in this action. Litigation is ongoing, so we will not comment on the court’s analysis.
This published opinion provides an overview of the proper remedies that a trial court can use to correct an an excessive award of punitive damages. The opinion doesn’t contain anything new or surprising, but it provides a good overview of existing law:
1. If a trial court finds that a punitive damages award is constitutionally excessive (i.e., the award exceeds the maximum amount permitted by due process), the trial court should grant judgment notwithstanding the verdict and reduce the award to the constitutional maximum.
2. If a trial court finds that a punitive damages award is excessive under state law (i.e., the award appears to be the product of passion and prejudice, or is disproportionate to the defendant’s financial condition), the trial court should grant a new trial. The new trial can be conditional, subject to the plaintiff’s acceptance of a remittitur of the award to a lesser amount.
The trial court in this case used the wrong procedure. The court found the award was excessive under state law, but instead of granting a new trial, the court granted judgment notwithstanding the verdict. The Court of Appeal (First District, Division Two) agreed that the award was excessive, but faulted the trial court for employing the wrong remedy. The Court of Appeal nevertheless affirmed the judgment, because the plaintiff’s counsel stipulated at oral argument that he would prefer to accept the reduced amount rather than undergoing a new trial. Thus, if the trial court had ordered a conditional new trial subject to a remittitur, the plaintiff would have accepted the remittitur. So in the end, the trial court’s procedural error was harmless.
Law 360 reports that a Los Angeles jury deliberated less than an hour before awarding $50 million in punitive damages (on top of $8.25 million in compensatory damages) against billionaire FilmOn founder Alki David. By my count, this is the largest of three punitive damages award against David this year. (See earlier reports here and here.)
The New York Daily News reports on a ruling by a federal district court judge in Washington D.C., ordering Iran to pay $30 million in compensatory damages and $150 million in punitive damages to a Washington Post journalist and his family for psychological and physical abuse inflicted on the reporter during 18 months of imprisonment.
As with the many other huge punitive damages awards awarded against Iran (see here for example), it is unclear whether the plaintiff will every collect anything.
In this unpublished opinion, the California Court of Appeal (Fourth District, Division One) affirms a punitive damages award that is roughly equal to the amount of compensatory damages. In theory, even a one-to-one ratio can be constitutionally excessive, if for example the reprehensibility of the defendant’s conduct is extremely low (which is what the defendant argued here). In practice, however, we rarely ever see a California appellate court reducing an award as excessive when the ratio is already one to one.
The Washington Post reports that a jury in Phoenix has awarded $8 million in compensatory damages and $50 million in punitive damages against Steven Gore, who owns a facility that handled donated human remains. The plaintiffs alleged that Gore committed fraud by representing that the remains would be used for medical research, when in fact some of the bodies were used for military testing or sold to third parties.
The Winston-Salem Journal reports on a jury award of $9.2 million in compensatory damages and $74.2 million in punitive damages against R.J. Reynolds and Philip Morris in a lawsuit brought by the surviving spouse of a smoker who died from respiratory disease. According to the article, this is the first known trial involving claims brought by a same-sex surviving spouse in the decades of Florida tobacco litigation (the so-called “Engle progeny litigation”).
Often you can tell how a case is going to turn out when you read the summary of the facts. That’s certainly true in this case involving claims against a landlord for negligent failure to provide habitable premises. Here’s how the court describes the condition of the defendant’s apartment building in this published opinion:
Only two units in the [12-unit] Building had kitchens, and there were only two community rest rooms. There was evidence that human waste had been thrown out of the Building and had collected on the back. There were openings that permitted rodents and vermin to enter. Steps to the Building were infected with dry rot and were close to collapsing. The Building contained illegal electrical work. An inspection by Plaintiffs’ expert revealed dead and live cockroaches throughout the Building and dirty bathrooms.
As discussed further below, each of the Plaintiffs testified about his or her experiences in the building, which included cockroaches, bed bugs and other vermin; mold; and filthy conditions in common areas. Tenants were forced to wash their dishes outside the Building. There were several months when the Building had no power or water and residents had to purchase buckets of water from Myllyla’s daughter. One tenant had a cockroach removed from her ear.
After reading that summary, you’re probably not surprised to learn that the court affirmed the award of punitive damages against the landlord (the jury awarded $95,000 in punitive damages to each of the nine plaintiffs).
The defendant’s main argument on appeal was that the plaintiff failed to present any evidence of the defendant’s financial condition. As our readers know, that argument often succeeds because many California plaintiffs apparently don’t realize it is their burden to present such evidence. In this case, however, the plaintiffs attempted to obtain financial information from the defendant, who stonewalled their efforts.
The plaintiffs served two notices on the defendant pursuant to Code of Civil Procedure section 1987, which provides a procedure to compel a party to attend trial and produce documents at trial. Notices under section 1987 have the same effect as service of a subpoena. The notices in this case asked the defendant to appear at trial to testify about his financial condition, and to produce documents relating to his financial condition.
The defendant could have objected to the notices because they did not provide sufficient time to respond. If the defendant had objected, he would have been excused from complying with the notices unless the plaintiffs moved to compel his compliance. But instead of objecting, the defendant simply ignored the notices, refused to testify at trial, and refused to produce any financial documents. As a result, the Court of Appeal (Second District, Division Two) holds that the defendant forfeited the right to complain about the lack of evidence of his finances.
Law 360 reports (subscription required) that FilmOn founder Alki David has been hit for $4.35 million in punitive damages in a lawsuit alleging that he committed sexual battery against a former employee. The jury awarded $650,000 in compensatory damages (resulting in a ratio of 6.7 to 1)
David previously lost an $11 million verdict to another former employee who made similar claims.
The BBC News reports that a jury in Philadelphia has awarded $8 billion in punitive damages against Johnson & Johnson in a lawsuit over the anti-psychotic drug Risperdal.
The plaintiff is a man who alleged that he grew breasts as a result of taking Risperdal and was not warned about that possible side effect. A jury in 2015 awarded $1.75 million in compensatory damages, which the trial court later reduced to $680,000 and barred punitive damages. The state appellate court reversed the ruling on punitive damages and sent the case back for a retrial on that issue. After this verdict, the case is undoubtedly heading back up on appeal again.
Johnson & Johnson is no stranger to colossal punitive damages awards. The company has been battered by a series of adverse jury verdicts in cases involving its pelvic mesh implants and talc products, not to mention a billion dollar verdict in a Texas case involving hip implants. Oh, and it’s fighting a $572 million award by an Oklahoma judge who found the company responsible for that state’s opioid epidemic.
The Wall Street Journal has an op-ed about the case entitled An $8 Billion Drug Heist.