California Punitives by Horvitz & Levy

  • Ninth Circuit vacates $7.9 million punitive damages award in dispute between Steinbeck heirs (Kaffaga v. Estate of Thomas Steinbeck)

    This published Ninth Circuit opinion holds that a $7.9 million punitive damages award must be vacated under California law because the plaintiff failed to introduce meaningful evidence of the defendant’s financial condition.

    This case arises out of decades of litigation between John Steinbeck’s heirs.  When Steinbeck died in 1968, he left his interests in his works to his third wife, Elaine.  He left $50,000 each to his two sons by previous marriages.  It seems that his sons were unhappy with that arrangement, resulting in decades of acrimonious litigation.

    The litigation ultimately culminated in this federal lawsuit by Waverly Kaffaga (the executrix of Elaine’s estate) against Gail Steinbeck (executrix of the estate Thomas Steinbeck, John’s son).  Kaffaga claimed that Gail had unreasonably asserted rights in John Steinbeck’s works, which caused multiple Holllywood producers to abandon negotiations with Kaffaga to develop screenplays for remakes of The Grapes of Wrath and East of Eden.

    A jury ruled in favor Kaffaga and awarded $5.25 million in compensatory damages for slander of title, breach of contract, and tortious interference with economic advantage, and $7.9 million in punitive damages.

    On appeal, the Ninth Circuit affirmed the judgment except for the punitive damages award.  As often happens with punitive damages appeals in California state court, the court held that the plaintiff had failed to introduce meaningful evidence of the defendant’s financial condition.  Kaffaga presented evidence that Gail had various television series and films in development, but introduced no evidence about the potential income from those projects.  Nor did Kaffaga present evidence from an expert accountant to examine Gail’s financial records to estimate her liabilities or net worth.

    The opinion mentions that at oral argument, Kaffaga’s counsel blamed Gail for the lack of evidence, arguing that she was uncooperative during discovery.  The Ninth Circuit rejected this contention because Kaffaga could not point to anything in the record showing that she moved to compel production of additional evidence, and because Kaffaga had not asked for a jury instruction seeking an adverse inference from Kaffaga’s alleged failure to disclose.

    The tone of the opinion strongly suggests that the court wants this opinion to be the last chapter in the Steinbeck litigation.  But the history of this litigation suggests that is unlikely.

  • $2 billion Roundup punitive damages reduced to $87 million

    This post is a bit tardy, but here’s a link to the July 26 L.A. Times story about a ruling that reduced the $2 billion Roundup punitive damages award to $87 million (and reduced the $55 million compensatory damages award to $17.3 million).

    Disclosure: as noted in previous posts, Horvitz & Levy represents Monsanto in Roundup litigation.

  • $2 billion Roundup punitive damages reduced to $87 million

    This post is a bit tardy, but here’s a link to the July 26 L.A. Times story about a ruling that reduced the $2 billion Roundup punitive damages award to $87 million (and reduced the $55 million compensatory damages award to $17.3 million).

    Disclosure: as noted in previous posts, Horvitz & Levy represents Monsanto in Roundup litigation.

  • Federal judge reduces Roundup punitive damages (Hardeman v. Monsanto)

    Law 360 reports that U.S.District Judge Vince Chhabria has reduced a $75 million punitive damages award to $20 million in a Roundup-based lawsuit against Monsanto.  The compensatory damages are roughly $5.2 million.

    [Disclosure: Horvitz & Levy represents Monsanto in Roundup litigation]

  • Federal judge reduces Roundup punitive damages (Hardeman v. Monsanto)

    Law 360 reports that U.S.District Judge Vince Chhabria has reduced a $75 million punitive damages award to $20 million in a Roundup-based lawsuit against Monsanto.  The compensatory damages are roughly $5.2 million.

    [Disclosure: Horvitz & Levy represents Monsanto in Roundup litigation]

  • Court of Appeal affirms order that vacated $340 million punitive damages award against Johnston & Johnson (Echeverria v. Johnson & Johnson)

    Two years ago a Los Angeles jury awarded $417 million, including $347 million in punitive damages, to a woman who claimed she developed ovarian cancer from talc in Johnson & Johnson’s Baby Powder.  The trial court tossed out the punitive damages award, finding that the plaintiffs presented no clear and convincing evidence of malice, fraud, or oppression.

    A few days ago, the Court of Appeal (Second District, Division Three) issued this published opinion affirming the trial court’s ruling on punitive damages.  It’s an important decision because it deals with a factual scenario that arises frequently in California punitive damages litigation.  The basic facts go something like this:

    A manufacturer sells a product at a time when someone has posited that an ingredient in the product may increase the risk of cancer, but the issue is a question of scientific debate.  The plaintiff uses the product and develops cancer, and seeks punitive damages from the manufacturer on theory that it consciously disregarded a possible risk to human health.

    The Court of Appeal explains that such evidence cannot support punitive damages, which must be based on a showing that the defendant was aware of probable dangerous consequences of its conduct.  For punitive damages purposes, it is not enough that someone somewhere identified a possible risk from the defendant’s product.  If the scientific community had not reached agreement on whether there was an actual risk, then the defendant did not act with malice by selling the product.

    So in this case, where the connection between talc and ovarian cancer remains under scientific investigation, the Court of Appeal said the jury could have reasonably concluded the defendant was negligent, but no reasonable jury could find by clear and convincing evidence that the defendant committed the sort of “despicable” conduct that warrants punitive damages.

    Significantly, the court explained that scientific studies issued after the plaintiff’s injury could not be used to prove the defendant’s state of mind before the product was sold.  “Scientific evidence developed post-injury did not create a reasonable inference that [the defendant] was acting with malice, pre-injury, in failing to warn of probable dangerous consequences of the product.”

    While it may seem obvious that studies released in 2013 cannot shed light on a defendant’s state of mind in the 1960s, California case law on this issue has been somewhat unclear.  This decision may help dispel some of that confusion.

  • Ventura County jury awards $10 million in punitive damages against Sriracha maker

    The LA Times reports that a jury awarded $13.3 million in compensatory damages and $10 million in punitive damages against Huy Fong Foods, Inc., the maker of Sriracha sauce. 

    The plaintiff is Underwood Ranches, who had supplied Huy Fong with jalapeno peppers.  Underwood claimed they suffered dramatic losses when Huy Fong abruptly terminated their contract.  The story doesn’t explain the basis for punitive damages, which ordinarily aren’t available in contract disputes.

  • Court of Appeal affirms order that vacated $340 million punitive damages award against Johnston & Johnson (Echeverria v. Johnson & Johnson)

    Two years ago a Los Angeles jury awarded $417 million, including $347 million in punitive damages, to a woman who claimed she developed ovarian cancer from talc in Johnson & Johnson’s Baby Powder.  The trial court tossed out the punitive damages award, finding that the plaintiffs presented no clear and convincing evidence of malice, fraud, or oppression.

    A few days ago, the Court of Appeal (Second District, Division Three) issued this published opinion affirming the trial court’s ruling on punitive damages.  It’s an important decision because it deals with a factual scenario that arises frequently in California punitive damages litigation.  The basic facts go something like this:

    A manufacturer sells a product at a time when someone has posited that an ingredient in the product may increase the risk of cancer, but the issue is a question of scientific debate.  The plaintiff uses the product and develops cancer, and seeks punitive damages from the manufacturer on theory that it consciously disregarded a possible risk to human health.

    The Court of Appeal explains that such evidence cannot support punitive damages, which must be based on a showing that the defendant was aware of probable dangerous consequences of its conduct.  For punitive damages purposes, it is not enough that someone somewhere identified a possible risk from the defendant’s product.  If the scientific community had not reached agreement on whether there was an actual risk, then the defendant did not act with malice by selling the product.

    So in this case, where the connection between talc and ovarian cancer remains under scientific investigation, the Court of Appeal said the jury could have reasonably concluded the defendant was negligent, but no reasonable jury could find by clear and convincing evidence that the defendant committed the sort of “despicable” conduct that warrants punitive damages.

    Significantly, the court explained that scientific studies issued after the plaintiff’s injury could not be used to prove the defendant’s state of mind before the product was sold.  “Scientific evidence developed post-injury did not create a reasonable inference that [the defendant] was acting with malice, pre-injury, in failing to warn of probable dangerous consequences of the product.”

    While it may seem obvious that studies released in 2013 cannot shed light on a defendant’s state of mind in the 1960s, California case law on this issue has been somewhat unclear.  This decision may help dispel some of that confusion.

  • Ventura County jury awards $10 million in punitive damages against Sriracha maker

    The LA Times reports that a jury awarded $13.3 million in compensatory damages and $10 million in punitive damages against Huy Fong Foods, Inc., the maker of Sriracha sauce.

    The plaintiff is Underwood Ranches, who had supplied Huy Fong with jalapeno peppers.  Underwood claimed they suffered dramatic losses when Huy Fong abruptly terminated their contract.  The story doesn’t explain the basis for punitive damages, which ordinarily aren’t available in contract disputes.

  • Court of Appeal reverses ruling in which trial court blamed himself for plaintiffs’ failure to introduce financial condition evidence (Tran v. Lam)

    The California Court of Appeal commonly reverses punitive damages awards when a plaintiff fails to present meaningful evidence of the defendant’s ability to pay.  This unpublished opinion falls into that category, but with an unusual wrinkle.

    During trial, plaintiffs’ counsel made some effort tried to introduce evidence of the individual defendants’ finances, by asking them about their historic earnings.  The trial court sustained  relevance objections to those questions.  Plaintiffs’ counsel thereafter made no further efforts to introduce evidence of the defendants’ finances.

    After the jury ruled for the plaintiffs and awarded punitive damages, the defendants moved to vacate the punitive damage award on the ground that the plaintiffs had failed to introduce any evidence of the defendants’ finances.  The trial court agreed the plaintiffs had presented no such evidence, but denied the defense motion because he blamed himself for the lack of evidence. 

    The judge explained that he had sustained the defendants’ objections on two grounds: (1) the defendants’ earnings from fifteen years earlier were too remote in time to be relevant, and (2) the court mistakenly thought that the trial had been bifurcated so that financial condition would be presented only in the second phase of trial.

    The court was correct on the first ground.  For punitive damages purposes, only the defendants’ finances at the time of trial are relevant.  But the court was wrong on the second ground.  The defendants had not asked for bifurcation. 

    The trial court concluded that, because of his own confusion regarding bifurcation, the plaintiffs had not received a full and fair opportunity to present their case regarding the defendants’ financial condition.  So the court granted the plaintiffs a new trial on the issue of punitive damages
    and denied the defendants’ motion for judgment notwithstanding the verdict.

    The defendants appealed and the Fourth Appellate District, Division Three, reversed. It found that the trial court did nothing to prevent the plaintiffs from meeting their burden of presenting financial condition evidence.  The court correctly sustained objections to questions that did not seek current financial condition, and the matter never came up again.  Although the court may have believed that the trial was bifurcated, and based on that mistake the court would have sustained objections to other questions about financial condition, the court never explained that to plaintiffs’ counsel, who simply failed to ask any further questions on the issue. 

    So in the end, the Court of Appeal concluded that the lack of evidence was the plaintiffs’ own fault.  The court reversed the order granting a new trial and directed the trial court to enter a new judgment in favor of the defendants on the issue of punitive damages.