California Punitives by Horvitz & Levy

  • Oberlin College case triggers fight about Ohio’s cap on punitive damages

    We haven’t yet written about the Ohio jury verdict awarding $33 million in punitive damages against Oberlin College, in a defamation case brought by a family-owned bakery.

    For those who haven’t heard about this case, The ABA Journal summarizes the basic facts: the bakery owners “sued the college and the dean of students after a shoplifting incident led to allegations the business practiced racial profiling. The allegations prompted student protests, which the family said was supported by the college.”

    We’re not going to get into the political ramifications of that case.  You can find plenty of that elsewhere.  Rather, we’re going to focus on a more nuts-and-bolts legal issue, namely, how Ohio’s legislative cap on punitive damages will apply to the case.

    First, a little background.  Ohio passed a cap on punitive damages back in the 1990s, but the Ohio Supreme Court struck that cap down as unconstitutional.  The state legislature tried again in 2004 and this time, after some change in personnel on the Supreme Court, the statute was upheld.

    The statute limits non-economic damages to $350,000 and limits punitive damages to three times the amount of compensatory damages.  In this case, the parties dispute whether the punitive damages cap should be applied to the jury’s full award of compensatory damages, or to the compensatory damages award after it has been reduced to comply with the cap.  They also dispute whether the caps apply to each individual cause of action for which relief was granted, or to the aggregate damages awarded.

    The answers to these questions make a big difference in the ultimate outcome of the case.  According to Oberlin College’s brief (link courtesy of Legal Insurrection), proper application of the caps results in a total award of just over $14.3 million.  According to the plaintiffs’ brief, they are entitled to $25 million after the caps are applied.

    However the trial judge resolves the issue, the case seems destined for appellate review.

    UPDATE: (6/27/19): The plaintiffs have now filed a brief (link courtesy of Legal Insurrection again) arguing that application of the punitive damages cap in this case would be unconstitutional.  As noted, the Ohio Supreme Court already rejected a constitutional challenge to the statute, but the plaintiffs here argue that the Supreme Court’s decision in that prior case held only that the statute was constitutional on its face, and left open the possibility that the statute might be still be unconstitutional as applied to a particular case.

  • Supreme Court reverses Ninth Circuit, holds that punitive damages are unavailable under maritime law for claims of unseaworthiness (Dutra Group v. Batterton)

    The Ninth Circuit created a circuit split last year when it held that punitive damages are available under general maritime law for personal-injury unseaworthiness claims (i.e., claims that a vessel owner willfully and wantonly failed to provide a vessel reasonably fit for its intended purpose, resulting in personal injury).

    Yesterday, the Supreme Court reversed the Ninth Circuit in a 6-3 decision written by Justice Alito (with Justices Ginsburg, Breyer, and Sotomayor dissenting).   

    Justice Alito based his majority opinion on two grounds: (1) “overwhelming historical evidence” indicating that punitive damages have not been available for personal-injury unseaworthiness claims, and (2) the need to preserve a parallelism between maritime common law and maritime statutory law (the Jones Act), which generally limits a seaman’s damages to pecuniary losses.

    Justice Alito had to distinguish the Court’s 2009 in Atlantic Sounding v. Townsend, which allowed recovery of punitive damages under the Jones Act and general maritime law for willful and wanton failure to provide “maintenance and cure” (a term of art referring to a vessel owner’s obligation to provide food, lodging, and medical services to injured seamen).  The majority opinion in Atlantic Sounding relied on historical evidence that punitive damages were traditionally available in maintenance and cure cases.  Justice Alito found no such evidence supporting recovery of punitive damages for unseaworthiness.  Interestingly, Justice Thomas, who wrote the majority opinion in Atlantic Sounding, signed on to Justice Alito’s opinion in Dutra.

    The opinion is not likely to have any impact outside the maritime context. 

  • Supreme Court reverses Ninth Circuit, holds that punitive damages are unavailable under maritime law for claims of unseaworthiness (Dutra Group v. Batterton)

    The Ninth Circuit created a circuit split last year when it held that punitive damages are available under general maritime law for personal-injury unseaworthiness claims (i.e., claims that a vessel owner willfully and wantonly failed to provide a vessel reasonably fit for its intended purpose, resulting in personal injury).

    Yesterday, the Supreme Court reversed the Ninth Circuit in a 6-3 decision written by Justice Alito (with Justices Ginsburg, Breyer, and Sotomayor dissenting).

    Justice Alito based his majority opinion on two grounds: (1) “overwhelming historical evidence” indicating that punitive damages have not been available for personal-injury unseaworthiness claims, and (2) the need to preserve a parallelism between maritime common law and maritime statutory law (the Jones Act), which generally limits a seaman’s damages to pecuniary losses.

    Justice Alito had to distinguish the Court’s 2009 in Atlantic Sounding v. Townsend, which allowed recovery of punitive damages under the Jones Act and general maritime law for willful and wanton failure to provide “maintenance and cure” (a term of art referring to a vessel owner’s obligation to provide food, lodging, and medical services to injured seamen).  The majority opinion in Atlantic Sounding relied on historical evidence that punitive damages were traditionally available in maintenance and cure cases.  Justice Alito found no such evidence supporting recovery of punitive damages for unseaworthiness.  Interestingly, Justice Thomas, who wrote the majority opinion in Atlantic Sounding, signed on to Justice Alito’s opinion in Dutra.

    The opinion is not likely to have any impact outside the maritime context.

  • New York jury awards $300 million in punitive damages against Johnson & Johnson in talc case

    The Wall Street journal reports that a New York jury has awarded $300 million in punitive damages, on top of $25 million in compensatory damages, to a woman who claimed she developed mesothelioma from using Johnson & Johnson’s baby powder, which she alleges contained asbestos-contaminated talc.

  • New York jury awards $300 million in punitive damages against Johnson & Johnson in talc case

    The Wall Street journal reports that a New York jury has awarded $300 million in punitive damages, on top of $25 million in compensatory damages, to a woman who claimed she developed mesothelioma from using Johnson & Johnson’s baby powder, which she alleges contained asbestos-contaminated talc.

  • Court of Appeal affirms $1M in punitive damages and furthers split of authority on clear-and-convincing standard of proof (Mazik v. Geico)

    This published opinion is a likely candidate for California Supreme Court review.

    This is an insurance bad faith case in which a jury awarded compensatory damages of $313,508 and punitive damages of $4 million against GEICO for unreasonably failing to pay its policyholder the policy limits of $50,000 under an underinsured motorist policy.  The trial court reduced the punitive damages to $1 million.  GEICO appealed only the punitive damages award.

    GEICO argued that evidence was insufficient to to show that any managing agent of GEICO participated in or authorized an act of malice, fraud, or oppression, as required by Civil Code section 3294.

    The Court of Appeal (Second District, Division Two) began its analysis by considering whether the clear-and-convincing standard of proof affects appellate review of the sufficiency of the evidence.  As we have noted, California’s appellate courts have split on this issue and the California Supreme Court recently granted review to resolve the split. 

    The Court of Appeal here decided to disregard the clear-and-convincing standard for purposes of  appellate review.  In so doing, the court cited a 1973 Supreme Court opinion (Crail v. Blakely), but did not discuss some of the more recent cases or acknowledge that the issue is currently pending before the Supreme Court.

    The court’s decision on the standard of review issue appears to be pivotal to its analysis of the merits.  The court concluded that the plaintiff’s evidence was sufficient, based in large part on inferences that the jury might have drawn from equivocal evidence.  For example, the court discussed evidence that claims adjusters at GEICO, who were not managing agents, cherry-picked evidence from the plaintiff’s medical files to justify their decision not to pay his claim.  They prepared evaluations that minimized the plaintiff’s injuries, while ignoring evidence to the contrary.  There was no direct evidence, however, that GEICO’s managing agent (a regional liability administrator) knew about the information that the adjusters omitted from their reports.  The Court of Appeal concluded, however, that the jury could have inferred the managing agent’s knowledge of that information based on evidence that he had “more than a passing familiarity” with the claim. 

    Had the Court of Appeal taken the clear-and-convincing evidence requirement into account, it might have reached a different conclusion.  Cases applying that standard have held that equivocal evidence is not sufficient to qualify as clear and convincing—when the evidence is equally consistent with ordinary negligence as with malice, the plaintiff has failed to show malice by clear and convincing evidence.

    There’s a good chance that if GEICO petitions the California Supreme Court for review, the court will grant review and decide it along with the currently pending case on this issue (or hold this case pending the resolution of the other case).

  • Court of Appeal affirms $1M in punitive damages and furthers split of authority on clear-and-convincing standard of proof (Mazik v. Geico)

    This published opinion is a likely candidate for California Supreme Court review.

    This is an insurance bad faith case in which a jury awarded compensatory damages of $313,508 and punitive damages of $4 million against GEICO for unreasonably failing to pay its policyholder the policy limits of $50,000 under an underinsured motorist policy.  The trial court reduced the punitive damages to $1 million.  GEICO appealed only the punitive damages award.

    GEICO argued that evidence was insufficient to to show that any managing agent of GEICO participated in or authorized an act of malice, fraud, or oppression, as required by Civil Code section 3294.

    The Court of Appeal (Second District, Division Two) began its analysis by considering whether the clear-and-convincing standard of proof affects appellate review of the sufficiency of the evidence.  As we have noted, California’s appellate courts have split on this issue and the California Supreme Court recently granted review to resolve the split.

    The Court of Appeal here decided to disregard the clear-and-convincing standard for purposes of  appellate review.  In so doing, the court cited a 1973 Supreme Court opinion (Crail v. Blakely), but did not discuss some of the more recent cases or acknowledge that the issue is currently pending before the Supreme Court.

    The court’s decision on the standard of review issue appears to be pivotal to its analysis of the merits.  The court concluded that the plaintiff’s evidence was sufficient, based in large part on inferences that the jury might have drawn from equivocal evidence.  For example, the court discussed evidence that claims adjusters at GEICO, who were not managing agents, cherry-picked evidence from the plaintiff’s medical files to justify their decision not to pay his claim.  They prepared evaluations that minimized the plaintiff’s injuries, while ignoring evidence to the contrary.  There was no direct evidence, however, that GEICO’s managing agent (a regional liability administrator) knew about the information that the adjusters omitted from their reports.  The Court of Appeal concluded, however, that the jury could have inferred the managing agent’s knowledge of that information based on evidence that he had “more than a passing familiarity” with the claim.

    Had the Court of Appeal taken the clear-and-convincing evidence requirement into account, it might have reached a different conclusion.  Cases applying that standard have held that equivocal evidence is not sufficient to qualify as clear and convincing—when the evidence is equally consistent with ordinary negligence as with malice, the plaintiff has failed to show malice by clear and convincing evidence.

    There’s a good chance that if GEICO petitions the California Supreme Court for review, the court will grant review and decide it along with the currently pending case on this issue (or hold this case pending the resolution of the other case).

  • Philadelphia jury awards $50M in punitive damages against Johnson & Johnson in pelvic mesh case

    The New Jersey Law Journal reports that a jury in Philadelphia has awarded more than $80 million, including $50 million in punitive damages, to a woman who claimed she was injured by a pelvic mesh device made by Johnson & Johnson subsidiary Ethicon. 

    If this story sounds familiar, that’s because a different Philadelphia returned a $120 million verdict about a month ago, in a case involving the same product. 

  • Philadelphia jury awards $50M in punitive damages against Johnson & Johnson in pelvic mesh case

    The New Jersey Law Journal reports that a jury in Philadelphia has awarded more than $80 million, including $50 million in punitive damages, to a woman who claimed she was injured by a pelvic mesh device made by Johnson & Johnson subsidiary Ethicon.

    If this story sounds familiar, that’s because a different Philadelphia returned a $120 million verdict about a month ago, in a case involving the same product.

  • Oakland jury awards $2B in punitive damages in Roundup case

    As we reported last week, plaintiffs’ counsel asked for $1 billion in punitive damages in the latest lawsuit alleging that the weedkiller Roundup causes cancer.  Today the jury awarded the plaintiffs twice that much—$1 billion to each plaintiff, for a total of $2 billion—as reported in Law360 (subscription required).