California Punitives by Horvitz & Levy

  • Florida jury awards $1 billion in punitive damages against nursing home

    The Ledger of Lakeland County is reporting that a jury in Polk County Florida has awarded $220 million in compensatory damages and $1 billion in punitive damages against two defendants, Trans Healthcare Inc. and Trans Healthcare Management, in a case alleging negligent care at a nursing home owned by the defendants. 

    The story says the trial was limited to damages because the court entered a default against the defendants when they stopped participating in the lawsuit.  They did participate in the damages trial, but their defense was apparently not very persuasive to this jury (to put it mildly). 

    The story also reports that the same defendants got hit with a $114 million verdict in another case in 2010, and that the plaintiffs in that case are still trying to collect.  The plaintiffs in this case are not likely to fare any better, but at least their lawyers can tout their $1 billion victory. 

  • ABA Journal soliciting nominations for the Blawg 100

    The ABA Journal is starting to compile its annual list of the top 100 legal blogs, and is inviting “blog amici” to submit nominations for their favorite blogs. Please consider putting in a good word for Cal Punitives or our sister blog, At the Lectern.

  • Orange County jury awards $1M in punitive damages against Dan Harkey

    The LA Times is reporting that yesterday a jury in Orange County awarded $1 million in punitive damages against Dan Harkey and his real estate lending company, Point Center Financial, based on allegations that Harkey maliciously breached his fiduciary duties to investors by making ill-advised loans and pocketing fees and commissions from those loans.  The total verdict is $10 million, counting the jury’s prior award of $9 million in compensatory damages.

    The case has generated a lot of publicity because Harkey is the husband of Assemblywoman Diane Harkey, who was initially named as a defendant but later dismissed.

  • $25,000 in punitive damages reversed due to lack of evidence of financial condition (Allen v. Packer)

    In this unpublished opinion, the California Court of Appeal (Second Appellate District, Division One) adds to the long line of decisions reversing a punitive damages award because the plaintiff failed to present meaningful evidence of the defendant’s financial condition.  Here, the record contained evidence of gross revenues, but nothing about the defendant’s expenses and liabilities. 

  • $760,000 in punitive damages reversed as excessive in relation to defendant’s financial condition (Strohbach v. United General Title Insurance)

    In a fraud action involving a real estate loan, a jury awarded $2.7 million in compensatory damages and $762,000 in punitive damages (two separate awards of $381,000 each against two defendants).  The defendants appealed and the California Court of Appeal (Fourth Appellate District, Division Three) issued an unpublished opinion rejecting all of their arguments except one: that the punitive damages were excessive in relation to the defendants’ ability to pay.

    The court began its discussion by observing that, while some courts have held that a defendant’s net worth should not be the sole measure of a its financial condition because net worth is too easily subject to manipulation, “it is also true that California courts have ‘disfavored’ awards tending to exceed 10 percent of net worth.”  One of the awards in this case approached 100 percent of that defendant’s net assets, without even considering his substantial liabilities.  To distinguish this record from cases involving “manipulated” net worth, the court observed that the that the defendant’s liabilities were real, and did not represent money transferred to “some surreptitious investment or secret stash.”  The other defendant had even more limited assets, and had never earned as much as $10,000 in a single year.  Based on that record, the court concluded that the plaintiffs had not carried their burden of proving the defendants’ ability to pay the punitive damages awards.

  • Assembly approves bill to prevent tax deduction of punitive damages; Senate not expected to act until August

    Yesterday we reported about the approval of Assembly Bill 458 by the California State Assembly’s appropriations committee.  We should have noted that the bill has been approved not only by the committee, but by the full Assembly.  The Sacramento Business Journal predicts that the Senate will not act on the bill before August, when the senators return from their summer recess.

  • Committee on Appropriations approves bill to prohibit deductions of punitive damages

    The Committee on Appropriations of the California State Assembly has approved a bill that would prevent California taxpayers from deducting payments of punitive damages.  Assembly Bill 458, which we previously discussed here, will now head to the state senate.  Despite the committee approval, the bill still seems unlikely to pass.  It would require a two-thirds majority approval.

  • Don’t fear the Reader: how to follow this blog’s RSS feed now that Google Reader is dead

    If you have been using Google Reader to follow this blog and have just discovered that Google Reader is no more, you may be interested in this piece from Slate: How to Survive the Google Reader Apocalypse.

  • Cert. petition asks Supreme Court to address preemption of punitive damages claims against drug makers (Novartis v. Fussman)

    Does federal law preempt punitive damages claims against drug manufacturers who have satisfied FDA approval and labeling requirements?  That is the first question raised in this cert. petition filed by Novartis Pharmaceuticals in Novartis Pharmaceuticals Corp. v. Fussman. 

    The plaintiff brought suit in federal district court, asserting a failure-to-warn claim under North Carolina law.  The plaintiff claimed Novartis failed to adequately warn of risks associated with the cancer drugs Aredia and Zometa.  A jury awarded $287,000 in compensatory damages and $12.6 million in punitive damages.  The district court reduced the punitive damages award to $1.3 million under a North Carolina statute that caps punitive damages at three times compensatory damages.

    Novartis appealed to the Fourth Circuit, arguing that federal law bars punitive damages in state law failure to warn cases against drug manufacturers who have complied with all FDA requirements.  The Fourth Circuit disagreed and affirmed the punitive damages award in an unpublished opinion.

    Novartis filed a petition for certiorari and the plaintiff waived his right to file a response.  But the Supreme Court, after considering the petition, requested a response from the plaintiff.  Yesterday, the Washington Legal Foundation filed an amicus brief in support of the petition.  See their press release here.

    To track the status of this petition, you can view the Supreme Court’s online docket here.

  • Iowa Supreme Court reaffirms that punitive damages are not available in civil rights cases

    Last Friday, the Iowa Supreme Court issued this opinion (Ackelson v. Manley Toy Direct), reaffirming the court’s earlier ruling that punitive damages are not available in sexual harassment and gender discrimination cases brought under the Iowa Civil Rights Act: 

    We have clearly and repeatedly stated our conclusion that the ICRA does not implicitly permit an award of punitive damages. This message has been a reoccurring pronouncement over the last twenty-seven years. No significant legislative changes have been made since our first pronouncement in 1986 that would even hint at a shift in legislative intent since that time.

    During this same period, the issue of punitive damages in civil rights claims has received broad national attention, making it very likely that our legislature would have taken action to alter our interpretation if it disapproved.  . . . Overall, we think our legislature would be quite surprised to learn if we decided to reverse course and take a different position under the guise of statutory interpretation. We did our job twenty-seven years ago and will leave it for the legislature to take any different approach.

    That excerpt certainly creates the impression that this issue has been settled in Iowa for quite some time (twenty-seven years, to be precise).  Apparently, however, Iowa’s trial courts had not gotten that message.  This Associated Press story in the Globe Gazette reports that “trial judges had been allowing punitive damages in civil rights cases,” according to a local plaintiffs’ attorney.  Presumably that will change now.