As reported in the New York Times, a jury in Los Angeles declined to award punitive damages against Johnson & Johnson in the first of many trials involving an allegedly defective artificial hip made by Johnson & Johnson’s DePuy orthopedics unit. The jury awarded $8.3 million in compensatory damages, but didn’t give the plaintiff the $23 million he requested.
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Maryland appeals court reverses $1 billion punitive damages award
In 2011, a Maryland jury awarded $1 billion in punitive damages against Exxon Mobil in a water contamination case. It was the second highest punitive damages award of the year, according to our summary of that year’s big awards. Earlier this week the Maryland Court of Appeals vacated the entire punitive damages award in that case (Exxon Mobil v. Albright). The opinion says that the jury’s award of punitive damages was based entirely on the theory that Exxon Mobil committed fraud, but the plaintiffs’ evidence was legally insufficient to support their fraud claims. So the court reversed the punitive damages without needing to reach the question of whether $1 billion was excessive.
UPDATE (3/4/13): One of our readers points out that the Maryland Court of Appeals is perhaps the only appellate court in the country whose justices wear red robes. Here’s a photo of of the court in its full red splendor:
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Another proposal to prohibit California taxpayers from deducting punitive damages
Once again, a California legislator has proposed a bill to prevent taxpayers from deducting payments of punitive damages from their state taxes. Assembly Judiciary Committee Chairman Bob Wieckowski, D-Fremont, introduced the proposal, Assembly Bill 458.
In his press release about AB 458, Wieckowski says the bill is designed “to prevent a tax loophole that allows companies to take a tax deduction when a court holds them liable for punitive damages.” His press release discusses only corporations—he says the purpose of punitive damages is “to punish the worst behavior by irresponsible corporations.” The text of the bill itself, however, says nothing about corporations. It would apply to any California taxpayer who pays punitive damages.
A similar bill was introduced last year (AB 1276) but failed to win the necessary two-thirds vote required for any tax increase. Similar proposals were discussed on the federal level in 2009 and 2010, but failed to gain any traction.
This bill is not likely to fare much better. As noted in the Daily Journal article (subscription required) about AB 458, “the bill currently has no committed sponsors.”
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L.A. jury awards $16.5 million in punitive damages in discrimination case
Today’s edition of the Daily Journal (subscription required) contains an article about a “record-setting” verdict awarding $21.7 million, including $16.5 million in punitive damages, in an employment discrimination case in L.A. superior court (Rodgriguez v. Valley Vista Services Inc.) Per the article, the plaintiff claimed she was fired because of a mental disability, but the employer said she was fired because she failed to report to work or call in for three days.
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L.A. trial judge vacates $15 million punitive damages award against Donald Sterling
Last December, a Los Angeles jury awarded $2.3 million in compensatory damages and $15 million in punitive damages against Los Angeles Clippers owner Donald Sterling. The plaintiff, a tenant in one of Sterling’s apartment buildings, claimed she lost most her personal belongings due to a fire in the building. She also claimed that she suffered emotional distress and that her acting career was derailed by the fire. By our count, the punitive damages award was the 6th largest in California in 2012.
Today, Judge William McLaughlin issued a 21-page minute order finding that plaintiff failed to present sufficient evidence to support her cause of action for intentional infliction of emotional distress damages. Judge McLaughlin also concluded that the punitive damages were excessive. Ultimately, he ordered a complete new trial on all issues, because he could not determine the extent to which the unsupported emotional distress claim affected the jury’s damages award.
Full disclosure: Horvitz & Levy represented Sterling in connection with the posttrial motions.
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Court of Appeal directs trial court to dismiss punitive damages claim against hospital
A California plaintiff who sues a healthcare provider for professional negligence cannot request punitive damages in the complaint until the trial court determines, based on competent evidence, that the plaintiff has a “substantial probability” of obtaining punitive damages. See Code of Civil Procedure section 425.13. California’s appellate courts take this requirement very seriously, as this published opinion indicates (Pomona Valley Hospital Medical Center v. Superior Court).
The plaintiff sued Pomona Valley Hospital, claiming she was injured by a medical putty (Striker Biotech’s OP-1 Putty) used during her back surgery. To support her claim for punitive damages, she relied on letters showing that the hospital was conducting a study on OP-1 putty. She said the letters showed the hospital acted with malice by including her in the study without her consent. The trial court agreed, and allowed the plaintiff to amend her complaint to request punitive damages.
The defendant petitioned the Court of Appeal (Second Appellate District, Division Five) for writ relief. The Court of Appeal called for further briefing and scheduled an oral argument. The oral argument apparently did not go well for the plaintiff, who sent a letter to the court withdrawing her punitive damages claim. Despite that letter, the Court of Appeal apparently concluded that the California legal community would benefit from further guidance on this issue, so it issued a published opinion reversing the trial court’s order. The Court of Appeal held that the plaintiff failed to submit any evidence that she was included in the OP-1 study, or that anyone was included in the study without their informed consent. Her evidence established nothing more than the existence of a study, which was not enough to carry her burden of demonstrating a probability of success on her claim for punitive damages.
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Ninth Circuit affirms order reducing $10M punitive damages award to $2.4M
The Ninth Circuit’s unpublished decision in Dawe v. Corrections USA is terse, as they usually are. It contains no statement of facts and skimpy analysis, so it’s difficult to tell exactly what the case is all about. But the opinion contains two holdings of note:
1. As to one defendant, the court affirmed a combined compensatory and punitive damages award that exceeded the defendant’s net worth by a factor of four. The court said “There is no constitutional prohibition of awards in excess of a party’s net worth.” That’s a little surprising, because the opinion elsewhere seems to apply California law, which does prohibit punitive damages that exceed the defendant’s ability to pay.
2. The court affirmed the district court’s reduction of the total punitive damages from $10,085,000 to $2,368,406, resulting in a roughly one-to-one ratio of punitive damages to compensatory damages. The court cited State Farm‘s holding that a one-to-one ratio can “reach the outermost limits of the due process guarantee” when compensatory damages are substantial. The court said that even though the defendant acted with malice and the plaintiff was financially vulnerable, the constitution would not permit a ratio in excess of one to one.
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Samsung won’t face punitive damages on top of $1 billion jury award
Judge Lucy Koh of the Northern District of California has rejected Apple’s bid for punitive damages in its patent lawsuit against Samsung that resulted in a $1 billion jury award last year. By statute, a court can award punitive damages up to three times the amount of the actual damages if the plaintiff presents clear and convincing evidence of willful patent infringement. Judge Koh, however, granted Samsung’s motion for judgment as a matter of law on that issue, finding that that Samsung’s infringement of Apple’s patents was not objectively willful.
Hat tip: IP Nav blog and Wired
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Ninth Circuit wipes out $80 million punitive damages award in Bratz litigation
In 2011 we reported on the massive judgment against Mattel in its battle with rival toymaker MGA over the Bratz line of dolls and accessories. The judgment included $80+ million in compensatory damages, $80+ million in punitive damages, and $140 million in attorneys’ fees.
With a judgment like that, you might expect the appeal to result in a lengthy opinion. Nope. The Ninth Circuit needed only nine pages to completely vacate the compensatory and punitive damages and a portion of the fee award.
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Paper summarizes recent developments on punitive damages caps
The Federalist Society has published its Civil Justice Tort Reform Update 2012. Among other things, the paper discusses the punitive damages caps recently enacted in Arizona (in products liability cases), South Carolina, and Tennessee.
