California Punitives by Horvitz & Levy

  • Italian Supreme Court confirms that it will not enforce U.S. judgments containing punitive damages

    Mondaq reports that Italy’s Supreme Court, the Court of Cassazione, has reaffirmed that it will not enforce U.S. judgments containing punitive damages.

    Back in 2007, in Parrott v. Soc. Fimez., the Court of Cassazione ruled that an Alabama judgment containing punitive damages was unenforceable in Italy, because punitive damages are incompatible with Italy’s public policy. 

    This case, Ruffinatti v. Oyola-Rosado, involved a Massachusetts judgment.  According to the Mondaq story, the judgment on its face did not include punitive damages.  But the Italian Supreme Court apparently concluded that the $8 million compensatory damages was so large, and so disconnected from the plaintiff’s actual injuries, that it must be punitive in nature.  Accordingly, the court refused to enforce the judgment under the reasoning set forth in Parrott.

    Related post:

    Law Review Article: “Recognition and Enforcement of U.S. Punitive Damages Awards in Continental Europe: The Italian Supreme Court’s Veto”

  • Indiana trial judge refuses to apply cap on punitive damages; state Solicitor General asks Indiana Supreme Court to step in

    The Associated Press is reporting (via the Houston Chronicle) about a case involving the constitutionality of Indiana’s $50,000 cap on punitive damages.  A jury awarded $150,000 in punitive damages to a plaintiff who alleged he was molested by his uncle, a Catholic priest.  The trial court rejected the defendant’s request to reduce the award to $50,000, reasoning that the cap violates the separation of powers doctrine.  The judge also refused to apply Indiana’s split-recovery statute, which allows the state to collect 75 percent of every punitive damages award. That got the attention of Indiana Solicitor General Thomas Fisher, who has petitioned the Indiana Supreme Court for review.

    By our count 30 states currently have statutory caps on punitive damages.  In a few other states (most recently Arkansas), state courts have held such caps unconstitutional.  

  • Florida Court of Appeal orders new trial on punitive damages claim against Philip Morris

    We’ve mentioned this case (Naugle v. Philip Morris) a few times before.  Back in November 2009, a jury awarded $300 million, including $244 in punitive damages.  During the posttrial phase, the trial court reduced the total damages to less than 40 million.  And now the Florida Court of Appeal has ruled that the trial judge should have granted a new trial on damages instead of ordering a remittitur.  The appellate court reasoned that Philip Morris was entitled to a new trial based on the trial court’s finding that the jury was motivated by passions, anger, and sympathy.

    The California Supreme Court made a similar holding in Schelbauer v. Butler Manufacturing Co. (1984) 35 Cal.3d 442, 454, when it expressly disapproved the use of a remittitur as a means to cure legal error, holding that use of remittitur is “confined to cases in which an excessive damage award [is] the only error in the jury’s verdict.”

    Last year Wyeth asked the U.S. Supreme Court to decide whether a remittitur can be used to cure a verdict tainted by passion and prejudice, but Wyeth’s petition was denied.

    This case is part of the continuing fallout from the Florida Supreme Court’s Engle decision reversing a $145 billion verdict in a class action against five tobacco defendants. Point of Law has a post summarizing the saga.

  • Trial court properly dismissed punitive damages claim because plaintiff introduced no evidence of corporate ratification (Betson v. Rite Aid)

    This unpublished opinion (Betson v. Rite Aid) allows a plaintiff to proceed with her claims for disability discrimination and retaliation, but prohibits her from seeking punitive damages.  Although she accused her manager of numerous malicious acts, she presented no evidence that the manager’s misconduct was authorized or ratified by the defendant’s upper management.

    The plaintiff worked as a shift supervisor at a Rite Aid drug store in Beverly Hills.  She sued Rite Aid for various theories of discrimination, retaliation and harassment.  She claimed that the store manager routinely mocked her because she had a limp, refused to accommodate her disability, and fired her based on false accusations of stealing money from a cash register.  The trial court granted summary adjudication on many of plaintiff’s claims, including her claim for punitive damages.  The case went to trial on the remaining claims and the jury awarded the plaintiff $500,000.  The trial court, however, granted Rite Aid’s motion for judgment notwithstanding the verdict and entered judgment for Rite Aid.

    Plaintiff appealed and the California Court of Appeal (Second Appellate District, Division Four), held that the trial court erred in granting JNOV and erred in granting summary adjudication on plaintiff’s claims for disability discrimination and retaliation.  Nevertheless, the court affirmed the trial court’s decision to toss out the plaintiff’s claim for punitive damages, because plaintiff presented no evidence that the store manager’s misconduct was ratified by any officer, director, or managing agent of Rite Aid.  The plaintiff argued that Rite Aid’s continued employment of the store manager was sufficient evidence of ratification, but the Court of Appeal rejected that contention as a matter of law.

    This case is a reminder that a corporate employee with the title of “manager” may not qualify as a “managing agent” within the meaning of Civil Code section 3294. As the California Supreme Court has explained, managing agents include only those corporate employees who have sufficient authority in the corporation such that their decisions ultimately determine corporate policy.  (See White v. Ultramar.)

  • Los Angeles jury awards $7.7M in punitive damages to former “The Price is Right” model; try to guess the final award without going over

    The Associated Press reports that a Los Angeles jury has awarded $777,000 in compensatory damages and $7.7 million in punitive damages in an employment discrimination suit brought by a former model on “The Price is Right.”  The plaintiff, Brandi Cochran, claims she was not permitted to return to work on the show after she took maternity leave.  The defendant, Freemantle Media, contends the trial judge erroneously excluded evidence that over 40 percent of the models on the show have been pregnant.

    Given the size of the compensatory damages and the high punitive-to-compensatory ratio, this award is not likely to survive through posttrial motions and an appeal.  Our readers are invited to guess the final amount of the punitive damages award, without going over. 

  • Supreme Court of Mississippi adopts an unusual procedural rule

    Our readers are well aware that California has a unique procedural rule that puts the burden on plaintiffs to introduce meaningful evidence of the defendant’s financial condition in order to obtain punitive damages.  A plaintiff who fails to introduce such evidence forfeits any claim for punitive damages. 

    As far as I know, no other state has such a rule. In 1992, the Mississippi Supreme Court expressly rejected our rule and held that neither party is required to introduce financial condition evidence, but if no such evidence is presented, neither party can challenge the amount of the punitive damages award on appeal.  (See C & C Trucking Co. v. Smith (Miss. 1992) 612 So. 2d 1092, 1105.) 
     
    This recent opinion (Coleman & Coleman v. Waller Funeral Home) from the same court puts a surprising twist on that rule.  In Coleman & Coleman, a jury awarded $25,000 in punitive damages against the defendant.  The defendant challenged the award in a posttrial motion by submitting evidence of its negative net worth.  Based on that evidence, the trial court vacated the punitive damages award.  The plaintiff appealed, citing C & C Trucking and arguing that the defendant waived its right to challenge the amount of the punitive damages by failing to present its financial condition evidence at trial.  The Supreme Court agreed that C & C Trucking is the controlling authority, but it found a waiver by the plaintiff rather than the defendant.  The Supreme Court said that the plaintiff, by failing to introduce the defendant’s financial condition at trial, waived its right to challenge the trial court’s posttrial ruling.

    Even from my perspective as a defense lawyer, that seems unfair to the plaintiff.  I could understand a court saying that a party has to present financial condition evidence to the jury in the first instance before that party can raise the issue on appeal.  But I don’t understand how a court can allow one party to present such evidence after the verdict and then preclude the other party from challenging the post-verdict ruling based on that evidence. 

    Absent a waiver, the court in this case might have reached the opposite result, based on a decision it issued just three months ago holding that a defendant with a negative net worth is not immune from punitive damages.  (See Canadian Nat’l Ry. Co. v. Waltman (Miss 2012) 94 So.3d 1111.)

  • Judge vacates $20 million punitive damages award against Joe Francis

    A few months ago we reported about Steve Wynn’s $20 million punitive damages award against Girls Gone Wild founder Joe Francis.  According to the Hollywood Reporter, the trial judge has vacated that award in its entirety because Wynn failed to produce any evidence of Francis’ financial condition at the time of trial. We have seen a lot of appellate reversals of punitive damages awards on that basis, but not many instances of a trial court granting posttrial relief under that rationale.  Typically, if the trial court believes the plaintiff has not provided sufficient evidence of the defendant’s financial condition, the court will grant a nonsuit or a directed verdict before the case goes to the jury.

    In addition to vacating the punitive damages award, the trial court also trimmed the compensatory damages by $1 million.  Francis says his legal team is predicting a “100 percent chance of success of appealling the remaining part of the case.”

  • L.A. jury awards $3.6 million in punitive damages aginst game maker for trademark infringement

    Today’s Daily Journal (subscription required) reports that a federal court jury here in Los Angeles has awarded $5 million in compensatory damages and $3.6 million in punitive damages against a board game maker who allegedly infringed upon the plaintiff’s trademarked phrase “Would You Rather . . .?”  This litigation has been going on for seven years and has already been up to the Ninth Circuit once.  It’s going up again, according to the statements of defense counsel quoted in the article.

  • Oregon jury awards $75 million in punitive damages against defense contractor

    Last month we reported on a defense contractor’s failed attempt to have Iraqi law applied to a lawsuit in federal court alleging that the contractor knowingly exposed members of the Oregon National Guard to hexavalent chromium while they were serving in Iraq.  The Seattle Times reports that a jury in that case has awarded a total of $75 million in punitive damages.  The verdict requires Halliburton spin-off Kellogg Brown & Root (KBR) to pay $850,000 in compensatory damages and $6.25 million in punitive damages to each of the 12 plaintiffs. This one is almost certainly headed to the Ninth Circuit.

  • UC Irvine professor seeks punitive damages from Johnny Depp

    We rarely report on pretrial proceedings in punitive damages cases.  Most cases end up settling, so we don’t usually cover them until they reach a final verdict or decision by the court.  But this story is so odd it’s worth a quick mention.  The Daily Pilot reports that a professor at UC Irvine’s medical school is suing actor Johnny Depp for punitive damages.  The plaintiff claims that Depp’s bodyguards roughed her up in the VIP area of an Iggy & the Stooges concert.  The story says the trial judge permitted plaintiff to proceed with her punitive damages claim, but the story doesn’t explain whether the court made that ruling in connection with a motion to strike, a summary adjudication motion, or some other procedure.  In any event, I found it amusing that Iggy Pop’s fan base has matured to the point that, when a fight breaks out at a show, it involves a medical professor and a celebrity entourage.