California Punitives by Horvitz & Levy
  • Videotaped debate over “Hot Coffee” and tort reform

    Last year we blogged about the documentary “Hot Coffee,” which focuses on Liebeck v. McDonald’s and a few other cases to illustrate the evils of tort reform.  As noted in our prior post, the film’s director Susan Saladoff said she made the film as an antidote to what she perceives as a pro-defendant bias in the mainstream media’s treatment of tort reform.

    In this video provided by Widener University School of Law, you can view a debate between Ms. Saladoff and Victor Schwartz, general counsel for the American Tort Reform Association.  The video has something for folks on both sides of the issue.  If you’re a fan of the movie, you’ll enjoy seeing Ms. Saladoff passionately explain why everyone should see this film, because it opens people’s eyes to the corporate takeover of the American justice system.  If you’re not a fan of the movie, you’ll enjoy seeing Mr. Schwartz identify all the parts of the film he believes are false or misleading.

    Warning, this video was recorded via Skype and its a little garbled in places.  There are some moments when students are asking questions of Ms. Saladoff and Mr. Schwartz, but the questions are inaudible.  And the video begins in the middle of Ms. Saladoff’s comments.  Despite these technical glitches, I found the video quite interesting.

    Hat tip: TortsProf Blog

    Related posts:

    “Hot Coffee” documentary takes aim at media depictions of civil litigation

  • Judge Rex Heeseman’s latest op-ed on punitive damages

    Judge Rex Hesseman of the Los Angeles County Superior Court has an op-ed in the Los Angeles & San Francisco Daily Journal entitled “‘Finances’ and punitive damages.”  (Subscription required.)  Judge Heeseman, who writes regularly on punitive damages and insurance law, focuses this time on Bankhead v. ArvinmeritorHere’s his conclusion about the potential effects of the Court of Appeal’s decision to affirm a $4.5 million punitive damages award based on expert opinion that the defendant could pay such an award, notwithstanding its negative net worth:

    It can be asserted that focusing upon finances is a sort of an “end run” around the aforementioned “guidelines” of the U.S. Supreme Court.  Furthermore, the emphasis by Bullock III and ArvinMeritor on the “specific facts of each case” (admittedly echoing comments in Campbell) may bring flexibility, but also uncertainty.  . . .  And, for the “punitive damages phase” in some lawsuits, is it now advisable (required?) to have your “expert witness” ready to testify about “net worth,” “financial condition” and/or “ability to pay”?  Will there be a “dueling of experts” in that context, similar to that in some other litigation (e.g. standard of care in medical malpractice)?

    We hope the California Supreme Court will provide some guidance on these questions in the furture, but as we noted in our most recent post about Bankhead, the California Supreme Court declined to wade into this area of the law in the context of that case.

    Related posts:

    California Supreme Court denies review in Bankhead v. Arvinmeritor

    Defendant files petition for review in Bankhead v. Arvinmeritor

    Published opinion affirms $4.5M punitive damages award in asbestos case (Bankhead v. ArvinMeritor)  

  • Fannie Mae immune from punitive damages (for now)

    The Federal National Mortgage Association, better known as Fannie Mae, cannot be liable for punitive damages so long as it remains under the conservatorship of the Federal Housing Finance Agency.  So says an order issued by U.S. District Judge Rosemary Collyer of the U.S. District Court for the District of Columbia.  (Herron v. Fannie Mae, no. 1:10-CV-00943-RMC.)  
    That’s consistent with the general rule that instrumentalities of the federal government are not subject to punitive damages.  (See, e.g., Woodland Production Credit Assn. v. Nicholas (1988) 201 Cal.App.3d 123, 129 [“[n]either the federal government nor its instrumentalities may be held liable for punitive damages unless there is an express statutory authorization for such an award”].)

    Hat tip: The Blog of LegalTimes

  • California Supreme Court denies review in Bankhead v. Arvinmeritor

    The California Supreme Court today decided not to review the Court of Appeal’s decision in Bankhead v. Arvinmeritor, which upheld a $4.5 million punitive damages award against a defendant with a negative net worth.  So that published opinion will remain on the books and California law will remain murky as to what constitutes “meaningful” evidence of the defendant’s financial condition for the purpose of imposing punitive damages.

    Related posts:

    Defendant files petition for review in Bankhead v. Arvinmeritor

    Published opinion affirms $4.5M punitive damages award in asbestos case (Bankhead v. ArvinMeritor)

  • Justice Kennedy issues stay in Icicle Seafoods v. Clausen

    SCOTUSblog is reporting that Justice Kennedy has ordered a stay of enforcement in the Icicle Seafoods case we blogged about earlier this month.  The order prevents plaintiffs from collecting on their $1.3 million punitive damages award while the defendant’s cert. petition is pending, on the condition that the defendant’s appeal bond remains in effect during that time.

    Related post:

    Cert. petition raises punitive damages issues (Icicle Seafoods v. Clausen)

  • Los Angeles jury awards $18M in punitive damages in asbestos case, on top of $30 million compensatory damages

    A jury in Los Angeles has awarded $18 million in punitive damages in an asbestos personal injury case against Dow Chemical subsidiary Union Carbide, according to this press release from the plaintiff’s lawyers.  (Izell v. Union Carbide Corp., et al., LASC no. BC469931.)

    The jury had previously awarded $30 million in compensatory damages, consisting entirely of non-economic damages (pain and suffering).  Because the jury allocated 60 percent to fault to Union Carbide, it will be responsible for $18 million in compensatory damages, resulting in a one to one ratio of punitive to compensatory damages.

    By my count, this is the third largest punitive damages award of the year in California.

  • Oakland jury awards $21M in punitive damages against Jehovah’s Witnesses

    MSNBC.com is reporting that yesterday a jury in Oakland awarded $21 million in punitive damages, on top of a compensatory damages award of $7 million, to a woman who alleged she was sexually abused by a member of the Fremont congregation of Jehovah’s Witnesses.  (Jane Doe v. The Watchtower Bible & Tract Society, Alameda Superior Court no. HG11558324.)

    Defense counsel says he is planning to appeal; he says he is not aware of any other case in which a religious organization was held liable for wrongdoing committed by a church member who was not in an an official position of responsibility.

    Update:  Here is a link to the Court of Appeal online docket.  Some documents in the case have been posted here.

  • Defendant files petition for review in Bankhead v. Arvinmeritor

    Back in April we blogged about this published opinion, which affirmed a $4.5 million punitive damages award against a defendant whose audited financial statements showed a negative net worth.  The defendant, Arvinmeritor, has filed a petition for review with the California Supreme Court, raising the following issues:

    1. Should a publicly traded company’s net worth be the measure of “financial condition” for purposes of evaluating its ability to pay a punitive damage award, in the absence of evidence that the company improperly manipulated the net worth number to lower it?

    2. Can the factor of comparable civil or criminal penalties, the third guidepost of federal due process review established by the United States Supreme Court, be considered “essentially irrelevant” in all cases involving common-law tort duties, or in asbestos-related personal injury cases in particular?

    The Supreme Court’s deadline for ruling on the petition is July 29.  You can track the status of the petition on the Supreme Court’s online docket.

    Full disclosure: Horvitz & Levy filed a letter in support of the petition for review on behalf of the U.S. Chamber of Commerce, the National Association of Manufacturers, and the Motor & Equipment Manufacturers Association.

  • Cert. petition raises punitive damages issues (Icicle Seafoods v. Clausen)

    Who knew maritime law would generate so many notable punitive damages cases?  After Exxon Shipping v. Baker and Atlantic Sounding v. Townsend, now we have Icicle Seafoods v. Clausen.

    In Icicle Seafoods, a worker was injured on a barge and sued the barge owner for failing to provide “maintenance and cure,” a no-fault remedy akin to workers’ compensation for injured seamen.  A jury awarded $37,420 in compensatory damages, determined that the defendant’s failure to timely pay those damages was “callous and indifferent or willful and wanton,” and awarded $1.3 million in punitive damages, for a ratio of 34 to 1.  The case made its way to the Washington Supreme Court which affirmed the award in a divided opinion.  The majority concluded the award was not excessive because, if you add a $387,558 attorney’s fees award to the compensatory damages, the 34 to 1 ratio turns into a 2.8 to 1 ratio.

    The defendant filed a cert. petition this week, raising the following issues:

    1. Whether, in determining the ratio between compensatory and punitive damages for purposes of applying federal limits on punitive damages, court awarded attorney’s fees are properly included as compensatory  damages.

    2. Whether, and to what extent, punitive damages in maritime cases may exceed the 1:1 ratio between compensatory and punitive damages applied by the Court’s Exxon decision.

    Our readers may recall that the first issue has already been settled in California: our courts have repeatedly held that attorney’s fees may not be added to compensatory damages for purposes of the BMW/Campbell ratio calculation.  The Washington Supreme Court’s contrary holding is a bit surprising, given that the plaintiffs in State Farm v. Campbell asked the U.S. Supreme Court to add the attorney’s fees to the compensatory damages for ratio purposes and the Supreme Court refused to do so.  But as the petition points out, the lower courts have split on this issue, notwithstanding Campbell.  You can track the status of the petition on the Supreme Court’s online docket.

  • Illinois jury awards $100 million in punitive damages against ConAgra

    BusinessWeek reports that a jury in federal district court in Illinois has awarded $81 million in compensatory damages and $100 million in punitive damages against ConAgra Foods, Inc.  The case involves an explosion in a grain elevator in 2010 that left three workers severely injured. Interestingly, ConAgra says the entire amount is covered by insurance.  I suspect their insurers may disagree.  I don’t know what law is being applied in this particular case but in most states, including California, punitive damages are not insurable (notwithstanding some arguments to the contrary).