Insurance Journal reports that a jury in Montana has awarded $2 million in compensatory damages and $32 million in punitive damages to a 90-year-old resident of an assisted-living facility who claims that her insurer wrongly suspended payments for her dementia care. The article doesn’t give many details about the case, but it’s hard to imagine how the punitive damages award could survive judicial review, given the substantial compensatory damages and the ratio of 16 to 1.
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Florida appellate court reverses $79 million judgment in tobacco case
One of the biggest U.S. verdicts of 2010 is no more.
In November 10, a Florida jury awarded $7.2 million in compensatory damages and $72 million in punitive damages against R.J. Reynolds in a lawsuit brought by the adult daughter of a smoker who died from lung cancer. Yesterday a Florida intermediate appellate court affirmed the jury’s finding of liability but overturned the entire damages award.
The court determined that the compensatory damages award was not reasonably supported by the evidence. Among other things, the court noted that the jury awarded twice the amount of damages that the plaintiff’s lawyer requested, and the jury assigned only half the amount of fault that the lawyer conceded should be assigned to plaintiff’s father. Because the court vacated the compensatory damages award, it also vacated the punitive damages award, remanding the case to the lower court for a redetermination of all the damages.
Related posts:
Florida appellate court reverses $40 million punitive damages award in tobacco case
Philip Morris wins sixth straight trial in Florida smoker litigation
Florida jury awards relatively modest punitive damages in smoker lawsuit
Another punitive damages award in Florida tobacco litigation
Florida jury awards $20 million in punitive damages to smoker’s widow
Smoker’s widow wins $12.5 million in punitive damages
Florida trial judge cuts $244 million punitive damages award
Florida jury awards $25 million in punitive damages to smoker’s widow
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Odd WSJ report about Chrysler discharging punitive damages liability through bankruptcy
The Wall Steet Journal ran a story last week reporting that Chrysler, through its bankruptcy reorganization, discharged its liability for punitive damages in products liability lawsuits arising from vehicles manufactured before the bankruptcy. The story gives the impression that Chrysler’s “immunity” from punitive damages is somehow unique or unusual, but as Professsor Todd Zywicki of the Volokh Conspiracy points out, “That WSJ article was weird–it is black-letter bankruptcy law that you can discharge products liability and other tort claims in bankruptcy. . . . The real anomaly here is actually GM. There for purely political reasons the government allowed claims against GM to pass through bankruptcy.”
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U.S. Supreme Court decisions in BMW and State Farm have failed to reduce punitive damages awards, according to new paper
Tort reform of punitive damages has failed, according to Cornell law professor Theodore Eisenberg.
In The Empirical Effects of Tort Reform, a chapter from the forthcoming Research Handbook on the Economics of Torts, Professor Eisenberg uses statistical analysis to study the effects of various efforts to rein in punitive damages, including the U.S. Supreme Court’s opinions in BMW v. Gore and State Farm v. Campbell. As most readers of this blog know, those decisions held that an award of punitive damages is unconstitutionally excessive if it is disproportionate to the reprehensibility of the defendant’s conduct and the actual harm that the defendant inflicted upon the plaintiff. One might expect those decisions to produce a general decline in the average ratio between punitive damages and compensatory damages. Eisenberg’s statistics show no such decline. In fact, his statistics show that, in cases involving compensatory damages awards up to $100,000, the average ratio of punitive damages to compensatory damages actually increased after State Farm.
Eisenberg characterizes the Supreme Court’s tort reform effort as a failure, but that’s OK with him because he does not believe there was anything to reform in the first place. Rather, he blames the Chamber of Commerce for stoking public outrage about a mythical punitive damages crisis that never really existed.
He grudgingly acknowledges, however, the existence of evidence showing that tort reform has succeeded in reducing “extreme” punitive awards. He makes that acknowledgment only in passing, but it seems to severely undercut his conclusion that reform of punitive damages has failed. The main focus of tort reform in the punitive damages context has been to reduce the “outliers,” not to reduce the average ratio on a nationwide basis. That’s certainly what the Supreme Court was aiming at in BMW and State Farm. So if tort reform is responsible for a reduction of the the extreme awards, perhaps it isn’t a failure after all. Anyway, it’s an interesting article and well worth a read to anyone interested in empirical analysis of tort reform, not just of punitive damages, but also in the context of medical malpractice and products liability litigation.
Hat tip: TortsProf Blog -
Federal judge piles on punitive damages against Iran and Sudan: $1.67B and $236M
In the past few years we have seen a flurry of colossal punitive damages awards against Iran and Cuba in cases involving state-sponsored terrorism and human rights violations.
In one of those cases back in 2010, U.S. District Judge Royce Lamberth awarded $61.3 million against Iran for its role in the 1983 bombing of the U.S. Marine Corps barracks in Beirut. Chief Judge Lambert has now upped the ante in a big way, awarding another $487 million in compensatory damages and $1.67 billion in punitive damages against Iran for the same conduct. As in the prior case, nobody expects the plaintiffs to collect on this judgment. But Chief Judge Lambert stated in his opinion that he hopes the families of the victims find some measure of solace in his ruling.
Chief Judge Lamberth issued another symbolic opinion on the same day, awarding $79 million in compensatory damages and $236 million in punitive damages in a default judgment against the Republic of Sudan for its involvement in the bombing of the USS Cole.
Perhaps these awards will indeed provide some comfort to the victims. That certainly is a laudable goal. But I keep wondering whether these gigantic uncontested awards might have some unforeseen consequences for punitive damages jurisprudence. Punitive damages are supposed to be used to provide punishment and deterrence, and these awards don’t seem to be serving either purpose. Will this departure from traditional principles spill over into other cases involving more traditional civil litigation? Probably not in any direct way. I don’t foresee any court citing these rulings for their precedential or even persuasive value. But it’s impossible to measure the impact of these awards on our society’s perceptions about the appropriate use (and amount) of punitive damages in the long run.
Hat tip: The Huffington Post
Related posts:
Federal Judge Awards $300 Million In Punitive Damages Against Iran
Federal judge awards $61.3 million in punitive damages against Iran
$25 Million in Punitive Damages Against Cuba
Miami Judge Awards $393 Million in Punitive Damages Against Cuba
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Unpublished opinion affirms trial court’s rejection of jury instruction limiting punitive damages to one to one ratio
It has been very quiet here lately. We haven’t had any big verdicts, appellate decisions, legislative proposals, or law review articles to report in the past few weeks. If you’re desperate for your fix of punitive damages news, this will have to do: in this unpublished opinion, the California Court of Appeal (Second Appellate District, Division One) held that the trial court properly refused to instruct the jury that the maximum punitive damages award was $12,250 (the amount of compensatory damages). It’s hard to argue with the court’s analysis; there isn’t any law that would impose a one-to-one ratio with a compensatory damages award of that size. The defendant was clearly over-reaching by requesting that instruction.
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New law review article: “Punitive Damages in Cyberspace”
Michael Rustad of Suffolk University Law School has posted on SSRN a copy of his article: “Punitive Damages in Cyberspace: Where in the World is the Consumer?”
From the abstract:
A content analysis of all Internet-related cases reveals that no consumer obtained punitive damages during a decade of cyberlaw litigation. Tort remedies have the potential of filling the gap left by ineffective criminal sanctions against cyberwrongs such as online stalking. Public enforcement needs to be augmented by consumers operating as “private attorneys general” who pursue punitive justice against cyberlaw wrongdoers. At present, punitive damages serve as a form of corporate self-help to assist corporations in protecting rights and consolidating market share in cyberspace. I explore the reasons why punitive damages have not yet developed as a consumer protection remedy in cyberspace. This Article will demonstrate that punitive damages are a necessary consumer remedy against Internet wrongdoers where the probability of discovery is low and the harm to consumers is generally undetected and unpunished by public authorities.
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Sacramento jury awards $125 million in punitive damages against hospital for sexual harassment
The LA Times is reporting that a jury in federal district court in Sacramento has awarded $42.7 million in compensatory damages and $125 million in punitive damages against Catholic Healthcare West. The lawsuit involves allegations of sexual harassment and retaliation against a physician’s assistant at Sacramento’s Mercy General Hospital.
The article says the combined $168 million award is believed to be the largest award for a single victim of workplace harassment in U.S. history. The plaintiff’s attorney is quoted as conceding that the amount of the award is likely to be reduced.
Sacramento juries have been doling out some big punitive damages awards in recent years, including awards of $28 million and $10 million in 2010, but this one is in a different level of the atmosphere.
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Punitive damages for inadequate warnings
Drug & Device law has an interesting post about punitive damages in failure-to-warn cases. The post focuses on a federal district court decision (Salvio v. Amgen) that held “punitive damages are unfounded where a manufacturer-defendant warns of the potential danger that resulted in injury to a plaintiff.” In other words, even if the warning is inadequate in some way, the fact that the defendant gave some warning about the risk defeats the “conscious indifference” mental state required for punitive damages. The post discusses a number of prior cases in various jurisdictions and concludes that the court’s holding is on solid ground.
The California Court of Appeal decision in Johnson & Johnson v. Superior Court stands in stark contrast to all the cases discussed in the Drug & Device Law post. In that case, as we previously reported, the court allowed the plaintiff to seek punitive damages based on a claim that the defendant’s warning about potential allergic reactions to Motrin was not sufficiently detailed. That decision led to a $15.6 million punitive damages award, one of the top ten punitive damages awards of the year in California. The case is up on appeal again, so the Court of Appeal will have the opportunity to take a look at the evidence to decide whether this really is a case of malice or oppression within the meaning of Civil Code section 3294.
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Oregon jury awards $25 million to smoker in retrial; original award was $150 million
Oregonlive is reporting that an Oregon jury has awarded $25 million in punitive damages to the family of a smoker in a lawsuit against Philip Morris. This was a partial retrial of a case in which the original jury awarded $169,000 in compensatory damages and $150 million in punitive damages. As we reported in June 2010, the Oregon Supreme Court reversed that award because the trial court had given a jury instruction that improperly allowed the jury to punish Philip Morris for injuries to nonparties. Although the second jury’s award of $25 million is much less than the original award, it still represents a ratio of 148 to one, and Philip Morris says it plans to appeal again on the grounds that the award is excessive. The case is Schwarz v. Philip Morris.