A little while ago I posted about a Colorado Supreme Court opinion that affirmed an $18 million punitive damages award, and I observed that state supreme courts don’t often affirm blockbuster punitive damages awards.  One of our readers then alerted me to the Oregon Supreme Court’s opinion last week in Strawn v. Farmers Insurance Co. of Oregon, which affirmed an $8 million punitive damages award.  (Technically, the court reinstated an $8 million punitive damages award that had been reversed by the Court of Appeal.) 

That doesn’t quite qualify as a “blockbuster,” but it is surprising that the court affirmed the award given that the compensatory damages were only $800,000.  A 10-to-1 ratio seems awfully high in a case that involves purely economic harm (underpayment of insurance policy benefits).  Then again, the Oregon Supreme Court has a history of marching to the beat of its own drum when it comes to punitive damages; this is the court that affirmed the $79.5 million punitive damages award in Philip Morris v. Williams even after the U.S. Supreme Court held that the jury instructions in that case violated Due Process.

DISCLOSURE: Horvitz & Levy was not involved in the Strawn case, but we do represent Farmers in other matters.

It’s not often that a state supreme court affirms a blockbuster punitive damages award, but yesterday the Colorado Supreme Court affirmed a $39.6 million judgment in a personal injury action, including $18 million in punitive damages, in the case of Qwest Services Corp. v. Blood.  The plaintiff, a lineman for an electric utility, was injured during a climb on a wooden utility pole.  The 46-year-old pole was rotten and collapsed under the plaintiff’s weight.  He sued the defendant, the company that owned of the pole, for failure to implement a routine pole inspection program.

The Colorado Supreme Court’s opinion has three primary holdings:

1.  Colorado’s punitive damages statute does not violate the Due Process Clause as interpreted by the U.S. Supreme Court in Philip Morris v. Williams; the statute does not suggest that a jury can or should award punitive damages to punish the defendant for harm to nonparties.

2.  The evidence was sufficient to support a punitive damages award against the defendant, because a reasonable jury could conclude that the defendant’s failure to implement a pole inspection problem was “wilful and wanton” within the meaning of Colorado’s punitive damages statute. 

3.  The amount of the award was not excessive under the three guideposts of BMW v. Gore because the reprehensibility of the defendant’s conduct was sufficient to support a punitive damages award that was less than the amount of compensatory damages.

Related posts:

Colorado Supreme Court to consider excessive punitive damages, despite statutory cap

The Associated Press is reporting (via the Washington Post) that a jury in Mississippi awarded $322 million last week to a man who claimed he developed asbestosis as a result of working with drilling mud additives.  The defendants are Chevron and Union Carbide, who were each found 50 percent at fault for the plaintiff’s injuries.  (Brown v. Phillips 66, et al., Miss. Cir. Ct., Smith Cty.)

The AP story says the $322 million award is the largest single plaintiff’s asbestos verdict in U.S. history, according to the plaintiff’s attorney.  The AP story doesn’t say how much of that award was attributable to punitive damages, but this story in the HarrisMartin asbestos litigation reporter (subscription required) says the breakdown was as follows: $22 million in compensatory damages and $300 million in punitive damages.  That’s a ratio of 13.7 to one, which cannot possibly withstand scrutiny under BMW and Campbell.  The award also appears to violate Mississippi law, which places limits on punitive damages based on a sliding scale according to the defendant’s net worth.  The maximum award permitted under that statute (Miss. Code Ann. 11-1-65) is $20 million for a defendant with a net worth in excess of $1 billion.  Any way you slice it, this award doesn’t figure to last very long.

Reuters is reporting that Swiss biopharmaceutical firm Actelion Ltd. plans to appeal from a jury award of $547 million in compensatory damages and $30 million in punitive damages in a dispute with rival drug company Asahi Kasei Pharma Corp.  Asahi accused Actelion of intentionally interfering with Asahi’s attempts to develop a drug for the treatment of heart disease, in order to preserve Actelion’s dominant position in that market.

Ordinarily, when a jury awards tens of millions in punitive damages, that award becomes the focal point of the appeal.  But in this case the punitive damages issues will obviously take a back seat to arguments challenging the colossal compensatory award.

Asahi’s lawyers have issued this press release touting their victory.

Reuters is reporting that a federal district court jury in Virginia has awarded $12 million in compensatory damages and $200 million in punitive damages to a plaintiff who claims he suffered brain damage after receiving injections of Botox made by defendant Allergan.  This is one of the largest U.S. punitive damages awards we’ve seen in a while, but it doesn’t appear to have any chance of standing up.  The case is proceeding under Virginia law, which caps punitive damages at $350,000.