California Punitives by Horvitz & Levy

  • Behr v. Redmond: Court of Appeal publishes previously unpublished opinion, creates split of authority

    A week ago we reported on the unpublished opinion in Behr v. Redmond, in which the Court of Appeal reduced a jury’s award of compensatory damages from $4 million to $1.6 million, without disturbing the jury’s award of $2.8 million in punitive damages.  As we noted at the time, the opinion’s treatment of the punitive damages conflicts with published cases, making the court’s decision not to publish its opinion rather surprising.

    Today, the Court of Appeal ordered publication of its opinion.  It appears from the court’s online docket that neither of the parties requested publication; the court ordered publication on its own motion.

    Now that there is a split in California case law about the proper treatment of a punitive damages award following a large reduction in compensatory damages, this case may end up in the California Supreme Court.

  • Proposed bill would require that judges, not juries, determine the amount of punitive damages in California

    California Assembly member Don Wagner has introduced a bill that would give trial courts exclusive authority to determine the amount of punitive damages awards in California.  The bill, Assembly Bill 556, provides that juries will continue to determine whether punitive damages can be imposed, i.e., juries will still decide whether the plaintiff has proved by clear and convincing evidence that the defendant acted with malice, oppression, or fraud.  But if the jury answers “yes” to that question, the jury would not be permitted to determine the amount of punitive damages.  That would be determined by the judge.

    This is the first time I have seen anyone propose this type of bill in California.  Someone seems to propose a cap on punitive damages every year, but I don’t recall seeing this one before.  This bill is scheduled for a hearing before the Assembly Judiciary Committee on March 22.

  • Proposed cap on punitive damages in California is deleted from amended version of bill

    We previously blogged about Assembly Bill 158, which, in its original form, would have limited punitive damages in California to three times compensatory damages.  The bill also included proposals to (1) eliminate punitive damages in products liability cases in which the defendant could establish that its product was in compliance with applicable regulations, and (2) limit noneconomic damages to $250,000 in all negligence cases.

    An amended version of the bill is now scheduled for a hearing on March 1315.  The amended version of the bill, however, no longer includes the caps on punitive damages or noneconomic damages.  It contains only the limitation on punitive damages for products liability cases.

  • No punitive damages for former law firm associate who was passed over for partnership

    I haven’t been following this case, but apparently a former associate at the Orrick Herrington law firm is suing the firm for $100 million, including punitive damages, because they promised to make him a partner but didn’t.  This New York Law Journal story reports that the trial judge granted Orrick’s motion to strike the claim for punitive damages, on the ground that being passed over for partnership isn’t the sort of egregious misconduct that could support an award of punitive damages.  The plaintiff says he will appeal.  Good luck with that. 

  • Smoker’s family wins $11.3 million in punitive damages

    The latest jury verdict in the on-going Florida tobacco litigation: $6 million in compensatory damages and $11.3 million in punitive damages to the children of a deceased smoker, per this story on the Courtroom View Network.

    Related posts:

    Smoker asks for $10 billion in punitive damages; jury awards $260,000

    Plaintiffs break losing streak in Florida smoker lawsuits, win $72 million punitive damages award
    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

    “Smokers, tobacco, both winners in early Engle cases”

    Jury rules for plaintiff in first phase of retrial after reversal of $145 billion punitive damages award

    After reversal of $145 billion class action punitive damages award, Florida smokers seek punitive damages in individual suits

  • Behr v. Redmond: $2.8M punitive award affirmed, despite reduction of compensatory damages from $4M to $1.6M

    Here’s a somewhat surprising unpublished opinion from the California Court of Appeal (Fourth Appellate District, Division Two).

    The plaintiff, who claimed the defendant gave her genital herpes, won a verdict of $4 million in compensatory damages and $2.8 million in punitive damages.  That compensatory award included $2.5 million for future medical expenses.

    On appeal, the defendant argued (among other things) that no substantial evidence supported the award of future medical expenses.  The Court of Appeal agreed and reduced the compensatory damages from $4 million to $1.6 million.

    After reading that part of the opinion, I was expecting the Court of Appeal to do one of two things: (1) reduce the amount of punitive damages to preserve the punitive-to-compensatory ratio awarded by the jury, as the Court of Appeal did in Las Palmas Associates v. Las Palmas Center Associates (1991) 235 Cal.App.3d 1220, 1254, or (2) send the case back to the trial court to re-evaluate the amount of punitive damages in light of the reduced compensatory damages award, as the Court of Appeal did in SEIU v. Colcord (2008) 160 Cal.App.4th362.

    Surprisingly, the court followed neither approach, and instead affirmed the punitive damages award based on its conclusion that the ratio of compensatory damages, as reduced, was not excessive.  In my view, that approach overlooks the fact that juries are instructed to make their punitive award proportionate to the actual harm to the plaintiff.  The jury in this case performed this task based on an extremely inaccurate assessment of the actual harm.  It seems very unlikely that the jurors would have awarded exactly the same amount of punitive damages if they had known that the correct amount of “actual harm” was $2.5 million less than they thought.

    More surprisingly, the court did not publish its opinion, even though it departs from the approach taken in published cases on this issue.  I guess I shouldn’t be too surprised, because this has happened before.  As I said at that time, I expect this issue will eventually make its way to the California Supreme Court.

  • Does Michigan have more truck accidents because it doesn’t allow punitive damages?

    Opponents of limits on punitive damages typically argue that unlimited punitive damages are necessary to deter bad corporate behavior and protect public safety.  See this recent blog post, for example.  If that reasoning is correct, states with caps on punitive damages should be experiencing a rise in corporate misconduct and a decline in public safety.  And the situation should be even worse in states that have banned punitive damages altogether.  But is there any evidence this is true?  Yes, according to these Michigan plaintiffs’ lawyers.

    They argue, in this video and on this page of their website, that Michigan is suffering from a high rate of trucking accidents because that state does not allow punitive damages.  They say that trucking companies, free from the threat of punitive damages, “knowingly hire unqualified, unfit truck drivers who commit safety violations that cause accidents.”  They cite evidence that Michigan experiences more than 100 fatal truck accidents per year, and another 5,000 truck accidents causing serious personal injuries per year.

    One thing seems to be missing: evidence that the rate of truck accidents in Michigan is higher than in states where punitive damages are allowed.  Without such evidence, it seems awfully difficult to argue that truck accidents in Michigan are caused by that state’s prohibition on punitive damages.

    I decided to take a look at the data available on the internet to see if I could test the hypothesis that Michigan’s lack of punitive damages has resulted in more truck accidents.  According to this University of Michigan study, Texas had the most fatal truck accidents between 2003 and 2007, a total of 2,545.  Michigan had a total of 606 during the same time period.  According to the 2010 census figures, Texas has a population of  25.1 million and Michigan has a population of 9.9 million.  That means that Texas actually has a higher rate of truck accidents per capita, .0001 per person for Texas compared to .00006 per person for Michigan.  Texas, by the way, allows punitive damages (subject to a cap).   

    Florida also had a very high number of fatal truck accidents during the same time period, a total of 1,894.  With a population of 18.8 million, Florida’s rate of fatal truck accidents per person is .0001, the same as Texas, and higher than Michigan.  Florida, of course, has no caps on punitive damages and is home to many of the largest punitive damages awards in the country in recent years.  Hmmm, the hypothesis isn’t looking so good.  In fact, the only correlation so far is that states that allow punitive damages have a higher rate of fatal truck accidents, but I’m certainly not confusing correlation with causation.

    Let’s look at a Ohio, a state that is more economically and geographically similar to Michigan.  Ohio had 828 fatal truck accidents in 2003-2007, with a population of 11.5 million, for a rate of .00007 per person.  Again, higher than Michigan.  And Ohio law permits punitive damages (subject to a cap).

    Based on this limited examination of the data, there appears to be no support whatsoever for the theory that Michigan has a higher rate of truck accidents as a result of its prohibition on punitive damages. To truly isolate the impact of punitive damages law on trucking accidents, a researcher would have to dig a lot deeper, and isolate a lot of other variables – economic, geographic, demographic.  That may be possible, but I haven’t seen any such study. If any of our readers have seen one, let us know.

  • Ballester v. Ecolab: plaintiff cannot use punitive damages claim to circumvent workers’ comp exclusivity

    The plaintiff in this case brought a claim against his employer for intentional infliction of emotional distress, arguing his supervisor “fraudulently” criticized his job performance.  Unfortunately for him, it is well established in California that the Workers’ Compensation Act provides the exclusively remedy for infliction of emotional distress resulting from alleged personnel actions.  To avoid that rule, the plaintiff included in his complaint a cause of action for punitive damages, and argued that the punitive damages claim took the case outside the realm of workers’ compensation exclusivity.  The trial court disagreed, sustained the employer’s demurrer to the complaint, and entered judgment for the defense.

    The California Court of Appeal (First Appellate District, Division Three) affirmed in this unpublished opinion, citing the well-established rule that “[t]here is no cause of action for punitive damages. . . . ‘Punitive damages are merely incident to a cause of action, and can never constitute the basis thereof.’”  Accordingly, because the plaintiff had no cause of action that was not subject to workers’ compensation exclusivity, the trial court correctly dismissed his claims.

  • Shaw v. Long Drug Stores: retail chain’s regional manager qualifies as “managing agent”

    In this unpublished opinion, the California Court of Appeal (Second Appellate District, Division Five) permits a plaintiff in an employment case to seek punitive damages from her employer.

    The plaintiff, a drug store employee, accused her supervisor of sexual harassment.  She sued her employer for compensatory and punitive damages, but the trial court granted the defendant’s motion for summary adjudication on the issue of punitive damages.  The court ruled that the plaintiff presented no evidence that her supervisor’s misconduct was was approved by a corporate “managing agent,” as required to obtain punitive damages against a corporation under California Civil Code section 3294.

    The Court of Appeal disagreed.  It said the plaintiff presented evidence that she complained to the defendant’s regional manager, who was responsible for managing every aspect of the day-to-day operations at approximately 25 stores.  The court said this evidence demonstrated a sufficient level of independent discretionary authority to support a finding that the regional manager was a managing agent.  Curiously, the court did not cite Roby v. McKesson, the California Supreme Court’s latest decision on the requirements for establishing managing agent status.

  • House Judiciary Committee approves proposal to cap punitive damages at $250,000 in all medical malpractice cases nationwide

    Politico reports that the House Judiciary Committee voted along party lines (18-15) to approve a medical malpractice reform bill which, among other things, would limit punitive damages in med mal cases to $250,000 or two times compensatory damages, whichever is greater.  The bill would apply to all med mal lawsuits in federal and state courts.  If passed, the bill would have an impact in California, where we have a cap of $250,000 on non-economic damages in med mal cases, but no cap on punitive damages.  (And contrary to what the AP might tell you, there is a difference between non-economic damages and punitive damages.)