The Sacramento Bee is reporting that a Sacramento jury has awarded $1.1 million in compensatory damages and $28 million in punitive damages against Horizon West Healthcare, a nursing home company. The plaintiffs claimed that Horizon was responsible for the death of their 79-year-old mother. With a ratio like that (25.5 to 1), this award is going down.

Hat tip: Fred Pilot

Judge Rex Heeseman of the Los Angeles Superior Court contributes regularly to the Los Angeles Daily Journal on various topics, including punitive damages. In his latest piece, Calculation of the “PD Ratio” (May 11, 2010), which you can view here if you have a subscription, Judge Heeseman discusses the decision a few months ago in Amerigraphics v. Mercury.

Judge Heeseman’s article provides a nice overview of some of the major California appellate decisions addressing the proper ratio of punitive damages to compensatory damages. The article discusses the Amerigraphics decision in light of these precedents, and examines some of the questions raised by Amerigraphics.

For example, Judge Heeseman notes that in Amerigraphics, an insurance bad faith case, the court excluded from the ratio calculation any amounts awarded to the policyholder as “Brandt” fees (fees that the policyholder incurred in order to obtain wrongfully withheld policy benefits). Judge Heeseman notes that other decisions (such as Major v. Western Home) included Brandt fees in the ratio analysis. He suggests that California law is now unclear as to whether Brandt fees should be considered for ratio purposes.

Judge Heeseman also notes that the Amerigraphics court ultimately settled upon a ratio of 3.8 to 1 as the constitutional maximum on the facts of that case, and he says “[i]t appears this is the first occasion, in California at least, where an appellate court utilized a ‘fraction’ in the ratio.”

I think it’s true that California appellate courts generally adopt whole-number ratios, but fractional ratios are fairly common in California, because appellate courts often prefer to set the punitive damages at a nice round number. (See, e.g., Diamond Woodworks v. Argonaut (2003) 109 Cal.App.4th 1020, 1056-1057 [ordering a remittitur of punitive damages to $1 million, for a ratio of 3.8 to one, exactly the same ratio adopted in Amerigraphics]; Notrica v. State Compensation Insurance Fund (1999) 70 Cal.App.4th 911, 951-954 [ordering a remititur of punitive damages to $5 million, for a ratio of 10.3 to 1]; Rosener v. Sears, Roebuck & Co. (1980) 110 Cal.App.3d 740, 746, 757 [ordering a remittitur of punitive damages to $2.5 million, resulting in a ratio of 15.8 to one].) In the most recent example, the Court of Appeal in Roby v. McKesson adopted a ratio of 1.4 to 1, only to see that number reduced to 1 to 1 by the California Supreme Court.

For those of you wondering where have all the punitive damages gone, they’re baaack! With a vengeance. On the heels of a $200 million punitive damages award by a jury in Los Angeles, a jury in Las Vegas has topped that by dishing out $500 million in punitive damages.

As reported by the Associated Press, a jury awarded awarded $5 million in compensatory damages and $500 million in punitive damages to a husband and wife who alleged that the husband was infected with Hepatitis C during a colonoscopy. The jury awarded punitive damages not against the medical facility that infected the plaintiff, but against two drug companies that made and distributed propofol, the anesthetic drug used during the procedure. The plaintiffs alleged that the companies, Teva Parenteral Medicines and Baxter Healthcare Corp., supplied the drugs in vials that were larger than necessary, tempting the healthcare providers to re-use the vials on multiple patients, even though the vials were labeled for individual use. During the trial, the plaintiffs’ attorney referred to the vials as “weapons of mass infection.” (See this report in the Sun Times.)

This award is destined to be reversed or reduced. The basis for imposing punitive damages seems shaky and the amount of the award is simply absurd. An affirmance of this award would literally be unprecedented. Not surprisingly, the defendants have announced their plans to appeal. But even if the defendants get this award tossed, they won’t be out of the woods. Apparently there are series of similar cases in the pipe-line. This was just the first to make it to trial.

Yesterday, a Los Angeles jury awarded $8.8 million in compensatory damages and $200 million in punitive damages in an asbestos case against Certainteed Corporation and the Los Angeles Department of Water & Power (DWP). (The case is Evans v. AW Chesterton Co et al., case no. BC418867.)

It’s not clear to me whether the punitive damages were assessed against both defendants, or just one of them. Either way, the ratio of punitive damages to compensatory damages is 22.7 to 1. If that award remains intact through posttrial motions and appeal (not likely), it would dwarf the largest punitive damages award ever to to survive appeal in California ($55 million in Buell-Wilson v. Ford).

Hat tip: CVN Blog.

UPDATE: The Recorder (via Law.com) has a story on this verdict.