The California Supreme Court has issued its opinion in Roby v. McKesson. I haven’t had a chance to read it in detail yet, but from a quick skim I see that the Supreme Court agreed with the Court of Appeal that the jury’s $15 million punitive damages award was constitutionally excessive, and further held that any amount of punitive damages in excess of the amount of compensatory damages ($1.9 million) would violate due process. I’ll post more on this later.
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Roby v. McKesson Opinion Will Be Issued Monday, Nov. 30
The California Supreme Court has announced that it will issue its opinion in Roby v. McKesson on Monday, November 3o. One of the issues presented in Roby is:
May an appellate court determine the maximum constitutionally permissible
award of punitive damages when it has reduced the accompanying award of
compensatory damages, or should the court remand for a new determination of
punitive damages in light of the reduced award of compensatory damages?The Supreme Court issued a pre-argument briefing order suggesting that the court was thinking about remanding the case for a redetermination of the compensatory damages, in which case the court would not reach the punitive damages issues.
Related posts:
Briefs in Roby v. McKesson Now Available on Cal. Supreme Court Website
California Supreme Court Will Hear Oral Arguments in Roby v. McKesson on Sept. 2
Cal. Supreme Court Requests Supplemental Briefing in Roby v. McKesson
CAOC Amicus Brief in California Supreme Court Covers Punitive Damages Issues in Roby v. McKesson
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Kentucky Court Upholds Award of Punitive Damages to Supervisor Who Authorized Sexual Assault
You don’t see this every day; a court concludes that a supervisor engaged in improper conduct towards an employee, and permits an award of punitive damages to both the employee and the supervisor.
In this published opinion, the Kentucky Court of Appeals affirmed an award of $1.1 million in compensatory damages and $5 million in punitive damages to a McDonald’s employee who was subjected to an improper strip search and a sexual assault. While those numbers may seem high, it isn’t completely surprising that McDonald’s ends up being liable for a sexual assault authorized by a supervisor.But here’s where it gets weird. The supervisor also recovered $100,000 in compensatory damages and $400,000 in punitive damages (reduced from the $1 million awarded by the trial court). The supervisor claimed she was tricked by a prank caller into ordering the strip search. According to the supervisor, the prank caller said he was a police officer and asked the supervisor to call her boyfriend (who did not work for McDonald’s), and bring him into the store to conduct a body cavity search of the employee. Apparently, that seemed like a reasonable request to her, so she complied. The supervisor’s boyfriend then came to the store and sexually assaulted the employee. When McDonald’s corporate management learned of the incident, they fired the supervisor. She then sued McDonald’s for intentional infliction of emotional distress.
The Court of Appeals ruled that McDonald’s was liable to both the employee and the supervisor because McDonald’s corporate management knew that a prank caller was contacting its stores, pretending to be a police officer and convincing the store managers to conduct strip searches, but McDonald’s made a conscious decision not to train or warn their store managers or employees about the calls. Accordingly, McDonald’s must pay half a million dollars to the supervisor who was “duped” into asking her boyfriend to perform a body cavity search on an employee.
Hat tip: ABA Journal
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More Punitive Damages Against Pfizer in Prempro Litigation: Philadelphia Jury Awards $28 million
As reported by Bloomberg, Pfizer has been hit with another big punitive damages award – – $28 million – – in litigation over its hormone replacement drug Prempro.
At the same time, a judge in a separate case involving the same drug formally unsealed a $75 million punitive damages verdict. That verdict, which a jury rendered earlier this month in the same courthouse, was supposed to be confidential but was quickly leaked to the press.
In a third Prempro case, the Eighth Circuit determined earlier this month that the plaintiffs had presented sufficient evidence to support a claim for punitive damages (but the court ordered a new trial to redetermine the amount of the award).
According to plaintiffs’ lawyers, Pfizer faces lawsuits from 10,000 more women who claim injuries from Pfizer’s hormone replacement drugs. Pretty soon this is going to add up to some real money.
Related posts:
A Mixed Bag For Pfizer On Prempro Punitive Damages
Jury Awards Undisclosed Amount of Punitive Damages Against Pfizer in Prempro Litigation
Arkansas District Court Vacates $27 Million Punitive Damages Award Against Wyeth and UpJohn
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Smoker’s Lawyer Says Huge Verdict Was Based on Defendant’s Wealth
In this AmLaw Litigation Daily story, the plaintiff’s attorney who recently won a $244 million punitive damages verdict against Philip Morris says the award was so high because “this was the first trial in which the jury heard about the ‘real financial resources’ of Philip Morris.”
It sounds like future proceedings will involve a fight over the U.S. Supreme Court’s statement in State Farm v. Campbell that “[t]he wealth of a defendant cannot justify an otherwise unconstitutional punitive damages award.”
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Nelson v. Exxon Mobil: Punitive Damages Claims Can Be Assigned
This published opinion could be headed for the California Supreme Court.
The opinion addresses whether the right to recover punitive damages is assignable under California law. The Court of Appeal (Third Appellate District) held that the right to recover punitive damages is assignable if that right arises from a cause of action that is assignable. The court observed that causes of action arising from an injury of a personal nature (e.g., slander, assault, malicious prosecution) are not assignable. But the injury in this case was groundwater contamination, an injury to real property. The court observed that claims for injury to real property are transferred with the property when title passes from one owner to another. Accordingly, the court concluded that a property owner could assign its right to seek punitive damages in connection with injury to the property.
The court acknowledged that several other cases, including California Supreme Court cases, contain language suggesting that the right to seek punitive damages is never assignable. But the Court of Appeal said the results in those cases could be harmonized with the new rule announced in this opinion. Nevertheless, the result in this case is inconsistent with the plain language of other published opinions, which makes a strong case for Supreme Court review.
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Florida Jury Awards $244 Million in Punitive Damages to Smoker
As reported by Reuters, a Florida jury has awarded $56.6 million in compensatory damages and $244 million in punitive damages to a smoker with emphysema. This is by far the largest verdict in the 8,000 or so individual trials that are proceeding in Florida as a result of the Florida Supreme Court’s 2006 Engle decision, which tossed out a $145 billion class action punitive damages award.
Related posts:
Florida Jury Awards $25 Million in Punitive Damages to Smoker’s Widow
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Buell-Wilson Cert. Petition Featured on SCOTUSblog’s “Petitions to Watch”
SCOTUSblog has identified the cert. petition in Buell-Wilson as one of the “petitions to watch” for the Supreme Court’s upcoming conference on November 24. The SCOTUSblog post includes links to the opinion and the petition-stage briefing.
- Opinion below (California Court of Appeal)
- Petition for certiorari
- Brief in opposition
- Petitioner’s reply
- Amicus brief of the Alliance of Automobile Manufacturers
- Amicus brief of Product Liability Advisory Council, Inc.
- Amicus brief of the U.S. Chamber of Commerce
- Amicus brief of DRI — The Voice of the Defense Bar
Related posts:
Ford Files Cert. Petition in Buell-Wilson
California Supreme Court Denies Request to Re-Publish Buell-Wilson
The Largest Punitive Damages Award to Survive Appeal in California?
Cal. Supreme Court Dismisses Review in Buell-Wilson v. Ford
Plaintiff Asks California Supreme Court to Dismiss Review in Buell-Wilson v. Ford
California Supreme Court Grants Review in Buell-Wilson v. Ford
Court of Appeal May Have Been Too Quick on the Trigger in Buell-Wilson Post-Opinion Order
Court of Appeal Denies Petition for Rehearing in Buell-Wilson v. Ford
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$5 Million Punitive Damages Award in Beef Jerky Dispute
Punitive damages arise in some strange contexts. In this opinion, the Wisconsin Court of Appeals reinstated a $5 million punitive damages award in a father-son feud over control of a beef jerky empire.
The trial court had reduced the award to $736,000, but the appellate court determined that the trial court had no power to order the reduction because the defendant filed his posttrial motion one day late. Oops.
Hat tip: Beef Jerky Blog (“The Undisputed King of Beef Jerky!”)
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Gunderson v. Wall: Inconsistencies in Defendant’sTestimony Are Not Alone Sufficient to Support Punitive Damages
This unpublished opinion shoots down an argument that arises fairly often in punitive damages appeals. When the issue on appeal is whether the plaintiff failed to prove malice by clear and convincing evidence, plaintiffs sometimes argue that the defendant’s testimony contained inconsistencies, which shows the defendant was lying, which in turn proves that the defendant was acting with an evil motive, i.e., malice.
The Second Appellate District, Division Seven, rejected that sort of argument here. It ruled that inconsistencies in the defendant’s testimony were not a substitute for clear and convincing proof of malice:
In this case, the issue is whether there was substantial evidence to support a finding by clear and convincing evidence that Wall knew or should have known that Welded was receiving stolen funds. As previously discussed, the inconsistencies in Wall’s trial testimony reasonably could support a finding by the jury that Wall was not a credible witness and that he thus had failed to prove his affirmative defense of good faith. But none of the inconsistencies supported the inference that, at the time Welded received the two transfers from Gruys, Wall knew or had reason to know that Gruys had stolen those funds from someone else. Unlike the good faith defense for which Wall and Welded had the burden of proof, the burden rested on Gunderson to establish by clear and convincing evidence that Wall and Welded (as opposed to Gruys) were guilty of malice, oppression, or fraud. However, absent any evidence that Wall and Welded had actual or constructive knowledge that the transferred funds did not belong to Gruys, Gunderson could not satisfy his burden of proving that Wall and Welded acted with an intent to cause Gunderson injury or engaged in despicable conduct in a conscious disregard of his rights.
Accordingly, the court reversed an $800,000 punitive damages award. (The court also reversed a $2.4 million punitive damages award against another defendant, after concluding that the award resulted from an improper discovery sanction.)
There may be some situations in which inconsistencies in the defendant’s testimony do in fact support an inference of malice, because the inconsistencies rule out any possible explanation for the defendant’s conduct other than malice. But that will not always be the case, as this opinion illustrates.