California Punitives by Horvitz & Levy

  • Hawaii Appeals Court Reverses $12.5 Million Punitive Damages Award

    The Hawaii Intermediate Court of Appeals has issued an opinion reversing a $12.5 million punitive damages award in a products liability case.

    The plaintiff was injured in an auto accident and sued Takata Corporation, a seatbelt manufacturer. The plaintiff claimed he was wearing his seatbelt during the accident but it failed to restrain him and he was ejected from the vehicle. After a jury trial, the plaintiff obtained a judgment for $4.5 million in compensatory damages and $12.5 million in punitive damages.

    The Hawaii appellate court reversed the entire judgment and ordered a new trial, ruling that the trial court had erroneously excluded testimony by a defense expert. The court, having ordered a complete new trial, did not need to address any punitive damages issues. Nevertheless, it went on to hold that the plaintiff was not entitled to punitive damages because he failed to prove by clear and convincing evidence that Takata knew or should have known that the seatbelt in question was susceptible to failure.

    This is just my personal nonscientific observation, but there seems to be an above-average percentage of complete reversals in cases involving huge punitive damages awards. If that’s true, it’s probably because a disproportionately large punitive damages award is often a sign that something went wrong during the trial. That’s my defense lawyer perspective but I’m sure the plaintiffs’ bar sees things differently.

    UPDATE: For a summary of other aspects of the opinion (Udac v. Takata), see Hawaii Legal News.

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

    Reuters has this report about the results thus far in the series of individual smoker lawsuits taking place in Florida.

    As mentioned in prior posts, these suits are taking place as a result of the Florida Supreme Court’s 2006 decision in Engle v. Liggett Group, which reversed a $145 billion class action punitive damages award and ruled that the plaintiffs had to bring their own individual cases to prove that cigarettes caused their illnesses.

    According to the Reuters story, the plaintiffs have prevailed in seven of the nine cases to go to trial thus far, winning damages ranging from $600,000 to $30 million. Only two of the plaintiffs have recovered punitive damages.

  • California Supreme Court Will Hear Oral Arguments in Roby v. McKesson on Sept. 2

    In prior posts, we have mentioned in Roby v. McKesson, a case pending before the California Supreme Court. The briefing in that case has focused primarily on employment law issues, but punitive damages are in the mix.

    For example, Roby argues that Court of Appeal went too far in reducing her punitive damages award from $15 million down to $2 million, for a punitive-to-compensatory ratio of 1.4 to 1. Roby’s petition for review suggested that the reduction was the result of a “knee-jerk adherence” to the “mere suggestion” in State Farm v. Campbell that the ratio of punitive damages to compensatory damages should be low, perhaps no more than 1 to 1, in cases involving substantial compensatory damages.

    In April of this year, the Supreme Court asked the parties to file supplemental briefs to address whether the jury’s damages awards are so ambiguous that a new trial is required. That question raises the distinct possibility that the Supreme Court won’t even reach the punitive damages issues in Roby, but we’re continuing to keep an eye on this one just in case. Oral argument has been set for Sept. 2. Click here to view the court’s online docket.

  • New Mexico Appeals Court Reverses $50 Million Punitive Damages Award

    Back in 2007, a New Mexico jury awarded $3.2 million in compensatory damages and $50 million in punitive damages for the alleged neglect of a nursing home patient. The defendant appealed, arguing, among other things, that the punitive damages were unconstitutionally excessive, since the ratio of punitive damages to compensatory damages exceeded 15 to 1.

    Last week, the New Mexico Court of Appeals issued an opinion (Keith v. ManorCare, Inc.) reversing the entire judgment and ordering a new trial. The court did not reach the ratio issue because it concluded that the trial court made a prejuducial instructional error that affected both liability and damages, requiring a complete new trial.

  • Yet More on Punitive Damages in Admiralty Cases

    Suprisingly, the subject of punitive damages in admiralty cases has become a hot topic in recent years, with the Supreme Court taking up two cases in this area (Exxon Shipping and Atlantic Sounding Co. v. Townsend.)

    Unfortunately for those who actually care about these issues, the Supreme Court split 4-4 on the primary admiralty law issue in Exxon Shipping, namely, whether punitive damages can be imposed on a ship owner for the acts of a ship captain. Admiralty experts can blame Justice Alito for the continuing lack of guidance. He recused himself from Exxon Shipping because he owns Exxon Mobil stock.

    Fear not, admiralty punitive damages gurus, the Tulane Law Review is here to help. Their June 2009 issue arises out of a symposium on admiralty law and contains two articles on punitive damages in admiralty cases. The aptly named professor John Paul Jones* of the University of Richmond authored “The Sky Has Not Fallen Yet on Punitive Damages in Admiralty Cases” and Tulane law student Megan Ann Healy wrote “Exxon Shipping Co. v. Baker: The Supreme Court’s Indecision Leaves Shipowners List at Sea as to the Applicability of Vicarious Liability for Punitive Damages.” I can’t find a linkable version of either article, but the Westlaw citations are 83 TLNR 1289 and 83 TNLR 1521, respectively.

    *Yes, there really is an admiralty expert named John Paul Jones. No, not this John Paul Jones.

  • “Defending the Punitive Damages Claim”

    The July 2009 edition of Defense Counsel Journal, a publication of the International Association of Defense Counsel, contains an article entitled “Defending the Punitive Damages Claim: How to Use Philip Morris v. Williams and Exxon Shipping Co. v. Baker.” The article was written by Kristen Dennison, an associate at Campbell, Campbell, Edwards & Conroy. (No linkable version is available, but you can find it on Westlaw at 76 DEFCJ 368.)

    Some highlights:

    Philip Morris is not just a jury instruction case. It stands for an important procedural due process principle involving the right to be heard and to defend those other claims. Philip Morris can, and should, be used in conjunction with Gore and State Farm for the argument that the standards for imposing punitive liability in product liability actions are unconstitutionally vague.

    Exxon Shipping is not just a maritime law case. Rather, it provides instructive insight into the Court’s concern over the vague standards used by most states for imposing punitive liability, and the resulting problem of “outlier” punitive damages awards that are inconsistent between the same types of cases, causing the very arbitrariness, uncertainty, and lack of notice that Philip Morris denounced.

  • Microsoft Hit With $40 Million in Punitive Damages for Patent Infringement

    U.S. District Judge Leonard Davis of the Eastern District of Texas has entered judgment against Microsoft for $200 million in compensatory damages and $40 million in punitive damages, based on Microsoft’s willful infringement of a patent owned by i4i Limited Partnership. Judge Davis has also ordered Microsoft to stop selling any version of Microsoft Word that is capable of opening an XML file. In other words, Microsoft can no longer sell Microsoft Word 2003 or Microsoft Word 2007.

    Hat tip: Patently-O.

  • Leonin v. Salapare: $25,000 Punitive Damages Award Reversed

    Here’s yet another unpublished opinion from the California Court of Appeal (Fourth Appellate District, Division Two) reversing a punitive damages award because the plaintiff failed to meet its burden of introducing sufficient evidence of the defendant’s financial condition. This seems to happen about once a month.

  • Yanes v. Orea: Punitive Damages Portion of Default Judgment Reversed

    The California Court of Appeal (Fourth Appellate District, Division Two) issued an unpublished opinion reversing the portion of a default judgment that awarded $411,688.79 in punitive damages. The plaintiff failed to serve a statement requesting a specific amount of punitive damages, which is a prerequisite to obtaining punitive damages by default. We have seen this before. (See our prior posts here and here.)

  • Griffin Dewatering v. Northern Ins.: $10 Million Punitive Damages Award Reversed

    The California Court of Appeal (Fourth District, Division Three) issued a published opinion on Friday, reversing an $11.1 million judgment, including $10 million in punitive damages.

    The court didn’t reach any punitive damages because it reversed the liability finding and directed entry of judgment for the defendant on all issues. I mention it here only because it was one of the largest punitive damages verdicts in California in 2005. (And because my firm represented the defendant).