California Punitives by Horvitz & Levy

  • Briefs in Roby v. McKesson Now Available on Cal. Supreme Court Website

    Woo-hoo! This is the sort of thing an appellate nerd like me gets excited about. The California Supreme Court has introduced a terrific new feature to its website. The court has posted links to the briefs in the cases on the court’s September 2 oral argument calendar (including Roby v. McKesson). The links include both the review-stage briefs and the merits-stage briefs. I certainly hope the court continues this feature for future argument calendars.

    Hat tip: The Complex Litigator. As Scott at the Complex Litigator points out, this may be the court’s response to a recent controversy over the court’s distribution of briefs to Lexis and WESTLAW. Unlike those fee-based services, the court’s website makes the briefs freely available to anyone, conveniently grouped together so that no searching is necessary.

  • Martin v. Harpaz: $6.6 Million in Punitive Damages Reversed Because of Insufficient Financial Condition Evidence

    The California Court of Appeal (Second Appellate District, Division One) issued this unpublished opinion yesterday, reversing a punitive damages award because the plaintiff failed to introduce sufficient evidence of the defendants’ financial condition. The punitive damages awards, against 5 different defendants, totaled $6.6 million.

    The plaintiff, apparently aware of California’s rule requiring plaintiffs to present meaningful evidence of the defendant’s financial condition, introduced some evidence of the defendants’ finances. The evidence showed the defendants had some large cash receipts for their business operations, but it also showed that the defendants’ had massive debts, and that some of the defendants had declared bankruptcy. Apparently, the plaintiffs offered no forensic accountant or other expert to estimate the defendants’ net worth.

    After a bench trial, the trial court awarded punitive damages awards based on its conclusion that none of the defendants’ testimony regarding their net worth was worthy of belief. Thus, the trial court seemed to mistakenly believe that the defendants, rather than the plaintiffs, had the burden of proof on this issue.

    The Court of Appeal reversed. It ordered all the punitive damages awards stricken from the judgment because the plaintiffs had failed to present evidence of the defendants’ net worth. By my quick count, this is the seventh unpublished California opinion this year reversing a punitive damages award because of the plaintiffs’ failure to present meaningful financial condition evidence.

  • L.A. Jury Awards $13.8 Million in Punitive Damages to Smoker’s Daughter in Bullock Retrial

    Bloomberg reports that a Los Angeles jury has awarded $13.8 million in punitive damages in the retrial of Bullock v. Philip Morris. The compensatory damages were $850,000.

    As readers of this blog may recall, last year the Court of Appeal reversed a $28 million punitive damages award in this case and ordered a retrial on punitive damages. We blogged quite a bit about that decision and the subsequent proceedings before the California Supreme Court. In a nutshell, the Court of Appeal reversed because the trial court improperly refused a defense request for an instruction telling the jury not to punish for harm to others (i.e., an instruction based on Philip Morris v. Williams.)

    The jury in the first trial actually awarded $28 billion in punitive damages, resulting in the second largest judgment in U.S. history. The trial court, however, cut that down to $28 million on posttrial motions. On retrial, plaintiffs’ lawyer Michael Piuze again asked the jury to award “billions,” but instead he got a little less than half of the previous $28 million award. Still a lot of money, but surely a disappointment to Piuze. According to Bloomberg, one of the dissenting jurors wanted to award $500 million. As it is, the $13.8 million award is more than 16 times higher than the actual damages.

  • 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.