California Punitives by Horvitz & Levy

  • 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    Here’s yet another unpublished opinion from the California Court of Appeal (Fourth Appellate District, Division Two) reversing a punitive damages award because the plaintiff failed to meet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    The California Court of Appeal (Fourth Appellate District, Division Two) issued an unpublished opinion reversing the portion of a default judgment that awarded $411,688.79 in punitive damages.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).

  • Hold the Gravy: No Punitive Damages in Fosamax Litigation

    Bloomberg is reporting that U.S. District Judge John Keenan intends to dismiss the plaintiffs’ punitive damages claims in a massive lawsuit against Merck & Co.

    The lawsuit alleges that Merck’s osteoporosis drug Fosamax causes irreversible “jaw rot.” (I don’t know exactly what that is, but it doesn’t sound good.) Merck is facing more than 850 lawsuits over Fosamax. Judge Keenan’s ruling comes in connection with three bellwether trials set to begin on August 11.

    The plaintiffs’ lawyers are downplaying the dismissal of their punitive damages claim. “The punitive damages are just the gravy,” said plaintiffs’ counsel Timothy O’Brien.

  • Berry v. Taggart: Trial Court Properly Denied Motion to Strike

    The California Court of Appeal (First District, Division 1) issued this unpublished opinion, affirming a trial court order denying a defendant’s special motion to strike the plaintiff’s complaint under Code of Civil Procedure section 425.16 (the “anti-SLAPP” statute).

    I won’t delve into the anti-SLAPP aspects of this opinion, which are beyond the scope of this blog. For our purposes, its important to note only that an appellate court reviewing the denial of an anti-SLAPP motion must consider whether the plaintiff established a probability of prevailing on the complaint. With respect to the punitive damages allegation in the complaint, the defendant argued that the plaintiff could not prevail on its fifth cause of action for punitive damages because California law does not recognize a “cause of action” for punitive damages.

    The Court of Appeal agreed that there is no separate cause of action or tort for punitive damages under California law. But the court nevertheless concluded that the fifth cause of action in plaintiff’s complaint, although styled as a cause of action for punitive damages, actually stated facts sufficient to support a cause of action for malicious prosecution. The court went on to say that, because punitive damages are unquestionably recoverable in a malicious prosecution action, plaintiff had established a likelihood of obtaining punitive damages sufficient to defeat the defendant’s special motion to strike.

  • Superior Dispatch, Inc. v. Insurance Corp of New York: Trial Court Erred in Striking Punitive Damages Claim in Insurance Bad Faith Case

    The California Court of Appeal (Second District, Division 3) issued this published opinion yesterday, reversing a trial court’s grant of summary judgment to an insurer in an insurance bad faith suit.

    Among other things, the opinion states that the trial court erred in striking the plaintiff’s punitive damages claim because the facts alleged in the complaint would be sufficient to support a finding of “oppression,” one of the predicates to awarding punitive damages under Civil Code 3294.

    The punitive damages portion of the opinion is not particularly noteworthy. We mention it only in connection with our ongoing efforts to develop a complete picture of all the punitive damages decisions coming out of the California Court of Appeal.

  • $25 Million Punitive Damages Award in Riverside Employment Case

    The Riverside Press-Enterprise is reporting that a jury has awarded $916,000 in compensatory damages and $25 million in punitive damages in an age discrimination case against Sears Holdings. The plaintiff, a former manager of a KMart store, claims he was fired as part of a company-wide policy of replacing older workers with “fresh blood.”

    The 27.3-to-1 ratio of punitive damages to compensatory damages is suspect, to say the least. Not surprisingly, Sears says it plans to file posttrial motions and, if necessary, an appeal.

  • Some Stats On Punitive Damages in the California Court of Appeal

    Since we began this blog in January 2008, we’ve tracked every California Court of Appeal opinion on the topic of punitive damages, published and unpublished. As a result, we’ve collected a fair amount of data. I’m starting to sift through some of that data to see what it might tell us about how our appellate courts deal with punitive damages. I’ve started by looking just at the 2009 California punitive damages decisions. When I have time, I’ll update these figures with the cases from 2008.

    Total decisions, published and unpublished

    There have been 26 California Court of Appeal decisions in 2009 addressing punitive damages, not counting cases where punitive damages were awarded but the court of appeal’s opinion did not address punitive damages issues (e.g., not including Blanks v. Seyfarth Shaw, in which the Court of Appeal ordered a new trial on all issues, resulting in the reversal of a $15 million punitive damages award). Only 2 of the punitive damages opinions in 2009 have been published. (Scott and Major).

    Defendants’ success rates in challenging punitive damages

    To date, there have been 18 appeals in 2009 involving a defendant’s challenge to an award of punitive damages. (As explained below, the other cases involve defense verdicts or punitive damages claims that were dismissed before trial.)

    In 13 of those 18 cases, the defendant was successful in getting a punitive damages award vacated or reduced, either by the trial court or the court of appeal. That’s an overall success rate of 72 percent for defendants.

    In 6 of those 18 cases (33 percent), the punitive damages were vacated entirely.

    Looking exclusively at cases in which the trial court rejected the defendants’ posttrial challenges, the defendants succeeded in getting some relief from the Court of Appeal (either a reduction or a completely reversal) in 8 out of 13 cases (62 percent).

    Plaintiffs’ success rates in appealing from trial court rulings for the defense

    There have been 4 cases so far in 2009 in which a plaintiff appealed from a trial court decision dismissing a punitive damages claim (by nonsuit, directed verdict, or a motion to strike). Only one of those plaintiffs were successful (25 percent).

    There have been 3 cases in which plaintiffs appealed from a decision not to award punitive damages (two jury trials and one bench trial). All 3 of those appeals were unsuccessful.

    Conclusions

    These sample sizes are too small to support any conclusions. And even when we have more data, it is important to keep in mind that these stats are based exclusively on appellate decisions, and do not include cases in which a trial court made a posttrial ruling that was never appealed. So you have to take all these numbers with a grain of salt.

    Nevertheless, the one thing that jumps out at me from these stats is the high success rates for defendants. It will be interesting to see whether that is just a 2009 anomaly, or whether those percentages hold true when we add in the stats from the 2008 cases.

  • L.A. Jury Awards $370 Million Against Co-Founder of Guess Inc.

    The Associated Press is reporting that a Los Angeles jury has awarded a $370 million verdict, including $25 million in punitive damages, in a defamation lawsuit against Georges Marciano, co-founder of Guess, Inc.

    The plaintiffs in the action are five former employees of Marciano. He sued them in 2007, accusing them of stealing from him. His claims were dismissed, but the ex-employees counter-claimed for defamation.