California Punitives by Horvitz & Levy

  • 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).

  • 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.