California Punitives by Horvitz & Levy

  • New Book on Punitive Damages from a European Perspective

    TortsProf Blog has a post about a new book published by the Institute for European Tort Law entitled “Punitive Damages: Common Law and Civil Law Perspectives.” The book can be purchased here for $189.00. Here’s the publisher’s description:

    With the growing literature on the subject of punitive damages, the consensus is that it seems worthwhile and even necessary to discuss, thoroughly and on a comparative basis, the nature, role and suitability of such damages in tort law and private law in general.

    This book contains reports from selected jurisdictions that explicitly allow the award of punitive damages as well as from jurisdictions which purport (sometimes emphatically) to deny their existence (although a number covertly incorporate such damages into the framework of their tort systems). It benefits from an economic analysis of punitive damages, a report from a private international law perspective, one on their insurability and one on aggravated damages. The book’s comparative report and conclusion critically evaluates the material in the above reports and advances a thorough analysis of the nature of punitive damages, the cases for and against them, and their suitability in the field of tort law. Alternative remedies in private and criminal law are also considered.

    The publication will appeal to students, academics, practitioners, judges, policy makers and those in the insurance industry.

    UPDATE: On a related note, Professor Michael Wells Lewis of the University of Georgia School of Law has posted an article on SSRN entitled: “A Common Lawyer’s Perspective on the European Perspective on Punitive Damages.” Hat tip: TortsProf Blog (again).

  • “Through the Looking Glass: A Respose to Professor Dan Markel’s Retributive Damages”

    Professor Sheila B. Scheuerman of the Charleston School of Law has written an essay, posted here on the site of Cornell Law Review’s Legal Workshop, responding to an article by Professor Dan Markel of the Florida State University College of Law. Prof. Markel’s article, mentioned in a few previous posts on this site, proposed that states move away from the current system of punitive damages and adopt an alternate system which he calls “retributive damages.”

    On the Torts Prof Blog, Prof. Scheuerman summaries her critque of Prof. Markel’s proposal:

    First, can the “retributive damages” model properly be considered punitive
    damages? Second, do “retributive damages” avoid the doctrinal problems that have
    plagued punitive damages for decades? In my view, the answer to both questions
    is “no.”

  • More on Sotomayor and Punitive Damages

    My co-bloggers have already linked to a few reports about how a Justice Sotomayor might vote in punitive damages cases. This Bloomberg.com story addresses that issue again.

    As reported by Bloomberg, Judge Sotomayor struck a pro-business chord during her Senate testimony when she said that “[i]n business, the predictability of law may be the most necessary.” That statement echoes the reasoning of Justice Souter in his opinion for the majority in Exxon Shipping, in which he stated that a imposing a maximum one-to-one ratio of punitive damages to compensatory damages eliminates arbitrary and unpredictable outcomes.

    The Bloomberg story goes on to note, however, that Judge Sotomayor twice voted to uphold punitive damages against arguments that the awards were unconstitutionally excessive. One of those cases was Motorola Credit Corp. v. Uzan (2d Cir. 2007) 509 F.3d 74. To our knowledge, the $1 billion punitive damages award in that case is the second largest punitive damages award ever to survive appeal in the U.S. It’s worth noting, however, that the punitive damages award in that case was only half the amount of the $2 billion compensatory damages award, so that award was well within the one-to-one limit advocated by Justice Souter.

    I looked on Westlaw to find the other case referenced in the Bloomberg story and I found Moskowitz v. Coscette [2001 WL 51009]. In that case, the jury awarded $125,000 in compensatory damages and $75,000 in punitive damages. In a summary order, the 2nd Circuit upheld the award. Again, the award was below the one-to-one ratio limit.

    In my view, these opinions don’t shed much light, if any, on how Justice Sotomayor might vote on punitive damages issues coming before the Supreme Court. They certainly don’t indicate how Justice Sotomayor might feel about the validity of the Supreme Court’s line of cases, starting with BMW v. Gore, that imposed restrictions on the amount of punitive damages as a matter of due process. All we can say is that Judge Sotomayor has never voted to strike down a punitive damages award as excessive, but she hasn’t voted to uphold a punitive damages award exceeding a one-to-one ratio either.

  • Huge Punitive Damages Award Brewing in Kentucky

    A press release on PR Newswire reports that a Kentucky jury has ruled in favor of the plaintiffs in a mass tort action against DuPont arising out of the release of toxic fumes from a chemical plant.

    So far, the jury has awarded $1.25 million in compensatory damages and $12.5 million in punitive damages. But those awards are for only 6 of 179 plaintiffs. The other 173 cases remain to be tried. Apparently, the trial court has ordered that the liability findings from this trial will be binding in the subsequent trials. The subsequent trials will apparently focus only on causation and compensatory damages. Any plaintiff who recovers compensatory damages will automatically be entitled to a punitive damages award of ten times the amount of compensatory damages.

    Based on the awards to the first 6 plaintiffs, this case is on pace to generate awards totaling $37.3 million in compensatory damages and $373 million in punitive damages.

  • Turnabout in Dole Banana Litigation: Now Dole is Asking for Punitive Damages

    We’ve been blogging about California litigation brought by Nicaraguan banana workers against Dole, based on alleged exposure to pesticides. Early on, the plaintiffs obtained (and then lost) a punitive damages award against Dole. The litigation has taken some bizarre twists and turns since then, including a disciplinary proceeding instigated by the Ninth Circuit against one set of plaintiffs’ lawyers, and a dismissal of another action, prompted by the revelation that many of the plaintiffs in that action never worked on a banana farm and/or had fathered children, despite their claims of sterility.

    The latest news in this saga is that Dole is bringing a lawsuit of its own. According to LABIZObserved, Dole has sued a filmmaker who made a pro-plaintiff documentary about Dole’s conduct and the subsequent litigation. Dole claims the filmmaker (Fredrik Gertten) ignored the truth, even after the California court proceedings unfolded and revealed the falsity of the plaintiffs’ claims. Dole is asking for punitive damages.

  • Clark v. Clark: $2.5 Million Net Worth Sufficient to Support $100,000 Punitive Damages Award

    We’ve been blogging recently about the slew of cases reversing punitive damages awards because the plaintiff failed to present meaningful evidence of the defendant’s financial condition.

    Here’s a change: in an unpublished opinion, the California Court of Appeal (First Appellate District, Division Three), reverses a trial court’s determination that the plaintiff’s evidence of the defendant’s financial condition was insufficient. The Court of Appeal concluded the evidence established a net worth of $2.5 million, more than enough to support a $100,000 award. The Court of Appeal faulted the trial court improperly weighing evidence and considering evidence not before the jury.

  • Scott v. Phoenix Schools: Wrongful Termination Alone is Not Enough to Support Punitive Damages

    The California Court of Appeal (Third Appellate District) reversed a $750,000 punitive damages award in this published opinion, holding that the defendant was liable for wrongful termination, but had not acted with malice or oppression and was therefore not liable for punitive damages.

    The plaintiff, the director of a preschool, refused to enroll a student because doing so would have put the school in violation of minimum teacher-student ratios for child care centers in California. When the parents complained to the school that the plaintiff was rude and dismissive, the school fired her. She sued, claiming she had been fired in violation of public policy, for refusing to violate the minimum teacher-student ratio. A jury awarded $1.1 million in compensatory damages and $750,000 in punitive damages. The Court of Appeal affirmed the jury’s liability finding and compensatory damages award, but reversed the punitive damages award:

    [W]e conclude that wrongful termination, without more, will not sustain a
    finding of malice or oppression. There was no evidence Phoenix attempted to hide
    the reason it terminated Scott. It admitted to terminating her because she would
    not enroll the McMaster child. Likewise, there was no evidence Phoenix engaged
    in a program of unwarranted criticism to justify her termination. Because there
    was nothing more than a wrongful termination here, punitive damages were not
    warranted, and the trial court should have granted defendant’s motion for
    judgment notwithstanding the verdict on the issue of punitive damages

    Interestingly, the court’s analysis seems to apply the “clear and convincing” evidence standard when reviewing the record for evidence to support the punitive damages award. (See, e.g., typed opn. p. 20 [“in order to sustain the punitive damages award, the evidence must leave no substantial doubt that Phoenix engaged in despicable conduct, or conduct intended to cause injury to Scott”].) As we have noted in prior posts, there is a split of authority in California as to whether appellate courts should consider the “clear and convincing” standard when reviewing punitive damages for substantial evidence, or whether that standard is for the exclusive use of the trial court. The California Supreme Court granted review to resolve that split last year in Harvey v. Sybase, but dismissed review when the parties settled. The Supreme Court is being asked to take that issue up again in Leeper-Johnson v. Prudential. (See the Supreme Court’s on-line docket.)

  • Monier-Kilgore v. Flores: Yet Another Reversal Based on a Plaintiff’s Failure to Prove the Defendant’s Financial Condition

    The California Court of Appeal (Third Appellate District) issued this unpublished opinion reversing $1.1 million in punitive damages because the plaintiff failed to introduce meaningful evidence of the defendant’s financial condition. The plaintiff put on evidence regarding the plaintiff’s income and bank deposits, but no evidence of the defendant’s liabilities and expenses. The court found that without such evidence, the jury had no basis for determining the defendant’s net worth or ability to punitive damages, especially since many of the defendant’s assets would be needed to satisfy the compensatory damages award.

    This is the third case in the past week in which a punitive damages award was reversed on this basis. (See our posts about the other two cases here and here.) It would have been four cases if the defense counsel in this case had not bailed out the plaintiff by presenting evidence of net worth after the plaintiff failed to do so.

    I have lost count of how many unpublished cases we have seen on this issue since we launched this blog in January 2008. Perhaps its time for the courts to publish a few of these decisions, to remind trial lawyers of the importance of presenting meaningful evidence of the defendant’s financial condition.

  • Exxon Mobil Asks 9th Circuit to Reconsider Valdez Costs Ruling

    As reported on SCOTUSblog, Exxon Mobil has filed a petition for rehearing, asking the Ninth Circuit to reconsider its ruling that Exxon is responsible for its own costs on appeal ($70 million). Exxon argues that it should be treated as a prevailing party because it succeeded in eliminating 90% of the $5 billion punitive damages awarded by the jury.

    As we noted yesterday, Exxon has decided not to challenge the Ninth Circuit’s determination that the plaintiffs are entitled to interest on the reduced punitive damages award dating back to the date of the original judgment.

    SCOTUSblog has posted a copy of Exxon’s petition for rehearing or rehearing en banc.

  • Punitive Damages and Default Judgments

    In California, a plaintiff cannot obtain punitive damages as part of a default judgment in a personal injury or wrongful death case unless the plaintiff first serves a statement of damages, specifying the amount of punitive damages requested. (See California Code of Civil Procedure 425.11, subd. (c).)

    This rule came in to play in two unpublished decisions issued this week by the California Court of Appeal. In Anson v. St. Michael’s Episcopal Church, the plaintiff failed to serve a statement of damages, and the Fourth Appellate District, Division Three, held that he was not entitled to recover punitive damages by default. By contrast, in Cantu v. Thomas, the plaintiff did serve a statement of damages requesting a specific amount of punitive damages, and the Fourth Appellate District, Division Two, affirmed the $20,000 in punitive damages he obtained by default.

    UPDATE: On June 30, the Second Appellate District, Division Eight, issued another unpublished opinion on this issue. In Daniel v. Lathen, the court upheld the portion of a trial court’s order that vacated a $320,000 punitive damages award obtained by default. The plaintiff was not entitled to punitive damages because he failed to serve a statement of damages before obtaining the default.