California Punitives by Horvitz & Levy

  • Banana Litigation Losing Its Appeal?

    Sorry about the bad pun. I just couldn’t help myself.

    This post relates to Tellez v. Dole, a case we blogged about last year. In Tellez, Nicaraguan banana workers sued Dole Food Company in California state court, seeking punitive damages because they allegedly became sterile when they were exposed to the agricultural chemical DBCP on Nicaraguan banana farms nearly 30 years ago. A jury awarded nearly $6 million to the plaintiffs, including $2.5 million in punitive damages. L.A. Superior Court judge Victoria Chaney vacated the punitive damages award and the Dole appealed from the remainder of the award. (See the court of appeal’s on-line docket here.)

    The National Law Journal is now reporting that Judge Chaney is threatening to dismiss other similar cases brought by the same plaintiffs’ lawyers, amid allegations of fraud by the plaintiffs and their counsel. Judge Chaney’s order refers to evidence that some plaintiffs never even worked on a banana farm, employment documents that were falsified, and a Nicaraguan radio broadcast on which the lead plaintiffs’ lawyer told listeners not to cooperate in the case.

    This isn’t the first time that banana litigation has backfired for plaintiffs’ lawyers here in L.A. As readers of this blog will recall, prominent L.A. trial lawyers Tommy Girardi and Walter Lack got themselves into hot water for their ethical lapses in related litigation, resulting in the Ninth Circuit’s appointment of a special prosecutor to pursue disciplinary action against them.

  • Obama Administration Endorses Broad Application of Punitive Damages in Employment Class Actions Without Need for Individual Determinations

    The EEOC has recently reversed course and decided to get involved in Dukes v. Wal-Mart Stores, Inc., currently set for oral argument before an en banc panel of the 9th Circuit on March 24. The district court and a divided panel of the Ninth Circuit have previously held that a class of 2 million potential plaintiffs in a gender discrmination lawsuit could be certified and that claims for punitive damages would not be tried on a case-by-case basis. The EEOC had decided not to get involved in this case as it worked its way up through the courts. According to the Recorder, Brad Seligman of the Impact Fund said that the recent amicus brief filing does not represent “a radical new EEOC making this decision.” Robin Conrad of the U.S. Chamber of Commerce disagrees, telling the Recorder, “It’s very troubling that the Obama administration thinks it might be appropriate to impose massive punitive damages on companies without ever giving them their day in court.”

    In its amicus brief, the EEOC argues that “Punitive damages lend themselves to classwide determination in a Title VII pattern-or-practice case since neither the claim nor the damages focuses on individual victims of discrimination. The focus of a claim under a pattern-or-practice theory is not on individual employment decisions but rather on an overall ‘pattern of discriminatory decisionmaking.’”

    Wal-Mart’s lawyer, Theodore Boutrous Jr. at Gibson, Dunn & Crutcher, called the EEOC’s position “fundamentally incorrect.”

    The composition of the en banc panel suggests that this could be a closely divided opinion. The panel members include Chief Judge Kozinski, and Circuit Judges Reinhardt, Rymer, Hawkins, Silverman, Graber, Fisher, Paez, Berzon, Bea and Ikuta.

  • Korean Pop Star Rain Gets Hit With $4.8 Million Punitive Damages Award In Hawaii

    The Associated Press is reporting that a jury in federal district court in Hawaii has awarded $4.8 million in punitive damages against Korean pop star Rain, aka Jung Ji-hoon.

    The plaintiff, a Hawaii concert promoter, sued Rain for breach of contract and fraud in connection with Rain’s decision to back out of a concert at the last minute. The jury awarded compensatory damages of $1 million for fraud and $2.3 million for breach of contract.

    Rain cancelled his Hawaii concert just days before the scheduled date. The plaintiffs argued that Rain never intended to perform in Hawaii, saying his crew never applied for proper visas or shipped their equipment. A similar lawsuit was recently filed here in L.A., where Rain’s concert at the Staples Center was canceled a few hours before show time.

  • Red Hill Enterprises v. Gould: Defendant Who Refuses To Turn Over Requested Documents Cannot Challenge Plaintiffs’ Failure to Prove Net Worth

    Yesterday, the California Court of Appeal (Second District, Division Seven) issued this unpublished opinion reversing a nonsuit order and allowing the plaintiff to proceed with a claim for punitive damages.

    This fraud trial was bifurcated into two phases. Before the trial began, the plaintiff asked the defendant to produce certain documents regarding its financial condition, so that the plaintiff could meet its burden of proving the defendant’s net worth in the punitive damages phase of the trial. (See our prior posts about other recent opinions apply this unique rule of California appellate procedure.) After the jury ruled for the plaintiff in the first phase, the defendant said it would promptly produce the requested documents for the plaintiff’s review. A few days passed and the defendant failed to turn over the documents as promised. Instead, the defendant waited until the morning of the second phase of the trial and then turned over only some of the documents.

    The plaintiff tried to establish the defendant’s financial condition through other means, such as asking the trial court to take judicial notice of public records. The trial court shot down all of the plaintiff’s requests, and then granted nonsuit on the ground that the plaintiff had failed to present sufficient evidence of the defendant’s financial condition.

    The Court of Appeal reversed, ruling that the defendant, by failing to turn over the requested documents, forfeited its right to complain about the plaintiff’s failure of proof. In so doing, the court extended the holding of Mike Davidov Co. v. Issod (2000) 78 Cal.App.4th 597. That opinion found a forfeiture where the defendant refused to comply with a court order to turn over financial condition documents. The court here extended that ruling to situations where the is no court order, only a request by the plaintiff.

    The Court’s reasoning makes sense to me, so long as the record established that the defendant actually had additional documents that it failed to turn over. When a defendant turns over all the information in its possession, there should be no forfeiture, even if the defendant’s documents are inadequate to establish the defendant’s net worth. The defendant should not be required to create documents to satisfy the plaintiff’s burden. If the defendant does not have an adequate statement of its net worth, the plaintiff bears the burden of gathering the necessary information, by eliciting testimony from the defendant or through other means. In this case, however, it seems that trial court blocked the plaintiff from pursuing any other means, leaving the plaintiff with no way to meet its burden.

  • California Supreme Court Denies Review in Brewer v. Premier Golf

    According to the California Supreme Court’s Conference Results posted today, the court has denied review in Brewer v. Premier Golf Properties, a case we previously blogged about here and here.

    Among other things, the Court of Appeal’s opinion in Brewer held that punitive damages are unavailable in an action for violations of statutes and regulations governing pay stubs, minimum wages, and meal and rest breaks. The court concluded that, because those statutes and regulations created new rights that did not exist at common law, the statutory remedies for violations of meal/rest break, minimum wage, and pay stub laws are the exclusive remedies. Also, the court held that punitive damages are unavailable for these sorts of claims because they ultimately arise from a contractual obligation, whereas Civil Code section 3294 provides that punitive damages are only available for the breach of an obligation not arising from contract.

  • Punitive Damages, Remunerated Research, and the Legal Profession

    The December 2008 edition of the Stanford Law Review, now available on Westlaw, contains this student note entitled “Punitive Damages, Remunerated Research, and the Legal Profession.” The Westlaw citation is 61 STNLR 711.

    The note, authored by recent Stanford graduate Shireen A. Barday, explores an issue that attracted a lot of attention last summer when Justice Souter, while authoring the majority opinion in Exxon Shipping, included a footnote stating that the court would not rely on academic research that was funded by Exxon. (Footnote 17.) Adam Liptak wrote a New York times piece on that footnote, and Rick Hasen questioned the Supreme Court’s approach on his Election Law Blog.

    Barday’s note observes that medical and scientific journals require authors to disclose their sponsors, but law reviews freely publish articles without requiring any financial disclosure. Barday proposes (1) mandatory financial disclosure requirements for law review submissions, and (2) the creation of a conflicts database that would allow lawyers and judges to track industry funded research. The first proposal seems eminently reasonable, but the second may be a little too ambitious to be realistic.

  • Market Share Liability & Punitive Damages

    The Winter 2008 edition of the Columbia Journal of Law & Social Problems, now available on Westlaw, contains an article entitled “Market Share Liability: the Case for Evolution in Tort Law.” The Westlaw citation is 42 CLMJSP 225.

    The note, authored by Columbia student Andrew B. Nick, is primarily an attack on the California Court of Appeal’s opinion in Magallanes v. Superior Court (1985) 167 Cal.App.3d 878, which held that punitive damages are unavailable in lawsuits based on market-share liability. The article criticizes the reasoning of Magallanes and argues that extending punitive damages to market-share cases “would allow the benefits of punitive damages to be achieved on a truly grand scale.”

    P.S. The name of the Magallanes opinion is misspelled throughout the article. Aren’t law review editors supposed to catch that sort of thing?

  • No Punitive Damages in Exxon Gas-Leak Lawsuit

    The Baltimore Sun reports that the jury in the Maryland gas-leak lawsuit against Exxon Mobil ruled for the plaintiffs, awarding $150 million in compensatory damages but no punitive damages. The plaintiffs had asked for billions, but they’ll have to make do with $150 million. It seems entirely likely that their outlandish request was nothing more than a strategic ploy designed to make a sum like $150 million seem modest by comparison.

    The Baltimore Sun story reports that Exxon had already agreed to pay $38 million to clean up the spill, and agreed to pay a $4 million penalty to the state of Maryland, the largest environmental penalty ever paid to the state.

  • Plaintiffs Seek “Several Billion Dollars” from Exxon; Verdict to be Announced Tomorrow

    The Baltimore Sun reports that the jury has reached a verdict in a Baltimore lawsuit in which the plaintiffs are seeking “several billion dollars” in compensatory and punitive damages from Exxon Mobil Corp. The verdict will be read at 9 am tomorrow.

    The plaintiffs are 300 residents of Jacksonville Maryland who allege that 26,000 gallons of gasoline seeped into that city’s groundwater from a leaking pipe in 2006. They contend that Exxon officials knew leak-detection equipment was inadequate. Exxon says it accepts responsibility for cleaning up the spill but did not commit fraud or act with intentional malice or negligence. The jury began deliberating February 27 after a 19-week trial.

  • More Celebrity Punitive Damages News

    After a dearth of celebrity-related punitive damages news, we have two stories today:

    Bruce Willis is suing two producers at Foresight Unlimited, claiming they lied to him about the financing they had obtained for Three Stories About Joan, a film Willis was supposed to direct. He wants punitive damages for fraud.

    “Joe the Plumber” (is he still a celebrity?) is seeking punitive damages from three former Ohio officials for allegedly violating his privacy when they gathered his personal information in a records search.