California Punitives by Horvitz & Levy

  • Human Rights Suit Against Chevron May Raise Interesting Punitive Damages Issues

    Much has been written in the press about Bowoto v. Chevron, which began trial this week in San Francisco federal court. (See, e.g., L.A. Times, Reuters, Huffington Post.) In a nutshell, the plaintiffs allege that Chevron committed human rights violations in a 1998 incident on an oil platform off the coast of Nigeria. The plaintiffs are seeking recover under the Alien Tort Claims Act, a little-used law that dates back to 1789. They say they were staging a peaceful protest on the platform when they were assaulted by Nigerian military forces who were paid, fed, and housed by Chevron. Chevron contends that the protest was anything but peaceful, and that the plaintiffs threatened the safety of its workers.

    Of relevance to this blog, the plaintiffs’ case includes a claim for punitive damages. As noted in a prior post, interesting constitutional questions arise when a plaintiff seeks punitive damages in a U.S. court based on actions that took place in another country. Earlier this year, similar issues were raised in a Los Angeles case involving a group of Nicaraguan farm works who sued Dole and others, complaining about the use of the agricultural chemical DBCP on banana farms in Nicaragua nearly 30 years ago. The plaintiffs obtained $2.5 million in punitive damages, but the trial judge tossed out the award, apparently in response to Dole’s argument that the punitive damages were improper because they were based on conduct that was lawful in the jurisdiction where it occurred.

  • DOJ Report Contains Stats on State Court Punitive Awards

    The U.S. Department of Justice, Bureau of Justice Statistics, has released a report entitled Civil Bench and Jury Trials in State Courts, 2005, containing all sorts of interesting statistics regarding the outcomes of state court civil trials. For example, the median total award in civil trials in 2005 was $28,000, including compensatory and punitive damages. But as you would expect, the median award is considerably higher for certain types of cases. In asbestos cases, for example, the median total award is $682,000.

    For our purposes, the most interesting stats are the punitive damages figures that appear on pages 6 and 7 of the report. There is too much information to repeat here, but some highlights include:

    • Plaintiffs recovered punitive damages in 700 of the 1,823 trials in which punitive damages were sought.
    • Punitive damages were awarded more frequently, and in higher amounts, in cases involving contract-related torts (e.g., tortious interference with contract, fraud, employment discrimination) than in tort cases not involving contractual relationships.
    • Punitive damages exceeded compensatory damages in 62% of cases involving contract-related torts and 37% in cases not involving contractual relationships.
    • Punitive damages were at least four times greater than compensatory awards in 26% of all trials where punitive damages were awarded.
    • Punitive damages exceeded compensatory damages by a ratio of 10 to 1 or greater in 17% of all trials where punitive damages were awarded.

    I’m somewhat surprised by the statistics about contract-related tort claims. I would have thought those sorts of cases would generate lower punitive damages than cases involving personal injuries and deaths. But the opposite is true – – cases with purely economic injuries generate higher and more frequent punitive damages awards.

    It bears noting that the study only reports the amounts awarded, and does not provide any statistics about the final punitive damages after post-trial motions and appeals.

  • NiSource and Chesapeake Energy Settle Case with $270 Million Punitive Damages Award

    We previously blogged about a $404 million judgment in West Virginia against two energy companies, NiSource and Chesapeake Energy. The judgment, which included a $270 million punitive damages award, was based on the defendants’ failure to make royalty payments to property owners who had leased natural gas rights to the defendants.

    Today, the Northwest Indiana and Illinois Times is reporting that NiSource has agreed to settle the case for $338.8 million. Co-defendant Chesapeake Energy is chipping in another $41.2 million.

    The West Virginia Supreme Court’s refusal to even consider this case raised questions about the constitutionality of West Virginia’s post-verdict review of punitive damages, and NiSource filed a petition for certiorari with the U.S. Supreme Court. Those issues will have to wait for another day.

  • District Court Tosses $5.2 Million Punitive Damages Award Against TASER

    Judge James Ware of the Northern District of California has issued a posttrial order vacating $5.2 million in punitive damages against TASER International.

    The jury’s award of punitive damages in this case made headlines because it was the first time TASER had lost a products liability suit. The suit was brought by the heirs of a man who died after police in Salinas, California shot him multiple times with a stun-gun manufactured by TASER. TASER maintained that the death occurred because the victim was high on crank. The jury assigned 85 percent fault to the decedent, but they nevertheless awarded $5.2 million in punitive damages to his estate and his heirs.

    Judge Ware vacated the award of $200,000 to the estate because the jury made a special finding that TASER neither knew that it was creating a risk of harm nor consciously disregarded a scientifically knowable risk. Accordingly, there was no finding on which a jury could legally base an award of punitive damages. Judge Ware vacated the award to the heirs under California Code of Civil Procedure section 377.61, which prohibits the recovery of punitive damages in wrongful death actions. It is unclear from the court’s order why the jury verdict form even allowed the jury to award such damages, but apparently plaintiffs’ counsel conceded that “he saw the inconsistency in the verdict form when it was presented to him for review prior to closing argument,” but did not call it to the court’s attention. (See p. 13 of the order.)

    TASER issued a press release about the ruling.

  • A New Blog on the California Constitution

    Steve Mayer at Howard Rice in San Francisco has launched a new blog, the California Constitution, discussing law and politics related to the California Constitution. Steve knows his stuff: he is a well-respected appellate lawyer specializing in representing public entities and cases concerning the initiative process. Welcome to the blogosphere, Steve!

  • Squabbling Among Exxon Valdez Plaintiffs Delays Payment of Punitive Damages

    The commercial fishing plaintiffs in the Exxon Valdez litigation, after years of complaining about the delays created by ExxonMobil’s appeals, are now creating further delays by fighting amongst themselves over the distribution of the punitive damages award.

    Back in August, ExxonMobil agreed to pay a portion of the punitive damages award ($383 million). The money is set to be distributed under a plan devised by the district court back in 1996, but one of the plaintiffs,Sea Hawk Seafoods, Inc., a Seattle-based corporation that ran a processing plant in Valdez, has now filed a lawsuit to challenge that plan. You can read the details in the Anchorage Daily News.

    Hat tip: TortsProf Blog.

  • SCOTUS May Consider Another Punitive Damages Issue Arising Under Maritme Law

    A pending petition for certiorari to the U.S. Supreme Court raises a question involving the availability of punitive damages in maritime cases, specifically, whether a seaman may recover punitive damages against a shipowner for failing to pay for injuries suffered in a shipboard accident. The case, Atlantic Sounding Co. v. Townsend, is featured on SCOTUSblog‘s “Petitions to Watch,” presumably because there is a circuit split on this issue. Even if the Supreme Court grants cert., this case is unlikely to have any impact outside of the maritime context.

    Any readers with a passion for maritime punitive damages issues can read the 11th Circuit’s opinion, the cert. petition, the brief in opposition, and amicus briefs by the American Waterways Operators, the Cruise Lines International Association, and United Maritime Group, all in support of the petitioner.

  • Plaintiff’s Amicus Briefs in Williams III Now Available Online

    We previously posted links to the petitioner’s brief on the merits and supporting amicus briefs in Philip Morris v. Williams (Williams III), as well as the respondent’s brief on the merits. The amicus briefs for the plaintiff/respondent are now available (via the ABA):

    Brief for Federal Procedure Scholars in Favor of Respondent

    Brief for the Oregon Trial Lawyers Association in Favor of Respondent

    Brief for Retired Oregon Supreme Court Justices Susan M. Leeson, Hans A. Linde, Betty Roberts, And Richard L. Unis in Support of Respondent

    Brief for Public Justice, P.C., The Tobacco Legal Control Consortium, The Tobacco Products Liability Project, The Tobacco Control Resource Center, Public Health Advocacy Institute, The Tobacco Trial Lawyers Association, and the American Association for Justice in Support of Respondent

    Brief for the States of Oregon, Delaware, Maryland, Mississippi, New Mexico, South Carolina, Tennessee, and Wyoming in Support of Respondent

    To recap, the issued presented in Williams III is:

    Whether, after this Court has adjudicated the merits of a party’s federal claim and remanded the case to state court with instructions to “apply” the correct constitutional standard, the state court may interpose–for the first time in the litigation–a state-law procedural bar that is neither firmly established nor regularly followed.

    The case will be argued December 3.

  • SCOTUS Rejects FedEx Petition to Review Standard for Awarding Punitive Damages in ADA Cases

    Law.com reports that the US Supreme Court has rejected a cert petition by FedEx seeking review of a 4th Circuit decision (Federal Express Corp. v. Equal Employment Opportunity Commission, 513 F.2d 360 (2008)) affirming a jury award of $100,000 in punitive damages. In the suit brought by a deaf package handler pursuant to the Americans with Disabilities Act (ADA), the Baltimore jury found FedEx liable under the “reckless indifference” standard for punitive damages in ADA cases (see Kolstad v. American Dental Association, 527 U.S. 526 (1999)), and the 4th Circuit appellate court rejected FedEx’s argument on appeal that its internal compliance and grievance policies established a “good faith” defense to the claim as a matter of law.

    The 4th Circuit construed the “reckless indifference” standard as not requiring a subjective “bad motive” on the part of the employer, and further held that “the mere existence of an ADA compliance policy will not alone insulate an employer from punitive damages liability.” FedEx challenged that analysis in its petition for certiorari, arguing that the decision “will allow the issue [of punitive damages] to go automatically to the jury in every ADA case involving the interactive process, regardless of the employer’s state of mind in attempting to comply with its obligations.” The EEOC brief in opposition countered that the “reckless indifference” standard in Kolstad required only “consciousness of consequences or of wrongdoing,” and that “an employer can avoid the imposition of punitive damages by demonstrating that it engaged in good-faith efforts to comply with the law.” The EEOC’s press release announced the denial of FedEx’s petition for certiorari last week.

    Note that the compensatory award was only $8,000. As described by Sean Andrussier in the North Carolina Appellate Blog, FedEx challenged the $100,000 punitive award (12.5 times the compensatory award) as excessive on appeal. It does not appear, however, that FedEx renewed that argument in its cert petition. The punitive award was well within the applicable $300,000 statutory cap for damages under the ADA. But as the aforementioned blog post explains:

    The notion that an award is beyond due process review for excessiveness if it falls within a statutory range is misplaced. See, e.g., Kent v. A.O. White, Jr., Consulting Eng’r, P.C., 559 S.E.2d 731, 736-40 (Ga. Ct. App. 2002) (holding that punitive award that had been reduced by trial court to $250,000 statutory cap remained unconstitutionally excessive and ordering reduction to $85,964).

  • Plaintiffs Lawyers in West Virginia Give $14,000 to Justices Considering Huge Punitive Damages Award

    We’ve been blogging quite a bit about a West Virginia lawsuit against DuPont that resulted in a $400 million judgment, including $196.2 million in punitive damages. The case has generated quite a few headlines, culminating in last week’s decision by the West Virginia Supreme Court to review the case on its merits.

    Now the West Virginia Record is reporting that the plaintiffs’ firms have given a combined $14,000 to two West Virginia Supreme Court justices who are seeking reelection. (A defense firm also donated $1,000 to one of the same justices.) As the story points out, one of the same plaintiffs’ lawyers has publicly complained that DuPont unfairly influenced the judicial process by lobbying West Virginia’s governor to file an amicus brief in the case. And that lawyer (whose office is in Florida, not West Virginia) has also complained about the unfair influence of the Chamber of Commerce in West Virginia.

    Whenever I read about lawyers in other states donating large sums of money to the political campaigns of appellate justices, and then appearing before those same justices in high-stakes cases, I’m thankful that California’s appellate justices don’t have to run in contested elections.