California Punitives by Horvitz & Levy

  • New Law Review Article on Punitive Damages in Employment Litigation

    Joseph Seiner of the University of South Carolina School of Law has posted an article on SSRN entitled, “The Failure of Punitive Damages in Employment Discrimination Cases: A Call for Change.” Here is an excerpt from the abstract:

    This paper explores the basic foundations of punitive damages in the American judicial system, and examines the goals of providing this form of relief in employment discrimination cases. While public perception suggests that punitive damages have been instrumental in helping to eradicate employment discrimination, the numerical data paint a different picture. After analyzing this data, this paper suggests one alternative way of better achieving the original deterrent purpose behind the addition of punitive damages to Title VII. The paper proposes a three-part framework for analyzing all cases of intentional discrimination and recommends adopting a new scheme for remedial relief under Title VII. The paper then explores the implications of adopting the proposed approach and examines how the proposal fits within the contours of the academic scholarship. The paper concludes by urging that the Congressional intent of deterring unlawful discrimination can more properly be achieved through the proposed form of relief.

    It is refreshing to see a punitive damages law review article that contains empirical data. For all the academic writing in this area, there seems to be a dearth of research into the hard data.

    The solution proposed in Prof. Seiner’s article is to replace punitive damages in employment discrimination cases with “liquidated damages” equal to double the amount of the plaintiff’s actual harm. Liquidated damages would be available in any case of intentional discrimination, without the showing of malice or reckless indifference that Title VII currently requires for punitive damages. Professor Seiner says this would provide for greater deterrence by allowing awards in excess of the current $300,000 cap that Title VII places on punitive damages (which has not been adjusted for inflation in 15 years). He also, notes, however, that the proposal would benefit employers in some cases, because under the current system employers are sometimes subjected to punitive awards that are disproportionate to the plaintiff’s actual harm in cases where the actual harm is small. In any event, the defendant would still be able to defeat a claim for liquidated damages by making a showing of good faith.

    Unlike a lot of academic proposals for reforming punitive damages litigation, this is one that Congress might conceivably enact. But such a proposal would only be enacted if Congress perceived a need for additional deterrence in employment discrimination cases and thought civil damages were the best way to achieve that deterrence. Obviously, those are issues that would generate significant debate.

    Hat tip: Workplace Prof Blog

  • The Dark Lord Sauron Has Been Defeated

    We previously blogged here about the lawsuit by the estate of J.R.R. Tolkien against New Line Cinema which included a request for punitive damages. As reported here, the trial court has now rejected plaintiff’s request for punitive damages.

  • West Virginia Supreme Court Agrees to Review $196.2 Million Punitive Damages Award Against Dupont

    According to the West Virginia Record, the West Virginia Supreme Court has decided to hear a case involving a $400 million judgment, including $196.2 in punitive damages, against DuPont. The case involves claims by residents of Harrison County that DuPont poisoned the area around its Spelter plant with zinc, cadmium and arsenic. Read our prior posts about the case here.

    The Supreme Court’s decision to grant review will forestall, at least temporarily, any resolution of the question whether West Virginia violates due process by not affording appellate review of punitive damages as a matter of right.

    The grant of review probably will not, however, dissipate the controversy over Gov. Joe Manchin’s decision to get involved in the case by filing an amicus brief asking the court to consider hearing cases with large punitive damages awards.

  • Keanu’s Excellent Judicial Adventure: Judge Tosses Punitive Damages Claim

    We previously blogged about Keanu Reeves’ unsuccessful motion to strike a punitive damages claim against him. According to the Associated Press, the judge has had a change of heart, and has now dismissed the punitive damages claim.

    The plaintiff in the case is a photographer who claims that Reeves intentionally ran into him while Reeves was pulling his car out of a parking spot. Reeves previously moved to strike the punitive damages claim on the ground that any injury was accidental, but L.A. superior court judge Elizabeth A. Grimes ruled, “There’s not a whisper of accident here.” She has apparently now reached the opposite conclusion, dismissing the punitive damages claim on the ground that plaintiff presented no evidence of malice. (The AP story gives no clue as to the procedural posture of the case, but I’m guessing the court has granted a motion for summary adjudication.)

  • Lawyers for Metrolink Crash Victims Intend to Challenge Limit on Damages

    The Associated Press has an article today entitled “Damages Limit A Concern in the Wake of Train Crash” (via the LA Daily News). The article includes quotes from Brian Panish, a plaintiff’s attorney who is representing two of the crash victims in last week’s head-on collision between a Metrolink commuter train and a Union Pacific freight train in Los Angeles. (The article mistakenly refers to Panish as a defense attorney.) Panish intends to challenge the Amtrak Reform and Accountability Act of 1997, which places a $200 million limit on damages payouts in rail accident cases. The limit includes compensatory and punitive damages.

    Of course, that’s assuming that punitive damages would even be available in such a case. In litigation over the 2002 crash between a Metrolink commuter train and a Burlington Northern freight train in Placentia, the superior court ruled the plaintiffs’ punitive damages claim was preempted by federal law. (Full disclosure: Horvitz & Levy consulted on the motion for summary adjudication that knocked out the punitive damages claim in the Placentia litigation. Panish’s firm represented some of the plaintiffs.)

  • “Just Because I Asked for Punitive Damages Doesn’t Mean I Wanted Punitive Damages”

    CAFA Law Blog has an amusing post describing a case in which the plaintiff claimed he inadvertently included a claim for punitive damages in his class action complaint.

  • Erwin Chemerinsky Article on Exxon Shipping Co.: “A Narrow Ruling on Punitive Damages”

    Professor Erwin Chemerinsky, the founding dean of the University of California, Irvine, School of Law, has an article in the September 2008 edition of “Trial,” a publication of the American Association of Justice (formerly the Association of Trial Lawyers of America.) The article (subscription required) describes the U.S. Supreme Court’s holding in Exxon Shipping Co. v. Baker. Chemerinsky concludes that the Supreme Court’s reasoning should not have much application outside the maritime context:

    Businesses, and those seeking to limit punitive damages, will attempt to read the Court’s holding broadly and apply it in many different contexts. But the Court was clear that it was dealing only with punitive damages in maritime cases. At most, its reasoning can be applied to other areas of federal common law where punitive damages are allowed.
    Yet there’s no doubt that the case reflects a Court that generally is hostile to punitive damages and wants to impose limits, whether based on due process or common law principles. There’s also no doubt that Exxon Shipping is not the Court’s last word on punitive damages.

    For those who don’t subscribe to Trial, you can find the article on Westlaw with this citation: 44-SEP JTLATRIAL 62.

  • Celebrities Strike Again: Gary Coleman Sued for Punitive Damages in Bowling Alley Accident

    For those of you who depend on us for celebrity punitive damages news, we cannot disappoint: Gary Coleman has been sued for punitive damages for allegedly running down a fan in a bowling alley parking lot.

  • District Court Reduces Payless Punitive Damages from $137 Million to $15 Million

    Judge Garr M. King of the District of Oregon has issued a post-trial opinion reducing what was possibly the largest trademark infringement award ever. (See our prior posts here, here and here.) The jury awarded a total of $305 million, but the court chopped it down it down to a mere $65 million.

    The jury had awarded $137 million under the Lanham Act for disgorgement of profits, but Judge King exercised his discretion under the Lanham Act to reduce that figure to $19.7 million.

    As for the punitive damages award, Judge King denied Payless‘ motion for a new trial, conditioned on Adidas’ acceptance of a remittitur of the punitive damages award to $15 million. He determined that the $30.6 million awarded by the jury for lost royalties represented Adidas’ “actual harm,” for purposes of comparing the punitive damages to actual harm. He then went on to conclude that, given the low reprehensibility of the conduct at issue, even a 1 to 1 ratio of punitive damages to actual harm would be excessive:

    After considering the Gore guideposts, I have decided that even a 1 to 1 ratio between compensatory and punitive damages is too high. The main reasons are that there was no physical harm or disregard for a person’s health or safety, there were no lost sales, Adidas suffered no economic harm that jeopardized its business in any way, and, even though Payless acted willfully, it did not do so for the entire period addressed here. I realize that going below a 1 to 1 ratio is unusual but such awards have been approved if there is only economic harm. See Motorola Credit Corp. v. Uzan, 509 F.3d 74 (2nd Cir. 2007) (following a court trial in a financial fraud case the trial court characterized as hard to imagine financial conduct more reprehensible,
    the appellate court affirmed the trial court’s decision on remand to reduce the punitive damages to $1 billion from $2.1 billion, along with compensatory damages of $2.1 billion). After giving this much thought, I conclude that the punitive damages must be reduced to $15 million to comport with due process concerns. Accordingly, I deny Payless’ motion for a new trial, conditioned on Adidas accepting a remittitur of the punitive damages award to $15 million.

    Hat tip: Seattle Trademark Lawyer.

  • Law Review Article: Punitive Damages and Class Actions

    Francesco Parisi of the University of Minnesota Law School and Marta Cenini of the University of Milan have posted an article on SSRN entitled “Punitive Damages and Class Actions.”

    Here’s the abstract:

    Punitive damages and class actions can be viewed as sharing a common economic function – creating optimal deterrence. This is a function that these remedies can best pursue in different domains. When a tortfeasor causes harm that affects many victims, the preferred remedy is a class action. This is especially so when the amount of compensatory damages are high.There are scenarios, however, in which imposing punitive damages represents the best solution. We identify some of these scenarios to suggest the proper domains of these two remedies. Finally, we identify situations where a combined use of these two remedies is desirable. We suggest that when the amount of losses suffered by victims is so small as to preclude a class action due to transaction costs and inactivity, it may nevertheless be useful to combine punitive damages with a class action. Punitive damages should be awarded within a class action if and only if there are frictions that could prevent the injured party from taking legal action.

    Law professors have been writing on this subject for decades, but unfortunately, the courts have yet to fashion any of these academic proposals into a generally accepted method for resolving punitive damages claims in mass tort cases.

    Hat tip: Mass Tort Litigation Blog.