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!
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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.
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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.
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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 RespondentTo 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.
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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).
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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.
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BNA Audioconference on Punitive Damages on Oct. 15
BNA is holding an audioconference on October 15 entitled “The New Course of Punitive Damages After Philip Morris and Exxon Shipping.” The program will run from 1:00 to 2:30 PM ET, and will cover the following topics:
- Examination of what the 2007 decision in Philip Morris USA v. Williams means and how that issue has played out in the courts since the decision.
- Review of what Exxon Shipping Co. v. Baker decided and its implications beyond maritime cases.
- How the U.S. Supreme Court views empirical studies cited in briefs.
- What is at issue in the return of the Philip Morris case to the U.S. Supreme Court?
- What might be the next punitive damage issue the Court could confront?
The speakers will be Robert S. Peck, President of the Center of Constitutional Litigation, and Victor E. Schwartz of Shook, Hardy & Bacon LLP.
To register for the conference, click here.
Hat tip: TortsProf Blog.
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Plaintiff Files Merits Brief in Williams III
The plaintiff/respondent in Philip Morris v. Williams (Williams III) has filed her brief on the merits. You can view the brief on the ABA’s website here. Links to the petitioner’s brief on the merits and supporting amicus briefs can be found in this post.
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.
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Bailout Bill Includes Tax Break for Exxon Valdez Plaintiffs
You may have heard that the bailout bill that Congress passed today includes some “tax sweeteners.” Some might call it “pork.”
Among them is a provision that gives the class of commercial fisherman in the Exxon Valdez case a variety of tax breaks on their $500 million punitive damages award. The provision (section 504 of the 2008 Emergency Economic Stabilization Act) gives the plaintiffs the right to average out their punitive damages awards over three years rather than suffer a one-time tax hit. They are also permitted to make 401k or IRA contributions that exceed the normal limits. The San Francisco Chronicle reports that the provision is expected to cost the federal government about $49 million in lost revenue.
Various reports (like the Chronicle story linked above) say the provision was added to gain the vote of Rep. Don Young, R-Alaska. But the Anchorage Daily News reports that Young actually voted against the bailout bill, even with the earmark for the Exxon Valdez plaintiffs. Senator Lisa Murkowski, R-Alaska, who had previously sponsored a separate bill to provide a tax cut for Exxon Valdez plaintiffs, had this to say about the provision in the bailout bill:
While I was extremely disappointed in the Supreme Court’s decision to reduce the punitive damage award to the victims of the Exxon Valdez oil spill, our provision will help lessen the tax burden and allow the 30,000 plaintiffs to keep more of the compensation they receive.
Technically, of course, punitive damages are not designed to provide “compensation,” which is awarded separately through compensatory damages. The Exxon Valdez plaintiffs received over $500 million in compensatory damages long ago.
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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