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.
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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.
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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.
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W. Va. Supreme Court Candidates Support Appellate Review of Punitive Damages
The Charleston Gazette contains this article about candidates running for election to the West Virginia Supreme Court: “Two Supreme Court Hopefuls Support Automatic Review of Punitive Damages.”
Currently, defendants in West Virginia have no right to appellate review of punitive damages awards. All they can do is seek discretionary review by the West Virginia Supreme Court. As we observed in a prior post, the absence of a right to appeal raises due process questions.
The issue has been in the spotlight recently because the West Virginia Supreme Court declined to review a case involving $270 million in punitive damages and the Governor of West Virginia filed a controversial amicus brief asking the court to review a $196.2 million punitive damages award against DuPont.
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Review Dismissed in Harvey v. Sybase
The California Supreme Court today dismissed review in Harvey v. Sybase, a case presenting a significant unresolved issue affecting California punitive damages litigation. As the Supreme Court’s online docket indicates, the parties settled the case and stipulated to a dismissal.
The issue presented in Harvey was whether the clear and convincing evidence standard, which governs punitive damages determinations in California, applies only in the trial court, or does it also apply on appeal? In other words, should the Court of Appeal take that standard into account when it reviews the record to determine whether substantial evidence supports a jury’s determination that the defendant acted with malice, oppression, or fraud (the California prerequisites for imposing punitive damages)?
This issue arises whenever a defendant argues on appeal that the facts of a particular case don’t warrant punitive damages. Unfortunately, California courts are all over the map on this issue, including the California Supreme Court, as we observed in a prior post about Harvey. Fortunately, because the issues arises so often, the Supreme Court should not have to wait very long to find another vehicle for deciding this issue.
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U.S. Supreme Court Schedules Oral Argument in Williams III for December 3
According to the U.S. Supreme Court’s monthly argument calendar for the month of December, 2008, the Court will hear oral arguments in Philip Morris v. Williams (Williams III) on December 3, 2008.
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.
See our prior post for links to the opening brief on the merits and the various amicus briefs in support of the petitioner.
Hat tip: SCOTUSblog.
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Commentary on Prof. Dan Markel’s Punitive Damages Theory
Professor Michael OHear has posted this commentary on the Marquette University Law School law blog about a presentation made by Florida State law professor Dan Markel. Prof. Markel presented his paper “How Should Punitive Damages Work?” to kick off a speaker series at Marquette. Prof. O’Hear questions whether Prof. Markel’s proposals are workable in the real world.
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Punitive Damages Now Available in Thailand
Thailand News Today reports (in a blog post authored by Chaiporn Supvoranid, a partner at Baker & McKenzie), that Thailand has passed a law known as the “Consumer Cases Act” which “introduces several new concepts into the Thai legal system such as punitive damages . . . .” This seems to cut against the trend reported elsewhere that foreign jurisdictions are generally hostile to U.S.-style punitive damages.
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San Diego Jury Awards $40 Million in Punitive Damages for Crash of Marine Helicopter
According to the San Diego Union Tribune, a jury today awarded $15.2 million in compensatory damages and $40.4 million in punitive damages against San Diego Gas & Electric Company in a case involving a helicopter crash that killed four Marines.
In the 2004 crash, the Marines’ UH-1N (Huey) helicopter collided with a 130-foot utility tower located on Camp Pendleton. The plaintiffs claimed that SDG&E was negligent for not installing safety lights on the tower. SDG&E says the tower had been on the base for 25 years and they would have installed lights if the Marine Corps had asked. They contend the crash was the result of errors by the crew and they plan to appeal.
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Off Topic: “Motion to Strike Hunger”
Please pardon this interruption from our usual punitive damages programming, but it’s for a good cause. You may not have heard, but September 2008 is national Hunger Action Month. From September 15 to September 30, our firm (Horvitz & Levy) is sponsoring a “Motion to Strike Hunger” food drive to benefit the Los Angeles Regional Food Bank, which provides food to over one million people in Los Angeles County who are struggling to feed their families.
We invite our Los Angeles area readers to join us by doing any of the following :(1) signing up to hold a food drive at your firm or business from September 15 to September 30 (it’s very easy – – just sign up here and the food bank will deliver collection barrels and pick up the donations at the end of the food drive)
(2) scheduling your own volunteer day
and/or (3) making a cash donation.
The firm that donates the most pounds of food per capita will earn the title of “Most Generous Movant.” (This is an appeal to litigators who enjoy the thrill of competition but, of course, the good feeling of giving is its own reward.)