Legal Newsline reports that the West Virginia Supreme Court declined to consider a case involving a $404 million verdict against NiSource Inc., an Indiana-based energy company. The case involves NiSource’s alleged failure to make royalty payments to property owners who had leased gas rights to the utility. NiSource says it will seek a stay of the judgment so it can petition the U.S. Supreme Court for certiorari.
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Will the Exxon Valdez Case Produce a Unanimous Opinion?
Linda Greenhouse has an interesting article, “At Supreme Court, 5-to-4 Rulings Fade, but Why?” noting the substantial decline in 5-4 opinions from the United States Supreme Court this term. So far this term, only one of 35 opinions has been decided 5-4, whereas at this point last term, 13 out of 41 had been decided 5-4. Greenhouse posits that the reasons for this are “liberals using their limited leverage to exact some modest concessions as the price of helping the conservatives avoid another parade of 5-to-4 decisions.” As Greenhouse points out, three recent cases resulted in majority opinions with 6 or 7 justices in cases that might have been thought of as candidates for 5-4 decisions (the Indiana voter id law, the Kentucky lethal injection case, and the federal law on child pornography). This trend limits the influence of Justice Kennedy who last term was in the majority in all 24 5-4 decisions and only dissented in 2 of the 68 cases decided. This term, Justice Kennedy has already dissented 5 times.
The interesting question for purposes of this blog is how this potential trend toward greater agreement among the justices will play out in the Exxon Valdez case. By not focusing on the constitutional limits on punitive damages, Justices Scalia, Thomas and Ginsberg will not need to adhere to their prior dissents finding no due process limit on punitive damages. This potentially opens up a larger coalition to reverse the award. There is also a suggestion by Greenhouse that the recent cases that one might have expected to be 5-4 were more fact-driven opinions that did not rely on broad rules, which potentially enabled more justices to sign on. However, as we posted earlier, the oral argument in the Exxon case suggested a divided court. The question is how divided? Stay tuned to this blog to find out.
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California Courts Number One?
We previously blogged here about the Chamber of Commerce rankings which placed the California courts in 44th place nationwide for having a reasonable and balanced tort liability system for U.S. business. A new article by Stephen J. Choi, G. Mitu Gulati, and Eric A. Posner, “Which States Have the Best (and Worst) High Courts?” concludes, contrary to the Chamber of Commerce rankings, that the top five state court systems in the nation are California, Arkansas, North Dakota, Montana, and Ohio.
Hat Tip: How Appealing.
UPDATE: (by Curt Cutting): The two studies aren’t quite as inconsistent as they might seem at first glance. The Choi, Gulati & Posner article ranks only the highest courts of each state, not the state’s court system as a whole. Also, the Choi, Gulati & Posner rankings are based on three objective criteria: influence, independence, and productivity. By contrast, the study sponsored by the U.S. Chamber surveyed corporate counsel about their perceptions of the fairness of each state’s judicial system. It’s not hard to imagine how a state could excel under the Choi et al. criteria but still fare poorly in the Chamber survey.
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Philadelphia Jury Awards $20.5 Million, Including $15 Million in Punitive Damages, For Fatal Liposuction
According to this report from the Legal Intelligencer (via Law.com), a Philadelphia jury returned a verdict yesterday awarding $20.5 million, including $15 million in punitive damages, to the parents of an 18-year-old college student who allegedly died from a botched liposuction procedure.
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Trial Court Declines to Overturn $350 Million Verdict Against Dow and Rockwell In “Rocky Flats” Case
According to this report from the Chicago Tribune, Judge John Kane of the federal district court in Denver has denied the post-trial motions filed by Dow Chemical Co. and Rockwell International Corp. in a case involving a $350 million verdict. Judge Kane also ordered the defendants to pay 8 percent interest dating back to 1990, when the suit was filed. The plaintiffs’ attorney says that brings the total to more than $900 million.
The defendants operated a nuclear weapons facility known as “Rocky Flats,” and the plaintiffs are neighboring landowners who claim that contamination from the plant lowered their property values. Earlier press reports indicated that the verdict included $110.8 million in punitive damages against Dow and $89.4 million in punitive damages against Rockwell. Not surprisingly, the Chicago Tribune report says both defendants plan to appeal.
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Guardado v. Superior Court: Court of Appeal Holds That a Determination of Plaintiff’s Ability to Seek Punitive Damages Is Not a Ruling on the Merits
This published opinion involves the intersection of two California procedural rules in the context of punitive damages litigation.
The first rule is Code of Civil Procedure (section 170.6), which allows parties to assert one peremptory challenge to a trial judge without a showing of cause, but requires parties to assert the challenge before the judge makes a “determination of contested fact issues relating to the merits.”
The second rule is Civil Code (section 3295(c)), which provides that a plaintiff cannot conduct discovery of the defendant’s financial condition for the purposes of seeking punitive damages unless the plaintiff first demonstrates a substantial probability that he or she will prevail on a claim for punitive damages.
The question presented in this case was whether a finding by the trial court that a plaintiff has a substantial probability of prevailing on a claim for punitive damages is a “determination of contested fact issues relating to the merits” under section 170.6. The trial court concluded that it was not such a determination, and the Court of Appeal (Second District, Division Eight) agreed. The Court of Appeal relied on the statutory language of Sec. 3295(c), which expressly states that a pretrial punitive damage discovery determination “shall not be considered to be a determination on the merits of the claim.” The court concluded that a decision that is not on the “merits” for the purpose of section 3295(c) is also not on the “merits” for the purpose of section 170.6.
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Daily Journal Focus Column on Holdgrafer v. Unocal Opinion
Rex Heeseman had a column in the Daily Journal last Friday called “Price Fixing” (subscription required) which discusses the Holdgrafer v. Unocal opinion. His primary contention is that the Court of Appeal’s opinion is a departure from the approach taken by other courts in the wake of the U.S. Supreme Court’s recent decision in Philip Morris v. Williams. This is similar to the argument raised by plaintiffs in their petition for review. However, as we set forth in our answer to the petition for review, we believe the opinion simply applies the principles set by the United States Supreme Court in Campbell v. State Farm in precluding plaintiffs from seeking to punish a defendant for its dissimilar conduct toward non-parties.
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The Complex Litigator Weighs in on the Likely Impact of Savaglio v. Wal-Mart
H. Scott Leviant at The Complex Litigator has a thoughtful and detailed post referring to our post last week on the pending Savaglio v. Wal-Mart appeal. He argues that the “new right-exclusive remedy” rule that Wal-Mart urges as a bar to the punitive damages award is inapplicable to claims based on a right to wages, since he contends that the right to wages was a common law “right[] in existence prior to California’s Labor Code . . . .” But even if that were so, as Scott correctly acknowledges the Savaglio class action is primarily a case about meal periods. One could certainly characterize the right at issue in Savaglio (for purposes of the “new right-exclusive remedy” rule) as a right to meal periods rather than a right to wages. Several courts appear to have recognized that the right to such meal periods did not exist at common law but are instead the product of wage orders and statutory law. (E.g., Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1105 [explaining that the Industrial Welfare Commission “issued wage orders mandating the provision of meal and rest periods in 1916 and 1932”].)
Moreover, even if courts were to accept the argument that the right to wages was a common law right, perhaps courts may distinguish between a right to wages generally and an entitlement to certain premium payments created by statute. For example, the California Supreme Court has indicated that both overtime pay and Labor Code section 226.7 payments for missed or late meal periods are “premium” payments. (Murphy, supra, 40 Cal.4th at pp. 1109, 1120.) At least one federal district court, applying the “new right-exclusive remedy” rule, has held that a plaintiff could not maintain a conversion claim based on the right to overtime pay on the ground that this was a right created by statute rather than by common law for which the detailed remedial scheme in the Labor Code provided exclusive remedies. (See, e.g., Green v. Party City Corp. (C.D.Cal. Apr. 9, 2002), Case No. CV-01-09681 CAS (EX), 2002 WL 553219, at pp. *4-*5.) If other courts arrive at the same conclusion, the “new right-exclusive remedy” rule may bar punitive damages claims based on the right to premium wage payments.
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New Trial Motion Denied in Mark Geragos/Michael Jackson Punitive Damages Case
We previously blogged about a bench trial in which Los Angeles County superior court judge Soussan Bruguera awarded $2 million in compensatory damages and $16 million in punitive damages against defendants who supposedly taped attorney Mark Geragos’s conversations with Michael Jackson on a private airplane the day Jackson surrendered to face child molestation charges. This story on Law.com reports that Judge Bruguera has denied the new trial motions filed by defendants XTraJet Inc. and its owner Jeffrey Borer. Borer’s attorney says he will appeal. XtraJet is apparently bankrupt.
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Oklahoma Jury Hits Shell With $53 Million in Punitive Damages for Underpayment of Royalties
NewsOK.com reports that Shell Oil Co. is mulling an appeal from a $66 million jury verdict, which includes $53 in punitive damages. The plaintiffs claimed that Shell underpaid royalties on an oil-well lease agreement that was originally executed in 1927.
Any appeal will likely involve some discussion of the California Supreme Court’s recent decision in City of Hope v. Genentech, in which the court reversed a $200 million punitive damages award in a case involving underpayment of royalties.