California Punitives by Horvitz & Levy

  • Harvey v. Sybase: California Court of Appeal Reinstates Punitive Damages Award

    Last Friday, the California Court of Appeal (First District, Division Five) issued this partially published opinion reinstating a plaintiff’s claim for punitive damages in an employment discrimination case.

    The jury awarded $1.3 million in compensatory damages and $500,000 in punitive damages. The trial court granted JNOV in favor of the defendant on punitive damages, finding that no evidence supported a jury’s award. The Court of Appeal, in the unpublished part of its opinion, reversed the JNOV. For the most part, the court’s analysis is not particularly noteworthy. The court simply disagrees with the trial court’s conclusion that the plaintiff presented no substantial evidence that the defendant acted with “malice, oppression, or fraud,” the prerequisites for punitive damages under California law.

    But one small aspect of the court’s opinion caught my eye. The court acknowledges that plaintiffs must prove malice, oppression, or fraud by clear and convincing evidence, but the court then states, “Despite this more stringent burden of proof at the trial level, we nevertheless confine our review to determining whether the record contains evidence of circumstances warranting the imposition of punitive damages.” Maybe I’m misreading this, but it sounds as if the court believes that the clear and convincing evidence standard applies only at the trial court level and not on appeal. But a published California case expressly states that the clear and convincing evidence standard applies on appeal as well as in the trial court. (See Shade Foods, Inc. v. Innovative Products Sales & Marketing, Inc. (2000) 78 Cal.App.4th 847 [“since the jury’s findings were subject to a heightened burden of proof, [this court] must review the record . . . in light of that burden. In other words, [this court] must inquire whether the record contains ‘substantial evidence to support a determination by clear and convincing evidence’”].) Of course, Division Five is free to disagree with this opinion by their colleagues in Division One, but if they were going to disagree with a published opinion, they probably should have published that part of their analysis.

    As an interesting side note, the plaintiff in this case was represented by our fellow blogger Bruce Nye at Cal Biz Lit. Congratulations Bruce, for getting that punitive damages award reinstated.

  • Court of Appeal May Have Been Too Quick on the Trigger in Buell-Wilson Post-Opinion Order

    We’ve been following the twist and turns in Buell-Wilson v. Ford, in which the Court of Appeal reaffirmed a $55 million punitive damages award even after the US Supreme Court vacated their prior opinion affirming that same award.

    Last week we blogged about a rather harsh order from the court denying Ford’s petition for rehearing. The order said “Ford asserts that our opinion erroneously states that counsel conceded at oral argument that Ford failed to raise instructional error in the first appeal.” The court then proceeded to quote from the transcript of the oral argument to show that Ford’s counsel had in fact conceded that very point at oral argument. The court next took the rather unusual step of modifying its opinion to add this discussion, which seems to serve no other purpose than to embarrass Ford’s counsel, Gibson Dunn.

    A number of attorneys in our firm wondered why Gibson’s experienced appellate team would make such an easily refuted argument? Why would they contend they didn’t concede something at oral argument, when the portions of the transcript quoted by the court clearly show that they did in fact concede this point? Surely they must have requested a copy of the recording of the oral argument, and if they did, why would they claim they didn’t concede something when the transcript clearly shows they did?
    We figured there had to be more to the story, so we took a look at Ford’s petition for rehearing. As it turns out, there is indeed more to the story. As far as we can tell, Ford did not even make that argument that the court ascribes to it. Ford didn’t argue, “We never conceded at oral argument that we failed to raise instructional error in the prior appeal.” They argued, “We never conceded that our failure to raise the instructional error in the prior appeal amounted to a forfeiture.” That’s a big difference. The transcript excerpts quoted by the court don’t indicate that Ford’s counsel conceded a forfeiture; he only conceded that the issue wasn’t raised in the first appeal. But then he went on to say: “I think we fully preserved the issue fully by making our proposal [in the trial court] . . . now that there has been a vacating of the judgment, the issues are fresh before the court, we fully briefed them, they are important issues of public policy so we think it’s fully appropriate for this court to address the jury instruction issue . . .” (You don’t need to take our word for it – – you can view the rehearing petition here.)
    Perhaps the court simply misunderstood the distinction between (a) conceding that the issue wasn’t raised and (b) conceding that the failure to raise the issue amounted to a forfeiture. Admittedly it’s a somewhat subtle distinction buried among a lot of other issues on appeal. But the court should have given this issue a very careful look before modifying its opinion in a way that impugns the reputation of counsel. As the late Bernard Witkin observed, the criticism of an attorney in a published judicial opinion is a severe sanction. (See 1 Witkin, Cal. Procedure (4th ed. 1996) Attorneys, § 621, p. 732.)

  • Will the Scruggs Firm Face Punitive Damages for Bribery?

    The Daily Mississippian reports: ” Judge William Coleman ruled today that Scruggs Law Firm, along with other firms in the Scruggs Katrina Group (SKG), irreparably harmed the law firm Jones, Funderburg, Sessums, Peterson and Lee when members of the Scruggs firm tried to bribe presiding Judge Henry Lackey in the fee dispute case between the Jones firm and SKG. A trial is set for Nov. 12 in Oxford to decide how much the Jones firm is owed in attorney’s fees as well as possible punitive damages the bribe caused the Jones firm. . . . SKG signed a joint venture agreement outlining several different aspects of the partnership. The Jones firm felt they were owed 20 percent of $26.5 million. However, they received just more than $900,000 and in March 2007 sued the other SKG firms for more money. This is the suit in which Scruggs and others attempted to bribe Lackey. . . . Punitive damages could be awarded to the Jones firm, though they must prove how the bribe financially hurt them. ‘Any attorney for any client should be concerned about punitive damages,’ Mayo said. By March, Scruggs and four other co-conspirators pleaded guilty to the bribery attempt. So far no sentencing date has been set.”

  • California Supreme Court Denies Review in Gnesda v. UPS

    We previously blogged about this unpublished opinion in which the Court of Appeal vacated a sizable punitive damages award (originally $20 million but reduced to $3.5 million by the trial court) because the trial plaintiffs neglected to introduce evidence of the defendant’s financial condition at the time of trial. Today the California Supreme Court denied the plaintiff’s petition for review.

  • Holdgrafer v. Unocal: Plaintiffs File Petition for Review

    The plaintiffs in Holdgrafer v. Unocal filed a petition for review to the California Supreme Court. The petition raises the following two issues: “1. Whether a trial court’s determination to admit evidence of a defendant’s misconduct towards third parties because it is similar to its conduct towards the plaintiff’s is reviewed de novo by the appellate court, as the Court of Appeal held here, or for abuse of discretion, as the Fourth District of the Court of Appeal subsequently held in Buell-Wilson v. Ford Motor Co. (March 10, 2008) 160 Cal.App.4th 1107, 1130-1131? 2. Whether the federal due process requirement that, ‘upon request,’ juries must be instructed that punitive damage awards may not be used to directly punish harm to third parties (though that harm may be considered in determining the reprehensibility of the defendant’s conduct), requires reversal where the defendant’s proposed instruction is inaccurate and incomplete?”

    We have previously blogged about this opinion here. Disclosure: As we have mentioned before, our firm is counsel for the defendants in this case.

  • The Complex Litigator: New California-Centric Blog on Complex Litigation

    Los Angeles attorney H. Scott Leviant has launched a blog called The Complex Litigator, which he describes as “A California-centric collection of comments and procedures that makes complex litigation and class actions uniquely challenging.” Undoubtedly, the subject matter of the Complex Litigator will overlap with the subject of this blog, given that complex litigation often involves claims for punitive damages. We’re late to this party, since several other California bloggers have already taken note of Scott’s blog, but better late than never. Welcome, Scott!

    Hat Tip to Greg May at The California Blog of Appeal.

  • Plaintiffs’ Attorneys Win $218 Million Fee Award for Helping Obtain a Punitive Damages Verdict that Was Reversed on Appeal

    Law.com has this story today about a $218 million fee award to two plaintiffs’ lawyers for their work on a now defunct tobacco class action. If I’m reading this story correctly, the attorneys received these fees for laying the groundwork for the Engle class action litigation in Florida, which resulted in a whopping $145 billion verdict against tobacco manufacturers. The Florida Supreme Court threw out that award on appeal, but apparently the trial court has awarded fees to the plaintiffs’ attorneys out of a fund that the defendants deposited in lieu of an appeal bond.

    The trial court accepted the representation of plaintiffs’ counsel that they had worked an average of 77 hours a week on the case. Said the court: “These are reasonable and conservative hours.”

    $218 million for losing a case? I certainly don’t know the whole story behind this litigation, but that doesn’t seem quite right to me.

  • Bell Garden’s Halloween Shooting Nets Punitive Damages Award Against Police

    According to the Los Angeles Times, “Two members of a Bell Gardens family who said police beat them at a Halloween costume party in 2005 have been awarded a $4.5-million civil rights judgment, their attorneys said Monday. Gerardo Cazares, 30, and his father-in-law, Manuel Moreno, 46, had alleged that Bell Gardens officers who responded to a complaint of loud music at the party beat them without provocation, shot them with pepper spray and fired a beanbag gun at such close range that the older man was left with a permanent chest scar. . . . At the conclusion of a federal civil rights trial Friday, jurors ordered the Bell Gardens Police Department and five officers to pay the men $3.2 million in general damages and $1.3 million in punitive damages. . . The city insisted that police officers acted appropriately and that the two men attacked officers.
    Officers arrived to find numerous fights going on, the city contended. Cazares, who was dressed as the Grim Reaper, led a large group of partygoers toward Det. Michael Cox and tried to push him out of the party, city attorneys said. A violent struggle erupted between Cazares and Cox, and Moreno struck the detective in the head with a folding metal chair, city lawyers said. Several officers were injured, including Cox, who needed staples for his head wound, the city said. Officers eventually fired a beanbag from a shotgun to stop the fight, city lawyers argued.”

  • Parties in Bullock v. Philip Morris File Reply Briefs Supporting Petitions for Review

    For those of you following the ongoing saga of the $28 billion punitive damages award in Bullock v. Philip Morris (reduced to $28 million by the trial court, affirmed on appeal, later vacated by the Supreme Court and remanded for reconsideration, and reversed and remanded for a new trial by the Court of Appeal after reconsideration), you can view the latest California Supreme Court filings here:

    Philip Morris’s reply in support of its petition for review

    Bullock’s reply in support of her petition for review

  • U.S. Supreme Court Denies Cert. In McGee v. Tucoemas

    According to the Order List posted today, the Supreme Court has denied our petition for certiorari in McGee v. Tucoemas. The next significant punitive damages petition on the Supreme Court’s plate is Exxon v. Grefer, which the justices will consider at their April 18 conference.