California Punitives by Horvitz & Levy

  • 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.

  • Michael Allen Article About the Significance of Philip Morris v. Williams

    Michael P. Allen, a professor at Stetson University College of Law, has written an article entitled “Of Remedy, Juries, and State Regulation of Punitive Damages: The Significance of Philip Morris v. Williams.” The article has been available on SSRN for a few months, but it just became available on Westlaw. A few things about the article caught my eye. First, Allen views the Williams decision as a further tightening of the ratio analysis that the Court adopted in BMW v. Gore and refined in State Farm v. Campbell:

    I suggest that Philip Morris is another step in the Court’s campaign to restrict the device to what it perceives to be its historical roots. Specifically, the Court in Philip Morris more explicitly adopts a one-on-one tort model as the constitutionally favored view of the tort system, at least with respect to punitive damages.

    Compare Allen’s view to that of Anthony Sebok, who draws the opposite conclusion from Williams in his Charleston Law Review article entitled “After Philip Morris v. Williams: What is Left of the Single Digit Ratio?“

    Allen also makes an observation about how the Court’s punitive damages jurisprudence has divided the conservative justices, and how Williams offers some insight as to how Chief Justice Roberts and Justice Alito will come down on that split:

    [T]he federal constitutional regulation of punitive damage awards, the overwhelming number of which are rendered under state law, has always been an intriguing battleground on which so-called “conservative” justices needed to choose between their purported instinct to protect business and commercial interests on the one hand and the protection of states from federal “interference” on the other. One saw this perceived conservative division at play in earlier punitive damages cases in which Justices O’Connor and Kennedy consistently voted to limit state punitive damage awards through, among other things, substantive due process principles. In contrast, Justices Scalia and Thomas consistently dissented in those cases, arguing principally that the Constitution provides no warrant for federal intervention concerning punitive damage awards.

    In Philip Morris we got at least a preliminary indication of where the new Chief Justice and Justice Alito come down on this “conservative split.” Perhaps somewhat surprisingly, both of them joined Justice Breyer’s majority opinion reaffirming and extending the Supreme Court’s precedents imposing federal constitutional limitations on state punitive damage awards. And they did so despite the opportunity to join a dissent based at least in part on a commitment to state-sovereignty principles.

    My co-blogger Jeremy Rosen has touched on this same issue in his posts about the role of conservative judges in punitive damages litigation and the possible impact of the presidential election on the Court’s decisions in this area.

  • USAA Responds to Blog Posts About Punitive Damages Award

    Apparently, a lot of folks were upset after reading media reports about a $3.5 million punitive damages verdict against insurer USAA for unreasonably denying coverage to a Marine stationed in Iraq. So upset that they posted over 90 comments on a blog. In a rather unusual move, USAA has responded to those blog posts with a post of its own. The post defends USAA’s conduct in the case and expresses confidence that the verdict will be overturned on appeal.

  • Sacramento Federal Jury Awards $4.1 Million in Punitive Damages for Sexual Assault

    According to the Sacramento Bee, “A federal jury deliberated 30 minutes Thursday, then awarded a woman more than $4.1 million in punitive damages after finding that her former employer acted with ‘malice, oppression or with reckless indifference’ in failing to protect her from aggravated sexual assault by a state worker. The jury of five women and three men awarded Sharon Paterson $827,500 in general damages three weeks ago against Inter-Con Security Systems Inc., a private firm that contracts with the state Department of General Services for guards at state facilities in Sacramento. . . . In a hallway interview, Inter-Con trial attorney Matthew Ruggles pointed out Thursday’s award was made under that part of the federal civil code dealing with workplace discrimination and hostility, and it caps punitive damages at $300,000. ‘We don’t think punitive damages should have been awarded at all, but it’s kind of academic,’ Ruggles said. Paterson attorney Lawrence King said he will oppose a motion to reduce the award on the ground that U.S. District Judge Morrison C. England Jr. erred in not detailing for the jury the elements of punitive damages under comparable state law, which has no cap. As to Thursday’s award, King said, ‘I’m gratified the jury understood that, to get the attention of a company like Inter-Con, the verdict must be substantial, so something like this won’t happen again.’ . . . ‘It didn’t seem like they really took sexual harassment seriously, and there was nothing we saw to show that things changed’ after Paterson’s lawsuit was filed in 2005, one juror said.”

  • Arpin v. United States: Judge Posner Applies Due Process Analysis from Punitive Damages Cases to Non-Economic Damages

    Judge Posner issued an opinion agreeing that the ratio jurisprudence has applications beyond punitive damages. In a case involving excessive compensatory damages, he suggests using a ratio between loss of consortium damages and the other damages awarded to the plaintiff. He also suggests that the ratio should be calibrated by canvassing other comparable awards:

    “Courts may be able to derive guidance for calculating damages for loss of consortium from the approach that the Supreme Court has taken in recent years to the related question of assessing the constitutionality of punitive damages. The Court has ruled that such damages are presumptively limited to a single-digits multiple of the compensatory damages, and perhaps to no more than four times those damages. State Farm Mutual Automobile Ins. Co. v. Campbell, 538 U.S. 408, 424-25 (2003); see, e.g., International Union of Operating Engineers, Local 150 v. Lowe Excavating Co., 870 N.E.2d 303, 320-22 (Ill.2006). The first step in taking a ratio approach to calculating damages for loss of consortium would be to examine the average ratio in wrongful-death cases in which the award of such damages was upheld on appeal. The next step would be to consider any special factors that might warrant a departure from the average in the case at hand. Suppose the average ratio is 1:5—that in the average case, the damages awarded for loss of consortium are 20 percent of the damages awarded to compensate for the other losses resulting from the victim’s death. The amount might then be adjusted upward or downward on the basis of the number of the decedent’s children, whether they were minors or adults, and the closeness of the relationship between the decedent and his spouse and children. In the present case the first and third factors would favor an upward adjustment, and the second a downward adjustment because all of Arpin’s children were adults when he died.
    We suspect that such an analysis would lead to the conclusion that the award in this case was excessive, cf. Brown v. Arco Petroleum Products Co., 552 N.E.2d 1003, 1010 (Ill.App.1990); Bart v. Union Oil Co., 540 N.E.2d 770, 773 (Ill.App.1989), but it is not our place to undertake the analysis. It is a task for the trial judge in the first instance, though we cannot sustain the award of damages for loss of consortium on the meager analysis in the judge’s opinion; it does not satisfy the requirements of Rule 52(a). We have suggested (without meaning to prescribe) an approach that would enable him to satisfy them.”

    It will be interesting to see if this analysis works in California and other jurisdictions. There is certainly support for the argument in United States Supreme Court cases and California cases. (Cf. State Farm Mut. Auto. Ins. Co. v. Campbell (2003) 538 U.S. 408, 426 [123 S. Ct. 1513, 155 L.Ed.2d 585] [emotional distress damages include a punitive component]; Simon v. San Paolo U.S. Holding Co., Inc. (2005) 35 Cal.4th 1159, 1189 [same]; Gober v. Ralphs Grocery Co. (2006) 137 Cal.App.4th 204, 222-223 [same].) One case, though, seems to have rejected such an approach. (See Westphal v. Wal-Mart Stores, Inc. (1998) 68 Cal.App.4th 1071, 1080-1083 [sanctioning appellant for bringing a frivolous appeal by arguing that a noneconomic damage award was excessive in light of the modest amount of economic damages awarded].)