According to Variety, famed director and actor Woody Allen has sued American Apparel, Inc. for compensatory and punitive damages: “The lawsuit complained of a billboard featuring a frame from ‘Annie Hall,’ a film that won Allen a best director Oscar. The image showed Allen dressed as a Hasidic Jew with a long beard and black hat and Yiddish text meaning ‘the holy rebbe.’ The words ‘American Apparel’ also were on the billboard. The billboard falsely implied that Allen sponsored, endorsed or was associated with American Apparel, said the lawsuit, which seeks at least $10 million in compensatory damages and unspecified punitive damages.”

Jacob Sullum at Reason has posted commentary on the recent New York Times article on punitive damages that we blogged about here. Sullum argues: “Last week The New York Times ran a front-page story by Adam Liptak that describes the dismay caused in foreign courts by the American concept of punitive damages. It’s not just that such awards are sometimes jaw-droppingly high; it’s also that they serve a purpose, punishment/retribution, that is usually said to be a function of the criminal justice system, where defendants enjoy stronger procedural safeguards than they do in civil courts. Punitive damages—which are not really damages at all, since compensation for injuries is not the goal—invite juries to pick numbers out of thin air, with little or no statutory guidance, as an expression of how reprehensible they think the defendant’s conduct was. And while the Supreme Court has said the Due Process Clause imposes some limits on the ratio of punitive to compensatory damages, it has not taken the next logical step of saying that when the goal is explicitly punishment rather than compensation, defendants should receive all the protections they would get in a criminal case, including a higher burden of proof for the accuser.”

In 1989, in Browning Ferris Industries v. Kelco Disposal, Inc., the Supreme Court held that the Excessive Fines Clause of the Eight Amendment does not apply to awards of punitive damages in cases between private parties. Today, the Court surprisingly overturned Browning-Ferris and held that punitive damages imposed by state courts are in fact governed by the Eighth Amendment. It remains to be seen how the overlay of Eighth Amendment jurisprudence will impact the ratio analysis set forth in State Farm v. Campbell and other cases; a colorable argument can be made that any awards exceeding compensatory damages are inherently excessive and therefore unconstitutional. Read the Court’s opinion here.

According to the New York Law Journal, a New York trial judge found that a lawsuit over bedbugs could not include a claim for punitive damages because the bugs were merely a nuisance. However, the court let go forward the negligence claims of two Maryland tourists for bites they sustained during a two-night stay at the theater district’s Milford Plaza. In holding that plaintiffs could not seek punitive damages, the court had to distinguish a Judge Posner 7th Circuit opinion which had upheld a significant punitive damage award for bedbugs.

The New Jersey Supreme Court decided today in Tarr v. Bob Ciasulli’s Mack Auto Mall, Inc. that the defendant was entitled to a new trial because the plaintiff’s attorney improperly invited the jury to award punitive damages on a general deterrence theory, to “send a message to deter this particular defendant and others.” The court held that, under New Jersey’s Punitive Damages Act, a jury may aim only for deterrence of the specific defendant.

The court also held that jurors deciding punitive damages can properly consider the defendant’s financial condition both at the time of the wrongdoing and at the time of trial. In so holding, the court rejected the defendant’s argument that it cannot be subjected to punitive damages because it is now a defunct organization with no assets. Based on this holding, the plaintiff’s attorney claimed victory and predicted he would obtain a larger award of punitive damages than the $85,000 he obtained in the first trial, according to this article on Law.com.

The New Jersey Supreme Court’s opinion is contrary to California law on both issues. In California, numerous opinions have recognized the legitimacy of a general deterrence theory. (See, e.g., Ferguson v. Lieff, Cabraser, Heimann & Bernstein (2003) 30 Cal.4th 1037 [“Punitive damages by definition are not intended to compensate the injured party, but rather to punish the tortfeasor whose wrongful action was intentional or malicious, and to deter him and others from similar extreme conduct”].) And California courts have repeatedly held that juries can consider the defendant’s financial condition only as of the time of trial. (See, e.g., Kelly v. Haag (2006) 145 Cal.App.4th 910, 915 [“A punitive damages award is based on the defendant’s financial condition at the time of trial”].)