The Legal Pad reports on a recent recommendation made by Judge Tashima of the Ninth Circuit that famed plaintiffs’ lawyers Tom Girardi and Walter Lack should be sanctioned roughly $400,000 for filing a frivolous appeal.
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New Jersey Supreme Court Rejects “General Deterrence” Theory of Punitive Damages
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”].)
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Cal Chamber Posts Video Clips from Hearing on Bill to Cap Punitive Damages
The California Chamber of Commerce has posted a video on its website with clips from the hearing on SB 423, which would have imposed a cap on punitive damages in California. The bill was rejected by the judiciary committee of the California State Senate, as we reported in our previous coverage of the bill. Yes, this is somewhat old news, but hey, it isn’t often that we can link to a video about punitive damages.
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Charleston Law Review Article on Punitive Damages Jury Instructions
In September 2007, the Charleston School of Law held a symposium on punitive damages entitled “Punitive Damages, Due Process, and Deterrence.”
One of the papers from that conference, published in the Spring 2008 edition of the Charleston Law Review, has just become available on Westlaw. (We previously blogged about another paper from that conference, available on SSRN.)
The paper is entitled “Clinging to Federalism: How Reluctance to Amend State Law-Based Punitive Damages Procedures Impedes Due Process,” authored by Anthony J. Franze, Counsel with Arnold & Porter’s DC office. The citation is 2 Charleston L. Rev. 297. Here is the introduction, with the footnotes omitted:
Over a decade ago, when a majority of the Supreme Court first recognized substantive due process limits on punitive damages, Justice Scalia lamented that “[t]he Constitution provides no warrant for federalizing yet another aspect of our Nation’s legal culture.” Justice Ginsburg similarly echoed that the Court “unwisely venture[d] into territory traditionally within the States’ domain.” Those sentiments, while not carrying the day, have not died. From judicial complaints that the tort process has been improperly federalized, to academics’ arguments that the Supreme Court is “serving as a punitive damages puppeteer who interferes with the ability of the states to constrain corporate wrongdoing,” criticism of the so-called federalization of punitive damages lingers. While I disagree with these views on a number of grounds, in this short essay I focus on a practical concern: the extent to which clinging to federalism has impeded needed procedural reform at the trial level. In particular, I focus on model jury instructions. Despite calls for reform, the punitive damages model instructions relied on by litigants and courts across the country continue to reflect state law standards notwithstanding that, more often than not, those standards ignore or facially conflict with the Supreme Court’s federal constitutional benchmarks. Though there may be any number of reasons for the slow pace of legislative and instructional reform, this essay argues that it is time to cast aside any federalism-based resistance to conducting the needed overhaul of model punitive damages instructions. To this end, I provide three reasons why I believe the time for instructional reform is now.
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“Foreign Courts Wary of U.S. Punitive Damages”
Adam Liptak of the New York Times has a story today about the attitudes of other Western nations towards U.S. punitive damages awards. The story discusses a ruling by the Italian Supreme Court refusing to enforce a $1 million judgment issued by Alabama’s state courts against an Italian helmet manufacturer: “The court said that a peculiarity of American law — punitive damages — was so offensive to Italian notions of justice that it would not enforce the Alabama judgment.” The court refused to enforce any portion of the judgment because it could not tell how much of the judgment was attributable to punitive damages and how much was intended to function as compensation. (I believe this is because, in Alabama, punitive damages are the only form of damages recoverable in wrongful death actions.)
The story also mentions, however, that punitive damages have made some inroads in certain jurisdictions, such as Spain and Canada. We have previously blogged about the availability of punitive damages in Canada and the changing views on punitive damages in Europe.
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Supreme Court to Rule on Chemtall Cert. Petition on March 28
The cert. petition in Chemtall v. Stern, which we have discussed in prior posts, is on the Supreme Court’s conference list for March 28, according to the Supreme Court’s online docket.
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Another Celebrity Punitive Damages Award on Its Way? Kid Rock Is Sued for Exemplary Damages
We recently reminded readers about the $25 million punitive damages award against OJ Simpson in the civil action (Rufo v. Simpson) (registration required) in which OJ was found liable for wrongful death. According to an Access Hollywood article about Kid Rock (don’t ask how I came to be reading Access Hollywood), the celebrity otherwise known as Robert Ritchie allegedly got rough back in March 2006 with some autograph seeking fans outside Teddy’s Nightclub at the Hollywood Roosevelt hotel. The plaintiffs have sued the nightclub and the hotel on premises liability grounds as well, and are reportedly seeking over $15 million in damages.
Who says we don’t bring you hard news in this blog?
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Philip Morris v Williams—It’s Baaaaaaack (Yet Another Punitive Damages Cert Petition to SCOTUS)
When the Oregon Supreme Court thumbed its nose at the directives from the US Supremes in Philip Morris v. Williams, affirming a punitive damages award (one that’s 97 times the amount of the compensatory award) despite the trial court’s failure to instruct the jury that it should not punish for harm to nonparties, many of us were a bit surprised. (We’ve since noticed that the Oregon Supreme Court has something of a pattern going here.)
Philip Morris is now knocking on the Supreme Court’s door again, this time with a cert petition that offers up these issues:
QUESTIONS PRESENTED
When this case was last before it, this Court reversed the decision of the Oregon Supreme Court and held that due process precludes a jury from imposing punitive damages to punish for alleged injuries to persons other than the plaintiff. Philip Morris USA v. Williams, 127 S. Ct. 1057, 1065 (2007). This Court then remanded the case to the Oregon Supreme Court with directions to “apply the [constitutional] standard we have set forth.” Ibid. On remand, however, the Oregon Supreme Court refused to follow this Court’s directive. Instead, the Oregon court “adhered to” the judgment that this Court had vacated because it found that Philip Morris had procedurally defaulted under state law and thereby forfeited its claim of federal constitutional error. App., infra, 22a.
The questions presented—the second of which was accepted for review but not reached when this case was last before the Court—are:
1. 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.
2. Whether a punitive damages award that is 97 times the compensatory damages may be upheld on the ground that the reprehensibility of a defendant’s conduct can “override” the constitutional requirement that punitive damages be reasonably related to the plaintiff’s harm.
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Holdgrafer v Unocal—Plaintiffs’ Petition for Rehearing Pending on Various Punitive Damages Issues
We’ve previously discussed the recent Holdgrafer opinion reversing a $5 million punitive damages award because it was tainted by improperly admitted evidence of defendant’s dissimilar conduct toward nonparties. Plaintiffs have filed a petition for rehearing taking scattershot aim at the appellate decision. Plaintiffs argue, among other things, that the opinion “errs in holding that a de novo standard of review applies to the trial court’s determination of similarity of conduct,” and that the Court of Appeal’s “legal standards for determining whether conduct is ‘similar’ are too narrow.”
The Court of Appeal has 30 days from the date of the opinion (i.e., until April 3) to rule on the rehearing petition. You can follow the progress on the court’s online docket.
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Punitive Damages Oral Arguments at the United States Supreme Court
Eugene Volokh has an interesting post on the different lawyers who have argued punitive damages cases before the United States Supreme Court.