California Punitives by Horvitz & Levy

  • Trial Court Dismisses Punitive Damages Award Against Dole in Case Involving Nicaraguan Farm Workers

    Dole Food Company announced today that Los Angeles Superior Court Judge Victoria Chaney has dismissed the $2.5 million in punitive damages that a jury awarded against Dole last November.

    In Tellez v. Dole, a group of Nicaraguan farm works claimed that Dole acted with malice against them in the use of the agricultural chemical DBCP on contracted banana farms in Nicaragua nearly 30 years ago. The punitive damages claim raised some interesting constitutional issues, since the plaintiffs were foreign nationals seeking punitive damages under California law for acts that occurred in a foreign country. Dole complained that the punitive damages ran afoul of the U.S. Supreme Court’s holding in BMW v. Gore that punitive damages cannot be based on acts that were lawful where they occurred. Apparently, Judge Chaney agreed.

  • Is This the First Time the Oregon Supreme Court Has Reduced a Punitive Damages Award as Unconstitutionally Excessive?

    As far as I can tell, the Oregon Supreme Court’s decision yesterday in Goddard v. Farmers Insurance may be the first time the Oregon Supreme Court has ever reduced a punitive damages award as unconstitutionally excessive in the 12 years since the U.S. Supreme Court established the due process constraints on punitive damages in BMW v. Gore. This is quite a surprising turn of events from the court that recently affirmed a $79.5 million punitive damages award after a reversal by the U.S. Supreme Court.

    In addition to Williams, here are some other cases in which the Oregon high court has rejected excessiveness arguments:

    Parrott v. Carr Chevrolet, Inc., 17 P.3d 473, 487-90 (Or. 2001) (applying BMW v. Gore, but approving an 87:1 ratio in light of the defendant’s “particularly egregious acts”);

    Lakin v. Senco Prods., Inc., 987 P.2d 463, 476 (Or. 1999) (affirming $4 million punitive damage award in product liability action)

    Oberg v. Honda Motor Co., Ltd., 888 P.2d 8, 14 (Or. 1995) (affirming punitive damages award after U.S. Supreme Court had reversed and remanded for excessiveness review).

    Is anyone aware of a case, prior to Goddard, in which the Oregon Supreme Court found a punitive damages award to be unconstitutionally excessive?

  • Oregon Supreme Court Holds Punitive Damages Award Excessive

    The Oregon Supreme Court held yesterday in Goddard v. Farmers Insurance Co. that a $20.7 million punitive damage award against Farmers Insurance was excessive because it was 24 times the compensatory award. The Supreme Court found that a 4 to 1 ratio was the constitutional limit.

  • More Punitive Damages Against Wyeth

    We previously blogged here about a Nevada jury’s punitive damage award against Wyeth arising out of one of its drugs. Wyeth has now been hit with a $27 million punitive damage award in Arkansas arising from risks allegedly associated with the same hormone replacement drugs at issue in the Nevada case. The compensatory award was $2.75 million, which seems to put this case on the very high end of the scale of the permitted ratio. Wyeth says it will appeal.

  • Dan Markel’s Article on Retributive Damages

    Professor Dan Markel has posted an abstract of his Retributive Damages article on PrawfsBlawg. Based on the abstract, the article promises to be interesting, especially the part in which he “makes sense of the Supreme Court’s recent and somewhat puzzling holding in Philip Morris USA v. Williams.” In a previous post about Williams, we offered our own attempt to make sense of the Supreme Court’s holding.

  • Punitive Damages Based on Litigation Conduct

    The recent decision in Holdgrafer v. Unocal primarily addressed the impropriety of using the defendant’s dissimilar acts towards nonparties as the basis for punitive damages. But the decision also contained an interesting footnote regarding another type of evidence that cannot be used to support a punitive award: evidence of the defendant’s litigation conduct. In footnote 17 on page 30 of the opinion, the court states that plaintiff’s counsel improperly urged the jury to punish Unocal for its assertion of a statute of limitations defense. The court’s statement is significant because, in our experience, plaintiffs often ask juries to punish defendants not only for their tortious conduct, but also for having the nerve to defend themselves. This opinion rejects that sort of insidious attack on a defendant’s right to have his day in court.

  • Commentary on Holdgrafer v. Unocal Opinion

    The Cal Biz Lit Blog has a post analyzing our recent win in Holdgrafer v. Unocal, summarizing the central holding as follows: “State Farm held that dissimilar incidents were not admissible to prove the amount of punitive damages. The California court held that dissimilar incidents are inadmissible to prove the entitlement to punitive damages.” The Metropolitan News makes the same point: “Reversing a $5 million dollar punitive damage award against the Unocal Corporation, Div. Six held that the due process proscription against the introduction of ‘dissimilar acts’ in punitive damages cases must apply to both the jury’s predicate determination of whether a defendant is liable for punitive damages as well as its assessment of the amount of damages to be awarded.”

    I have one quibble with the Cal Biz Lit Law post; it suggests that the fact that the trial court reduced the punitive damage award from $10,000,000.76 to $5,000,000 shows that the San Luis Obisbo courts are “conservative.” Considering the Court of Appeal’s conclusion that the entire award was invalid for failure to comport with due process, I am not sure that the trial court’s reduction by half constitutes a “conservative” result. On the other hand, as I have blogged about previously, considering that two of the most “conservative” justices on the United States Supreme Court do not believe that there is any due process limitation on punitive damages, perhaps it is “conservative” to affirm high punitive damage awards.

    The local San Luis Obispo paper describes the opinion here.

  • Sare v. Rosa—Unpublished Opinion Reverses Punitive Damages Obtained in Default Judgment

    This unpublished opinion serves as a reminder of the rule that a plaintiff cannot recover punitive damages in a default judgment unless the plaintiff first serves the defendant with a notice specifying the amount of punitive damages sought. Here, the plaintiff obtained a punitive damages award by default but the Third Appellate District reversed because the plaintiff had not served the required notice.

    The opinion contains a rather pointed concurring opinion by Justice Robie: “I completely concur in the opinion of my colleagues and write separately only to point out that the conduct of the trial judge in granting the default judgment is inexcusable. The appellate courts should not be burdened by appeals from default judgments exceeding the demand of the complaint. The law is long settled and every trial judge in the state should be aware of it.”

  • Holdgrafer v. Unocal—California Court of Appeal Reverses Punitive Damages on Due Process Grounds

    Division Six of the Second District Court of Appeal in Ventura, California has just issued its opinion in Holdgrafer v. Unocal. [Our firm is counsel for defendant Unocal.] Based on the US Supreme Court decisions in Philip Morris v. Williams and State Farm v. Campbell, the court found the $5 million punitive damages award was tainted by improperly admitted evidence. We’ll offer further thoughts once we’ve fully digested the decision but, in the meantime, here’s language from the opinion’s s introduction:

    In deciding whether a punitive damages award violates the constitutional prohibition of arbitrary or grossly excessive punishment, the most important factor to be considered is the reprehensibility of the defendant’s conduct.[1] The United States Supreme Court has instructed courts undertaking this inquiry that “[a] defendant’s dissimilar acts, independent from the acts upon which liability was premised, may not serve as the basis for punitive damages.”[2] On de novo review, we conclude that evidence of two massive oil spills is too dissimilar to be considered in assessing defendant’s reprehensibility in causing and responding to the underground contamination of plaintiffs’ commercial property. We further conclude that in order to comply with due process, the proscription of “dissimilar acts” evidence in punitive damages cases must apply to boththe jury’s predicate determination whether a defendant is liable for punitive damages (Civ. Code, § 3294, subd. (a)), as well as to its subsequent evaluation of a defendant’sreprehensibility in assessing the amount of punitive damages to be awarded.
    …
    We agree with Unocal that the punitive damages award does not comport with due process because the jury was effectively invited to punish Unocal for injuring persons or entities that are not parties to this litigation, for conduct that had nothing to do with that which harmed the plaintiffs in this case. Because Unocal’s dissimilar conduct was admitted not only for the purpose of evaluating the degree of Unocal’s reprehensibility in setting the amount of punitive damages, but also to prove that Unocal was guilty of malice, fraud or oppression, the jury’s findings of liability for punitive damages and the amount of the award are both fatally undermined. Accordingly, although we affirm the award of compensatory damages, we reverse and remand for anew trial on punitive damages liability and the amount of such damages to be awarded, if any.

    Update (3/5/2008): Here is media coverage of the opinion.

  • Mark Geragos, Michael Jackson, and Punitive Damages

    Well-known lawyer Mark Geragos was just awarded $2 million in compensatory damages and $16 million in punitive damages in a lawsuit against the people who supposedly illegally taped his conversations with Michael Jackson the day Jackson surrendered to face child molestation charges.

    Update (3/4/2008): The punitive damages were awarded after a bench trial and defendants say they will appeal.