California Punitives by Horvitz & Levy

  • Nevada Judge Cuts $99 Million Punitive Damages Award Against Wyeth

    According to this Forbes article, a Nevada trial court has reduced a jury’s $99 million punitive damages award against Wyeth down to $35 million. The court also reduced the compensatory damages from $35 million to $23 million. The resulting $58 million judgment is still the largest personal injury award in Nevada history, according to the article.

    The case involves Wyeth’s hormone replacement drugs, Premarin and Prempro. The plaintiffs claim they developed breast cancer as a result of those drugs.

  • Texas Supreme Court Holds That Punitive Damages Against Employer Are Insurable

    On February 15, the Texas Supreme Court issued an opinion deciding the following certified question from the Fifth Circuit: “Does Texas public policy prohibit a liability insurance provider from indemnifying an award for punitive damages imposed on its insured because of gross negligence?” The court answered that question in the negative. That puts Texas law at odds with California law, which provides that punitive damages are not insurable.

  • Can the Red Cross, FDIC, or Federal Credit Unions Be Sued for Punitive Damages?

    We previously blogged here about our firm’s pending cert petition in McGee v. Tucoemas Federal Credit Union. My partner Rob Wright, who is counsel of record for the credit union, explains the important issues raised by the petition:

    Congress has given most federal instrumentalities, including federal credit unions, authority to “sue and be sued.” In Tucoemas Federal Credit Union v. McGee, we have petitioned for a writ of certiorari on the issue of whether a federal credit union’s authority to sue and be sued includes being sued for punitive damages. The appellate court in this case was confronted with two lines of seemingly conflicting authority. One line includes decisions by the Sixth, Eighth, Ninth, and Eleventh Circuits of the United States Court of Appeals holding that a federal instrumentality’s authority to sue and be sued does not include being sued for punitive damages. Typical of these decisions is Matter of Sparkman, 703 F.2d 1097 (9th Cir. 1983), which relied on “the long-established principle that the United States, its agencies, and instrumentalities cannot be held liable for punitive damages unless there is express statutory authorization for such liability.” Id. at 1100. As a result, the Ninth Circuit held that while the “sue and be sued” clause in the enabling legislation for the federal instrumentality at issue in that case (a production credit association) “waives sovereign immunity from ordinary lawsuits, it does not subject production credit associations to liability for punitive damages. Such immunity must be waived expressly.” Id.

    The other line of authority consists of decisions by the United States Supreme Court holding that “sue and be sued” clauses are construed liberally. Typical of these decisions is FDIC v. Meyer, 510 U.S. 471 (1994), which holds that courts “‘liberally construe the sue-and-be-sued clause’” and will presume that a federal instrumentality’s liability “‘is the same as that of any other business.’” Id. at 481 (original emphasis). However, none of the decisions in this second line of authority address punitive damage claims.

    In this case, the California Court of Appeal held that the line of United States Supreme Court decisions liberally construing the sue and be sued clause impliedly overrule the line of Court of Appeals decisions construing the clause to exclude punitive damage claims. As a result, the California Court of Appeal affirmed the punitive damages award against the federal credit union.

    Because the issue here could affect not just federal credit unions but other federal instrumentalities with sue and be sued clauses as diverse as the American Red Cross and the Federal Deposit Insurance Corporation, this petition may be worth watching.

  • Cornell Previews Exxon Valdez Oral Argument

    Cornell University’s Legal Information Institute has prepared this excellent summary and preview of the Exxon Valdez case scheduled to be argued in the U.S. Supreme Court on February 27, 2008. The preview concludes with this assessment: “The first question for the Court is when a shipowner can be held liable for punitive damages for a ship master’s tort. In answering this, the Court will resolve disagreement among the circuits. However, the question has a case-specific complication: Exxon’s possible independent liability. The second question—whether CWA displaces punitive damages under maritime law—may have little significance beyond this case. The Oil Pollution Act of 1990, not the CWA, is now the controlling statute in oil spill cases. Nevertheless, resolving the second question in Exxon’s favor may enable the court to avoid sending the case back for further factfinding if Exxon’s independent liability proves pivotal to judgment on Question 1.”

  • President Bush Supports Proposal to Cap Punitive Damages in Medical Malpractice Actions

    According to this Associated Press article issued today, President Bush is asking Congress to pass legislation aimed at reducing Medicare’s drain on the general treasury. The article says Bush’s proposal would impose limits on non-economic and punitive damages awarded in medical malpractice cases.

  • U.S. Supreme Court Expands Oral Argument Time in Exxon Valdez Punitive Damages Case

    The Supreme Court issued an order today expanding the time allowed for oral argument in the Exxon Valdez case. Instead of the usual 30 minutes per side, the court has alloted 45 minutes per side for oral argument. The Court rejected the state of Alaska’s request to participate in oral argument.

    Hat tip to SCOTUSblog.

  • Exxon Valdez Plaintiffs Hope DVD Will Influence Supreme Court to Affirm $2.5 Billion Punitive Damages Award

    Marcia Coyle of the National Law Journal has an interesting article about a DVD filed in the Supreme Court by the plaintiffs in the Exxon Valdez case. The DVD contains audio of Captain Hazelwood’s distress call to the Coast Guard and video of the environmental impact of the spill. The plaintiffs submitted the DVD without objection from Exxon Mobil.

    The article mentions that the plaintiffs sought permission to file an electronic brief in the Supreme Court and the clerk’s office agreed to circulate the e-brief to the court, but the plaintiffs “decided not to push it.” I’m not sure why the plaintiffs thought an e-brief would be “pushing it.” Our firm regularly files e-briefs, and although we have never filed one in the U.S. Supreme Court, we have heard consistently from judges and court staff in other courts that they find e-briefs very useful and they would like to receive them more often. We have never had any court reject a request to file an ebrief.

  • “Was the Oregon Supreme Court’s Opinion Heroic, Dangerously Defiant, or Simply Formalistic?”

    Anthony Sebok has an article on FindLaw which analyzes the Oregon Supreme Court’s recent opinion in Philip Morris v. Williams. He looks to a number of justifications that have been given to defend the Oregon Supreme Court’s opinion. Ultimately, he opines that “the Oregon Supreme Court could have read the [sic] Philip Morris’s cert petition, or Breyer’s conclusion, or the 2002 appellate decision for their substance, as opposed as to a counterintuitive formal or literal meaning. And had it done so, its interpretation would have been much more persuasive. But a substantive interpretation would have meant giving a victory to a hated tobacco-company defendant–one that had forced the United States Supreme Court to twice intervene in Oregon’s own local search for justice on behalf of an Oregonian whom a jury had found was defrauded by the company and killed by its product.” His bottom line is that “I would like the United States Supreme Court to take some time out of its busy schedule to vacate the recent Oregon decision, and to remand with instructions that the jury verdict be retried with instructions that do not violate the Constitution. That would be a fitting response to a state court that seems to think that winning is the only thing that matters.”

  • A $500,000 Punitive Damage Award in Canada is Considered to Be Extremely High and Newsworthy

    The Supreme Court of Canada is about to hear argument in an appeal from the lower appellate court’s reversal of a $500,000 punitive damage award in a wrongful termination case. That $500,000 award is apparently the highest punitive damage award ever awarded in an employment case in Canada. Perhaps we could learn something from our neighbor to the north.

    UPDATE (by Curt Cutting on 2/14/08 at 9:50 pm): A few years ago, that award would have amounted to less than $350,000 in U.S. dollars, but today the exchange rate is roughly even. God help us if the exchange rate ever gets bad enough to bring this award into the realm of the mega awards we see in California.

  • Changing Views on Punitive Damages in Europe

    Historically, European countries did not permit the award of punitive damages. A new article by John Gotanda, Charting Developments Concerning Punitive Damages: Is The Tide Changing?, suggests that change is in the works.

    Here is an abstract of the article which can be found in the Columbia Journal of Transnational Law:

    This essay discusses a number of developments outside of the United States concerning punitive damages, which may ultimately signal a change in the way other countries view American awards of such damages.

    To date, courts in many countries have refused to recognize and enforce American punitive damages awards on the ground that they violate the host country’s public policy. In most civil law countries, such as France and Germany, penal damages can only be ordered in criminal proceedings; a civil award of such damages has been viewed as contrary to ordre public. In common law countries, while punitive damages generally may be awarded in civil suits, there is no agreement on the circumstances warranting punitive damages, and courts differ on the appropriate amount of such an award.

    While traditionally American awards of punitive damages have been difficult to enforce abroad, this practice may be about to change. Recently developments in France, Germany and the European Union, as well as decisions in Australia, Canada and Spain point toward greater receptivity to punitive damages and enforcement of foreign awards of these damages. In France, proposed revisions to the French Civil Code call for awarding punitive damages in certain cases. In Germany, a study by a prominent scholar finds that German courts are beginning to award penal damages in civil actions. In the European Union, a European Commission Green Paper raises the possibility of allowing the doubling of damages in certain antitrust cases. In Australia, a recent decision by the Supreme Court of South Australia opines that Australian courts would enforce large punitive damages awards ordered by American courts. Moreover, in Canada and Spain, appellate courts affirm decisions to enforce American judgments that included punitive damages. While these developments do not point toward clear sailing for American punitive damages abroad, when viewed together they may foreshadow a change in the wind that may ultimately lead to greater enforcement of these damages.