California Punitives by Horvitz & Levy

  • Court of Appeal affirms directed verdict on punitive damages (Shenoi v. Maya)

    This unpublished opinion affirms the grant of nonsuit on a plaintiff’s claim for punitive damages in a defamation case.  The opinion contains a paragraph explaining the differences between the definitions of “malice” in punitive damages law versus defamation law:

    With respect to “malice,” Shenoi has confused constitutional malice, or
    New York Times malice – the malice a public figure plaintiff must plead and prove to
    establish liability for defamation – with the malice required for punitive damages. New
    York Times malice is actual falsity or reckless disregard of truth or falsity (New York
    Times Co. v. Sullivan (1964) 376 U.S. 254, 279-280.) He has also confused punitive
    damages malice with the malice necessary to defeat the conditional privilege of Civil
    Code section 47, which is ill-will or lack of reasonable grounds for belief in the truth of
    the publication. (See Sanborn v. Chronicle Publishing Co. (1976) 18 Cal.3d 406, 413.)

    The opinion goes on to explain that the plaintiff identified no clear and convincing evidence to meet the definition of malice for purposes of punitive damages.

    Disclosure: Horvitz & Levy represents the defendants in this matter.

  • Texas jury awards $1.2 billion in revenge porn case

    BBC news reports that a jury in Texas has awarded $200 million in compensatory damages and $1 billion in punitive damages to a woman who sued her ex-boyfriend for posting intimate photos of her online.  As the story notes, the award is uncollectible.  The defendant is not a billionaire.  But awards like this, and the press coverage of them, benefits plaintiffs and their attorneys in other punitive damages cases by normalizing verdicts of this size.

  • California Court of Appeal reverses nonsuit of punitive damages claim (Air Combat v. City of Fullerton)

    This unpublished opinion reverses a trial court’s ruling that a plaintiff failed to present sufficient evidence to warrant a jury instruction on punitive damages.

    A tenant at the municipal airport in Fullerton got into a dispute with the city over the extension of its lease.  The tenant vacated the premises and, in the process, removed not only furniture but also cabinetry, windows, walls, sliding glass doors, a staircase, and plumbing fixtures. The city sued for conversion and sought punitive damages, but the trial court refused to instruct the jury on the issue of punitive damages, concluding that the city had failed to present any evidence of malice.

    The Court of Appeal (Fourth District, Division Three) reversed, holding that even without any direct evidence of malice, a jury could infer malice from the tenant’s conduct.  The court acknowledged that a jury might conclude that the tenant’s actions were the result of mere negligence or an honest mistake about the lease’s requirement to return the premises to their pre-lease condition.  But the court said a jury might also infer that the tenant intentionally removed or destroyed the property with malice in retaliation for the City’s refusal to extend the lease.

    The court’s analysis is in tension with published cases holding that punitive damages, because they are subject to the clear and convincing standard of proof, require evidence that is inconsistent with the possibility of mere negligence or honest mistake.  See, for example, Food Pro v. Farmers Insurance Exchange.  This opinion does not mention or attempt to distinguish that line of authority.

  • California Supreme Court adopts broad interpretation of statute that shields public entities from punitive damages (Los Angeles Unified v. Superior Court)

    Last week the California Supreme Court issued this opinion adopting a broad interpretation of a California statute that exempts public entities from punitive damages.

    Government Code section 818 provides that public entities cannot be held liable for damages imposed “primarily for the same of example and by way of punishing the defendant.”  That statute clearly applies to punitive damages, but what about other statutory provisions that provide double or treble damages for certain types of misconduct?

    Previous Supreme Court decisions had suggested that section 818 applies only to damages that are “simply and solely punitive.” Under that view, public entities could be liable for double or treble damages under a statute that is designed to punish but also to serve some other purpose, e.g., incentivize lawsuits, provide redress for otherwise uncompensated harms or expenditures, or advance some other policy goal.  But the Supreme Court overruled that line of authority, concluding that section 818 bars any form of damages that is imposed primarily for punishment, even if the statute also has some other secondary purposes.

  • Illinois legislature votes to expand availability of punitive damages

    National Law Review reports that the Illinois legislature has passed a bill, House Bill 0219, that would make punitive damages available in wrongful death actions.  The articles states that under current Illinois law, punitive damages are available only to the victim and do not survive the victim’s death.  Illinois Governor J.B. Pritzker has not yet signed the bill into law but is expected to do so.

    California law does not permit punitive damages in wrongful death actions brought by the heirs of a decedent, but they are recoverable in a survival action on behalf of the decedent’s estate.

  • New York judge awards $50 million in punitive damages to billionaire hedge fund founder Louis Bacon in defamation lawsuit

    Financial Times reports on New York case in which a judge has awarded $50 million in compensatory damages and $50 million in punitive damages to billionaire hedge fund founder Louis Bacon.  The defendant is Canadian fashion mogul Peter Nygard.  Bacon claims Nygard defamed him in multiple ways—by falsely asserting that Bacon is a Ku Klux Klan member, that he was guilty of insider trading, that he was involved in the death of an employee, and that he was involved in arson.

    The $100 million damages award in this case may be the least of Nygard’s legal problems.  He is in jail awaiting trial in Canada on charges of sexual assault, and has been charged in the US with racketeering and sex trafficking.  His businesses are already in bankruptcy, so he may not have the resources to pay the damages award in this case anyway.

  • Georgia jury awards $125 million in punitive damages

    AP reports on a verdict in federal district court in Georgia awarding $10.5 million in compensatory damages and $125.5 million in punitive damages to a Georgia couple who alleged that their land was polluted by a neighboring solar panel facility.  Given the disparity between the punitive damages and the compensatory damages, the punitive awards seems unlikely to survive posttrial and appellate review.

  • New York jury awards $50 million in punitive damages in sexual abuse case

    WGRZ reports on a verdict in Erie County New York awarding $50 million in compensatory damages and $50 million in punitive damages for violation of New York’s 2019 Child Victims Act.

  • Riverside County jury awards $1.44 billion in punitive damages against man for sexual abuse of his stepdaughter

    The LA Times reports on a verdict in Riverside County Superior Court awarding $836 million in compensatory damages and $1.44 punitive damages.  The plaintiff is a 39-year-old woman who sued her stepfather for sexual abuse. Prior to trial, the plaintiff obtained a $200,000 settlement from her mother and a $1 million settlement from the Church of Jesus Christ of Latter-day Saints.  The plaintiff alleged that her mother and the church knew about the abuse and did nothing to protect her.  Those settlements are likely to be her only real recovery in the case—as the article notes, the verdict against her stepfather is “largely symbolic and unlikely ever to be fully paid.”

  • Court of Appeal holds that trial court cured wildly excessive punitive damages by reducing it, eliminating any need for a new trial (Exteres v. Connections Group)

    When a jury awards an excessive amount of punitive damages, the trial court has the authority to order a new trial unless the plaintiff agrees to accept a reduced amount.  That’s a well-established principle of posttrial procedure.

    But are there some situations where the jury’s award is so high that the trial court should simply order a new trial, without giving the plaintiff an option of accepting a remittitur to a more reasonable number?  Logic dictates that the answer should be yes.  If an award is so high that it creates a presumption that the jury was acting out of passion and prejudice, then the defendant should be able to get a new trial before a jury that will decide the case based solely on the facts.  In that situation, it is unfair to make the defendant pay the maximum amount that a jury could properly have awarded.  Perhaps a jury that wasn’t influenced by passion and prejudice would have awarded something less than the maximum amount.  This principle finds support in the California Supreme Court’s opinion in Sabella v. Southern Pacific, which assumed there are some situations in which excessive damages resulting from passion or prejudice “cannot be cured by a remittitur.”

    The Court of Appeal in this unpublished opinion didn’t buy that argument, and rejected the defendant’s bid for a new trial.  According to the court (Fourth Appellate District, Division Two), the trial court cured any problem with the jury’s $117 million punitive damages award by reducing it to $1.43 million.  The court explained that ” ‘the relevant amount for purposes of our review is not the amount awarded by the jury, but the reduced amount ordered by the remittitur.’ ”  That analysis makes sense where the defendant’s argument on appeal challenges the amount of the punitive damages.  But the court’s analysis is not responsive to the defendant’s argument that the award was so high that it showed the jury was acting out of passion and prejudice, requiring a new trial.  Here, where the jury’s verdict was more than eight times the highest amount that a reasonable jury could have awarded, there seems to be a strong argument that the jury’s verdict was based on passion and prejudice, and that the only way to cure that is to start over with a new jury.