Court of Appeal affirms $40,000 in punitive damages after reversing $3.8 million in compensatory damages (Corenbaum v. Lampkin)

Our report on this case is a bit tardy, because I was traveling abroad when the decision was issued.  The main issue in this case has nothing to do with punitive damages, but it merits a brief mention here because the court’s treatment of the punitive damages award is somewhat unusual.

The primary question in this appeal was whether, in light of the California Supreme Court’s opinion in Howell v. Hamilton Meats, personal injury plaintiffs can present evidence of the amounts their medical providers billed for services, even though the providers agreed to accept lesser amounts as payment in full for their services.  Howell held that a plaintiff’s damages are properly measured by the amount paid, not the amount billed.  The question here was whether the amount billed was nonetheless admissible as relevant on the issues of future medical expenses and noneconomic damages.

The trial court allowed the plaintiffs to introduce evidence of the amount billed, but the California Court of Appeal (Second Appellate District, Division Three) held, in a published opinion, that the evidence was inadmissible.  Accordingly, the Court of Appeal reversed the jury's $3.8 million compensatory damages award for a new trial.  Interestingly, the court chose not to reverse the jury’s award of $40,000 in punitive damages.  Ordinarily, when an appellate court reverses a compensatory damages award for a new trial, reversal of the punitive damages is virtually automatic.  But perhaps the court in this case thought that the small amount of punitive damages awarded here dictated a different result.

Full disclosure: Horvitz & Levy represented the defendant in this appeal, although we did not brief or argue the punitive damages issues.  We associated into the case after the initial briefing, submitting a supplemental brief and presenting oral argument for the defendant.   The Court of Appeal inadvertently omitted our firm’s name from the slip opinion (presumably because we were not the initial counsel of record).

$4.8M punitive damages award reversed for lack of evidence that corporate management participated in wrongdoing (Martinez v. Rite Aid)

In October 2010 we reported about this $4.8 million punitive damages award against Rite Aid in a disability discrimination case.  Yesterday, the California Court of Appeal (Second Appellate District, Division Seven) vacated that award in an unpublished opinion. 

The Court of Appeal based its decision on Civil Code section 3294, subdivision (b), which provides that a corporation cannot be liable for punitive damages based on the acts of an employee unless a corporate officer, director, or managing agent committed, authorized, or ratified those acts.  The Supreme Court has defined a managing agent as a person who has the authority to determine corporate policy, meaning formal policies that affect a substantial portion of the company and are likely to come to the attention of corporate leadership.

The Court of Appeal held that none of the three different corporate employees who allegedly discriminated against the plaintiff qualified as managing agents within the meaning of section 3294.  One was a "human resources manager," one was a "store district manager," and the third was a "pharmacy district manager."  The court found that, although all of them had "manager" in their title, none of them had any real authority to establish formal company policies for a substantial portion of the company.  As a result, the court reversed the punitive damages award, entitling Rite Aid to judgment in its favor on that issue.  (For unrelated reasons, the court also reversed the jury's $3.4 million compensatory damages award and ordered a new trial on that issue.)

Supreme Court of India affirms $18.4 million punitive damages award

An editorial in Business Standard reports on a case in which the Supreme Court of India has affirmed a punitive damages award of "Rs 100 crone" in a contamination case against the operator of a copper smelting plant. That works out to $18.4 million, according to an on-line currency converter.

The editorial says India's Supreme Court has traditionally been hostile to punitive damages.  The author, who is apparently a student at Stanford law school, worries that the decision does not clearly explain the basis for the punitive damages award, possibly opening the door to expansion of punitive damages claims in future environmental litigation in India. 

Canadian judge awards a record $4.5 million in punitive damages

OHS News reports that a judge in Saskatchewan has awarded punitive damages totaling $4.5 million against two insurers (Zurich Life Insurance and AIG) for wrongfully withholding workers' compensation benefits.  According to OHS News, the award in this case represents "the largest ever punitive damages penalty in Canada."  In California, an award like that would not have made the top 10 list last year (though it would have come in at #10 in 2011).

Billionaire wins $12M in punitive damages from New York jury

Bloomberg News is reporting (via the San Francisco Chronicle) that a federal jury in Manhattan has awarded $12 million in punitive damages to Florida billionaire William Koch, who claimed he was duped into buying collectible wine that turned out to be fake.  The defendant, California internet entrepreneur Eric Greenberg, said he had no idea the wines from his private collection were not authentic.  Obviously the jury didn't believe him.  Nevertheless, it seems unlikely that the punitive damages award will survive through posttrial motions and an appeal. The award is 31.5 times the compensatory damages of $380,000.   

Las Vegas jury awards $500 million in punitive damages in hepatitis case

Earlier today we reported on the plaintiff’s request for $2.5 billion in punitive damages in this case.  The jury has just returned a verdict for $500 million in punitive damages, according to KLAS-TV. That’s $270 million against one defendant and $230 million against another.  While that isn’t nearly as much as the plaintiffs requested, the combined punitive damages are still about 21 times the compensatory damages, which seems to present a serious constitutional excessiveness problem.

Frog-phobic plaintiff is not entitled to punitive damages

This is one of the strangest punitive damages stories we have seen in a while.  The Associated Press reports (via Long Island Newsday) that the New York Court of Appeals has reversed an award of $250,000 in punitive damages to a plaintiff who claimed he was terrorized by the presence of frogs in his yard.

According to the story, the plaintiff claimed he developed a fear of frogs as a child, when he was chased by a man holding bullfrogs.  Decades later, his ranidaphobia resurfaced when some nearby construction allegedly turned his 40-acre property near Buffalo into a wetland, attracting hordes of frogs that blocked his driveway and his front door.  It's almost like they knew he was afraid of them!

Based on this tale of woe, the plaintiff and his attorney managed to persuade a jury to award $1.6 million in compensatory damages plus and additional $250,000 in punitive damages.  The Court of Appeals, however reversed the punitive damages, finding no evidence that the defendant acted with a conscious disregard for plaintiff's well-being. 

Plaintiffs seek $2.5 billion in punitive damages for Las Vegas hepatitis outbreak

The Associated Press reports that the plaintiffs' attorneys in a Nevada lawsuit against a healthcare provideder have asked the jury for an award of $2.5 billion in punitive damages.  The jury has already awarded $24 million in compensatory damages to the two plaintiffs, who were both infected with hepatitis during routine outpatient endoscopy procedures.

Plaintiffs in the Vegas hepatitis litigation have already rung the bell for $500 million in punitive damages.  In that case, the plaintiffs were sued two drug companies that made and distributed propofol, the anesthetic drug used during the procedure. The plaintiffs alleged that the companies supplied the drugs in vials that were larger than necessary, tempting the healthcare providers to re-use the vials on multiple patients, even though the vials were labeled for individual use.

In this latest case, the plaintiffs' request for $2.5 billion raises the question: why would a plaintiffs' attorney ask for an amount of punitive damages that is more than 100 times the amount of the plaintiff's actual harm, when such an award would surely be stricken as unconstitutionally excessive?  Perhaps it's because he read "Punitive Damages, How Juries Decide," by Cass Sunstein and others.  Sunstein found that the most significant predictor for a large punitive damages award is a large request.  That seems to hold true no matter how large the request is. So the plaintiffs' attorney may be thinking that he won't really get 2.5 billion, but he'll end up getting more, all other things being equal, than he would have gotten by asking for something more reasonable.

Louisiana appellate court increases jury's punitive damages award

Last week, the Louisiana Court of Appeal issued this opinion (Rachal v. Brouillette) increasing a jury's award of punitive damages against a drunk driver from $100,000 to $500,000.  This opinion caught our eye because the idea of an appellate court increasing a jury's award of punitive damages is literally unheard of in California.  Sometimes a California appellate court will disagree with a trial court's decision to reduce a jury's award, and will reinstate all or part of the original award.  But a California court would never increase the punitive damages above what the jury awarded.

Los Angeles trial judge vacates $7.7 million punitive damages award against producers of "The Price is Right"

Last November we reported about a Los Angeles jury's award of $777,000 in compensatory damages and $7.7 million in punitive damages in a pregnancy discrimination suit brought by a former model on "The Price Is Right."  We predicted at the time that the punitive damages award was not likely to survive through posttrial motions and appeal.

Our predictions haven't always come true, but this time we got it right.  Law 360 reports (subscription required) that the trial judge has vacated the entire verdict and ordered a complete new trial on all issues.  The judge, Kevin C. Brazile, ruled that he had incorrectly instructed the jury on the standard to be applied in determining whether the producers of The Price is Right discriminated against the plaintiff.  The instructions failed to reflect the California Supreme Court's recent holding in Harris v. City of Santa Monica, which requires a showing that the employer's action was "substantially motivated" by discrimination.

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Los Angeles jury awards $7.7M in punitive damages to former "The Price is Right" model; try to guess the final award without going over