January 21, 2020

$8 billion punitive damages award against J&J reduced to $6.8 million in Risperdal case

FiercePharma reports that a Philadelphia trial court has reduced the $8 billion punitive damages award against Johnson & Johnson to $6.8 million.  The case involves J&J's alleged failure to warn about the potential side effects of the anti-psychotic drug Risperdal.

According to the story, the court found that the punitive damages award was grossly disproportionate to the compensatory damages award of $680,000.  Johnson & Johnson says it still plans to appeal the award as reduced.  No doubt the plaintiffs will also appeal from the reduction of the award.

December 26, 2019

Court of Appeal vacates punitive damages in default judgment due to lack of evidence of defendant's finances (Dong v. Ryu)

This case is a reminder that California law requires plaintiffs to present evidence of the defendant's financial condition as a prerequisite to obtaining punitive damages, even in default judgments.

In this case, the plaintiffs argued on appeal that their default judgment should be affirmed, including $57,000 in punitive damages, even though they presented no evidence of the defendant's finances.  They argued that the defendant's failure to respond to their complaint deprived them of the opportunity to obtain information about the defendant's finances. 

The Court of Appeal (Second District, Division Two) rejected that argument in an unpublished opinion.  The court noted that plaintiffs failed to show that they even tried to meet their burden: "our review of the record reveals no showing of what efforts, if any, were undertaken by plaintiffs to obtain information regarding defendant’s financial condition."  The Court of Appeal reversed the punitive damages portion of the judgment and directed the trial court to enter judgment for the defendant on that issue.

December 23, 2019

Anti-whistleblower retaliation act for school employees does not authorize punitive damages against school districts (Visalia Unified School District v. Superior Court)

This published opinion addresses an issue of first impression: whether the Reporting by School Employees of Improper Activities Act (the Act) authorizes recovery of punitive damages against school districts.

The plaintiff, a former employee of the Visalia Unified School District, sued the District for retaliation in violation of the Act, seeking compensatory and punitive damages.  The Act authorizes recovery of punitive damages against a "person" who intentionally and maliciously engages in an act of retaliation.  For purposes of the Act, a "person" includes any state or local government.

The District moved to strike the punitive damages claim under Government Code section 818, which prohibits punitive damages against public entities.  The superior court denied the motion, finding that the Act impliedly supersedes section 818 because the Legislature adopted the Act in 2000, long after it adopted section 818 (in 1983). 

The Fifth Appellate District granted the District's petition for writ relief and reversed the trial court's ruling.  The Court of Appeal concluded that the trial court had overlooked key language in section 818, which bars punitive damages against public entities "notwithstanding any other provision of law."  The Court of Appeal also held that section 818 is a fundamental part of California public entity law, supported by strong public policy.  The court concluded that, if the Legislature had intended to overturn such an important rule, it would have done so expressly.

Labor Code whistleblower provision authorizes punitive damages (Mathews v. Happy Valley Conference Center)

This published opinion from the Sixth Appellate District holds that Labor Code section 1102.5, which prohibits retaliation against whistleblowers, impliedly authorizes punitive damages as a remedy.

Disclosure: Horvitz & Levy represents the defendant in this action.  Litigation is ongoing, so we will not comment on the court's analysis.

Court of Appeal sets forth appropriate post-trial remedies for excessive punitive damages (ENA North Beach v. 524 Union Street)

This published opinion provides an overview of the proper remedies that a trial court can use to correct an an excessive award of punitive damages.  The opinion doesn't contain anything new or surprising, but it provides a good overview of existing law:

1.  If a trial court finds that a punitive damages award is constitutionally excessive (i.e., the award exceeds the maximum amount permitted by due process), the trial court should grant judgment notwithstanding the verdict and reduce the award to the constitutional maximum. 

2.  If a trial court finds that a punitive damages award is excessive under state law (i.e., the award appears to be the product of passion and prejudice, or is disproportionate to the defendant's financial condition), the trial court should grant a new trial.  The new trial can be conditional, subject to the plaintiff's acceptance of a remittitur of the award to a lesser amount.

The trial court in this case used the wrong procedure.  The court found the award was excessive under state law, but instead of granting a new trial, the court granted judgment notwithstanding the verdict.  The Court of Appeal (First District, Division Two) agreed that the award was excessive, but faulted the trial court for employing the wrong remedy.  The Court of Appeal nevertheless affirmed the judgment, because the plaintiff's counsel stipulated at oral argument that he would prefer to accept the reduced amount rather than undergoing a new trial.  Thus, if the trial court had ordered a conditional new trial subject to a remittitur, the plaintiff would have accepted the remittitur.  So in the end, the trial court's procedural error was harmless.


December 2, 2019

Los Angeles jury awards $50M in punitive damages against Alki David

Law 360 reports that a Los Angeles jury deliberated less than an hour before awarding $50 million in punitive damages (on top of $8.25 million in compensatory damages) against billionaire FilmOn founder Alki David.  By my count, this is the largest of three punitive damages award against David this year.  (See earlier reports here and here.)

November 27, 2019

Iran ordered to pay $150M in punitive damages to Washington Post reporter and his family

The New York Daily News reports on a ruling by a federal district court judge in Washington D.C., ordering Iran to pay $30 million in compensatory damages and $150 million in punitive damages to a Washington Post journalist and his family for psychological and physical abuse inflicted on the reporter during 18 months of imprisonment. 

As with the many other huge punitive damages awards awarded against Iran (see here for example), it is unclear whether the plaintiff will every collect anything.

Court of Appeal affirms $640,000 punitive damages award (Callahan v. Ami Adini & Associates)

In this unpublished opinion, the California Court of Appeal (Fourth District, Division One) affirms a punitive damages award that is roughly equal to the amount of compensatory damages. In theory, even a one-to-one ratio can be constitutionally excessive, if for example the reprehensibility of the defendant's conduct is extremely low (which is what the defendant argued here).  In practice, however, we rarely ever see a California appellate court reducing an award as excessive when the ratio is already one to one.

November 21, 2019

Arizona jury awards $50M against company that mishandled donated bodies

The Washington Post reports that a jury in Phoenix has awarded $8 million in compensatory damages and $50 million in punitive damages against Steven Gore, who owns a facility that handled donated human remains.  The plaintiffs alleged that Gore committed fraud by representing that the remains would be used for medical research, when in fact some of the bodies were used for military testing or sold to third parties.

Florida jury awards $74M in punitive damages to smoker's same-sex spouse

The Winston-Salem Journal reports on a jury award of $9.2 million in compensatory damages and $74.2 million in punitive damages against R.J. Reynolds and Philip Morris in a lawsuit brought by the surviving spouse of a smoker who died from respiratory disease.  According to the article, this is the first known trial involving claims brought by a same-sex surviving spouse in the decades of Florida tobacco litigation (the so-called "Engle progeny litigation").