Arkansas could soon join the ranks of states that place a ceiling on punitive damages. This article from the Magnolia Reporter of Arkansas reports that the Arkansas Senate voted in favor of a resolution (SJR8) that will ask the voters of Arkansas whether to amend that state's constitution to impose a cap on punitive damages. The amendment would limit punitive damages to the greater of $250,000 or three times compensatory damages.
February 20, 2017
February 1, 2017
A few days ago, Law.com reported that a jury in federal district court in New Jersey has awarded $1.5 million in compensatory damages and $50 million in punitive damages in an age discrimination suit against Lockheed Martin.
The article says the plaintiff bought claims under New Jersey state law and the federal Age Discrimination in Employment Act (ADEA). The Fifth Circuit recently reaffirmed that the ADEA does not authorize punitive damages, so presumably the punitives were awarded under state law. But even if New Jersey state law permits punitive damages for such claims, the award is not likely to survive post-trial review, given the 33-to-1 ratio between punitive and compensatory damages.
Posted by Curt Cutting at 12:24 PM
January 31, 2017
Insurance Journal reports that the Montana House voted last week 60-40 to further tighten that state's legislative cap on punitive damages. Under existing Montana law, punitive damages are capped at the lesser of $10 million or 3 percent of the defendant's net worth. The new law would add a further limitation, prohibiting punitive damages from exceeding three times the amount of compensatory damages.
Back in 2014, a Montana trial court found the current statutory cap unconstitutional. The parties appeared to have settled that dispute, because there was no appeal to the Montana Supreme Court. That court had another case in 2014 that raised the issue of whether the cap is constitutional, but the court ended up vacating the punitive damages award on other grounds.
In any event, California plaintiffs' attorneys can rest easy. California remains among the minority of states having no legislative limitation on the amount of punitive damages.
Posted by Curt Cutting at 1:13 PM
January 27, 2017
European courts are generally not fans of American-style punitive damages, as we have noted. But the World Intellectual Property Review has an interesting article about a recent decision from the Court of Justice of the European Union: "EU law doesn't prevent punitive damages in IP suits, says CJEU." According to the article, the Polish Supreme Court took the view that punitive damages are not allowed for copyright infringement cases in the EU, but it asked the CJEU for a definite ruling on the issue. The CJEU took up the issue and held that EU member states are permitted to award punitive damages in copyright infringement cases if they so choose.
January 5, 2017
Texas Lawyer reports that a Dallas federal judge has cut last month's $1.04 billion punitive damages award against Johnson & Johnson down to $540 million. That ruling was expected, as we noted in our prior post about this case. It is also no surprise that both sides are unhappy with that result, and both sides have vowed to appeal.
What is surprising, however, is that the plaintiffs have hired Ken Starr to defend the billion-dollar punitive damages award on appeal. He has been an outspoken critic of punitive damages throughout his career. In his days as Solicitor General, he chaired a working group that drafted a report calling for various tort reforms relating to punitive damages. A few years later, he gave an address at Fordham law school, advocating for the total abolition of punitive damages: "Abolishing punitive damages would be an important, non-tinkering step toward real reform in the law." (See Law and Lawyers: The Road to Reform (March 1995) 63 Fordham L. Rev. 959, 968.)
Of course, lawyers are professional advocates and we often make arguments for our clients that differ from our own private beliefs. Still, it's surprising that Ken Starr would take this particular case. The plaintiffs are probably thinking that his background will lend credence to the argument that, if billion-dollar punitive damages are to exist at all, this is the appropriate case for it.
Posted by Curt Cutting at 4:01 PM
Reuters is reporting that a jury in Ohio has awarded $2 million in compensatory damages and $10.5 million in punitive damages to a man who claimed he developed testicular cancer from exposure to a chemical that leaked from a DuPont plant.
A DuPont spokesman said the company will appeal because the verdict "was the result of trial rulings that misrepresented the findings of an independent science panel and misled jurors about the risks" of exposure to the chemical in question (perfluorooctanoic acid, also known as PFOA or C8).
Posted by Curt Cutting at 1:02 PM
December 20, 2016
The EEOC believes that the Age Discrimination in Employment Act authorizes punitive damages. (See Enforcement Guidance on Retaliation and Related Issues.) Courts often find the EEOC's interpretations of federal employment laws persuasive. But in this case, the Fifth Circuit was not persuaded.
The Fifth Circuit issued an opinion last week reaffirming its view that the ADEA does not authorize punitive damages. (Vaughn v. Anderson Regional Medical Center.)
Plaintiff's counsel in that case told Bloomberg BNA that the Fifth Circuit stands alone in holding that punitive damages are unavailable under the ADEA. Not so, according to the author of an ADEA treatise. Howard Eglit, who writes the treatise Age Discrimination, says numerous courts have addressed whether the ADEA authorizes punitive damages, and "the response has been unanimously in the negative." (2 Age Discrimination § 8:110 (2d ed.).)
The plaintiff's counsel in Vaughn plans to seek Supreme Court review to resolve the split of authority that he says the Fifth Circuit has created, but Eglit's treatise suggests it will be an uphill battle to show that such a split even exists.
Posted by Curt Cutting at 8:26 PM
December 19, 2016
Claims Journal reports that a Jackson County Missouri jury has awarded $20 million in punitive damages and $450,000 in compensatory damages to a plaintiff suing American Family Insurance for retaliation and age and sex discrimination. Missouri is proving to be a very friendly venue for plaintiffs seeking punitive damages. Just ask Johnson & Johnson and Abbott.
Posted by Curt Cutting at 3:13 PM
December 5, 2016
Last Thursday, a federal jury in Dallas awarded $32 million in compensatory damages and $1 billion in punitive damages to six California plaintiffs who alleged they were injured by defective hip implants made by Johnson & Johnson's DePuy Orthopedics unit. The company immediately announced its plans to appeal, Reuters reports.
Before any appeal, however, it is likely that the trial judge will reduce the punitive damages. The judge in this case already reduced a big punitive damages award involving the same hip implants. He ruled in July that a $500 million verdict was excessive, and reduced it to $151 million under Texas state law.
Johnson & Johnson was able to avoid punitive damages when facing similar claims in Los Angeles a few years ago, as we reported at the time. But now Johnson & Johnson has to contend with this massive award, on top of the three big punitive damages verdicts in the Missouri talc litigation. 2016 has not been a good year for Johnson & Johnson in the courtroom.
Posted by Curt Cutting at 12:31 AM
November 14, 2016
The $7.5 million punitive damages verdict in this case was #10 on our list of the biggest punitive damages verdicts in California in 2012. Four years later, only $150,000 of that award survived appeal.
The plaintiff brought a personal injury action against a medical device manufacturer (Breg) and the doctor (Chao) who recommended and sold the device. The jury awarded roughly $5.8 million in compensatory damages, plus $7 million in punitive damages against Breg and $500,000 against Chao. Both defendants appealed.
In a partially published opinion, the California Court of Appeal (Fourth Appellate District, Division One) reversed.
It tossed the entire punitive damages award against Breg, because the plaintiff's intentional concealment against Breg was not supported by substantial evidence. The jury's malice finding against Breg was based solely on that claim, so without it there could be no punitive damages as to Breg.
As for Chao, the court found that both the compensatory damages and the punitive damages were excessive. California courts rarely reverse non-economic damages as excessive, but the court concluded that $5.1 million awarded by the jury for plaintiff's pain and suffering was simply too much. Although plaintiff sustained an injury that required multiple surgeries, by the time of trial she was suffering only "minimal physical discomfort, intermittent curtailment of daily activities, and some anxiety over the condition of her scar." The court ordered a new trial, subject to the plaintiff's agreement to accept a reduction of the compensatory damages to $1.3 million.
We have previously observed that California courts are divided on whether an appellate court should automatically reverse a punitive damages award after making a substantial reduction to the compensatory damages award. In our view, the better reasoned answer is "yes." Punitive damages are supposed to bear a reasonable relationship to the plaintiff's actual harm. Juries are instructed to make that determination in every case, and the defendant is entitled to have the jury decide that issue in the first instance.
This court, however, took the alternative approach, and held that the Chao was not entitled to have a jury decide the reasonable relationship question in the first instance. In other words, no automatic reversal of the punitive damages. Instead, the court held Chao would be entitled to a reversal only if the court determined that the punitive damages were excessive, taking into account the reduced compensatory award. Fortunately for him, the court answered that question in the affirmative. The court held that the $500,000 punitive damages award against Chao was excessive as a matter of state law. The court noted that the award exceeded 14% of Chao's net worth, and that California courts have held that anything over 10% is presumptively excessive. The court ordered a new trial, subject to plaintiff's acceptance of a reduction of the punitive damages to $150,000, which is roughly 5 percent of Chao's net worth.
Having found the punitive damages excessive under state law, the court did not consider Chao's alternative argument that the award was also excessive as a matter of federal due process.