May 22, 2019

Court of Appeal affirms $1M in punitive damages and furthers split of authority on clear-and-convincing standard of proof (Mazik v. Geico)

This published opinion is a likely candidate for California Supreme Court review.

This is an insurance bad faith case in which a jury awarded compensatory damages of $313,508 and punitive damages of $4 million against GEICO for unreasonably failing to pay its policyholder the policy limits of $50,000 under an underinsured motorist policy.  The trial court reduced the punitive damages to $1 million.  GEICO appealed only the punitive damages award.

GEICO argued that evidence was insufficient to to show that any managing agent of GEICO participated in or authorized an act of malice, fraud, or oppression, as required by Civil Code section 3294.

The Court of Appeal (Second District, Division Two) began its analysis by considering whether the clear-and-convincing standard of proof affects appellate review of the sufficiency of the evidence.  As we have noted, California's appellate courts have split on this issue and the California Supreme Court recently granted review to resolve the split

The Court of Appeal here decided to disregard the clear-and-convincing standard for purposes of  appellate review.  In so doing, the court cited a 1973 Supreme Court opinion (Crail v. Blakely), but did not discuss some of the more recent cases or acknowledge that the issue is currently pending before the Supreme Court.

The court's decision on the standard of review issue appears to be pivotal to its analysis of the merits.  The court concluded that the plaintiff's evidence was sufficient, based in large part on inferences that the jury might have drawn from equivocal evidence.  For example, the court discussed evidence that claims adjusters at GEICO, who were not managing agents, cherry-picked evidence from the plaintiff's medical files to justify their decision not to pay his claim.  They prepared evaluations that minimized the plaintiff's injuries, while ignoring evidence to the contrary.  There was no direct evidence, however, that GEICO's managing agent (a regional liability administrator) knew about the information that the adjusters omitted from their reports.  The Court of Appeal concluded, however, that the jury could have inferred the managing agent's knowledge of that information based on evidence that he had "more than a passing familiarity" with the claim. 

Had the Court of Appeal taken the clear-and-convincing evidence requirement into account, it might have reached a different conclusion.  Cases applying that standard have held that equivocal evidence is not sufficient to qualify as clear and convincing---when the evidence is equally consistent with ordinary negligence as with malice, the plaintiff has failed to show malice by clear and convincing evidence.

There's a good chance that if GEICO petitions the California Supreme Court for review, the court will grant review and decide it along with the currently pending case on this issue (or hold this case pending the resolution of the other case).

May 21, 2019

Philadelphia jury awards $50M in punitive damages against Johnson & Johnson in pelvic mesh case

The New Jersey Law Journal reports that a jury in Philadelphia has awarded more than $80 million, including $50 million in punitive damages, to a woman who claimed she was injured by a pelvic mesh device made by Johnson & Johnson subsidiary Ethicon. 

If this story sounds familiar, that's because a different Philadelphia returned a $120 million verdict about a month ago, in a case involving the same product. 

May 13, 2019

Oakland jury awards $2B in punitive damages in Roundup case

As we reported last week, plaintiffs' counsel asked for $1 billion in punitive damages in the latest lawsuit alleging that the weedkiller Roundup causes cancer.  Today the jury awarded the plaintiffs twice that much---$1 billion to each plaintiff, for a total of $2 billion---as reported in Law360 (subscription required).

May 9, 2019

Plaintiffs in latest Roundup lawsuit ask for $1B in punitive damages

Insurance Journal reports that the plaintiffs' attorneys requested a whopping $1 billion in punitive damages in the latest lawsuit over the weedkiller Roundup.

Disclosure: Horvitz & Levy represents Monsanto on appeal in another Roundup case. 

May 3, 2019

Judge rejects "Bones" punitive damages award

The Associated Press reports that L.A. Superior Court judge Richard Rico has denied the plaintiffs' petition to confirm an arbitrator's award of $128 million in punitive damages against 21st Century Fox.  Judge Rico confirmed the arbitrator's award of $50 million in compensatory damages, but refused to confirm the punitive damages award, apparently on the ground that the plaintiffs waived their right to seek punitive damages.

Related posts:

"After Stunning 'Bones' Decision, Fox Aims to Wipe Out $128M in Punitive Damages"

Arbitrator awards $128 million in punitive damages against 21st Century Fox

May 2, 2019

Supreme Court of California grants review to resolve split over application of "clear and convincing" evidence standard

As reported on our sister blog, At the Lectern, the Supreme Court has finally agreed to settle a long-running split of authority about how the clear and convincing evidence standard applies, if at all, on appeal.

The issue has great importance for punitive damages cases because, as readers of this blog are
aware, California plaintiffs must prove all the prerequisites for a punitive damages award by clear and convincing evidence.   (See Civil Code section 3294.)

As we have discussed in the past, our appellate courts do not agree about whether they should take the heightened standard of proof into account when reviewing the sufficiency of the plaintiffs' evidence.  Many courts say yes, but others have said no.

The Supreme Court has furthered the confusion by seeming to take both sides of the debate.  (Compare Crail v. Blakely [holding that clear and convincing standard was adopted only "for the edification and guidance of the trial court"] with In re Angelia P. [holding that the clear and convincing evidence standard is incorporated into the substantial evidence standard on appeal].)

The Supreme Court actually granted review to address this issue over a decade ago. But the parties settled that case and the issue became moot.  In the years since, many other petitions raised the issue, but the Supreme Court consistently denied them.  Now, finally, in Conservatorship of O.B., the Supreme Court has agreed to take the issue up again.  With any luck, the parties to that case will not reach a settlement.

April 30, 2019

Los Angeles jury awards $8 million in punitive damages against FilmOn.Tv founder Alki David

Per this story in the Hollywood Reporter, a jury in Los Angeles last week awarded $3 million in compensatory damages and $8 million in punitive damages to a woman who alleged that billionaire Alki David subjected her to sexual harassment and discrimination.

Court of Appeal reduces compensatory damages by $1.7M but affirms punitive damages (Cardoza v. Reed)

This unpublished opinion addresses an unsettled question of California punitive damages law that we have written about a few times.  The question is what a reviewing court should do with a punitive damages award when the court significantly reduces the compensatory damages on appeal.  Should the reviewing court automatically order a retrial on the issue of punitive damages, so that a jury can determine what punishment is appropriate for the actual harm caused?

In our view, the answer to that question should be yes.  Jurors are routinely instructed to award an amount of punitive damages that bears a reasonable relationship to the plaintiff's actual harm.  And courts routinely presume that jurors follow their instructions.  So if a jury imposes punitive damages based on the understanding that the plaintiff suffered $5 million in compensatory damages, but that understanding turns out to be false, and the Court of Appeal determines that the plaintiff really suffered only $2 million in compensatory damages, then the defendant is entitled to have a jury decide what punishment is appropriate for causing that harm. 

California courts used to follow that approach, but it recent years California appellate courts are increasingly reluctant to order a new trial under these circumstances.  Instead, they will order a new trial only if they determine that the jury's punitive damages award is unconstitutionally excessive when compared to the now-reduced compensatory damages award. 

That's the approach that the Court of Appeal (First District, Division Four) took in this case.  It shaved $1.7 million off the jury's compensatory damages award, but did not order a new trial on punitive damages.  Instead, the Court of Appeal affirmed the punitive damages award after concluding that the ratio between the punitive damages and the compensatory damages (as reduced) did not violate due process.  In the process, the Court of Appeal deprived the defendant of its right to have a jury decide the appropriate amount of punishment for the harm actually caused. 

Perhaps someday the California Supreme Court will sort this out.  Until then, we will probably continued to see more unpublished opinions like this one.

April 26, 2019

Philadelphia jury awards $100M in punitive damages against Johnson and Johnson in pelvic mesh case

The punitive damages awards keep piling up for Johnson and Johnson.  The latest, as reported by the Legal Intelligencer, is a verdict awarding $100 million in punitive damages, on top of $20 million in compensatory damages, to a woman who claimed she was injured by the company's defective pelvic mesh.

Related posts:

Philadelphia jury awards $25 million in punitive damages against Johnson & Johnson


Sacramento jury awards $35 million in punitive damages against assisted living facility

The Sacramento Bee reports here on a jury verdict awarding $7 million in compensatory damages and $35 million in punitive damages against Eskaton, an elder care provider.