January 31, 2008

More on Bullock v. Philip Morris: Curing Legal Error with a Remittitur?

Another interesting aspect of yesterday's opinion in Bullock (discussed in earlier posts here and here) is the court's analysis of the conditional new trial/remittitur procedure, under which a court orders that a new trial will take place unless the plaintiff consents to a reduction of the damages award. The Bullock court outlines the usual use of a remittitur to cure an award that is flawed simply because it is just too high in light of the evidence. But the court goes on to say a remittitur can also be used in some cases to cure a defect in an award that is the result of a legal error that affected the jury's deliberations. Specifically, "remittitur may be appropriate where instructional error resulted in an excessive award and the amount of the excess is ascertainable." Ultimately, on the particular facts of Bullock, the court concluded, "we cannot determine how the instructional error that we have found affected the amount of the punitive damages award and we cannot substitute our own assessment of the appropriate amount of punitive damages for that of a jury (or a judge on a new trial motion). We therefore conclude that a remittitur by this court would be inappropriate."

This result - an unconditional new trial order - makes sense to me, but what's a little harder to fathom is the court's reference, without further elaboration, to Stevens v. Snow (1923) 191 Cal. 58, 68, in which the Supreme Court used a remittitur to, in the words of the Bullock court, "reduc[e] by one-half the amount of a judgment based on instructional error and error in the admission of evidence despite the Supreme Court’s express acknowledgment that it could not determine how the errors affected the amount of the judgment." What's a little odd here is that no subsequent court seems to have followed Stevens on this matter of using a remittitur to cure an award that is potentially inflated due to legal error, and the Supreme Court 60 years later - in Schelbauer v. Butler Manufacturing Co. (1984) 35 Cal.3d 442, 454 - exhaustively analyzed and expressly disapproved the use of a remittitur as a means to cure legal error, holding that use of remittitur is "confined to cases in which an excessive damage award [is] the only error in the jury's verdict." Several other courts have reached the same conclusion, but the Bullock court didn't cite Schelbauer or any of the other decisions limiting remittitur to cases involving only pure excessiveness challenges to a damages award.

It would appear that, if a court follows the Stevens approach in any future case, a clear conflict will be set up between Stevens and Schelbauer.