April 21, 2008

Harvey v. Sybase: California Court of Appeal Reinstates Punitive Damages Award

Last Friday, the California Court of Appeal (First District, Division Five) issued this partially published opinion reinstating a plaintiff's claim for punitive damages in an employment discrimination case.

The jury awarded $1.3 million in compensatory damages and $500,000 in punitive damages. The trial court granted JNOV in favor of the defendant on punitive damages, finding that no evidence supported a jury's award. The Court of Appeal, in the unpublished part of its opinion, reversed the JNOV. For the most part, the court's analysis is not particularly noteworthy. The court simply disagrees with the trial court's conclusion that the plaintiff presented no substantial evidence that the defendant acted with "malice, oppression, or fraud," the prerequisites for punitive damages under California law.

But one small aspect of the court's opinion caught my eye. The court acknowledges that plaintiffs must prove malice, oppression, or fraud by clear and convincing evidence, but the court then states, "Despite this more stringent burden of proof at the trial level, we nevertheless confine our review to determining whether the record contains evidence of circumstances warranting the imposition of punitive damages." Maybe I'm misreading this, but it sounds as if the court believes that the clear and convincing evidence standard applies only at the trial court level and not on appeal. But a published California case expressly states that the clear and convincing evidence standard applies on appeal as well as in the trial court. (See Shade Foods, Inc. v. Innovative Products Sales & Marketing, Inc. (2000) 78 Cal.App.4th 847 [“since the jury’s findings were subject to a heightened burden of proof, [this court] must review the record . . . in light of that burden. In other words, [this court] must inquire whether the record contains ‘substantial evidence to support a determination by clear and convincing evidence’”].) Of course, Division Five is free to disagree with this opinion by their colleagues in Division One, but if they were going to disagree with a published opinion, they probably should have published that part of their analysis.

As an interesting side note, the plaintiff in this case was represented by our fellow blogger Bruce Nye at Cal Biz Lit. Congratulations Bruce, for getting that punitive damages award reinstated.


  1. Thanks for the congrats. On the subject of the clear and convincing standard on appeal, there is actually a split of authority at the appellate level. There is, as you note, Shade Foods, and to similar effect is American Airlines v. Sheppard, Mullin, Richter & Hampton (2002), 96 Cal.App.4th 1017. But to the contrary is Patrick v. Maryland Casualty Company (1990) 217 Cal.App.3d 1566, In re Marriage of Murray (2002) 101 Cal.App.4th 581, 603 and the unpublished part of Betty Jo Walker v. Farmers Insurance Exchange (2007) 153 Cal.App.4th 965. In the latter case, defense counsel was . . . . Horvitz & Levy.

  2. Yes, and in Walker it was equally wrong for the Court of Appeal to decide that issue in an unpublished part of the opinion. My point is that if the Court of Appeal is going to disagree with published authority, it should publish its disagreement. Especially when, as in Harvey, the contrary authority comes from the same district. (Of course, in Walker we prevailed in the published portion of the opinion so we didn't have much incentive to complain about the unpublished part.)

    Eventually the Supreme Court should resolve this issue once and for all.