May 30, 2008

"Foreign Torts and the Commerce Clause: Territorial Limitations on State Power to Impose Punitive Damages"

The Spring 2008 edition of Mass Torts, a publication of the Mass Torts Litigation Committee of the ABA's Litigation Section, contains this punitive damages article (ABA membership required) by William E. Thompson of Gibson Dunn's LA office. The article examines the constitutional problems that arise when a plaintiff seeks punitive damages for out-of-state or out-of-country conduct. Drawing on Commerce Clause principles and the Supreme Court's recent series of punitive damages decisions, the article offers five guidelines:

1. Punitive damages must vindicate an identified, concrete state interest.
2. Generalized assertions that out-of-state or overseas conduct was "unlawful" where it occurred are insufficient.
3. There must be more than "some" actions emanating from the forum to support asserting punitive damages jurisdiction.
4. The court must rigorously examine the lawfulness of the defendant's specific in-state acts, if any.
5. Where the foreign jurisdiction does not provide for punitive damages, that fact is relevant, especially under the due process fairness litigation.

The idea of imposing punitive damages for overseas conduct came into the spotlight recently when a group of Nicaraguan farm works sued Dole and others in Los Angeles, complaining about the use of the agricultural chemical DBCP on banana farms in Nicaragua nearly 30 years ago. The case fizzled, however, when the plaintiffs obtained only $2.5 million in punitive damages (a fraction of what they were seeking) and the trial court later tossed out the entire amount.

Hat tip to Mass Tort Litigation Blog.

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