June 3, 2009

A $3 Billion Punitive Damages Award in Los Angeles?

A Sacramento plaintiff's lawyer has issued a press release reporting that he won a $4.1 billion dollar judgment in an employment dispute in Los Angeles. The press release says the judgment was entered after the superior court confirmed a private arbitration award. The press release does not specify the amount of punitive damages awarded, except to say that the arbitrator awarded punitive damages equal to three times the compensatory damages.

UPDATE: I looked this case up on the L.A. Superior Court's website. Assuming I have the right case number (BC353567), this appears to be a default judgment, a fact not mentioned in the press release.

FURTHER UPDATE (6/5/09): Scot Bernstein, counsel for the plaintiff, contacted us to clarify that there were four defendants in this case, and only one of them defaulted. The other three moved to compel arbitration, which ultimately led to a $4.1 billion judgment confirming the arbitration award.

YET ANOTHER UPDATE (6/5/09): Today's edition of the The Daily Journal (subscription required) confirms the award: $4.1 billion, with $3 billion in punitive damages. Here's an excerpt:

A Los Angeles County judge has signed off on a $4.1 billion arbitration award
to the former employee of a large voice communications company, marking what
is believed to be the largest arbitration award ever for an employment

The JAMS award could lead employers to reconsider arbitration
agreements that have become standard in employee contracts, attorneys said.

Arbitrator William F. McDonald, a retired Orange County Superior Court judge,
found iFreedom Communications International Holdings Limited, and its founder, Timothy Ringgenberg, liable for more than $975 million in compensatory damages and awarded nearly $3 billion in punitive damages, as well as interest and penalties, to Paul Thomas Chester.

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