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Link: Chamber of Commerce Amicus Brief in Support of Defendant (courtesy of http://www.appellate.net/)
UPDATE: in a May 23, 2011 decision, the Colorado Supreme Court upheld the punitive damages award in this case, finding the defendant's failure to inspect its utility poles was sufficiently reprehensible to justify the $18 million award on top of the $22 million in compensatory damages owed to a utility worker who was paralyzed when a pole collapsed on him.
We have observed that California defendants sometimes overlook the possibility of moving to strike punitive damages claims at the pleading stage. In this unpublished opinion, the defendant filed such a motion, the trial court granted it, and the California Court of Appeal (Sixth Appellate District) affirmed. The court did so even though it awarded the plaintiff a new trial on her compensatory damages claim, on the ground that no substantial evidence supported the jury's defense verdict (you don't see that one every day).
UPDATE: Here's another unpublished opinion issued by the Sixth District on the same day, affirming an order granting a motion to strike punitive damages: Foresta v. Board of Directors of Homestead Park. We've only seen a few California opinions like this during the three years since this blog was launched, so it's quite surprising to see the same court issue two on the same day.
The U.S. Supreme Court was slated to consider Wal-Mart's cert. petition in Wal-Mart v. Dukes on November 23, but the court ruled on the other petitions from that conference today and made no ruling on Dukes. Instead, the case has been redistributed for consideration this Friday, December 3.
Links:
Supreme Court's on-line docket
Wal-Mart's cert. petition (via SCOTUSblog)
Related posts:
Wal-Mart v. Dukes cert. petition up for consideration next week
Cert. Petition in Wal-Mart v. Dukes raises class certification issues that may impact whether punitive damages are subject to class treatment
Ninth Circuit’s Dukes v. Wal-Mart decision addresses class certification of punitive damages claims
Kentucky.com reports that a jury has awarded $42.75 million, including $40 million in punitive damages, against a nursing home that allegedly neglected a 92-year-old man, resulting in his death. The defendant plans to appeal.
Although the Kentucky appellate courts have been known to uphold some questionable punitive damages awards, this award is not likely to survive, given the 14.5-to-1 ratio between the punitive and compensatory damages.
The Oregon Supreme Court has answered a certified question from the Ninth Circuit regarding Oregon's rights under a statute that gives the state the right to recover 60 percent of any punitive damages award.
In this case, Patton v. Target, a jury awarded $900,000 in punitive damages. After the verdict, but before the district court entered judgment, the parties settled and jointly moved for a judgment dismissing the case. The motion did not disclose the amount of the settlement and did not provide for any payment to the state. The state intervened, arguing that it had a vested interest in its share of the punitive damages award and that the parties could not settle without its consent. The district court (Judge Brown of the District of Oregon) allowed the state to intervene but ultimately granted the parties' motion for dismissal. The state appealed.
On appeal, the Ninth Circuit determined that the split-recovery statute is ambiguous with respect to the state's ability to block this kind of settlement. The statute provides that the state becomes a "judgment creditor" upon rendition of a punitive damages verdict, which doesn't really make any sense because ordinarily there can be no judgment creditor without an actual judgment. The statute doesn't explain what rights the state has as a judgment creditor before judgment has been entered. Rather than interpreting the statute itself, the Ninth Circuit asked the Oregon Supreme Court to address the following question:
When a jury has returned a verdict that includes an award of punitive damages under Oregon law, is the State of Oregon’s consent necessary before a court may enter a judgment giving effect to any settlement between the parties that would result in a reduction or elimination of the punitive damages to which the State would otherwise be entitled under Oregon Revised Statutes § 31.735?The Oregon Supreme Court answered the question in this opinion. The court holds that the state has no right to collect any portion of a punitive damages verdict before judgment has been entered. The statutory language purporting to give the state "judgment creditor" status before entry of judgment is meaningless and unenforceable. Accordingly, the parties are free to reach a settlement without the state's consent, and without giving the state any share of the settlement.
Bloomberg Businessweek reports that the plaintiffs in the Florida smoker lawsuits have broken their losing streak in a big way. After eight consecutive trials ended in defense verdicts, a jury awarded $8 million in compensatory damages and $72 million in punitive damages against R.J. Reynolds Tobacco Co., which has vowed to appeal.
Related posts:
Philip Morris wins sixth straight trial in Florida smoker litigation
Florida jury awards relatively modest punitive damages in smoker lawsuit
Another punitive damages award in Florida tobacco litigation
Florida jury awards $20 million in punitive damages to smoker's widow
Smoker's widow wins $12.5 million in punitive damages
Florida trial judge cuts $244 million punitive damages award
Florida jury awards $25 million in punitive damages to smoker's widow
"Smokers, tobacco, both winners in early Engle cases"
Jury rules for plaintiff in first phase of retrial after reversal of $145 billion punitive damages award
After reversal of $145 billion class action punitive damages award, Florida smokers seek punitive damages in individual suits
Wal-Mart's cert. petition in the Dukes case will be considered by the Supreme Court next Tuesday.
Useful links:
Supreme Court's on-line docket
Wal-Mart's cert. petition (via SCOTUSblog)
Related posts:
Cert. Petition in Wal-Mart v. Dukes Raises Class Certification Issues That May Impact Whether Punitive Damages are Subject to Class Treatment
Ninth Circuit’s Dukes v. Wal-Mart Decision Addresses Class Certification of Punitive Damages Claims
In this published opinion, the California Court of Appeal (Second Appellate District, Division Five) affirms a $6 million punitive damages award to a plaintiff who recovered $2.7 million in compensatory damages.
This opinion bucks the trend of California appellate decisions over the past few years, which have consistently applied the rule that the ratio of punitive damages to compensatory damages cannot exceed one-to-one when the compensatory damages award is "substantial." In keeping with the usual practices on this blog, I won't comment further because our firm represents the defendant and the litigation is ongoing.
The Heritage Foundation posted an article on its website yesterday entitled "Punitive Damages and the Tax Code: Punishing Business and the Economy." The article criticizes the Obama administration's proposal to prevent taxpayers from deducting payments of punitive damages awards.
Meanwhile, Professor Lawrence Zelenak of Duke Law has published an article on In Brief: the Online Magazine of the Virginia Law Review entitled "Of Punitive Damages, Tax Deductions and Tax-Aware Juries: A Response to Polsky and Markel." As the title suggests, the article is a critical response to the proposal by Professors Dan Markel and Gregg Polsky that plaintiffs' lawyers should be permitted to inform juries about the deductibility of punitive damages, so that juries can increase their punitive damages awards to offset any possible tax benefits.
Related posts:
More from Prof. Markel on Tax Policy and Punitive Damages
"Taxing Punitive Damages"
Proposed Legislation Would Eliminate Tax Deduction for Punitive Damages
Obama Administration Proposes To Eliminate Tax Deduction for Payment of Punitive Damages
We don't see many opinions in which a trial court rules that a plaintiff is not entitled to punitive damages, and the Court of Appeal disagrees. But here's one.
The Fourth Appellate District, Division Three, concludes that the trial court misinterpreted a contract between the parties. The trial court said the contract unambiguously prohibited the plaintiff from recovering punitive damages, but the Court of Appeal says no, the contract only prohibits the plaintiff from seeking indemnity for punitive damages awarded to a third party. Accordingly, the Court of Appeal sends the case back to the trial court for a retrial limited to the issue of punitive damages. The opinion contains no discussion of any of the potential problems associated with a partial retrial limited to punitive damages.
In this unpublished opinion, the California Court of Appeal (Second Appellate District, Division Seven) affirms a punitive damages award in excess of $5.2 million. Our firm represents the defendant in this case so, per our usual policy, we won't comment on the decision while the litigation is ongoing.
Last week we linked to a National Law Journal article exploring whether the new members of the U.S. Supreme Court might change that court's approach to punitive damages law. That story prompted us to consider whether Justice Tani Cantil-Sakauye, whose selection as the next Chief Justice of the California Supreme Court was approved yesterday by the voters, might reshape punitive damages law in California.
The short answer is no, we see no indications that Justice Cantil-Sakauye's addition to the court will result in a sea change in punitive damages law. For starters, none of the California Supreme Court's recent opinions on punitive damages have been closely divided. In the most recent decision, Roby v. McKesson, was decided by a vote of 5-2. The two previous cases, Simon v. San Paolo U.S. Holdings and Johnson v. Ford Motor Co., were decided 7-0 and 5-2, respectively. So there's no reason to think that the presence of one new justice on the court would have changed the outcomes in those cases.
Moreover, we see nothing in Justice Cantil-Sakauye's Court of Appeal opinions to suggest that she has any particular agenda when it comes to punitive damages. Her most notable punitive damages decision is Nelson v. Exxon Mobil, which is currently pending before the California Supreme Court. (Click here to view the docket.) In that case, she held that punitive damages claims are assignable when they arise from a cause of action that is assignable. We noted at the time that Justice Cantil-Sakauye's opinion seemed to conflict with other cases suggesting that punitive damages claims are never assignable. But her opinion on this issue does not suggest to us any grand plan to reshape punitive damages law. And Chief Justice Cantil-Sakauye won't even be able to participate in the Supreme Court's decision. (See Canon 3E(5)(f) of the California Code of Judicial Ethics [appellate justice is disqualified if "[t]he justice (i) served as the judge before whom the proceeding was tried or heard in the lower court"].) So at this time, we have no reason to expect any change in the California Supreme Court's approach to punitive damages.
The U.S. Supreme Court has denied the defendant's petition for certiorari in one of the punitive damages cases we've been tracking: Stroud v. Blount. The ruling appears on today's order list.
Related posts:
Stroud v. Blount cert. petition re-distributed for Supreme Court's Oct. 29 conference
Stroud v. Blount: cert. petition asks whether courts can consider attorneys' fees as "actual harm" for ratio purposes
