March 7, 2011

Behr v. Redmond: $2.8M punitive award affirmed, despite reduction of compensatory damages from $4M to $1.6M

Here's a somewhat surprising unpublished opinion from the California Court of Appeal (Fourth Appellate District, Division Two).

The plaintiff, who claimed the defendant gave her genital herpes, won a verdict of $4 million in compensatory damages and $2.8 million in punitive damages.  That compensatory award included $2.5 million for future medical expenses.

On appeal, the defendant argued (among other things) that no substantial evidence supported the award of future medical expenses.  The Court of Appeal agreed and reduced the compensatory damages from $4 million to $1.6 million.

After reading that part of the opinion, I was expecting the Court of Appeal to do one of two things: (1) reduce the amount of punitive damages to preserve the punitive-to-compensatory ratio awarded by the jury, as the Court of Appeal did in Las Palmas Associates v. Las Palmas Center Associates (1991) 235 Cal.App.3d 1220, 1254, or (2) send the case back to the trial court to re-evaluate the amount of punitive damages in light of the reduced compensatory damages award, as the Court of Appeal did in SEIU v. Colcord (2008) 160 Cal.App.4th362.

Surprisingly, the court followed neither approach, and instead affirmed the punitive damages award based on its conclusion that the ratio of compensatory damages, as reduced, was not excessive.  In my view, that approach overlooks the fact that juries are instructed to make their punitive award proportionate to the actual harm to the plaintiff.  The jury in this case performed this task based on an extremely inaccurate assessment of the actual harm.  It seems very unlikely that the jurors would have awarded exactly the same amount of punitive damages if they had known that the correct amount of "actual harm" was $2.5 million less than they thought.

More surprisingly, the court did not publish its opinion, even though it departs from the approach taken in published cases on this issue.  I guess I shouldn't be too surprised, because this has happened before.  As I said at that time, I expect this issue will eventually make its way to the California Supreme Court.