March 26, 2011

Wyeth v. Scofield cert. petition raises punitive damages issues

Drug maker Wyeth has filed a petition for certiorari in Wyeth v. Scofield, asking the U.S. Supreme Court to decide two questions:

1. Whether, when a verdict has been tainted by a jury's passion or prejudice, due process requires a trial court to grant a new trial instead of a remittitur.
2.Whether, and in what circumstances, a trial court violates due process when it awards a substantial amount in compensatory damages but nevertheless proceeds to award punitive damages in an amount exceeding the one-to-one ratio indicated in State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408 (2003) and Exxon Shipping v. Baker, 554 U.S. 471 (2008).
California courts have already grappled with the first question as a matter of state law.  The California Supreme Court held in Schelbauer v. Butler Manufacturing Co. (1984) 35 Cal.3d 442, 454 that the proper use of a remittitur, as opposed to ordering a new trial, is "confined to cases in which an excessive damage award [is] the only error in the jury’s verdict."   And the Court of Appeal held in Fidler v. Hollywood Park Operating Co. (1990) 223 Cal.App.3d 483, 489 that courts should order a new trial rather than a remittitur in cases where it appears the jury was influenced by passion and prejudice: "[t]he fairest result is to remand the matter for a new trial."  (See also Tan Jay Internat., Ltd. v. Canadian Indemnity Co. (1988) 198 Cal.App.3d 695, 705 [trial court properly ordered a new trial where it appeared that "the jury was impermissibly swayed by passion and prejudice"].)  Although California is fairly well settled on the issue, it couldn't hurt to have a definitive opinion on this issue from the U.S. Supreme Court.      

The second issue is one where courts nationwide have been all over the map.  The cert. petition does an excellent job of listing all the cases in which courts have, or have not, adhered to the U.S. Supreme Court's admonition that a one-to-one ratio is appropriate in cases involving "substantial" compensatory damages award.  For the most part, California courts have followed the Supreme Court's guidance, in cases like Jet Source Charter v. Doherty, Walker v. Farmers, and most recently, the California Supreme Court's decision in Roby v. McKesson.  But we have observed a few instances in which, in unpublished opinions, our courts have affirmed punitive damages awards that exceeded an already substantial compensatory award.  (See our prior posts here and here.)

The Supreme Court recently denied another petition asking for further guidance on State Farm's one-to-one ratio.  We'll see if this one fares any better.

Hat tip: Drug & Device Law