April 7, 2011

Atlas Flooring v. Porcelanite: 9th Circuit affirms $25M punitive damages award

In this memorandum disposition, the Ninth Circuit affirms a $25 million punitive damages award in a business dispute involving claims of fraud and intentional interference.  That's an awfully big number for conduct that caused purely economic harm.

The panel, composed of Judges O'Scannlain, Trott and Campbell (a federal district court judge sitting by designation), affirmed the award based on the egregious nature of the defendant's conduct and the low ratio (1.5 to one) of punitive to compensatory damages.  But the memorandum disposition doesn't elaborate on the facts, so it's hard to tell why the court thought this case warranted a departure from the statement in State Farm v. Campbell that cases with substantial compensatory damages will often support no more than a 1 to 1 ratio.