September 21, 2011

Kahaner v. Salamon: unpublished opinion further illustrates split on how to handle punitive damages after reduction of compensatory damages

We've noted in prior posts that California appellate courts have split on the question of what to do about a punitive damages award when the court determines that the compensatory damages must be reduced.  Traditionally, courts would order a reduction of the punitive damages, or at least a new trial, to account for the change in the compensatories.  But more recently we've seen some courts simply affirming the punitive damages without regard to the change in the compensatories (and therefore without regard to the change in the punitive-to-compensatory ratio).  This unpublished opinion from the Second Appellate District, Division Seven, falls into that category.  The court orders the trial court to reevaluate the amount of compensatory damages, but affirms an award of $50,000 in punitive damages without even knowing what the final compensatory amount will be.

This case isn't as extreme as Behr v. Redmond, where the Court of Appeal reduced the compensatory damages from $4 million to $1.6 but left a $2.8 million punitive damages award undisturbed.   Unfortunately, when the defendant in Behr petitioned for review to the California Supreme Court, he didn't get a single vote.  Perhaps the Supreme Court didn't think that case was the right vehicle to settle this issue, but will take up the issue in a future case.  I hope so, because the lower courts are all over the map on this issue and could use some guidance.