December 15, 2011

Unpublished opinion affirms trial court's reduction of $1 million punitive damages award to $450,000 (Sunkist v. Mahmood)

In this defamation case, a jury awarded $60,000 in compensatory damages and $1 million in punitive damages.  The trial court ruled that both the compensatory and punitive damages were excessive, but denied the defendant's motion for a new trial after the plaintiff consented to a reduction of the damages to $45,000 in compensatory damages and $450,000 in punitive damages.  The defendant appealed, arguing that the reduced amounts were still excessive.  The plaintiff cross-appealed seeking reinstatement of the $1 million punitive award.

The California Court of Appeal (First Appellate District, Division Three) issued this unpublished opinion rejecting both appeals and affirming the damages awards as reduced.  The opinion doesn't contain much analysis on the excessiveness issue; it simply concludes that, "[g]iven the nature and circumstances" of the case, the jury's $1 million award was excessive but the trial court's reduced award of $450,000 was not.

Although the excessiveness analysis isn't particularly noteworthy, the opinion reveals an interesting procedural irregularity in the lower court proceedings.  In the second phase of this bifurcated trial, one of the jurors became seriously ill, forcing the trial court to declare a mistrial.  The court then empaneled a second jury to decide the issue of punitive damages, instead of ordering a complete new trial.  That would seem to violate the "same jury" requirement of Civil Code 3295(d), which requires a single jury must decide both liability and punitive damages.  Case law has carved out some limited exceptions under which a limited retrial may be held on the issue of punitive damages.  (See our prior blog post about limited retrials.)  But this case wouldn't seem to fit those exceptions.  Nevertheless, the Court of Appeal affirms the judgment without even mentioning that problem.  Perhaps the defendant didn't raise this issue on appeal.