October 31, 2012

Court of Appeal affirms $25 million punitive damages award against co-founder of Guess, Inc. (Gottlieb v. Fahs)

In 2009 we reported on a Los Angeles jury verdict awarding $370 million, including $25 million in punitive damages, against Georges Marciano, the co-founder of Guess, Inc.  This unpublished opinion (Gottlieb v. Fahs) from the California Court of Appeal (Second Appellate District, Division Two) affirms the punitive damages, rejecting the defendant's claim that the record contained insufficient evidence of his financial condition.  But the Court of Appeal did grant him some relief.  It reduced the compensatory damages to a total of $25 million.

The end result is a much higher punitive-to-compensatory ratio than the jury originally awarded.  The defendant could have sought a new trial on that basis, although there is a split of authority on this issue as we have noted.  As far as the opinion reveals, the defendant did not raise that as a ground for a new trial.