November 25, 2014

Press release by Consumer Attorneys of California defends jury's $185 million verdict---by saying it is obviously excessive

A week ago we reported on a jury award of $185 million in punitive damages in a single-plaintiff employment case against AutoZone.  Not surprisingly, that colossal award got a lot of media attention.  Some even called it a "preposterous" verdict by a runaway jury.

In response to this criticism, the Consumer Attorneys of California issued a remarkable press release.  The press release says that criticism of the verdict is unwarranted, which isn't a surprising position for CAC to take.  But CAC's reasoning is quite surprising.  According to CAC, it makes no sense to talk about runaway juries or preposterous damage awards until the post-verdict proceedings are resolved, because "such big punitive damages awards are inevitably scaled back to a fraction of what was ordered by the jury."  The press release goes on to say that "nobody at AutoZone is expecting to write a check for $185 million" because U.S. Supreme Court precedent limits punitive damages to no more than nine times the amount of compensatory damages.

CAC has a point.  Many of the big punitive damages awards that generate media attention are later reduced during post-trial proceedings or on appeal.  And those rulings rarely get the same kind of press as the original verdict. 

Nevertheless, CAC's position is a startling one.  CAC's members fight vigorously to obtain awards like this. And they fight to hold on to them during post-verdict review.

Consider, for example, Bullock v. Philip Morris, in which a California jury awarded $28 billion in punitive damages to a single plaintiff.  The plaintiff's lawyer fought hard to hold on to that award.  When the trial court reduced it to $28 million, plaintiff's counsel filed a cross-appeal asking the Court of Appeal court to reinstate the full amount of the jury's award.  (See 2005 WL 4656293.)  That lawyer---Michael J. Piuze---is a past recipient of CAC's "Trial Lawyer of the Year Award." One of the attorneys at his firm is currently on CAC's board. 

It isn't just CAC's individual members who defend punitive damages awards in the nine-figure range and above.  CAC itself files amicus curiae briefs to defend such awards.  For example, in Romo v. Ford Motor Co., CAC filed an amicus brief to defend a $290 million punitive damages award. (See 2003 WL 22455474.)

Given this history, the CAC press release on the Auto Zone case comes as a great surprise, because it  seemingly acknowledges that an award much smaller than the Bullock and Romo awards is obviously excessive and will inevitably be reduced or vacated.  Having taken that position, it would now be difficult for CAC to file another amicus brief like the one it filed in Romo if the AutoZone case ends up on appeal.