April 28, 2015

Ninth Circuit affirms punitive damages award against UPS; verdict was the fifth largest in California in 2012 (Marlo v. UPS)

By our count, the $15.9 million punitive damages award in Marlo v. UPS was the fifth largest punitive damages verdict in California in 2012.  The district court reduced that award to $6.6 million, which was still three times the amount of compensatory damages.

The Ninth Circuit has affirmed the reduced award in this memorandum disposition, by a vote of two to one.  The memorandum is short on analysis, as such dispositions typically are.  It doesn't explain what sort of conduct warranted such a large award.  It does explain, however, that the UPS vice president who committed the misconduct had sufficient policymaking authority that he qualified as a "managing agent" under Civil Code section 3294.

The memorandum ends with the conclusory statement that the amount of the award, as reduced, is not constitutionally excessive.  It contains no explanation of why a one-to-one ratio is not the maximum permissible ratio in this case given the substantial punitive compensatory damages award. (See State Farm v. Campbell and Roby v. McKesson.)

The dissenting opinion by James G. Carr, a senior district judge sitting with the Ninth Circuit by designation, is even more terse.  It says, in its entirety:

Respectfully, and aware of my lesser familiarity with California law relating to managing agents, I dissent.
Yes, that's the same Judge Carr who wrote the order we blogged about yesterday, vacating a $20 million punitive damages award against Philip Morris.