May 4, 2015

Amicus briefs support SCOTUS review of West Virginia punitive damages award (Quicken Loans v. Brown)

Last week the U.S. Chamber of Commerce and the Washington Legal Foundation filed amicus briefs asking the Supreme Court to once again provide guidance on issues that arise when a court reviews (or in this case, declines to review) a punitive damages award for excessiveness.
In the case of Quicken Loans v. Brown, the plaintiff sued Quicken Loans for fraud, claiming it lent her more money than her house was worth.  A jury awarded $2.17 million in punitive damages and $17,500 in compensatory damages, a ratio of 124 to 1.  The plaintiff also recovered over $596,000 in fees and costs, which the trial court cited during post-trial proceedings as a basis for upholding the punitive damages award.  

Quicken Loans appealed to the West Virginia Supreme Court, raising a constitutional challenge to the size of the punitive damages award.  The court never reached that issue because it reversed the judgment on other grounds.  The case went back to the trial court, which entered a new judgment that increased both the compensatory and punitive damages. 

Quicken Loans appealed again, and the West Virginia Supreme Court invalidated the part of the trial court's order that increased the damages.  The Supreme Court ordered the original amounts reinstated, but declined (by a 3-2 vote) to review the amount of the punitive damages.  The majority said Quicken Loans had waived the issue by not raising it in the first appeal.  The dissenting opinion pointed out, however, that the "one of the petitioner's most significant assignments of error [in the first appeal] was that the punitive damages award was 'grossly excessive.'"  For whatever reason, the justices in the majority did not see it that way.

Quicken Loans has now petitioned for certiorari, raising these two issues:

1.  Whether a state court may evade its obligation to apply the United States Constitution and this Court's cases by asserting that expressly and pervasively raised federal constitutional claims were purported waived.

2.  Whether, in applying the punitive to compensatory damages ratio of State Farm v. Campbell [citation], court awarded attorney's fees are properly included as compensatory damages?

The Supreme Court has had many opportunities to delve back into this area in recent years, including other cases raising the second issue presented here (treatment of attorney's fees as compensatory damages for ratio purposes), but the justices haven't seemed interested.  Perhaps the unusual procedural history of this case will grab their attention.

WLF's amicus brief is available at this link.