May 14, 2015

Ninth Circuit wipes out $75 million punitive damages award against defense contractor

A few years ago we reported on this $75 million punitive damages award against defense contractor Kellog Brown & Root for conduct that took place in Iraq.  Today, the Ninth Circuit vacated that award in its entirety.
Members of the Oregon National Guard sued KBR in federal district court in Oregon, seeking recovery under Oregon law.  The plaintiffs blamed KBR for causing them to be exposed to hexavalent chromium in Iraq.  A jury awarded over $80 million in damages, including $75 million in punitive damages.  KBR appealed to the Ninth Circuit and our firm filed an amicus brief, arguing that the Constitution prohibits imposition of punitive damages under state law for conduct that occurred solely in a foreign country.

Today the Ninth Circuit issued a memorandum disposition reversing the judgment.  The Ninth Circuit didn't reach the question of extraterritorial punishment.  Instead, it reversed the judgment on the ground that KBR is not subject to personal jurisdiction in Oregon because KBR did not engage in any acts expressly aimed at Oregon.  The fact that KBR engaged in conduct towards members of the Oregon National Guard was not sufficient to create jurisdiction in Oregon.