May 15, 2020

California Court of Appeal overturns three large punitive damages awards (Curry v. Academy Pointe, Colucci v. T-Mobile, and Tilkey v. Allstate)

The pandemic-related shutdown has brought civil litigation in California to a screeching halt in the trial courts.  But the California Court of Appeal has continued processing cases and issuing opinions, and has overturned three large punitive damages awards since the shutdown began.

1.  In Curry v. Academy Pointe, Inc., a landlord-tenant dispute over disability accommodations, a jury awarded $750,000 in compensatory damages and $4.5 million in punitive damages.  The landlord appealed and the Court of Appeal (Second Appellate District, Division One) reversed the punitive damages award in an unpublished opinion.

The court found the punitive damages award was excessive because it bore no reasonable relation to  the low reprehensibility of defendants’ conduct, the severity of the plaintiff's harm (which was completely compensated by the substantial compensatory damages award), and the possible civil penalties authorized by the Legislature for similar conduct. The court therefore reduced the punitive damages award to $750,000, resulting in a 1 to 1 ratio between punitive and compensatory damages.

[Disclosure: Horvitz & Levy represented the landlord on appeal in Curry.]

2.  In Colucci v. T-Mobile, a workplace retaliation case, a jury awarded $1 million in compensatory damages and $4 million in punitive damages.  T-Mobile appealed and the Court of Appeal (Fourth Appellate District, Division One), in a published opinion, ordered a reduction of the punitive damages award to $1.5 million.

The court concluded that the reprehensibility of T-Mobile's retaliatory conduct was "in the low or moderate range of wrongdoing that can support an award of punitive damages."  And the court acknowledged that the California Supreme Court in Roby v. McKesson set a maximum ratio of 1 to 1 in another case involving a significant compensatory damages award and a low level of reprehensibility.  But the court did not explain why it chose a 1.5 to 1 ratio instead of following Roby's guidance and setting the maximum at 1 to 1.

3. In Tilkey v. Allstate, a jury awarded $2.7 million in compensatory damages and $16 million in punitive damages to a plaintiff asserting a claim of "compelled self-published defamation."  Allstate appealed, arguing that compelled self-published defamation is not a viable tort theory and, even if it were, it could not support an award of punitive damages.  The same court that issued the Colucci opinion, the Fourth Appellate District, Division One, issued a published opinion rejecting those arguments, but reversing the punitive damages award as excessive.  The court noted that the ratio of punitive damages to compensatory damages was more than 9 to 1, comparing the punitive damages only to the portion of the compensatory damages award attributable to defamation.  Rather than reducing the punitive damages award to a specific number, the Court of Appeal sent the case back to the trial court to determine the constitutional maximum.