May 20, 2020

Supreme Court of California hears arguments in case with punitive damages implications (Conservatorship of O.B.)

The California Supreme Court held oral argument yesterday in Conservatorship of O.BThat case is not a punitive damages case, but the issue it presents has significant implications for punitive damages litigation in California.

As previously reported here, the issue presented is whether California appellate courts should take the “clear and convincing” evidence standard into account when deciding whether substantial evidence supports a factual finding that must be proven by clear and convincing evidence.  As readers of this blog are aware, that issue has come up often in punitive damages litigation, including a 2008 case in which the Supreme Court granted review but never reached the issue because the parties settled.

The Supreme Court received amicus briefing in O.B. discussing the implications of this issue in punitive damages cases.  (Horvitz & Levy submitted one of those briefs, on behalf of the U.S. Chamber of Commerce.)  However, the oral argument yesterday focused exclusively on the application of the clear and convincing standard in the context of conservatorship cases.  Neither the parties nor the justices touched on the application of the heightened standard of proof outside of that context.

Based on the questions asked by the justices, I am cautiously optimistic that the California Supreme Court will ultimately take the same position as the U.S. Supreme Court and hold that the clear and convincing evidence standard applies on appeal, and does not "disappear" during appellate review as some Court of Appeal decisions have held.  But it is also possible that the Supreme Court may issue a very narrow opinion, leading to further litigation over this issue outside the conservatorship context.