UNANIMOUS EN BANC PANEL OF NINTH CIRCUIT HOLDS THAT TITLE VII CAP OBVIATES NEED TO REVIEW TITLE VII PUNITIVE AWARDS FOR EXCESSIVENESS UNDER BMW GUIDEPOSTS

Boton cuadrado blanco numero romano 7Earlier this year, the Ninth Circuit granted en banc review in Arizona v. ASARCO LLC to consider whether a punitive damages award that is subject to Title VII’s cap of $300,000 could nonetheless be unconstitutionally excessive when the compensatory damages are nominal and the ratio of punitive to compensatory damages accordingly is high.

In a post about the case a few weeks before the argument, I expressed the view that the parties and the courts were focused on the wrong question and that the right question is whether, as a matter of federal common law, a punitive award at the high end of the range is appropriate under the facts of the particular case.   And in a subsequent post, I explained why under that approach the punitive award in ASARCO should be considered excessive.

Yesterday, in an opinion by newly minted Chief Judge Sidney Thomas the en banc Ninth Circuit unanimously held that the concerns underlying the Supreme Court’s due process decisions—that the defendant receive fair notice of the extent of punishment to which it could be subjected and that defendants not be subjected to arbitrary punishments—are fully satisfied by Title VII’s cap.

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SUPREME COURT OF LOUISIANA STRIKES DOWN PUNITIVE DAMAGES AWARD ON RES JUDICATA GROUNDS

Two Bites on a Red AppleThe U.S. Postal Service advertises that “shipping isn’t complicated.”  Taking a page from the Postal Service’s book, the Supreme Court of Louisiana on Tuesday said much the same thing about res judicata.  In a concise unanimous decision, the court reversed an award of punitive damages against Exxon on res judicata grounds.  The court held that a defendant may not be required to relitigate whether its conduct warrants punitive damages after a jury found in its favor on that very question in an earlier case involving the same plaintiff.

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Washington Legal Foundation To Host Webinar On No-Injury Class Actions

Although this doesn’t have anything to do with punitive damages, readers of this blog may find an upcoming webinar sponsored by the Washington Legal Foundation to be of interest.  The webinar, which features my partner Andy Pincus and Jones Day partner Meir Feder (whom I have known for almost as long as I know Andy), will focus on so-called no-injury class actions—i.e., class actions seeking statutory damages for violations that didn’t cause actual injury to the named plaintiff(s) or to the similarly situated members of the putative class.

Andy and Meir will address, in particular, the pending certiorari petition in Spokeo Inc. v. Robins, which presents the question whether Congress may confer Article III standing on a plaintiff who suffered no concrete harm merely by creating a cause of action for statutory damages.  Andy is counsel of record for Spokeo, and Meir filed an amicus brief for Experian Information Solutions in support of Spokeo. 

Sixteen other companies and associations filed a total of nine additional amicus briefs in support of Spokeo, which are available here.  The issue intrigued the Supreme Court enough to invite the Solicitor General to submit a brief setting forth the views of the United States.  That brief has not yet been filed.

The webinar will take place on Tuesday, December 9, from 10:00 to 11:00 EDT.  Readers who are interested in listening in may use this link to register.

Jury Imposes $185 Million Punitive Award Against AutoZone In Individual Pregnancy Discrimination Case

Earlier this week, a federal jury in San Diego imposed a punitive damages award of $185 million against AutoZone in a case alleging pregnancy discrimination and retaliatory discharge.  The punitive damages are a whopping 212 times the $872,000 in compensatory damages that the jury awarded for lost wages and emotional distress.

Set of auto partsNeedless to say, it is exceptionally unlikely that anything close to $185 million will survive post-verdict and appellate review.  I have not yet had the chance to review anything other than media accounts about the case, but based on them a few things about the verdict jump out at me as being relevant to readers of this blog—all of which my colleagues and I have covered in previous posts.

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When Is A 99.6% Reduction Of A Punitive Damages Award Not Enough? When The Original Award Was $9 Billion And There Are Thousands Of Other Plaintiffs Seeking Comparable Awards.

Medical_Insurance_Concept_35162090A jury in the Western District of Louisiana made headlines last spring when it awarded a stunning $9 billion in punitive damages to a plaintiff who contended that the diabetes drug Actos caused his bladder cancer.  Last week, the district court cut the award by 99.6 % to approximately $37 million. Despite the impressive scale of the reduction, in our view the remitted award remains unconstitutionally excessive.  Furthermore, the district court’s lengthy opinion reveals significant errors of reasoning that we hope the Fifth Circuit will correct on appeal.  We address three of them here.

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Corporate Finances: Punitive Damages’ 800-Pound Gorilla

It seems perfectly obvious, to this writer at least, that by far the most significant factor fueling the drive over the past several decades to ever larger punitive awards is evidence of corporate finances, and jury instructions and arguments that punitive damages should be set on the basis thereof.

Business people sitting next to gorillaThis post will explore the following elements of the issue: (1) Why is financial evidence such a dominating factor in many juries’ punitive damages calculus?  (2)  When and why did this reliance on wealth in setting punishments arise?  (3) What are the economic and legal fallacies that undermine the validity of this practice? and (4) Do the Supreme Court’s decisions in BMW and State Farm provide a viable basis for arguing against the prevailing judicial tolerance of the misuse of such evidence and argument?

While this post is unusually lengthy, the topic is one that requires extended treatment.

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Seventh Circuit Issues Important Decision On “Hindsight Bias” In Punitive Damages Cases

Many states restrict punitive damages to situations in which the defendant either intended to injure the plaintiff or disregarded a substantial risk of injury.  Regrettably, courts often misapply the latter basis for punitive damages in a way that undermines its function of limiting punitive damages to cases of truly egregious misconduct.

In his opinion for the Seventh Circuit in Jentz v. ConAgra Foods, Inc., the ever-insightful Judge Easterbrook recently took a step to reverse the tide.

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Missouri Supreme Court Makes Fundamental Mistakes In Conducting Excessiveness Review Of Million-Dollar Punitive Award

In a post last week, Lauren Goldman discussed the Missouri Supreme Court’s decision in Lewellen v. Franklin striking down Missouri’s cap on punitive damages as applied to common-law causes of action and promised that we would do a subsequent post addressing the court’s further holding that the punitive damages in that case were not unconstitutionally excessive.  This is that post.

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May A Defendant Seek JMOL On Punitive Liability Based On A Standard Different From The One Reflected In The Jury Instructions?

We’ve been following the post-trial proceedings in Allen v. Takeda Pharmaceuticals North America, Inc., a product-liability action involving the diabetes drug Actos.  The case garnered headlines earlier this year when the jury awarded an astounding $9 billion in punitive damages against the two defendants.

Medical_Insurance_Concept_35162090On August 28, the district court in the Western District of Louisiana issued a ruling denying the defendants’ motion for judgment as a matter of law (JMOL) on liability for punitive damages and other issues.  Despite the suggestion of some news reports that the defendants are now on the hook for the $9 billion, the district court has not yet ruled on the defendants’ separate motion for a new trial under Rule 59, which argues among other things that the punitive damages are excessive.

In this post, I want to address a significant flaw in the district court’s reasoning concerning the defendants’ challenge to punitive liability. Although the error did not affect the decision’s outcome, the issue arises in other cases with some frequency and could make a difference in this case on appeal.

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Missouri Supreme Court Strikes Down State’s Punitive Damages Cap As Applied To Common-Law Causes Of Action

Beverage bottle openedLast week, in Lewellen v. Franklin, the Missouri Supreme Court sharply restricted the reach of the State’s punitive damages cap statute, which limits punitive damages to the greater of $500,000 or five times the compensatory damages.  The court reasoned that applying the statute to common-law causes of action that existed prior to 1820, when Missouri adopted its Constitution, violates the plaintiff’s right to trial by jury.

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