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.

Continue Reading

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.

Continue Reading

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.

Continue Reading

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.

Continue Reading

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.

Continue Reading

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.

Continue Reading

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.

Continue Reading

Missouri Court Of Appeals Reverses Punitive Award Because Of Erroneous Instructions

Judge Holding DocumentsIn a prior post, Andy Frey and I discussed the concern expressed by some defense lawyers that jurors in a bifurcated trial might bake punitive damages into their compensatory award because they are unaware that they will be able to impose punitive damages in a second phase.  We expressed the view that this concern can be readily addressed by instructing the jury before it deliberates in the first phase that, if it finds that the defendant acted with the requisite mental state, a second phase will commence to address the amount of punitive damages (if any).

The Missouri Court of Appeals’ decision last week in Advantage Buildings & Exteriors, Inc. v. Mid-Continent Casualty Co. confirms both that the concern about inflation of the compensatory damages is a real one and that the solution is proper instruction of the jury.

Continue Reading

The Specious Argument That Caps On Punitive Damages Are Affirmative Defenses That Must Be Pleaded

Line Graph_000004905228_LargeAs readers undoubtedly are aware, concerns about upward spiraling punitive awards have prompted many state legislatures to enact caps on punitive damages.  The plaintiff bar’s first line of attack on such statutes has been to challenge them under various provisions of state constitutions.

When that tactic has failed—as it has in most states—a second option in some plaintiffs’ playbook has been to assert in individual cases that the defendant forfeited the right to receive the benefit of the cap by not pleading it as an affirmative defense.  For example, the plaintiff has invoked this argument in the Montana Supreme Court case about which Andy Frey and Rory Schneider blogged a couple of months ago.

Continue Reading

Alternatives To Traditional Bifurcation

ChoicesIn a recent post, we set forth our views on why, with some forethought, traditional bifurcation—i.e., trying liability for the underlying tort, compensatory damages, and liability for punitive damages in the first phase and, if necessary, the amount of punitive damages in a second phase—can be a beneficial procedural safeguard for defendants.  Sometimes, however, circumstances may dictate other forms of bifurcation, or even trifurcation.

Continue Reading

LexBlog