Virginia Supreme Court Holds That Courts May Not Instruct Juries That Punitive Damages Are Disfavored

Virginia_supreme_court_sealThe drafting of jury instructions on punitive damages presents unique challenges for defense lawyers.  On the one hand, it is generally necessary to ask for an instruction that goes beyond existing law in order to preserve the argument that the law should be changed.  That is how the harm-to-nonparties issue was teed up in Philip Morris v. Williams.  And just importantly, because most pattern instructions on punitive damages are fairly perfunctory, it is often necessary to propose a more expansive alternative to ensure that the jury is adequately apprised of even existing law.

On the other hand, proposing an instruction that goes too far can result in reversal of a favorable verdict if the trial court goes along and gives it.  That is what happened in Cain v. Lee, a case recently decided by the Virginia Supreme Court.

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Third Circuit Holds That Under Pennsylvania Law An Insured Against Whom Punitive Damages Have Been Imposed May Not Recover Those Punitive Damages As Compensatory Damages In Bad-Faith Action Against His Insurer

Insurance-Certificate-Glasses_15701162As a matter of public policy, Pennsylvania (like a number of other states) prohibits insuring against punitive damages.  But what happens if an insurer refuses to settle a case against a policyholder within policy limits and the policyholder then sustains an award of punitive damages?  That was the question decided by the Third Circuit in Wolfe v. Allstate Property & Casualty Insurance Co.

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Why Criminal-Law Statute-Of-Limitations Principles Should Apply To Claims For Punitive Damages

Tall Case Grandfather Clock, Antique Empire Revival StyleThere are not many true affirmative defenses to punitive damages, much less ones that can be established on the face of the complaint.  One potential basis for dismissing a claim for punitive damages, which could be particularly useful in environmental cases alleging that conduct occurring in the distant past caused injuries that manifested only recently, involves the statute of limitations.

Although only a few courts have addressed the topic, there is a compelling conceptual argument that the statute of limitations for punitive damages should run from the date of the conduct for which punishment is sought, not the date of injury or discovery of injury, as would be the case for the underlying compensatory or remedial claims.  The basic idea is that the penal nature of punitive damages makes it appropriate to apply criminal-law limitations principles, under which the statute of limitations normally runs from commission of the wrongful act.

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Texas Supreme Court Limits Amount Of Supersedeas Bond In Decision With Possible Implications For Cases In Which Punitive Damages Are Challenged As Excessive

Seal_of_the_Supreme_Court_of_TexasOne of the biggest challenges confronting a defendant that has lost a large judgment is the need to file a supersedeas bond in order to prevent execution on the judgment during the pendency of the appeal.  There are good arguments for not requiring the defendant to bond the punitive damages part of such a judgment, but in our experience courts seldom accept them.

Recognizing the hydraulic pressure imposed on defendants by a requirement that they bond the full amount of the judgment, plus interest and costs, the Texas Legislature in 2003 enacted Section 52.006 of the Civil Practice and Remedies Code, which imposes an array of limitations on the bond requirement.

First, the Legislature limited the required bond to the amount of compensatory damages, plus the interest estimated to accrue during the appeal and any costs awarded in the judgment.  Second, the Legislature capped the amount of any bond at the lesser of $25 million or 50% of the defendant’s net worth.  And third, the Legislature gave the courts discretion to further reduce the amount of the bond if necessary to prevent the defendant from suffering “substantial economic harm.”

Earlier this year, the Texas Supreme Court provided some interesting guidance on the proper interpretation of Section 52.006. The decision in In re Longview Energy Co. may, in addition, provide useful grist for excessiveness arguments in punitive damages cases.

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West Virginia Supreme Court Of Appeals’ Refusal To Review Punitive Award For Excessiveness Under Due Process Clause Warrants Summary Reversal, Says Chamber Of Commerce In Mayer Brown-Authored Amicus Brief

wvscaSealAs readers of this blog and litigants and their attorneys in punitive damages cases well know, the U.S. Supreme Court gets the final say on matters of constitutional interpretation, including the due-process requirements for punitive damages awards. Except if you happen to live in West Virginia.

It turns out that the West Virginia Supreme Court of Appeals has made it something of a habit in recent years to ignore, sidestep, or outright reject controlling principles of federal law by, as the U.S. Supreme Court itself pointed out in 2012, “misreading and disregarding” Supreme Court precedents. This trend has been particularly noticeable in punitive damages cases, in which members of the West Virginia court have openly expressed their hostility toward the Supreme Court’s due-process holdings in State Farm v. Campbell, BMW v. Gore, and Philip Morris USA v. Williams.

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Montana Supreme Court Upholds $5 Million Punitive Award That Is Five Times The Compensatory Damages

Montana Punitive-DamagesMontana is known fondly to many as Big Sky Country, but it also is quickly gaining a reputation for big punitive damages awards.  Not only are juries imposing breathtaking amounts of punitive damages with increasing regularity, but the courts of Montana generally have been upholding those awards (or reducing them to amounts that would still be considered excessive in most other jurisdictions). Most recently, the Montana Supreme Court upheld a $5 million punitive award that was five times the already generous amount of compensatory damages.

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Mayer Brown Submits Amicus Brief For Chamber Of Commerce In Tenth Circuit Appeal Involving Excessive Punitive Damages

US-CourtOfAppeals-10thCircuit-SealAlthough the Supreme Court’s modern due process cases have given lower courts a framework for deciding whether an award of punitive damages is excessive, some lower courts have been misapplying the Supreme Court’s guidance, refusing to disturb (or inadequately reducing) punitive awards that are much larger than necessary to accomplish the legitimate retributive and deterrent purposes of punitive damages.

Lompe v. Sunridge Partners, LLC, which is currently pending before the Tenth Circuit, is illustrative.

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West Virginia Enacts Punitive Damages Statute

West Virginia Flag as the territory Map on the Black BackgroundWest Virginia long has been at or near the top of the Chamber of Commerce’s and American Tort Reform Association’s lists of judicial hellholes. Last month, the State took a big step toward changing its image, enacting a series of laws that aim to eliminate “jackpot justice.”

Most pertinent to readers of this blog, the Legislature passed and the Governor signed a punitive damages statute that comprehensively reshapes the manner in which this remedy is administered in West Virginia.

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Using Supreme Court Commerce Clause Doctrine To Demonstrate That A Large Punitive Award Effects Improper Extraterritorial Punishment

directional sign USA statesThe Supreme Court held in BMW v. Gore that states may not use punitive damages awards to punish a defendant for the impact of its conduct in other states. BMW involved an obvious violation of that principle: The plaintiff introduced evidence of approximately 1,000 vehicles that BMW had sold around the country without disclosing pre-sale refinishing, asked the jury to punish BMW $4,000 for each vehicle, and then received a punitive award of exactly $4 million—1,000 X $4,000.

But in many other cases, the violation is more opaque. Sometimes evidence of the number of “victims” of the conduct is introduced, but the punitive award does not bear a precise or readily ascertainable relationship to that number. In other cases, the plaintiff doesn’t introduce the number at all, but merely emphasizes that there are many other victims around the country and then receives an outsized punitive award.

How then is a court to know whether the award constitutes impermissible punishment for harms suffered by out-of-state victims?

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Mayer Brown Appellate Group Launches New And Improved Web Site

Way back in the prehistoric era of the worldwide web, Mayer Brown’s appellate group created what was, at the time, an innovative new web site. It was among the first legal web sites to incorporate sound (oral argument recordings) and archive vast amounts of information (the brief bank).

But times have changed and our web presence has needed to change with it, so I am pleased to announce the introduction of our new and improved web site, the url for which, like that of its predecessor, is www.appellate.net. My colleagues and I hope that you will find the site to be a useful resource.

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