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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Some Thoughts About Verdict Forms

Sign-Jury_Deliberations_2984166When we are asked to assist with post-verdict motions after a jury has returned a large punitive award, all too often we find that the verdict form relating to punitive liability asks only whether the standard for punitive liability has been satisfied.  That presents a handicap from which it may be impossible to recover.

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Why Senator Leahy’s Proposal To Bar Businesses From Deducting Punitive Awards From Taxable Income Is A Bad Idea

Books-IRS_187115In mid-January, Senator Patrick Leahy (Dem. Vt.) proposed—again—legislation that would prevent businesses from deducting from taxable income any punitive damages they have paid during the relevant tax year.

Although it would seem that this legislation has little chance of being enacted in the current Republican-controlled Congress, out of an abundance of caution we think it is worth reciting the reasons why this proposal is a bad idea.

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Second Circuit Holds 4:1 Ratio Excessive And Orders Remittitur To 2:1 In Hostile-Environment Case

In late December, the Second Circuit released a significant and interesting decision on excessiveness of punitive damages—and we say that not just because we represented the defendants in the case.

Traffic Cop Blowing WhistleTurley v. ISG Lackawanna, Inc. involved racial harassment of a steel worker by his fellow employees.  The plaintiff alleged that his employer and its parent did not respond adequately to the harassment.  A jury agreed and awarded the plaintiff a total of $1.25 million in compensatory damages—all for emotional distress—and $24 million in punitive damages against the corporate defendants.  The district court determined that the punitive damages were excessive and ordered a remittitur to approximately $5 million.

Although rejecting the defendants’ other arguments, the Second Circuit agreed with defendants that the punitive damages as remitted remained excessive.

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