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Andy Frey has been integral to the development of constitutional limitations on punitive damages for over 25 years.  During this time, he has argued four punitive damages cases in the US Supreme Court for business defendants, including BMW of North America, Inc. v. Gore, the Court’s seminal excessiveness case, as well as Philip Morris USA v. Williams and Honda Motor Co. v. Oberg, each of which resolved procedural due process challenges in favor of our clients.  No other defense counsel has argued more than one punitive damages case in the Court.  Andy also has successfully argued punitive damages cases in many lower federal and state courts.  Andy has represented insurers, automobile manufacturers, consumer product manufacturers, pharmaceutical companies, energy companies, financial institutions, and many other kinds of businesses in punitive damages litigation.

In addition, Andy has written many scholarly pieces on punitive damages, including co-authoring with Evan Tager and Lauren Goldman the chapter on punitive damages in the ABA’s multi-volume treatise, Business and Commercial Litigation in Federal Courts.  Andy has also often appeared on panels on punitive damages.

Read Andrew's full bio.

Over the years, we have reported on many cases in which courts adhered to the Supreme Court’s guidance in State Farm (and Exxon Shipping Co. v. Baker) that, when compensatory damages are “substantial, a 1:1 ratio of punitive to compensatory damages may be the maximum that due process allows. Recently, however, two state courts deviated from that trend and held that a 2:1 ratio was the constitutional maximum.
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You’ve likely seen by now media reports about an Illinois federal jury’s $150 million punitive award against AbbVie in a case brought by a plaintiff who alleged that AbbVie’s low-T medication AndroGel caused his heart attack.

The jury found against the plaintiff on his strict-liability and negligence claims. It found in favor of the plaintiff on his fraudulent-misrepresentation claim.  However, the jury awarded no compensatory damages on that claim; nevertheless, it imposed $150 million in punitive damages.
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TreatiseWe are excited to report that in late December Thomson Reuters released the fourth edition of the multi-volume treatise Business and Commercial Litigation in Federal Courts.  As in the first three editions, we contributed the chapter on punitive damages—Chapter 48 in the new edition.

The punitive damages chapter, which spans 154 pages, provides strategic

License Plate1Tomorrow marks the twentieth anniversary of the Supreme Court’s decision in BMW of North America. Inc. v. Gore, the first time the Court had ever held that a punitive damages award was unconstitutionally excessive under the Due Process Clause.

In the ensuing 20 years, the decision has proved to be a foundational case in punitive damages jurisprudence.  It has been cited in hundreds, if not thousands, of lower court decisions; it has been the subject of dozens of scholarly articles; and it is featured in virtually every tort and remedies case book used in law schools.

Far from being “a road to nowhere,” as Justice Scalia charged in his dissenting opinion, BMW has served as a constraining force on punitive damages from the moment it was issued.  Before BMW, no court anywhere had held that a punitive award was unconstitutionally excessive.  After BMW, hundreds of punitive awards have been reduced after being found excessive under the “guideposts” announced in that decision.

Having been fortunate enough to have represented BMW in that historical case, we thought it appropriate to provide some reflections on the occasion of the decision’s twentieth anniversary.
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Chicago_State_Athletics_wordmarkThe due process review of a punitive damages award for excessiveness has a number of interconnected parts. A series of relatively small errors can quickly add up and dramatically skew the outcome of a review process that is intended to impose predictability and consistency on the largely black-box process juries use when setting the amount of punitive damages.  The Illinois Appellate Court’s decision in Crowley v. Watson illustrates the point.
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The Due Process Clause of the Fourteenth Amendment requires procedural fairness in state trials, but that principle seems absent from a recent California Court of Appeal decision upholding a judgment against Kaiser Gypsum Company for almost $1.6 million in compensatory damages and close to $4 million in punitive damages.

Asbestos

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As we have observed in a prior post, defendants in punitive damages cases often fail to develop evidence in mitigation of the amount of punitive damages, enabling the plaintiff to focus the jury on evidence about the defendant’s wealth and to argue—essentially with no resistance—that a substantial award of punitive damages will be necessary to change the defendant’s conduct in light of that wealth.

Hip ImplantBucking this trend, Wright Medical Technology and Wright Medical Group, the defendants in multidistrict litigation alleging defects in their hip implants, have developed evidence designed to persuade juries that large punitive awards would be unnecessary and counterproductive. In particular, the Wright Medical defendants have developed evidence about the various deleterious effects that a large punitive award might have.  They also have developed evidence relating to their good “corporate character.”


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As we have noted in prior posts, many states require courts to bifurcate punitive damages trials upon the defendant’s request. The question therefore arises whether a federal court sitting in diversity must or, at least should, require bifurcation when the applicable state law requires bifurcation.

Shady GroveMost federal courts that have confronted the issue have concluded that bifurcation is procedural and that, under Erie, they therefore need not adhere to the bifurcation requirements of the state whose substantive law governs the case. While at first blush, the Supreme Court’s 2010 decision in Shady Grove Orthopedic Associates v. Allstate Insurance Co. may appear to reinforce that conclusion, on closer inspection it does not affect the analysis one way or the other.


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Self Employed ManThe Missouri courts seem to provide more than their share of material worthy of comment.  In Ross-Paige v. St. Louis Metropolitan Police Department, decided on June 30, a jury had found for the plaintiff, a St. Louis police officer, on her claim of retaliation under the Missouri Human Rights Act.  After the jury awarded $300,000 in compensatory damages and found the defendant liable for punitive damages, a second phase was held to set the amount of punitive damages.

The jury set punitive damages at a staggering and manifestly excessive $7.2 million, which was reduced under Missouri’s statutory cap of five times compensatory damages to about $2.5 million after attorneys’ fees were added to the compensatory damages.  (As noted in a prior post, the Missouri Supreme Court has declared the cap statute unconstitutional as applied to common-law actions, but has upheld it as applied to statutory causes of action such as that in the instant case.)


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