Photo of Andrew L. Frey

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.

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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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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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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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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Do Not Duplicate StampIn prior posts, we have occasionally adverted to the issue of multiple punishments in the constitutional context.  Just before the new year, a California appellate court issued an unpublished decision in Paletz v. Adaya bearing on a different aspect of the multiple punishment problem.  In Paletz, the Court of Appeal reversed an award of punitive damages as duplicative of an award of statutory penalties, concluding that the plaintiffs were not entitled to collect both forms of punishment for the same course of conduct.
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HorrorEveryone who follows punitive damages law knows that the Supreme Court has identified three guideposts for determining whether a punitive award is excessive under the Due Process Clause: (i) the degree of reprehensibility of the defendant’s conduct; (ii) the ratio of the punitive damages to the compensatory damages and/or the harm to the plaintiff that was likely to result from the defendant’s conduct; and (iii) the disparity between the punitive damages and the legislatively established penalties for comparable conduct.  The first guidepost in particular requires an assessment predicated on the facts of the case, which the parties will likely have disputed.  How should courts go about resolving those disputes?

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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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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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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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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.
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