Should divided panels of federal appellate courts really be deciding state-law issues of first impression? That’s what happened last month in Lindenberg v. Jackson National Life Insurance Co. In Lindenberg, two Sixth Circuit judges—over a lengthy dissent by the third member of the panel—resolved two state-law issues in a manner that expands the availability of punitive damages under Tennessee law.
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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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In 2015, West Virginia enacted a statute that caps punitive damages at the greater of $500,000 or four times the compensatory damages. We blogged about the statute here, explaining that the West Virginia legislature was seeking to reform the state’s image as a “judicial hellhole” that is hostile to defendants.
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Just about a week after suffering its third punitive award in pelvic-mesh litigation, Johnson & Johnson found itself on the wrong end of a $105 million punitive award—close to 20 times the $5.4 million compensatory award—in litigation alleging that its iconic talcum powder causes ovarian cancer in women.
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600px-I-70.svgSt. Louis and Kansas City have long been cross-state baseball rivals. Who can forget the 1985 I-70 World Series?

So it is hardly surprising that on the eve of St. Louis being named by the American Tort Reform Association as the number one Judicial Hellhole in the country, juries in Jackson County (home to Kansas City) would stake their own claim to that dubious distinction by returning two jaw-dropping punitive awards in consecutive days.
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Seal_of_the_Supreme_Court_of_TexasAn issue that seems to be arising with increasing frequency is whether the defendant must plead applicability of a cap on punitive damages in its answer. We have already explained why the argument that the cap is an affirmative defense that must be pleaded is specious.

The Texas Supreme Court agreed with that position

Isolated Keys on White with Clipping PathMcPadden v. WalMart Stores East, L.P., No. 14-cv-475, awarded more than $31 million to a former Wal-Mart employee who had worked for the company as a pharmacist.  The plaintiff sued for discrimination and retaliation after she was terminated as discipline for losing a pharmacy key.  As is common in these cases, the news stories were technically accurate but left a misleading impression of what happened.
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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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Boton cuadrado blanco numero romano 7Earlier this year, the Ninth Circuit granted en banc review in Arizona v. ASARCO LLC to consider whether a punitive damages award that is subject to Title VII’s cap of $300,000 could nonetheless be unconstitutionally excessive when the compensatory damages are nominal and the ratio of punitive to compensatory damages accordingly is high.

In a post about the case a few weeks before the argument, I expressed the view that the parties and the courts were focused on the wrong question and that the right question is whether, as a matter of federal common law, a punitive award at the high end of the range is appropriate under the facts of the particular case.   And in a subsequent post, I explained why under that approach the punitive award in ASARCO should be considered excessive.

Yesterday, in an opinion by newly minted Chief Judge Sidney Thomas the en banc Ninth Circuit unanimously held that the concerns underlying the Supreme Court’s due process decisions—that the defendant receive fair notice of the extent of punishment to which it could be subjected and that defendants not be subjected to arbitrary punishments—are fully satisfied by Title VII’s cap.


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