Last week, in Lewellen v. Franklin, the Missouri Supreme Court sharply restricted the reach of the State’s punitive damages cap statute, which limits punitive damages to the greater of $500,000 or five times the compensatory damages. The court reasoned that applying the statute to common-law causes of action that existed prior to 1820, when Missouri adopted its Constitution, violates the plaintiff’s right to trial by jury.
Continue Reading Missouri Supreme Court Strikes Down State’s Punitive Damages Cap As Applied To Common-Law Causes Of Action
The Specious Argument That Caps On Punitive Damages Are Affirmative Defenses That Must Be Pleaded
As readers undoubtedly are aware, concerns about upward spiraling punitive awards have prompted many state legislatures to enact caps on punitive damages. The plaintiff bar’s first line of attack on such statutes has been to challenge them under various provisions of state constitutions.
When that tactic has failed—as it has in most states—a second option in some plaintiffs’ playbook has been to assert in individual cases that the defendant forfeited the right to receive the benefit of the cap by not pleading it as an affirmative defense. For example, the plaintiff has invoked this argument in the Montana Supreme Court case about which Andy Frey and Rory Schneider blogged a couple of months ago.
MONTANA SUPREME COURT TO REVIEW DECISION DECLARING PUNITIVE DAMAGES CAP UNCONSTITUTIONAL
The threat of large punitive damages awards is particularly acute for businesses, large and small. Like many of its counterparts in other states, the Montana legislature sought to relieve businesses of the unpredictability and hydraulic pressure to settle created by the risk of uncabined punitive awards by imposing a cap on such awards: the lesser of $10 million or 3% of a defendant’s net worth.
Though similar restrictions have generally, but not always, withstood state constitutional challenge, a Montana state trial court judge struck down the cap as unconstitutional a little over three months ago. The defendant, with support from the Montana Attorney General as intervenor and two Montana business organizations as amici, has urged the Montana Supreme Court to reverse the lower court and uphold the constitutionality of the cap. (For copies of their briefs, click here and search for case DA 14-0113).
Continue Reading MONTANA SUPREME COURT TO REVIEW DECISION DECLARING PUNITIVE DAMAGES CAP UNCONSTITUTIONAL
Why The Ninth Circuit Should Hold That The Punitive Damages Award In Arizona v. ASARCO Is Excessive
In a prior post, I explained why the proper approach in Arizona v. ASARCO is to compare ASARCO’s conduct to conduct in other Title VII cases and then select a punishment—from zero to $299,999—commensurate with where ASARCO’s conduct stands on the spectrum of punishable conduct.
In this post, I will undertake to show why the Ninth Circuit panel and district court were mistaken in concluding that ASARCO’s conduct was reprehensible enough to warrant either (i) the highest punitive award ever imposed when compensatory damages were $1—$125,000—as the panel majority held, or (ii) the maximum permissible under Title VII—$299,999—as the dissenting member of the panel and the district court held.
Ninth Circuit To Hear Title VII Punitive Damages Case En Banc
It’s not often that federal courts of appeals agree to decide punitive damages cases en banc, so Arizona v. ASARCO, which the Ninth Circuit will rehear en banc on June 18, strikes us as worthy of attention. In fact, because the case potentially implicates a number of very important issues in the law of punitive damages, my colleagues and I plan to do a series of posts on the case.
So as not to bury the lead, let me say at the outset that I think that the parties and the original Ninth Circuit panel are looking at the issues in this case through the wrong lens. I’ll explain what I mean later in the post.
Continue Reading Ninth Circuit To Hear Title VII Punitive Damages Case En Banc