Louisiana generally does not permit punitive damages. But if an accident happens on navigable waters, and the plaintiff brings a claim under federal maritime law, a Louisiana jury can award punitive damages, and Louisiana courts then must decide the full panoply of issues that arise in punitive damages cases.  That’s what happened in Warren v. Shelter Mutual Insurance Co.

Continue Reading

Application of the Supreme Court’s excessiveness guideposts to cases involving multiple defendants is one of the more confounding problems that arises in punitive damages jurisprudence. The Supreme Court of Texas got the issue right in Horizon Health Corp. v. Acadia Healthcare Co., a case in which several defendants were jointly liable for compensatory damages but individually liable for separate punitive awards.
Continue Reading

Car insuranceSeemingly minor legal issues sometimes can have a surprisingly significant effect. That is particularly true with the ratio guidepost because the effect of any dispute about the guidepost’s application is literally multiplied. We recently filed an amicus brief on behalf of a group of organizations in an Eighth Circuit appeal that proves the point: Dziadek v. The Charter Oak Fire Insurance Company, No. 16-4070.
Continue Reading

fraction (1)On June 9, 2016, the California Supreme Court issued its decision in Nickerson v. Stonebridge Life Insurance Co., holding that so-called Brandt fees should be treated as compensatory damages when calculating the ratio of punitive to compensatory damages even when they are awarded by the trial court after the jury has returned its punitive damages award.

As discussed in my post about our amicus brief for the Chamber of Commerce in Nickerson, Brandt fees are the attorneys’ fees incurred by an insured in obtaining policy benefits that an insurer has been held to have denied the insured in bad faith.  Accordingly, at first blush Nickerson may appear to be irrelevant outside the insurance context.  But that first impression may be mistaken.
Continue Reading

pair-of-scissors-307766_640A couple of months ago, I did a post about the post-trial motions in the first trial arising out of alleged defects in Wright Medical Technology’s hip implant device. On April 5, the district court resolved the motions, rejecting all of Wright’s arguments for judgment as a matter of law or a new trial, but dramatically reducing the punitive damages from $10 million to $1.1 million.

The plaintiff in this case received a Wright hip implant and, after experiencing what the district court characterized as “a cataclysmic failure,” had to have it removed and replaced. She alleged that Wright’s hip implant was defectively designed and that Wright committed fraud and made negligent misrepresentations in marketing the device to surgeons.  Although the procedural history is complicated, the bottom line is that the jury found Wright liable for design defect and awarded the plaintiff $550,000 in compensatory damages; it also found that Wright made negligent misrepresentations about the virtues of its device, for which it awarded the plaintiff an additional $450,000 in compensatory damages, plus $10 million in punitive damages.
Continue Reading

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.
Continue Reading

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

Continue Reading

Seal_of_the_Supreme_Court_of_TexasOne of the biggest challenges confronting a defendant that has lost a large judgment is the need to file a supersedeas bond in order to prevent execution on the judgment during the pendency of the appeal.  There are good arguments for not requiring the defendant to bond the punitive damages part of such a judgment, but in our experience courts seldom accept them.

Recognizing the hydraulic pressure imposed on defendants by a requirement that they bond the full amount of the judgment, plus interest and costs, the Texas Legislature in 2003 enacted Section 52.006 of the Civil Practice and Remedies Code, which imposes an array of limitations on the bond requirement.

First, the Legislature limited the required bond to the amount of compensatory damages, plus the interest estimated to accrue during the appeal and any costs awarded in the judgment.  Second, the Legislature capped the amount of any bond at the lesser of $25 million or 50% of the defendant’s net worth.  And third, the Legislature gave the courts discretion to further reduce the amount of the bond if necessary to prevent the defendant from suffering “substantial economic harm.”

Earlier this year, the Texas Supreme Court provided some interesting guidance on the proper interpretation of Section 52.006. The decision in In re Longview Energy Co. may, in addition, provide useful grist for excessiveness arguments in punitive damages cases.


Continue Reading