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.

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Inevitably, when conscientious judges delve into the multi-dimensional issue of excessive punitive damages, they get some things right and other things wrong. Such is the case with the Fourth Circuit’s recent decision in Daugherty v. Ocwen Loan Servicing, LLC. Unfortunately, as a doctrinal matter at least, the erroneous aspects of the decision predominate.  
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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.
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Everything for your ailmentsThings have been quiet in the world of punitive damages for the last few months, but two recent decisions substantially reducing punitive awards under the BMW/State Farm factors warrant mention. My colleague Miriam Nemetz will discuss one of them—Grant Thornton, LLP v. Yung—in a forthcoming post. In today’s post, I will address the Ninth Circuit’s decision in Mitri v. Walgreen Co.­a case in which my colleague Michele Odorizzi and I represented the defendant.
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HiResCourts applying BMW and State Farm often emphasize the Supreme Court’s admonition that the constitutional line is not “marked by a simple mathematical formula”—typically when rejecting a defendant’s argument that the ratio of punitive to compensatory damages is indicative of an excessive award.  But in Mercedes-Benz USA v. Carduco, Inc., the Texas Court of Appeals showed that this dictum is a two-way street, reducing a punitive award to a small fraction of the compensatory damages.
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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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Carbon-monoxide-3D-ballsLately, we have had many occasions to criticize courts’ analysis of punitive damages issues, so it is nice for a change to be able to report on the Tenth Circuit’s insightful decision in Lompe v. Sunridge Partners.  Readers may recall that we published a post about our amicus brief for the Chamber of Commerce in this case about a year ago.  I am pleased to report that the court adopted virtually all of the argument and analysis set forth in the amicus brief.
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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.
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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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