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Preview: California Punitive Damages

California Punitive Damages



An Exemplary Blog



Updated: 2018-02-19T08:31:57.931-08:00

 



Proposed bill would authorize tripling of civil penalties in cases involving minors (AB 2015)

2018-02-16T16:37:45.031-08:00

California assembly member Brian Maienschein (R-San Diego) has introduced a bill entitled "Punitive damages: minors," which would authorize tripling of civil fines and penalties in cases involving minors.  

The law would apply to any civil penalty or remedy if (a) the purpose is to punish and deter and (b) the amount is subject to the trier of fact's discretion.  In such cases, the trier of fact could decide to increase the amount by a factor of three, if any of these factors are present:

(1) The defendant knew or should have known that his or her conduct was directed to one or more minors.

(2) Minors are substantially more vulnerable than other members of the public to the defendant’s conduct and actually suffered harm from the defendant’s conduct.
(3) The conduct involved the crimes of prostitution, pimping, and pandering.

It is not entirely clear how this bill, if enacted, would interact with current punitive damages law.  Punitive damages fall into the category of civil remedies that are designed to punish and deter.  And the amounts of such awards are within the discretion of the trier of fact, at least to an extent (subject to state and federal limitations on excessive awards).  Therefore, it appears that this bill would apply to punitive damages, but of course the state legislature cannot override the federal constitutional limitations on punitive damages.  So to the extent this bill would authorize an award in excess of those limitations, federal law would take precedence. 

The status of the bill can be tracked here.
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Ninth Circuit creates circuit split on availability of punitive damages in unseaworthiness cases (Batterton v. Dutra Group)

2018-01-23T17:01:50.348-08:00

The Ninth Circuit issued a published opinion today that expressly disagrees with a decision of the Fifth Circuit.

The issue is whether punitive damages are available in unseaworthiness cases under general maritime law.   The Ninth Circuit answered this question in the affirmative in 1987, in a case called Evich v. Morris.  But the Fifth Circuit ruled a few years ago that a subsequent Supreme Court case impliedly overruled Evich.

Not so, says the Ninth Circuit:
The Fifth Circuit’s leading opinions . . . are scholarly and carefully reasoned, but so are the dissenting opinions, which to us are more persuasive.
This case has the makings of a good cert. petition, with an express circuit split on an issue of federal common law.  Stay tuned to see whether the Ninth Circuit agrees to take this one en banc.(image)



SCOTUS asked to address punitive damages "overkill" in mass tort cases (Crane Co. v. Poage)

2018-01-18T12:30:46.393-08:00

In a few months, the Supreme Court will decide whether to wade back into the subject of punitive damages, a topic it hasn't addressed in a few years.  A pending cert. petition asks the Court to address the following two issues:
1. Whether the Due Process Clause requires appellate review that considers factors undermining the reasonableness of a punitive damages award? 
2. Whether the Due Process Clause prohibits a punitive damages award that is more than ten times a substantial compensatory damages award against a defendant who faces multiple suits arising from a single course of conduct?
The petition arises from a decision of the Missouri Court of Appeals that affirmed $822,250 in compensatory damages and $10 million in punitive damages.

The second issue in the petition is particularly interesting to me.  For decades courts have struggled to find a way to address the problem of duplicative punishment that arises when multiple plaintiffs seek punitive damages for the same conduct.  (In this case, the conduct was the defendant's use of asbestos-containing materials in equipment supplied to the Navy shortly after World War II).  Many courts have voiced concerns about punitive damages overkill, but they have not yet devised a workable solution. 

In California, defendants are permitted to raise this concern only if they present the jury with evidence or prior punitive damages awards.  (See Stevens v. Owens-Corning Fiberglas.)  In my view, that rule conflicts with the Supreme Court's subsequent due process decisions.  Those decisions require courts to evaluate punitive damages based on various matters not presented to the jury.  For example, the California Supreme Court held in 2016 that, when courts compare punitive damages awards to the amount of actual harm for excessiveness purposes, they can take into account attorney fees awarded as compensatory damages (Brandt fees), even if the fee award occurred after the jury's punitive damages verdict.  (See Nickerson v. Stonebridge.)  If courts can consider other matters not presented to the jury, they should also be allowed to consider the fact that the defendant has already been punished for the same conduct in other cases.

The Court will likely hold its conference on this petition in March. I believe this will be the first punitive damages petition to come before the Court since Justice Gorsuch replaced Justice Scalia, who consistently dissented from all of the Court's due process decisions on punitive damages. (image)