Category Archives: Punitive Damages

 

January 31st, 2008

Philip Morris $79.5M Punitive Award Reinstated By Oregon High Court


A $79.5M punitive damage award against Philip Morris in a smoker’s case has twice been tossed out by the U.S. Supreme Court and sent back to Oregon for reconsideration. Now, for the third time, the Oregon Supreme Court has upheld the blockbuster award in Philip Morris v. Williams. The news story is here (hat tip, How Appealing). The decision is here. And as I explain below, if it should go back up to the Supreme Court a third time, Philip Morris will likely lose if the court addresses the size of the award.

The last remand was due to an issue of confusing jury instructions, and the penultimate issue of the size of the award was never reached. The compensatory award was for $821,000, meaning that the punitive: compensatory ratio was almost 100:1. Defendants believe that no more than a 4:1 or 9:1 ratio will survive judicial scrutiny based on the court’s prior decison in State Farm v. Campbell (see, for instance, these posts at Drug and Device Law, Insurance Law Journal, the WSJ).

What will the Supreme Court do if they decide the size of the punitive damage award? They will likely let it stand under the present composition of the court, even though neither Roberts or Alito has spoken on the matter.

The reason I believe the almost 100-1 ratio will stand is set forth in this analysis I did in February 2007 in the wake of the last remand by the Supremes back to Oregon:
Philip Morris Punitive Damages Decision — Why It Was Good For Plaintiffs

Summarizing that post: The prior punitive damage case of State Farm v. Campbell was decided by a 6-3 majority. But two members of that majority are gone (Rehnquist and O’Connor) and two others from that majority indicated in the last decision either in dissent (Stevens) or oral argument (Breyer) that they have no problem with the concept of a 100:1 ratio if the facts deem it appropriate. Therefore, there are already five votes in favor of upholding a 100:1 ratio in principle.

Thus if the Supreme Court reviews this case for a third time, and actually reaches the issue of the ratio of punitive damages to compensatory, then Philip Morris will likely lose.

Here is the history of the case:

  • Jury verdict for $821,000 in compensatory damages and $79.5M in punitive damages;
  • Punitive damages reduced by trial court to $32M;
  • Punitive damage award reinstated by Oregon Court of Appeals;
  • Affirmed by Oregon Supreme Court;
  • Remanded by U.S. Supreme Court to decide punitive damages issue in light of its new ruling in State Farm v Campbell;
  • Affirmed again by Oregon Court of Appeals;
  • Affirmed again by Oregon Supreme Court;
  • Remanded by the U.S. Supreme Court based on the jury instructions; and
  • Affirmed for the third time (today) by the Oregon Court of Appeals.

Elsewhere:

 

October 3rd, 2007

Long Island Woman Has Unneeded Double Mastectomy

Both breasts were removed. Why? Because a lab technician admitted to cutting corners while labelling tissue specimens.

According to an ABC News report, a 35-year old woman underwent a double mastectomy after being told she had breast cancer, when in fact, she did not. The Long Beach, Long Island victim has now filed suit in Nassau County Supreme Court.

If, in fact, the technician was cutting corners either to save time or money, then we may be looking at a very rare beast: A matter of punitive damages in a medical malpractice case (though this could also be a matter of general negligence if done by the lab and not medical malpractice). The standard here in New York for punitive damages is reckless conduct that endangers the health, safety and well-being of the public (as opposed to negligent conduct). And this must be proven by clear and convincing evidence (as opposed to preponderance of the evidence).

In fact, just last week the Appellate Division Second Department (where this case resides) issued an opinion on the subject of punitive damages in the context of an abortion case. In Randi A. J. v Long Is. Surgi-Center, the defendant disclosed to the mother of the patient that her daughter had been in, allowing the mother to deduce her daughter had an abortion. While the case was sent back to the trial court on other grounds, it is a good discussion of the state of punitive damages law in New York.

(Eric Turkewitz is a personal injury attorney in New York)

 

September 5th, 2007

NY Child Killer Wants $15M Award Tossed — Decision May Have Wider Reprecussions

How much is too much when it comes to pain and suffering? While I have dealt with that subject before (see: How New York Caps Personal Injury Damages), New York’s Court of Appeals will re-visit today the issue in one of the saddest cases ever brought. And if they follow the law, they may be forced to reduce a compensatory damage award against a monstrous child killer.

The year was 1987 and now-disbarred lawyer Joel Steinberg beat his six-year old daughter Lisa to death. In 2004 the executor of Lisa’s estate procured a $15M judgment: $5 million for Lisa’s pain and suffering that day, $5 million for her pain and suffering as a battered child, and $5 million in punitive damages.

In a split decision from New York’s Appellate Division First Department in January 2007 that upheld the award from trial judge Louis York, Justice James Catterson, wrote for the majority as he bluntly summarized the case:

Joel Steinberg, the defendant-appellant, is a convicted child killer and abuser who fatally felled his six-year-old daughter with one blow of his hand, and then went out to dinner as she lay on a bathroom floor losing consciousness over the next eight to ten hours. He appeals now from a judgment that awarded damages against him for the pain and suffering he caused the little girl during her life, and in the tormented hours before her death.

Steinberg who appears pro se in this action complains, inter alia, that because the first-grader’s death was preceded by “at most eight hours of pain and suffering” and “quick loss of consciousness [emphasis supplied],” the award of $15 million in compensatory and punitive damages is excessive. We disagree, and in simply so stating acknowledge that sometimes words fail even those who use the language to render judgments on a daily basis.

In upholding the award, the Court specifically rejected its prior case law, with this rationale:

This case of an abusive father killing his child by knocking her down with a “staggering” blow to her head and then leaving her without medical attention while he enjoyed dinner and freebased cocaine is without precedential analog. Consequently, we find ourselves free to evaluate the award on the basis of “subjective opinions which are formulated without the availability, or guidance of precise mathematical quantification. [emphasis added]

The repercussions on New York law could be quite dramatic, unless the court rules (as it may try) that the facts of the conduct are so without precedent that even if the compensatory award is upheld, it could not be used on any other cases.

But wait! If New York’s high court goes that route, they have a major problem. As Justice James McGuire notes in a separate dissent:

In reviewing this award of compensatory damages, it is important to bear in mind that the outrageousness of appellant’s conduct is not a relevant factor.

He goes on from there to cite U.S. Supreme Court precedent:

“Although compensatory damages and punitive damages are typically awarded at the same time by the same decisionmaker, they serve distinct purposes. The former are intended to redress the concrete loss that the plaintiff has suffered by reason of the defendant’s wrongful conduct. See Restatement (Second) of Torts § 903, pp. 453-454 (1979); Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 54 [111 S.Ct. 1032, 113 L.Ed.2d 1] (1991) (O’Connor, J., dissenting). The latter, which have been described as ‘quasi-criminal,’ id. at 19 [111 S.Ct. 1032], operate as ‘private fines’ intended to punish the defendant and to deter future wrongdoing. A jury’s assessment of the extent of a plaintiff’s injury is essentially a factual determination, whereas its imposition of punitive damages is an expression of its moral condemnation” (Cooper Indus. v. Leatherman Tool Group, 532 U.S. 424, 432 [121 S.Ct. 1678, 149 L.Ed.2d 674] [2001] ).

And so there is, I think, the ultimate battle: On one side a huge award against a despised individual who did unspeakable acts. And on the other, a real issue that while punitive damages are to punish, compensatory damages are not supposed to take into account the nature of how the injury occurred. The bottom line: By considering the nature of the conduct for both punitive damages as well as compensatory damages, the court is allowing double-dipping. They are using the exact same conduct to justify two different awards.

This analysis of the extent of compensatory damages, by the way, brings me back to the September 11 lawsuits that I discussed yesterday, and the limited amount of damages that might be available to claimants. It seems likely that, if the compensatory award in Steinberg is upheld, claimants attorneys will attempt to cite it whenever possible in trying to uphold large awards, notwithstanding any caveat the court attempts to use in stating that this was a one-of-a-kind suit based on the reprehensible nature of the conduct.

Additional sources:

 

March 13th, 2007

An Insider’s View of the $47.5M Verdict Against Merck

A blog was put up by the son-in-law of the plaintiff, Frederick “Mike” Humeston, reflecting on the two Vioxx trials that they went through in Atlantic City against Merck. The first trial was won by Merck, but the verdict was tossed out by the judge. The second has now resulted in a whopper of a loss for Merck of $20M in compensatory damages and $27.5M in punitive damages.

The writer discusses the lawyers, the jurors and the judge. The jury comments, as always, are the most interesting.

About the first jury, he writes:

My wife went to Atlantic City that first time and told me that the jury seemed completely uninterested in the proceedings….After that first trial, my father-in-law told me he realized his case was in trouble when one of the questions the Jury asked was whether they (the Court) served any drinks in the “side bar.” The Judge had allowed the Jury to ask written questions of the witnesses and apparently were bored with the many “side bars” the lawyers and the Judge had undertaken to clarify points of law.

About the second jury, he writes:

Visiting, I could see the jury was involved, taking notes, asking intelligent questions. They were definitely engaged.

(link via Evan Schaeffer’s Legal Underground)