Florida Judge Says $244M Punitive Damages Award Will Be Overturned

The Daily Business Review (via Law.com) reports that a Florida trial judge has stated his intention to overturn a $244 million punitive damages award to an individual smoker. The judge said the award was "shocking" and was the result of passion and anger by the jury. He did not issue a formal ruling, nor did he say what amount of punitive damages he would allow.

Related posts:

Florida Jury Awards $244 Million in Punitive Damages to Smoker

"Exxon Shipping Co. v. Baker: Why the Supreme Court Missed the Boat on Punitive Damages"

Not many law students would feel comfortable publishing an article accusing the Supreme Court of biased, results-oriented judging. But University of Akron School of Law student Maria C. Klutinoty has no such qualms. She has written an article blasting the Supreme Court for its decision last year two years ago in Exxon Shipping, which adopted a maximum 1-to1 ratio for punitive damages to compensatory damages in federal maritime cases. The article suggests that the Justice Souter's majority opinion resulted from a bias in favor of major corporations:

In light of the fact that the defendant here was Exxon Shipping, a major
corporation, some have concluded that this decision was the product of a
conservative Court that placed the interests of business above the need to
punish and deter wrongful conduct. This possible bias certainly may have played
a role in the Court's decision, which appears to be much more concerned with
protecting Exxon than with deterring other corporations from acting
similarly.

The article concludes that lower courts should not apply Exxon Shipping outside the maritime context because the standard adopted in that opinion "eviscerated and rendered completely meaningless and void" the deterrence objective of punitive damages. The article, entitled "Exxon Shipping Co. v. Baker: Why the Supreme Court Missed the Boat on Punitive Damages," is available on Westlaw: at 43 AKRONLR 203.

Trial Judge Reduces $75M Punitive Damages Award to $5.6M in Pfizer Litigation

In the past two years Pfizer has been whacked with a series of large punitive damages awards in lawsuits claiming that its hormone replacement drugs cause breast cancer. One of the largest of those punitive damages awards was a $75 million award against Wyeth (which Pfizer acquired in October 2009) in a Philadelphia case involving $3.7 million in compensatory damages.

The Legal Intelligencer reports that the trial judge reduced that punitive damages award to $5.6 million, roughly 1.5 times the amount of the compensatory damages award. The plaintiffs plan to appeal.

So far, Pfizer's lawyers have been pretty successful in reducing the big punitive damages awards in these cases, but they haven't been able to knock them out entirely. They got a $27 million punitive damages award in Arkansas vacated and remanded for a new trial, and a $99 million award cut down to $35 million in Nevada.

Related posts:

More Punitive Damages Against Pfizer in Prempro Litigation: Philadelphia Jury Awards $28 million

A Mixed Bag For Pfizer On Prempro Punitive Damages

Jury Awards Undisclosed Amount of Punitive Damages Against Pfizer in Prempro Litigation

Arkansas District Court Vacates $27 Million Punitive Damages Award Against Wyeth and UpJohn

Nevada Judge Cuts $99 Million Punitive Damages Award Against Wyeth

Daily Journal Reports Decline in Punitive Damages Awards

Those of you with an online subscription to the Los Angeles & San Francisco Daily Journal can check out an article entitled "Blockbuster Punitive Awards Fell Off in 2009" in the Jan. 27 edition.

The article refers to a paper we blogged about last year, showing that California leads the nation in "blockbuster" punitive damages awards (awards over $100 million). The DJ article notes we had no blockbuster awards last year. In fact, the largest punitive damages award in California last year was "only" $50 million, in Auerbach v. Daily. As I noted in this post, however, we average about one blockbuster award per year, so a single year without such an award does not seem statistically significant. It hasn't even been a year and half since our last blockbuster (a $237 million punitive damages award in October 2008), so we can't declare the blockbuster dead just yet.

11th Circuit Hears Argument in Florida Tobacco Litgation

Law.com reports here on an oral argument before the 11th Circuit in yet another case addressing the fallout of the Florida Supreme Court's Engle decision. As we have noted in prior posts, Engle reversed a $145 billion punitive damages award in a class action brought by smokers, but determined that certain factual findings could be "retained" for future litigation. Now the 11th Circuit is trying to figure out what effect that decision has in federal court.

Related posts:

Florida Jury Awards $244 Million in Punitive Damages to SmokerFlorida Jury Awards $25 Million in Punitive Damages to Smoker's Widow

"Smokers, tobacco, both winners in early Engle cases"

Jury Rules For Plaintiff in First Phase of Retrial After Reversal of $145 Billion Punitive Damages Award

After Reversal of $145 Billion Class Action Punitive Damages Award, Florida Smokers Seek Punitive Damages in Individual Suits

Plaintiffs' Attorneys Win $218 Million Fee Award for Helping Obtain a Punitive Damages Verdict that Was Reversed on Appeal

Cal. Supreme Court Denies Review in Fariba v. Dealer Services

The California Supreme Court has denied review in a case we blogged about last October, Fariba v. Dealer Services. In that published opinion, the Court of Appeal affirmed an order granting directed verdict for the defendant on the issue of punitive damages. The court concluded that a directed verdict was appropriate because no reasonable jury could have found by clear and convincing evidence that the defendant acted in conscious disregard of the plaintiff's rights, given that the plaintiff's theory of liability turned on a legal issue of first impression.

Click here to view the California Supreme Court's online docket for this case.

Kunysz v. Sadler: Punitive Damages Reversed by Stipulation

Here's one you don't see everyday: a stipulated reversal of a punitive damages award.

The parties reached a settlement through a court-sponsored appellate mediation program and they agreed, as part of the settlement, to file a stipulation requesting that the underlying be vacated. Stipulated reversals used to be more common in California, but the Legislature enacted a statute limiting the circumstances in which an appellate court can grant stipulated reversals (Code of Civil Procedure section 128(a)(8)), and the courts have construed those requirements strictly. In this unpublished opinion, however, the Fourth Appellate District, Division Three, accepted the parties' stipulation and reversed a judgment that awarded $100,000 in punitive damages.

One of the factors that weighs in favor of granting a stipulated reversal is a likelihood of reversal on the merits. The court found a likelihood of reversal here because the punitive damages award was not accompanied by any award of actual damages.

Year In Review: 2009 California Punitive Damages Decisions by the Numbers

I had hoped to get to this sooner, but better late than never. Here's a recap of last year's California appellate decisions involving punitive damages.

Total decisions, published and unpublished

By my count, the California appellate courts decided 42 cases in 2009 addressing punitive damages. That doesn't include cases in which a defendant appealed a punitive damages award but the court of appeal did not reach any punitive damages issues because the court reversed on other grounds. (E.g., it doesn't include cases like Griffin Dewatering.)

Five of those 42 cases were published. (Roby, Fariba, Superior Dispatch, Scott and Major)

Defendants' success rates in challenging punitive damages

There were 32 appeals in 2009 involving a defendant's challenge to an award of punitive damages. (As explained below, the other 10 cases involved plaintiffs' appeals.)

In 23 of those 32 cases, the defendant was successful in getting a punitive damages award vacated or reduced. That's an overall success rate of 72 percent for defendants. That includes not only cases in which the Court of Appeal vacated or reduced a punitive damages award, but also cases in which the trial court vacated or reduced a punitive damages award and the Court of Appeal affirmed the trial court's ruling.

In 11 of those 23 cases, the punitive damages were vacated entirely.

Looking exclusively at cases in which the trial court rejected the defendants' posttrial challenges but the defendants succeeded in getting some relief from the Court of Appeal, the defendants prevailed on appeal in 15 out of 24 cases (63 percent).

Plaintiffs' success rates in appealing from trial court rulings for the defense

There were 7 cases in 2009 in which a plaintiff appealed from a trial court decision dismissing a punitive damages claim (by nonsuit, directed verdict, or a motion to strike). Two of those plaintiffs were successful in getting their punitive damages claim reinstated (34 percent).

There were 3 cases in which plaintiffs appealed from a decision not to award punitive damages (two jury trials and one bench trial). All 3 of those appeals were unsuccessful.

Conclusions

This is the first year for which we have compiled statistics like this, so it's hard to know how these numbers compare to previous years. But looking just at this year's numbers, the high rate of success for defendants challenging punitive damages awards is striking. The average civil appeal has about a 22 percent chance of success based on the Judicial Council's stats report (see page 28), but civil appeals challenging punitive damages awards seem to fare much better. We plan to expand these statistics in the future, so we will see if this level of success remains constant or was simply a one-year anomaly based on a small sample size.