Busting myths about punitives in products cases; don't let the defense misuse State Farm v. Campbell. Instead, learn to use it to your client's advantage to - believe it or not - prove the defendant's conduct deserves punishment.
The Supreme Court's decision in State Farm Mutual Automobile Insurance Co. v. Campbell has created a firestorm fire·storm
1. A fire of great size and intensity that generates and is fed by strong inrushing winds from all sides: the firestorm that leveled Hiroshima after the atomic blast.
2. of controversy. (1) Defense counsel relentlessly argue propositions from Campbell that do not exist in the language of the case. More disturbing, some trial courts and even appellate courts A court having jurisdiction to review decisions of a trial-level or other lower court.
An unsuccessful party in a lawsuit must file an appeal with an appellate court in order to have the decision reviewed. "buy in" to the myths created by the defense arguments. But when examined objectively, Campbell actually does little more than reiterate re·it·er·ate
tr.v. re·it·er·at·ed, re·it·er·at·ing, re·it·er·ates
To say or do again or repeatedly. See Synonyms at repeat.
re·it the standards established in prior cases, especially BMW of North America, Inc. v. Gore BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996), was a United States Supreme Court case limiting punitive damages under the Due Process Clause of the 14th Amendment. Facts
The plaintiff, Dr. (2) and Pacific Mutual Life Insurance Co. v. Haslip. (3)
As the district court handling the Exxon Valdez This article is about the tank vessel Exxon Valdez. For the spill, see Exxon Valdez oil spill.
Exxon Valdez was the original name (later Sea River Mediterranean and eventually Mediterranean case noted:
[Campbell] adds no new, freestanding factor to the constitutional analysis of punitive damages.... It is the court's view that [Campbell], while bringing the [Gore] guideposts into sharper focus, does not change the analysis. In fact, there are aspects of the due process evaluation of punitive damages awards which have not changed at all as a result of [Campbell]. (4)
In court, reveal these myths for what they are--furtive attempts by defendants to expand the effect of Campbell beyond what the Supreme Court actually held. And don't overlook the benefits to be drawn from Campbell in products liability cases.
Defendants have developed four myths about Campbell that they use to defeat punitive damages Monetary compensation awarded to an injured party that goes beyond that which is necessary to compensate the individual for losses and that is intended to punish the wrongdoer. claims.
Myth 1--Out-of-state conduct, even similar out-of-state conduct, cannot be considered. This myth directly conflicts with express statements in Campbell. The Court made clear that two types of out-of-state conduct cannot be considered in assessing the constitutionality of a punitive damages award: out-of-state conduct, even unlawful out-of-state conduct, that has no nexus to the conduct at issue; and out-of-state conduct that is lawful Licit; legally warranted or authorized.
The terms lawful and legal differ in that the former contemplates the substance of law, whereas the latter alludes to the form of law. A lawful act is authorized, sanctioned, or not forbidden by law. where it occurs.
On the other hand, "lawful out-of-state conduct may be probative Having the effect of proof, tending to prove, or actually proving.
When a legal controversy goes to trial, the parties seek to prove their cases by the introduction of evidence. when it demonstrates the deliberateness and culpability culpability (See: culpable) of the defendant's action in the state where it is tortious Wrongful; conduct of such character as to subject the actor to civil liability under Tort Law.
In order to establish that a particular act was tortious, a plaintiff must prove that an actionable wrong existed and that damages ensued from that wrong. , but that conduct must have a nexus to the specific harm suffered by the plaintiff. " (5)
Thus, in a products liability action, the defendant's out-of-state manufacture of a defective product that injures the plaintiff is admissible (algorithm) admissible - A description of a search algorithm that is guaranteed to find a minimal solution path before any other solution paths, if a solution exists. An example of an admissible search algorithm is A* search. . So, too, is evidence of other injuries caused by the same product, even if those injuries occurred in other states. Similarly, the defendant's failure to take corrective action A corrective action is a change implemented to address a weakness identified in a management system. Normally corrective actions are instigated in response to a customer complaint, abnormal levels if internal nonconformity, nonconformities identified during an internal audit or after notice of those injuries is relevant because it demonstrates the recidivist recidivist n. a repeat criminal offender, convicted of a crime after having been previously convicted. (See: habitual criminal) nature of the defendant's conduct. The Campbell Court confirmed that a recidivist can be more severely punished than a first-time offender. (6)
Myth 2--The most important criterion for examining the constitutionality of a punitive damages award is the ratio of compensatory to punitive damages. Defendants, and some courts, focus primarily on the ratio issue in discussing the constitutional appropriateness of a punitive damages award. But the Supreme Court has said--and emphatically--repeated--that "the most important indicium in·di·ci·um
Singular of indicia. of the reasonableness of a punitive damages award" is the reprehensibility rep·re·hen·si·ble
Deserving rebuke or censure; blameworthy. See Synonyms at blameworthy.
[Middle English, from Old French, from Late Latin repreh of the defendant's conduct. (7)
Factors for assessing the reprehensibility of the defendant's conduct are
* whether the harm was economic or physical (causing physical harm is more reprehensible rep·re·hen·si·ble
Deserving rebuke or censure; blameworthy. See Synonyms at blameworthy.
[Middle English, from Old French, from Late Latin repreh than causing economic harm). (8)
* whether the defendant's tortious conduct evinced an indifference to or a reckless disregard reckless disregard n. grossly negligent without concern for danger to others. Actually reckless disregard is redundant since reckless means there is a disregard for safety. (See: reckless) of the health or safety of others
* whether the target of the conduct was financially vulnerable
* whether the conduct involved repeated actions or was merely an isolated incident
* whether the harm was the result of intentional malice malice, in law, an intentional violation of the law of crimes or torts that injures another person. Malice need not involve a malignant spirit or the definite intent to do harm. , trickery Trickery
See also Cunning, Deceit, Humbuggery.
Bunsby, Captain Jack
trapped into marriage by landlady. [Br. Lit.: Dombey and Son]
cheated of bride after lavish wedding preparations. [Span. Lit. , or deceit Deceit
pretends to be titled to wed into wealth. [Br. Lit.: The Beaux’ Stratagem]
lies about amount of money received for land. [N.T.: Acts 5:1–6]
all its members are liars. [Am. . (9)
In a products liability case, these factors generally support a finding of extremely reprehensible conduct by defendants--which should be emphasized to the jury. Submit a jury instruction based on these factors and focus on each in your closing argument.
Myth 3--The defendant's wealth cannot be considered in determining the constitutionality of a punitive damages award. All that the Campbell Court said is that the "wealth of a defendant cannot justify an otherwise unconstitutional unconstitutional adj. referring to a statute, governmental conduct, court decision or private contract (such as a covenant which purports to limit transfer of real property only to Caucasians) which violate one or more provisions of the U. S. Constitution. punitive damages award." (10)
Indeed, in TXO TXO Taxi Orange (Austrian reality TV show) Production Corp. v. Alliance Resources Corp., the Supreme Court specifically approved the jury's consideration of a defendant's wealth as an appropriate factor in determining a punitive damages award, "in recognition of the fact that effective deterrence deterrence
Military strategy whereby one power uses the threat of reprisal to preclude an attack from an adversary. The term largely refers to the basic strategy of the nuclear powers and the major alliance systems. of wrongful conduct Noun 1. wrongful conduct - activity that transgresses moral or civil law; "he denied any wrongdoing"
actus reus, misconduct, wrongdoing
activity - any specific behavior; "they avoided all recreational activity" 'may require a larger fine upon one of large means than it would upon one of ordinary means ordinary means Medical ethics The measures that a person, as the 'steward' of his/her own life, is required to use to ensure health and self-preservation. See Reasonable person. Cf Extraordinary means. under the same or similar circumstances.'" (11)
The court in Mathias v. Accor Economy Lodging, Inc., also engaged in a ratio analysis that involved the defendant's wealth as a factor. (12) The defendant motel was infested in·fest
tr.v. in·fest·ed, in·fest·ing, in·fests
1. To inhabit or overrun in numbers or quantities large enough to be harmful, threatening, or obnoxious: with bedbugs, but instead of eradicating them, or even warning patrons about them, the motel blithely continued renting infested rooms to travelers. The jury awarded each plaintiff $5,000 in compensatory damages A sum of money awarded in a civil action by a court to indemnify a person for the particular loss, detriment, or injury suffered as a result of the unlawful conduct of another. and $186,000 in punitive damages--a 37-to-1 ratio. In upholding that award, Seventh Circuit Justice Richard Posner Richard Allen Posner (born January 11, 1939, in New York City) is currently a judge on the United States Court of Appeals for the Seventh Circuit. He is one of the most influential living legal theorists and a major voice in the law and economics movement, which he helped start , writing for the court, rejected the defendant's argument that punitive damages should be capped at a 4-to-1 ratio on the grounds that doing so might cause "plaintiffs to have difficulty in financing a lawsuit and [w]ould allow the wealthy defendant ... to use its financial resources to make litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute.
When a person begins a civil lawsuit, the person enters into a process called litigation. costly--and unattractive--for plaintiffs." (13)
That wealth remains an important consideration was recently reemphasized by the California Supreme Court in Simon v. San Paolo U.S. Holding Co., Inc. The court noted that wealth was a legitimate consideration "because a court reviewing the jury's award for due process compliance may consider what level of punishment is necessary to vindicate the state's legitimate interests in deterring conduct harmful to state residents."(14)
Myth 4--Aratio of 1 to 9 (compensatory to punitive damages) can never be exceeded. Campbell's language belies this myth: "[W]e have consistently rejected the notion that the constitutional line is marked by a simple mathematical formula, even one that compares actual and potential damages to the punitive award. We decline again to impose a bright-line ratio which a punitive damages award cannot exceed." (15)
Although the Court acknowledged that "single-digit multipliers are more likely to comport See COM port. with due process," it still refused to impose a bright-line single-multiplier rule and emphasized that "the precise award in any case, of course, must be based upon the facts and circumstances of the defendant's conduct and the harm to the plaintiff." (16) Thus, focusing on the ratio alone is improper and unjustified, as is predetermining that only a 4-to-1 ratio or a single-digit ratio can be constitutionally proper.
Other factors must be considered when assessing the ratio issue. In Gore, the Court noted that a ratio higher than single digits may be constitutionally appropriate in cases where "the injury is hard to detect or the monetary value of noneconomic harm might have been difficult to determine." (17) Most important, the ratio should include not only the actual and potential harm to the plaintiff, but also the potential harm to other victims. The Supreme Court noted in TXO:
It is appropriate to consider the magnitude of the potential harm that the defendant's conduct would have caused to its intended victim if the wrongful plan had succeeded, as well as the possible harm to other victims that might have resulted if similar future behavior were not deterred. (18)
In Simon, the California Supreme Court analyzed and applied this factor, holding that potential injury supports a larger punitive damages verdict when the harm "was foreseeable from the defendant's conduct--whether because it constituted an unintended but reasonably likely risk or because it was a goal of the tortfeasor's conduct." (19)
This factor allows additional discovery and evidence regarding the potential for injury to the plaintiff or others if the punitive damages imposed are not sufficient to deter the wrongful conduct.
The Campbell Court's refusal to establish a bright-line ratio is consistent with its prior decisions. The first case to suggest-and reject--such a ratio was Haslip, in which the Court expressed concern that the approved ratio of more than 4 to 1 may have been constitutionally" close to the line." (20) But just two terms later, in TXO, the Court made clear that a single-digit multiplier multiplier
In economics, a numerical coefficient showing the effect of a change in one economic variable on another. One macroeconomic multiplier, the autonomous expenditures multiplier, relates the impact of a change in total national investment on the nation's total is not always mandated. (21) It approved a 526-to-1 ratio of punitive to compensatory damages because of the potential harm that may have resulted from the defendant's pattern and practice of misconduct.
Since Campbell, trial and appellate courts have demonstrated that a single-digit ratio is not a mandate:
* Mathias upheld a 37.2-to-1 punitive damages ratio. (22)
* In Williams v. Kaufman County, the Fifth Circuit affirmed af·firm
v. af·firmed, af·firm·ing, af·firms
1. To declare positively or firmly; maintain to be true.
2. To support or uphold the validity of; confirm.
v.intr. a 150-to-1 ratio (23) and in Lincoln v. Case, it upheld a 100-to-1 ratio in a landlord-tenant discrimination action. (24)
* In Haggar Clothing Co. v. Hernandez, the Texas Supreme Court upheld a 20-to-1 ratio in a discrimination case. (25)
* In Jones v. Rent-A-Center, Inc., a federal court in Kansas conducted a Campbell analysis and upheld a 29-to-1 ratio in a sexual harassment sexual harassment, in law, verbal or physical behavior of a sexual nature, aimed at a particular person or group of people, especially in the workplace or in academic or other institutional settings, that is actionable, as in tort or under equal-opportunity statutes. case. (26)
* In Planned Parenthood Planned Parenthood
A service mark used for an organization that provides family planning services. of Columbia/ Willamette, Inc. v. American Coalition of Life Activists The American Coalition of Life Activists (ACLA) was a pro-life activist group that was the subject of controversy for its series of Wanted-style posters.
During a 1995 meeting, the group unveiled a "wanted" poster that listed the names and addresses of a "Deadly Dozen" , an Oregon federal court affirmed a punitive damages award of 31 to 1 in an action against antiabortion an·ti·a·bor·tion
Opposed to induced abortion: the antiabortion movement.
an activists who posted names and addresses of abortion providers a`bor´tion pro`vid´er
n. 1. same as abortionist. on the Internet. (27)
It is clear that no bright-line, single-digit rule has been imposed with respect to punitive damages--a point you should drive home to trial and appellate courts when defendants seek to impose such limits.
Campbell's upside Upside
The potential dollar amount by which the market or a stock could rise.
This is basically an educated guess on how high a stock could go in the near future.
See also: Bull, Downside
Plaintiff attorneys can use Campbell to develop an affirmative discovery plan and craft a meaningful evidentiary ev·i·den·tia·ry
1. Of evidence; evidential.
2. For the presentation or determination of evidence: an evidentiary hearing.
Adj. 1. program for trial.
Notice of the conduct. One of the factors that the Campbell Court strongly emphasized in assessing the due process protections that must be afforded to a defendant with respect to punitive damages is whether the defendant is fairly on "notice not only of the conduct that will subject [it] to punishment, but also the severity of the penalty." (28)
The district court in the Exxon Valdez case provided a process for assessing this parameter:
That analysis is a forward-looking inquiry from [the defendant's] point of view prior to the grounding of the Exxon Valdez. The Supreme Court has not said this expressly, but the forward-looking nature of the inquiry is necessarily implicit in the concept of fair notice to Exxon, i.e., what Exxon should reasonably have perceived as the likely consequences of its conduct. (29)
Thus, every opportunity the defendant had to correct the problem and failed to do so enhances the reprehensibility of the conduct. As the Exxon Valdez court noted, even an "isolated incident," like the grounding of that ship or a single accident involving a defective product, arises from conduct leading up to the incident. In the case of the Exxon Valdez, it was three years of allowing a known alcoholic to pilot the ships. In the case of a defective product, it is the known risk of injury and the failure to take action to protect others from that risk of harm.
This analysis opens up an area of discovery and potential trial evidence. For example, it should allow a plaintiff in a products liability case to obtain discovery and evidence regarding every complaint, lawsuit, or other claim filed against or submitted to the defendant for the same defect in the same product because that evidence goes directly to the issue of what the defendant should perceive to be the likely consequences of its conduct. This analysis also opens the door to obtaining information about prior judgments, fines, penalties, and punitive damages awards rendered against the defendant for the same product defect. Again, this evidence goes directly to the issue of what a reasonable manufacturer would understand to be the potential penalty for the conduct and the manufacturer's ongoing failure to correct the problem.
Effects on the entire state. You should discuss the state interests involved in imposing punitive damages when you brief the trial court and jury on your case. As the Court noted in Gore, "the federal excessiveness inquiry appropriately begins with an identification of the state interests that a punitive award is designed to serve." (30) Several courts have derived from this a two-step analysis. First, "define the scope of the legitimate state interests the punitive award is intended to further," and second, "apply the three [Gore] guideposts Guideposts is a Christian-faith based non-profit organization founded in 1945 by Dr. Norman Vincent Peale and his wife, Ruth Stafford Peale. The Guideposts organization is headquartered in Carmel, New York, with additional offices in New York City, Chesterton, Indiana, and Pawling, ." (31)
This means that you can--and should--emphasize your state's values, traditions, and compelling interest in ensuring that its citizens are protected from unwarranted and avoidable injury by manufacturers trying to maximize profits by selling products in the state. (32)
For example, in examining the type of harm that supports a punitive damages award, the district court in the Exxon Valdez case did not restrict its examination to harm to individual plaintiffs. Rather, the court took into consideration "the community impacts" of the defendant's conduct, including "a chronic pattern of economic loss, social conflict, cultural disruption, and psychological stress" caused by the conduct. (33) The court cited research that assessed the societal impact from the oil spill oil spill: see water pollution. and relied on it to show that the harm suffered was far more egregious e·gre·gious
Conspicuously bad or offensive. See Synonyms at flagrant.
[From Latin than "pure economic harm." (34)
Similarly, the California Supreme Court examined the issue of "what is to be deterred" in Johnson. The defendant argued that, under Campbell, punitive damages may be imposed only in order to deter the specific conduct directed at the specific plaintiff. (35) The court rejected that limited analysis, conducted an exhaustive analysis of both Campbell and Gore, and concluded that the U.S. Supreme Court affirmed "a state's constitutional freedom to use punitive damages as a tool to protect the consuming public, not merely to punish a private wrong." (36) Further, the court held, "a proper award of punitive damages would be one 'supported by the state's interest in protecting its own consumers and its own economy.'" (37)
This analysis can be used in a products liability case to obtain and introduce evidence showing the impact on the state's economy from the defendant's distribution and sale of a defective product. This is particularly helpful in cases where the defective product had widespread distribution within the state, like the Ford Explorer
The Ford Explorer is a mid-size sport utility vehicle sold in North America and built by the Ford Motor Company since 1990. and Firestone fire·stone
1. A flint or pyrite used to strike a fire.
2. A fire-resistant stone, such as certain sandstones.
Noun 1. tires. Obtain discovery regarding sales of the defective product in the state from the defendant, along with any assessment of the frequency and extent of injuries associated with the product. If the defendant has not done that type of analysis (or won't admit to it), you may have to conduct your own survey based on information from public records, the defendant's records, newspapers, and the like.
Once you have that data, give it to an economic expert who can calculate the expected rate and severity of injury within the state and provide an opinion as to the impact on the state's economy, in terms of medical care costs, disability payments, lost work hours and resulting loss of production, and the resulting economic impact on the state and its citizens. That evidence should be permitted under Campbell so that the jury can consider the egregiousness e·gre·gious
Conspicuously bad or offensive. See Synonyms at flagrant.
[From Latin of the defendant's conduct as well as its potential for harm.
Plaintiffs should be cautious about how they use evidence of the nationwide effect of the defendant's reprehensible conduct in continuing to knowingly market its defective product, because the Campbell Court said that each state may impose punitive damages only for conduct or injuries occurring within that state. (38) Thus, for the reasons discussed above, while the size of an award may not be based on the number of incidents (or number of people injured in·jure
tr.v. in·jured, in·jur·ing, in·jures
1. To cause physical harm to; hurt.
2. To cause damage to; impair.
3. ) in another jurisdiction, a defendant's similar out-of-state misconduct still may be relevant for establishing the overall reprehensibility of its in-state actions. Moreover, you can use the state's-interest analysis to bring home to jurors the effect the defendant's conduct has on every citizen's own pocketbook--taxpayer money is spent to take care of the people this defendant knowingly hurt.
Jury instructions Jury instructions are the set of legal rules that jurors must follow when the jury is deciding a civil or criminal case. Jury instructions are given to the jury by the judge, who usually reads them aloud to the jury. . Punitive damages jury instructions are more critical than ever because of the constitutional concerns expressed in Gore and Campbell. The jury instructions used in the Exxon Valdez case--although crafted before either Gore or Campbell was decided--are excellent examples of instructions that address the constitutional issues by giving the jury clear parameters. (39)
Additionally, the Supreme Court made clear in Campbell that the jury also must be instructed that "it may not use evidence of out-of-state conduct to punish a defendant for action that was lawful in the jurisdiction where it occurred." (40) But that instruction, in turn, puts the burden on the defendant to prove that its out-of-state conduct was lawful in other states. In a products liability action, it will be virtually impossible to show that any state permits a manufacturer to knowingly distribute defective products without liability for injuries.
Potential criminal and civil penalties. In Campbell, the Court backtracked somewhat on its Gore analysis regarding potential civil or criminal penalties for assessing the appropriateness of a punitive damages award. It essentially disregarded any potential criminal sanctions because of criminal due process concerns. (41) But the Court also gave very little weight to this measure, indicating that it has little relevance.
The district court in the Exxon Valdez case, however, applied an interesting analysis. Noting that the Supreme Court's dictates for assessing the constitutionality of a punitive damages award are all based on due process and fair notice, the court noted that both criminal and civil sanctions are, indeed, relevant. (42) Obviously, if the defendant knows the potential penalties for its conduct, it has received fair notice of the potential sanctions, and a punitive damages award comparable to those sanctions does not violate due process because the defendant had fair notice of that potential award. (43) The court even noted that relevance is not tied to the criminal sanctions actually imposed on Exxon in the criminal proceedings; rather, the "focus is the outer limit of potential sanctions that Exxon was charged with knowing prior to the grounding of the Exxon Valdez." (44)
Thus, where it is appropriate, the maximum civil and criminal sanctions or penalties that could have been assessed for the conduct should be calculated and used as a measure of the "fair notice" the defendant had of its potential liability. Such a guideline guideline Medtalk A series of recommendations by a body of experts in a particular discipline. See Cancer screening guidelines, Cardiac profile guidelines, Gatekeeper guidelines, Harvard guidelines, Transfusion guidelines. could be compelling for a jury--but you must prepare your argument and have expert testimony Testimony about a scientific, technical, or professional issue given by a person qualified to testify because of familiarity with the subject or special training in the field. to demonstrate what those penalties would be and why. You must also craft appropriate jury instructions so that jurors understand the use and limitations of that guideline.
Potential civil penalties may be limited, but that does not necessarily require the trial or appellate court to reduce punitive damages. For example, the Campbell Court intimated that a punitive damages ratio of 1 to 1 may have been constitutionally sound. In that case, the compensatory damages were $1 million. Thus, a $1 million punitive damages award would have been upheld, even though the court acknowledged that the comparable civil fine was only $10,000. So a punitive damages award that is 100 times more than a comparable civil penalty is arguably ar·gu·a·ble
1. Open to argument: an arguable question, still unresolved.
2. That can be argued plausibly; defensible in argument: three arguable points of law. constitutionally appropriate, even under the Campbell Court's analysis.
Other punitive damages awards. Because Gore and Campbell emphasize the fair notice issue to determine whether punitive damages awards meet constitutional due process requirements, consider evidence of other, similar punitive damages awards against the same or other manufacturers for essentially the same conduct. If fair notice means that the defendant is making its decisions while it knows of the potential risks, then the existence of other punitive damages awards for the same type of conduct should be admissible. (45)
Do not allow yourself or the court to be misled mis·led
Past tense and past participle of mislead. about the true impact of Campbell. Use that decision to expand discovery and pack the trial with evidence demonstrating that the defendant knew that it was doing wrong and knew the potential consequences of engaging in that conduct. The more you emphasize that element, the stronger your constitutional support for a punitive damages award.
RELATED ARTICLE: CCL 1. CCL - Coral Common LISP.
2. CCL - Computer Control Language. English-like query language based on COLINGO, for IBM 1401 and IBM 1410. works to preserve plaintiffs' right to punitive damages.
Limiting punitive damages awards and getting them reduced on appeal have been longtime long·time
Having existed or persisted for a long time: a longtime friend; a longtime resident of Detroit.
Adjective goals of corporations and the tort "reform" groups that they fund and direct. Recently, they started using a new tool to achieve those goals--the U.S. Supreme Court's decision in State Farm Mutual Automobile Insurance Co. v. Campbell, which provided guideposts for courts to consider in determining the constitutionality of punitive damages awards. (538 U.S. 408 (2003).)
Three cases challenging this strategy recently percolated up to the state supreme court level. In each, lawyers with the Center for Constitutional Litigation (CCL) in Washington, D.C., acted to thwart the defendants' efforts to reduce punitive damages awards.
Williams v. Philip Morris, Inc. CCL President Robert Peck serves as co-counsel with several ATLA ATLA Association of Trial Lawyers of America
ATLA American Theological Library Association
ATLA American Trial Lawyers Association
ATLA Air Transport Licensing Authority (Hong Kong)
ATLA Avatar: The Last Airbender members in Oregon in this case, pending before the Oregon Supreme Court The Oregon Supreme Court (OSC) is the highest state court in the U.S. state of Oregon. The only court that may reverse or modify a decision of the Oregon Supreme Court is the Supreme Court of the United States. .
In 1999, a jury awarded compensatory and punitive damages to Mayola Williams, whose husband died after being diagnosed with lung cancer lung cancer, cancer that originates in the tissues of the lungs. Lung cancer is the leading cause of cancer death in the United States in both men and women. Like other cancers, lung cancer occurs after repeated insults to the genetic material of the cell. caused by smoking. Liability was assessed on the basis of fraud, with evidence emphasizing Philip Morris's knowingly deceitful claims that there was no link between cancer and smoking.
The trial court reduced the punitive damages award--which was 96 times the compensatory award--by more than half, finding that it was constitutionally excessive. The Oregon Court of Appeals The Oregon Court of Appeals is the state intermediate appellate court in the U.S. state of Oregon. Except for death penalty cases, which are reserved to the Oregon Supreme Court, and tax court cases, it has jurisdiction to hear all civil and criminal appeals from circuit courts, reversed. The U.S. Supreme Court granted certiorari certiorari
In law, a writ issued by a superior court for the reexamination of an action of a lower court. The writ of certiorari was originally a writ from England's Court of Queen's (King's) Bench to the judges of an inferior court; it was later expanded to include writs , but after deciding Campbell, the Court sent Williams back to the Oregon Court of Appeals for reconsideration in light of Campbell's holding. The court of appeals reaffirmed its earlier decision, and the Oregon Supreme Court has granted review.
Philip Morris argues that Campbell makes any punitive/compensatory damages ratio in excess of 9 to 1 presumptively pre·sump·tive
1. Providing a reasonable basis for belief or acceptance.
2. Founded on probability or presumption.
pre·sump unconstitutional. Plaintiff counsel contend that Campbell did not establish binding ratios (such as the single-digit multiplier defendants habitually HABITUALLY. Customarily, by habit. or frequent use or practice, or so frequently, as to show a design of repeating the same act. 2 N. S. 622: 1 Mart. Lo. R. 149.
2. assert is the constitutional maximum), and that it expressly acknowledges that many factors can justify a punitive damages award that is more than nine times greater than a compensatory award.
Oral argument took place on May 10, 2005. At TRIAL press time, the court had not issued a decision. (Petition for review granted, 104P.3d601 (Or. 2004) (No. CA-A106791/S-51805).)
Simon v. San Paolo U.S. Holding Co., Inc. Lionel Simon offered to buy a building in Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. worth $1.5 million for $1.1 million. The building's owner agreed. While working out the details, the owner secretly contracted with another buyer, depriving Simon of a $400,000 gain. He filed suit against the owner, alleging fraud and seeking compensatory and punitive damages.
Simon received $5,000 in compensatory damages, which were limited by statute to his out-of-pocket expenses out-of-pocket expenses n. moneys paid directly for necessary items by a contractor, trustee, executor, administrator or any person responsible to cover expenses not detailed by agreement. . A jury also awarded $1.7 million in punitive damages, 340 times the compensatory award but only four times the actual harm Simon suffered, as measured by the loss of his potential gain. The California Court of Appeals affirmed.
CCL Senior Counsel Jeffrey White submitted an amicus brief on ATLA's behalf, urging the California Supreme Court to uphold the award. ATLA argued that courts have historically required that punitive damages bear some relation to a plaintiff's actual harm, not just the compensatory award, and that the compensatory damages in this case did not reflect the true scope of the actual harm.
The California high court concluded, however, that
while uncompensated or potential harm may in some circumstances be properly considered in assessing the constitutionality of a punitive damages award, here defendant's fraud neither caused nor foreseeably threatened to cause $400,000 in harm to plaintiff. Under these circumstances, the $1.7 million punitive damages award must be measured against the $5,000 compensatory award, and so measured it is grossly excessive.
The court reduced the punitive damages award to $50,000, reflecting a 10-to-1 ratio. (29 Cal. Rptr. 3d 379 (2005).)
Johnson v. Ford Motor Co. In 1998, the Johnsons bought a used 1997 Taurus from a California Ford dealership, relying on the dealer's representations that the car was without defects. In fact, it had numerous problems, which California's Lemon Law lemon law n. statutes adopted in some states to make it easier for a buyer of a new vehicle to sue for damages or replacement if the dealer or manufacturer cannot make it run properly after a reasonable number of attempts to fix the car. required the dealer to disclose but which Ford's corporate policies required the dealer to conceal. When the Johnsons realized they had been deceived, they sued Ford for defrauding them and thousands of other California consumers.
A jury awarded $17,000 in compensatory damages and $10 million in punitive damages (the amount that Ford earned in one year from sales in California from its fraudulent scheme Noun 1. fraudulent scheme - an illegal enterprise (such as extortion or fraud or drug peddling or prostitution) carried on for profit
illegitimate enterprise, racket ). The California Court of Appeals reduced the punitive damages award to $53,435, holding that the defendant could be punished only for its "private harm" to the plaintiffs and that juries were barred from considering the actual or potential harm to nonplaintiffs.
CCL Senior Counsel Ned Miltenberg submitted an amicus brief on ATLA's behalf, arguing that neither Campbell nor any of the Supreme Court's other punitive damages decisions prohibits "juries and judges from considering a defendant's 'other acts' toward nonparties in assessing the need for and the appropriate size of a punitive damages award."
In June 2005, the California Supreme Court adopted CCL's argument and reversed the lower appellate court. It explicitly held that Campbell allows the reprehensibility of a defendant's conduct to be assessed not only in light of its behavior toward and effects on a named plaintiff A named plaintiff is one of the small group of individual plaintiffs in a class action who are identified by name and who stand in for and represent the interests of the larger group of people who comprise the plaintiff class. in an isolated case, but also in view of the actual and potential effects of similar misconduct on nonplaintiffs. The Johnson court explained that "due process does not prohibit state courts, in awarding or reviewing punitive damages, from considering the defendant's illegal or wrongful conduct toward others that was similar to the tortious conduct that injured the plaintiff or plaintiffs." (29 Cal. Rptr. 3d 401 (2005).)
The Center for Constitutional Litigation, a private law firm, was established in 2002 to promote the rights of access to courts, complete remedies for all tortious injuries, and trial by jury, and to fight tort "reform."
(1.) 538 U.S. 408 (2003).
(2.) 517 U.S. 559 (1996).
(3.) 499 U.S. 1 (1991).
(4.) In re the Exxon Valdez, 296 F. Supp. 2d 1071, 1076 (D. Alaska 2004).
(5.) Campbell, 538 U.S. 408,422. See also Johnson v. Ford Motor Co., 113 P.3d 82, 90-91 (2005) (noting that Campbell and due process do not "prohibit state courts, in awarding or reviewing punitive damages, from considering the defendant's illegal or wrongful conduct toward others that was similar to the tortious conduct that injured the plaintiff").
(6.) Id. at 423.
(7.) See id. at 419 (quoting Gore, 517 U.S. 559, 575) (emphasis added).
(8.) Swinton v. Potomac Corp., 270 F.3d 794, 818 (9th Cir. 2001).
(10.) Campbell, 538 U.S. 408, 427-28 (emphasis added).
(11.) 509 U.S. 443, 463 (1993); see also Eden Elec., Ltd. v. Amana Co., 258 F. Supp. 2d 958, 972 (N.D. Iowa 2003).
(12.) 347 F.3d 672 (7th Cir. 2003).
(13.) See Jones v. Sheahan, Nos. 99C 3669, 01 C 1844, 2003 WL 22508171, at *19 (N.D. Ill. 2003) (citing Mathias, 347 F.3d 672, 677).
(14.) 113 P.3d 63, 79 (2005).
(15.) Campbell, 538 U.S. 408, 424-25 (quoting Gore, 517 U.S. 559, 582).
(16.) Id. at 425 (emphasis added).
(17.) Gore, 517 U.S. 559, 582.
(18.) TXO, 509 U.S. 443, 460 (emphasis added).
(19.) Simon, 113 P.3d 63, 74.
(20.) Haslip, 499 U.S. 1, 23.
(21.) TXO, 509 U.S. 443, 460.
(22.) Mathias, 347 F.3d 672.
(23.) 352 F.3d 994, 1016 (5th Cir. 2003).
(24.) 340 F.3d 283 (5th Cir. 2003).
(25.) 164 S.W.2d 386 (Tex. 2005).
(26.) 281 F. Supp. 2d 1277 (D. Kan. 2003).
(27.) 300 F. Supp. 2d 1055 (D. Or. 2004).
(28.) Gore, 517 U.S. 559, 574; Campbell, 538 U.S. 408, 417.
(29.) In re the Exxon Valdez, 296 F. Supp. 2d 1071, 1089-90 (emphasis in original).
(30.) Gore, 517 U.S. 559, 568.
(31.) In re the Exxon Valdez, 296 F. Supp. 2d 1071, 1090 n.58 (citing Smith v. Ingersoll-Rand Co., 214 F.3d 1235, 1252-53 (10th Cir. 2000)); Johansen v. Combustion Eng'g, Inc., 170 F.3d 1320, 1333 (11th Cir. 1999); White v. Ford Motor Co., 312 F.3d 998, 1013 (9th Cir. 2002).
(32.) See Eden Elec., Ltd., 258 F. Supp. 2d 958, for a discussion of state interests in a fraudulent contract case.
(33.) In re the Exxon Valdez, 296 F. Supp. 2d 1071, 1094.
(35.) Johnson, 113 F.3d 82, 90-92.
(36.) Id. at 92.
(37.) Id. (citing Gore, 517 U.S. 559, 572) (emphasis added).
(38.) Campbell, 538 U.S. 408, 422.
(39.) In re the Exxon Valdez, 296 F. Supp. 2d 1071, 1080-82 nn.26-36.
(40.) Campbell, 538 U.S. 408, 422.
(41.) Id. at 428.
(42.) Id. See also Rhone-Poulenc Agro, S.A. v. DeKalb Genetics Corp., 345 F.3d 1366, 1372 (Fed. Cir. 2003).
(43.) In re the Exxon Valdez, 296 F. Supp. 2d 1071, 1107-08.
(44.) Id. at 1107.
(45.) See Jones, Nos. 99C 3669, 01 C 1844, 2003 WL 22508171, at *19.
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