SCOTUS scheduled to rule on Icicle Seafoods cert. petition on September 24

For those of you tracking the status of the Icicle Seafoods cert. petition, the Supreme Court's online docket indicates the petition has been distributed for the September 24 conference.

Related posts:

Justice Kennedy issues stay in Icicle Seafoods v. Clausen

Cert. petition raises punitive damages issues (Icicle Seafoods v. Clausen)

Does the "clear and convincing evidence" standard of proof for punitive damages make any difference?

In California and many other U.S. jurisdictions, plaintiffs seeking punitive damages must meet a higher burden of proof than the usual "preponderance of the evidence" standard that applies to civil cases.  Plaintiffs must prove by clear and convincing evidence that the defendant engaged in punishable misconduct.  That higher standard of proof is thought to provide defendants with a significant procedural protection against unwarranted punitive damages.

But how does this play out in practice?  Does empirical data confirm that juries are less likely to award punitive damages when the plaintiff is saddled with a higher burden of proof?  The answer is "no," according a recent study entitled Jurors' Use of Standards of Proof in Decisions about Punitive Damages, published in Behavioral Sciences and the Law.  Here's the abstract of the article:

Standards of proof define the degree to which jurors must be satisfied that a fact is true, and plaintiffs in civil lawsuits assume the burden of proving their claims to the requisite standard of proof. Three standards—preponderance of evidence, clear and convincing evidence, and beyond a reasonable doubt—are used by different jurisdictions in trials involving liability for punitive damages. We investigated whether individual mock jurors apply these standards appropriately by instructing them to read two personal injury trial summaries and to use one of three standards in either qualitative or quantitative format when deciding punitive liability. Results showed that jurors tended not to incorporate the standard into their judgments: defendants were just as likely to be found liable when the plaintiff's burden was high (“beyond a reasonable doubt”) as when the burden was low (“preponderance of evidence”). The format of the instruction also had a negligible effect. We suggest that nonuse of the standard of proof is related to jurors' preferences for less effortful or experiential processing in situations involving complicated or ambiguous material.

That's sobering stuff for defendants facing punitive damages in California.  Worse yet, some of our appellate courts have held that the clear and convincing evidence standard is irrelevant in appeal challenging the sufficiency of the plaintiffs' evidence of malice, oppression, or fraud.  In other words, according to those courts, if the plaintiff fails to meet its higher burden at trial but the jury awards punitive damages anyway, there is absolutely nothing the defendant can do about it.  Some of our appellate courts, however, have rejected that notion and held that the sufficiency of the evidence must be measured through the prism of the clear and convincing standard.  Our Supreme Court granted review to resolve that split a few years ago but dismissed review when the parties settled the case.  We assume they'll take the issue up again when the right vehicle comes along.  


Hat tip: Robert Richards on Twitter

BDO Seidman denied insurance coverage for $55 million punitive damages award

Last year we reported on a $55 million punitive damages award against accounting firm BDO Seidman in Florida State Court.  That was one of the biggest punitive awards of 2011, although it didn't make our top five.

Last week a judge in New York ruled that the $55 million award is not covered by insurance.  The ruling confirms that, despite the views of some commentators, defendants should not expect coverage for punitive damages awards.

San Diego jury awards $7.5 million in punitive damages in medical device case

We don't see many cases involving punitive damages in medical malpractice cases, but the San Diego Union-Tribune reports that a jury there has awarded $500,000 in punitive damages against a doctor who allegedly mismanaged the plaintiff's treatment following knee surgery.  The jury also awarded $7 million in punitive damages against Breg Inc., the maker of a medical device (the Polar Care 500) that allegedly gave the plaintiff frostbite.  The compensatory damages award is $5.2 million. 

The article describes accusations of negligence against the doctor, but does not explain the plaintiffs' theory for recovering punitive damages - there's no discussion of how the plaintiff proved the defendants acted with malice, oppression, or fraud.   

The case seems to be getting more press than the usual civil lawsuit because the doctor involved happens to be the team physician for the San Diego Chargers.  As the story notes, the California Medical Board is seeking to revoke his license based on three alleged incidents of negligent care in unrelated cases.

$44 million punitive damages award reversed in unpublished opinion (VW Credit v. Keuylian)

In California, two recurring scenarios appear in the unpublished opinions on punitive damages: (1) the court reverses a punitive damages award because the plaintiff obtained a default judgment but did not provide the defendant with adequate notice of the amount of punitive damages the plaintiff was seeking, or (2) the court reverses a punitive damages award because plaintiff failed to introduce meaningful evidence of the defendant's financial condition.

In this unpublished opinion from the Fourth Appellate District, Division Three, we have a twofer: the plaintiff provided insufficient notice of the amount it was seeking by default and failed to introduce meaningful evidence of the defendant's financial condition.  The $44 million punitive damages award in this case never had a chance.

Videotaped debate over "Hot Coffee" and tort reform

Last year we blogged about the documentary "Hot Coffee," which focuses on Liebeck v. McDonald's and a few other cases to illustrate the evils of tort reform.  As noted in our prior post, the film's director Susan Saladoff said she made the film as an antidote to what she perceives as a pro-defendant bias in the mainstream media's treatment of tort reform.

In this video provided by Widener University School of Law, you can view a debate between Ms. Saladoff and Victor Schwartz, general counsel for the American Tort Reform Association.  The video has something for folks on both sides of the issue.  If you're a fan of the movie, you'll enjoy seeing Ms. Saladoff passionately explain why everyone should see this film, because it opens people's eyes to the corporate takeover of the American justice system.  If you're not a fan of the movie, you'll enjoy seeing Mr. Schwartz identify all the parts of the film he believes are false or misleading.

Warning, this video was recorded via Skype and its a little garbled in places.  There are some moments when students are asking questions of Ms. Saladoff and Mr. Schwartz, but the questions are inaudible.  And the video begins in the middle of Ms. Saladoff's comments.  Despite these technical glitches, I found the video quite interesting.

Hat tip: TortsProf Blog

Related posts:

"Hot Coffee" documentary takes aim at media depictions of civil litigation

Judge Rex Heeseman's latest op-ed on punitive damages

Judge Rex Hesseman of the Los Angeles County Superior Court has an op-ed in the Los Angeles & San Francisco Daily Journal entitled "'Finances' and punitive damages."  (Subscription required.)  Judge Heeseman, who writes regularly on punitive damages and insurance law, focuses this time on Bankhead v. Arvinmeritor.  Here's his conclusion about the potential effects of the Court of Appeal's decision to affirm a $4.5 million punitive damages award based on expert opinion that the defendant could pay such an award, notwithstanding its negative net worth:

It can be asserted that focusing upon finances is a sort of an "end run" around the aforementioned "guidelines" of the U.S. Supreme Court.  Furthermore, the emphasis by Bullock III and ArvinMeritor on the "specific facts of each case" (admittedly echoing comments in Campbell) may bring flexibility, but also uncertainty.  . . .  And, for the "punitive damages phase" in some lawsuits, is it now advisable (required?) to have your "expert witness" ready to testify about "net worth," "financial condition" and/or "ability to pay"?  Will there be a "dueling of experts" in that context, similar to that in some other litigation (e.g. standard of care in medical malpractice)?

We hope the California Supreme Court will provide some guidance on these questions in the furture, but as we noted in our most recent post about Bankhead, the California Supreme Court declined to wade into this area of the law in the context of that case.


Related posts:

California Supreme Court denies review in Bankhead v. Arvinmeritor

Defendant files petition for review in Bankhead v. Arvinmeritor

Published opinion affirms $4.5M punitive damages award in asbestos case (Bankhead v. ArvinMeritor)  

Fannie Mae immune from punitive damages (for now)

The Federal National Mortgage Association, better known as Fannie Mae, cannot be liable for punitive damages so long as it remains under the conservatorship of the Federal Housing Finance Agency.  So says an order issued by U.S. District Judge Rosemary Collyer of the U.S. District Court for the District of Columbia.  That's consistent with the general rule that instrumentalities of the federal government are not subject to punitive damages.  (See, e.g., Woodland Production Credit Assn. v. Nicholas (1988) 201 Cal.App.3d 123, 129 ["[n]either the federal government nor its instrumentalities may be held liable for punitive damages unless there is an express statutory authorization for such an award"].)

Hat tip: The Blog of LegalTimes

California Supreme Court denies review in Bankhead v. Arvinmeritor

The California Supreme Court today decided not to review the Court of Appeal's decision in Bankhead v. Arvinmeritor, which upheld a $4.5 million punitive damages award against a defendant with a negative net worth.  So that published opinion will remain on the books and California law will remain murky as to what constitutes "meaningful" evidence of the defendant's financial condition for the purpose of imposing punitive damages.

Related posts:

Defendant files petition for review in Bankhead v. Arvinmeritor

Published opinion affirms $4.5M punitive damages award in asbestos case (Bankhead v. ArvinMeritor)

Justice Kennedy issues stay in Icicle Seafoods v. Clausen

SCOTUSblog is reporting that Justice Kennedy has ordered a stay of enforcement in the Icicle Seafoods case we blogged about earlier this month.  The order prevents plaintiffs from collecting on their $1.3 million punitive damages award while the defendant's cert. petition is pending, on the condition that the defendant's appeal bond remains in effect during that time.

Related post:

Cert. petition raises punitive damages issues (Icicle Seafoods v. Clausen)