Overlawyered: Chronicling The High Cost Of Our Legal System

Posts Tagged ‘punitive damages’

Roman Catholic Diocese of Vermont Hit With 18:1 Punitives Award

A jury in Vermont has awarded a former altar boy $192,500 in compensatory damages, and $3.4 million in punitive damages, for suffering alleged molestation at the hands of a priest in 1977.  According to the Times Argus of Vermont, this is the third trial this year involving the same priest, who, amazingly, still retains his collar though he’s retired from active service.  As a result, the diocese of Vermont appears to be teetering on the edge of bankruptcy.  The diocese has announced it will appeal the verdict.

The ratio of punitive to compensatory damages appears to violate the  Supreme Court’s suggestion in Exxon Shipping v. Baker (an admiralty case decided on statutory grounds) that a punitive ratio in excess of single digits, or even 1:1, is unconstitutional.  But as Cal Punitives points out, is this the case with which to put that suggestion to the test?

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Latest issue of Class Action Watch

The latest issue of the Federalist Society’s Class Action Watch has many articles of interest to Overlawyered readers:

  • William E. Thomson & Kahn A. Scolnick on the Exxon Shipping case;
  • Jimmy Cline on Arkansas’s disregard for class action certification standards;
  • Jim Copland on the “Colossus” class action;
  • Laurel Harbour on the New Jersey Supreme Court decision on medical monitoring class actions;
  • Lyle Roberts on lead-counsel selection in securities class actions;
  • Mark A. Behrens & Frank Cruz-Alvarez on the lead paint public nuisance decision by the Rhode Island Supreme Court; and
  • Andrew Grossman, extensively citing to Overlawyered and my brief in discussing the Grand Theft Auto class action settlement rejection.

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Cantrell v. Target: $200 medical bill = $3.1 million verdict

Let us stipulate: when Rita Cantrell tried to pay for her goods with a thirty-year-old $100 bill, Target employees were foolish in being unable to recognize the old currency, and mistakenly identified it as a possible counterfeit. Cantrell fled the store when Target asked if she had another means of paying, raising suspicions, so Target security staff passed along a photo of Cantrell to 70 other local stores participating in a loss-prevention consortium to notify them of the incident. One of the stores recognized Cantrell as one of its employees and called in the Secret Service, which investigated, and found that the bill was real; Target passed along a new notice clearing Cantrell of any wrongdoing.

Cantrell, shaken and embarrassed by the involvement of the Secret Service and her employer, incurred $200 of medical expenses–and sued. Cantrell acknowledged that Target had a right to notify other stores of the incident, but complained that the manager could have worded his e-mail differently, and, besides, some of the members of the loss-prevention consortium did not have retail operations and thus did not need to know about the incident.  Notwithstanding Target’s motion for summary judgment, the court let the case proceed to a jury, which happily proposed that Cantrell be made a millionaire for the inconvenience–$100,000 in “compensatory” damages, and a 30-1 punitive damages ratio. Magistrate Judge Bruce Howe Hendricks entered judgment without touching the figure or waiting for post-trial briefing, and Target says it will appeal, so we’ll see what the Fourth Circuit does with this next year. (Cantrell v. Target Corp., No. 6:06-cv-02723-BHH (D.S.C. 2008); Eric Connor, “Jury set $3.1 milion award in Target case, lawyer says”, Greenville News, Oct. 28).

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$55 million in Marine helicopter crash

Curt Cutting at California Punitive Damages takes note of a jury’s very large verdict against San Diego Gas and Electric last month, including $40 million in punitive damages, after a helicopter fatally collided with a 130-foot utility tower located on the base at Camp Pendleton. “The plaintiffs claimed that SDG&E was negligent for not installing safety lights on the tower. SDG&E says the tower had been on the base for 25 years and they would have installed lights if the Marine Corps had asked. They contend the crash was the result of errors by the crew and they plan to appeal.” (Sept. 3; Tony Perry, “$55.6 million awarded in fatal Marine helicopter crash”, Los Angeles Times, Sept. 4). Bruce Nye at Cal Biz Lit calls the verdict a “stunner” (Sept. 8).

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September 11 roundup

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Another lost-pants case

Unlike Roy Pearson in the celebrated D.C. case, Charleston, W.V. lawyer Richard D. Jones isn’t demanding $67 million from the dry cleaner, nor is he a sitting judge (his practice is in civil defense). About the only visible angle that distinguishes the case from the entirely ordinary: Jones wants punitive damages from defendants Pressed For Time and Lisa Williams. (W.V. Record, more).

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Mirapex jackpot justice – literally

Gary Charbonneau had a gambling history, including substantial wins, which devolved into compulsive gambling in 2002. He blames this on his Parkinson’s disease medication, Mirapex, which he started taking in 1997. Mirapex changed its warning label to include reports of a correlation while Charbonneau was taking the drug; Charbonneau’s doctor kept prescribing the drug. Nevertheless, Charbonneau was able to persuade a jury that the failure to warn was what was responsible for his $200,000 gambling losses (much of which came from gambling illegally) and resulting marital troubles. The jury verdict even awarded $8 million in punitive damages, giving a whole new meaning to jackpot justice (though one would expect the trial court to reduce this substantially). The only press coverage of this lawsuit, aside from a handful of blogs (Pharmalot; TortsProf; InjuryBoard), is in an op-ed I wrote for today’s Examiner about the case and about how a Supreme Court case and Congressional legislation could affect it. (Theodore H. Frank, “Jackpot justice gets new meaning,” DC Examiner, Aug. 19).

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Johnson v. Allstate Insurance Co.: drunk driving for profit

Wayne Davis, Jr., had a .203 blood-alcohol level, when he drove his pickup across the center line of a Camden County, Missouri, highway on March 24, 2000, and crashed head on into the compact car of Edward and Virginia Johnson.

You’ll be happy to hear that the Johnsons didn’t try to blame the beer company or the auto manufacturer, and simply sued Davis. Davis’s insurer, Allstate, contacted the Johnsons’ attorney, David Sexton, in April, and asked for access to the Johnsons’ medical record. Sexton responded by demanding the policy limits. Allstate requested the medical records three more times, and finally got the records on December 20. (A Dan Margolies Kansas City Star article (via Childs) incorrectly says Allstate did not respond, but the court’s opinion says otherwise.) Allstate immediately agreed to pay the settlement limits, but now Sexton refused, saying his April offer had expired, and he now wanted $3 million from Allstate. We’ll let the Missouri Court of Appeals explain what happened next:

Read On…

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Breaking: Tennessee Supreme Court reinstates punitive damages in Flax v. DaimlerChrysler

Perhaps we spoke too soon when we commended the Tennessee appellate court for getting it partially right. As we stated in November 2004:

In 2001, Louis Stockell, driving his pickup at 70 mph, twice the speed limit, rear-ended a Chrysler minivan. Physics being what they are, the front passenger seat in the van collapsed backwards and the passenger’s head struck and fatally injured 8-month old Joshua Flax. The rest of the family walked away from the horrific accident. Plaintiffs’ attorney Jim Butler argued that Chrysler, which already designed its seats above federal standards, should be punished for not making the seats stronger — never mind that a stronger and stiffer seat would result in more injuries from other kinds of crashes because it wouldn’t absorb any energy from the crash. (Rear-end collisions are responsible for only 3% of auto fatalities.) Apparently car companies are expected to anticipate which type of crash a particular vehicle will encounter, and design accordingly. The $105M verdict includes $98M in punitives.

We had more details of trial shenanigans in December 2004 and noted the reduction of the punitives by the trial court to a still unreasonable $20 million in June 2005. In December 2006, the intermediate appellate court threw out the punitive damages and the negligent infliction of emotional distress claim, leaving a $5 million compensatory damages verdict to be split between Chrysler and the driver responsible for the accident. An injustice, but at least a smaller injustice.

However, today, a 3-2 vote of the Tennessee Supreme Court made it a larger injustice again, reinstating $13,367,345 of punitive damages over a good-faith dispute over appropriate seatback design, giving no credit to evidence that the design in the Caravan was safer than the plaintiffs’ proposed design, and effectively disregarding Tennessee statutory law that compliance with federal standards creates a presumption against punitive damages. The Court did not mention Exxon Shipping‘s suggestion that punitive damages greater than a 1:1 ratio were possibly constitutionally inappropriate where compensatory damages were substantial and the defendant’s actions were not intentional or done for profit. The Court unanimously affirmed the elimination of the NIED claim; one justice would have thrown out the compensatory damages, as well, because of the volume of inadmissible and improperly prejudicial evidence admitted. (Flax v. Daimler Chrysler (Tenn. Jul. 24, 2008); id. (Wade, J., concurring); id. (Clark, J., partially dissenting); id. (Koch, J., partially dissenting); E. Thomas Wood, “High court upholds $18.4M damage award in DaimlerChrysler case”, Nashville Post, Jul. 24; Kristin M. Hall, AP/Chicago Tribune, Jul. 24). The majority decision relied heavily on the expert testimony of Paul Sheridan, an MBA non-engineer and professional anti-Chrysler witness whom a federal court called “wholly unqualified” to testify on seat back design.

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