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On January 29, CCL filed an amicus curiae brief on behalf of the American Association for Justice supporting a Petition for Certiorari in McBride v. Estis Well Service, S. Ct. Docket No. 14-761. The case arises out of an accident aboard a barge supporting a truck-mounted drilling rig. The rig toppled over, killing one of the crew and injuring several others. The decedent’s representative and two injured workers alleged that Estis, their employer and owner of the barge, willfully ignored warnings concerning the dangerous condition of the rig. The central issue for the Supreme Court is whether seamen may recover punitive damages for willful and wanton breach of the general maritime law duty to provide a seaworthy vessel.

A federal magistrate judge dismissed the McBride claim for punitive damages, based on prior Fifth Circuit precedent. A panel of the U.S. Court of Appeals for the Fifth Circuit reversed, holding that the prior precedent had been overruled by Townsend v Atlantic Sounding (2009), a Supreme Court decision written by Justice Thomas, which upheld recovery of punitive damages under general maritime law for willful failure to provide an injured seaman with maintenance and cure.  However, on rehearing en banc, the entire Fifth Circuit reversed the panel decision by a 9-6 vote. The circuit court extended the Supreme Court’s decision in Miles v Apex Marine Corp. (1990), which held that non-pecuniary damages, such as loss of society, were not recoverable in a Jones Act suit, to bar recovery of punitive damages. There is a split in authority among the federal circuits on this issue.

The AAJ amicus brief, authored by CCL  Senior Counsel Jeffrey White, urged the Court should to grant McBride’s cert petition. The Court has historically safeguarded the rights of seamen as “wards of the admiralty.” In addition, the case is controlled by Townsend, which held that Congress intended the continued availability of existing remedies, such as punitive damages, rather than Miles, which declined to make new remedies available under general maritime law. Finally, CCL suggested that the federal courts draw upon the reasoning and experience of state common law courts in recognizing the availability of punitive damages in products liability suits which, like unseaworthiness actions, are grounded in strict liability. 

The Indiana Court of Appeals heard argument on why the state’s claim of immunity from suit denies Jordyn Polet her right to seek compensation for injuries sustained when the stage collapsed at the 2011 Indiana State Fair. Polet, 11 years old at the time of the incident, attended the state fair with her family and a family friend, to see the country duo Sugarland on stage, when a sudden wind caused the overhead rigging and lighting system to collapse on the crowd gathered in the pit. Seven people were killed, including the Polets’ friend, and another 58 were injured in the tragedy. The State settled with nearly all who were injured in the event, offering a percentage of their claimed medical expenses as of several months after the event. The limited offer attempted to stay within a per-occurrence limit of $5 million in the state tort claims act. The act also limits individual claims to $700,000 each.

Jordyn Polet turned down an offer of $1690, choosing to continue with her filed lawsuit as the meager offer did not come close to covering her total damages. Subsequently, the Indiana Legislature appropriated an additional $6 million to be distributed among those who had settled their lawsuits, thereby excluding Polet. The State then claimed immunity from suit against Polet because it had expended the full $5 million authorized by the tort claims act. Polet attacked the constitutionality of the state’s claim of immunity as violative of the Open Courts and Equal Privileges guarantees of the Indiana Constitution. A state trial court ruled against her, and she appealed.

Represented by CCL President Robert S. Peck, Polet argued that the tort claims act was an unequivocal waiver of immunity and that she had a valid, accrued cause of action that Indiana could not divest by how it settled others’ claims. The Open Courts provision permitted her to take her claim to court under the act, and the Equal Privileges provision meant that she had to be eligible to seek damages up to $700,000, just as she would have if she alone had been injured.  The aggregate cap, Peck told the court, treated her less fairly and less equally, than other tort claimants sued by the state merely because of the number of other people who had been injured. Arguing for the state, Indiana Solicitor General Thomas Fisher claimed that Polet was treated the same as the other claimants injured at the fair because she too had been offered a settlement. Peck argued that an offered settlement is not what the tort claims act guarantees and that a proper comparison considered Polet’s rights against others who might make claims against the state from a different incident. The court took the matter under advisement.

On Tuesday, November 25^th, the California Supreme Court issued an order granting the petition for review in Hughes v. Pham, a case CCL has been working on for several years. The court is holding the case pending its resolution of another case, Rashidi v. Moser, which presents the same statutory question presented in the Hughes petition. The court has not yet said whether it will ask for briefing on the constitutional issues presented in the Hughes petition, including whether California’s $250,000 cap on noneconomic damages in medical malpractice cases violated the state’s “inviolate” right to jury trial. The lead case does not involve the constitutional issues presented in the Hughes petition. A decision in the lead case is expected by early January.

In an unpublished opinion issued on August 22, California’s Fourth District Court of Appeal, Division Two, upheld the state’s $250,000 cap on noneconomic damages in medical malpractice cases against constitutional challenges based on the state constitutional rights to trial by jury and equal protection, and the separation of powers doctrine.

The most problematic part of the opinion is the court’s analysis of the California Constitution’s self-described “inviolate” right to a jury trial. The court of appeal said that the right to a jury trial “may be modified in furtherance of a legitimate state interest,” a standard that has never been used by the California Supreme Court when examining whether the jury trial right is violated and demotes the constitutional provision to the status of legislation. The court’s analysis ignores what was preserved when the right to jury trial was placed in the state constitution, secure from legislative intrusions. The court of appeal’s decision stands in stark contrast with recent decisions from the highest courts of other states that also have an “inviolate” right to a jury trial protected by their state constitutions.

The appeal came after a jury determined that the plaintiffs were entitled to $3.75 million in damages for noneconomic injuries that included permanent paralysis, pain and suffering, and loss of consortium. Under California’s cap, the trial judge reduced this portion of the jury’s verdict to $500,000: $250,000 for each plaintiff.

The plaintiffs are represented by CCL’s Valerie M. Nannery, David Bricker of Waters Kraus & Paul in Los Angeles, CA, Burt Rosenblatt of Ely, Bettini, Ulman & Rosenblatt in Phoenix, AZ, and Steven B. Stevens in Los Angeles, CA. 

On August 6, a panel of judges on California’s Fourth District Court of Appeal, Division Two, heard argument from CCL’s Senior Litigation Counsel Valerie M. Nannery that the state’s $250,000 cap on noneconomic damages in medical malpractice cases violates the right to a jury trial under the state constitution. The appeal came after a jury determined that the plaintiffs were entitled to $3.75 million in damages for noneconomic injuries including permanent paralysis, pain and suffering, and loss of consortium. Under California’s Medical Injury Compensation Reform Act of 1975 (MICRA) cap, the trial judge reduced this portion of the jury’s verdict to $500,000: $250,000 for each plaintiff.

Nannery argued that, under the California Constitution and California Supreme Court precedent, the proper analysis of the right to trial by jury is an historical one. She argued that one of the most essential features of the right to jury trial is that the jury determines the facts, and damages in civil actions at common law are a question of fact. Nannery urged the court to use the historical analysis of the right to jury trial, as the highest courts in Oregon, Washington, Georgia and Missouri have, and hold that the MICRA cap violates the state’s “inviolate” right to trial by jury in civil actions.

The plaintiffs are represented by CCL’s Valerie M. Nannery, David Bricker of Waters Kraus & Paul in Los Angeles, CA, Burt Rosenblatt of Ely, Bettini, Ulman & Rosenblatt in Phoenix, AZ, and Steven B. Stevens in Los Angeles, CA. The case was fully submitted at the end of the August 6th hearing, and the parties await the court’s decision.

The Pennsylvania Supreme Court has refused to disturb a lower court ruling that Wyeth is liable for punitive damages for its marketing and sale of Prempro, a hormone therapy that combines estrogen and progestin. An epidemiologist has estimated that the use of estrogen plus progestin caused approximately 8,000 to 15,000 extra breast cancers each year for women between 50 to 69 years of age. Wyeth asked the Supreme Court to consider whether its compliance with FDA safety standards should, as a matter of law, negate this liability. CCL’s Andre M. Mura wrote an amicus curiae brief on behalf of the Pennsylvania Association of Justice, arguing that there was sufficient record evidence to demonstrate that Wyeth had superior knowledge of Prempro’s cancer-related risks but failed to warn physicians and in doing so acted in reckless disregard of patient safety. Further, CCL argued that FDA approval of a drug and its label, and FDA oversight of drug safety after a drug is marketed for sale, do not absolve a drug manufacturer of its duty under federal and state law to monitor a drug’s safety profile and warn physicians or patients of known risks. More than one year after briefing and oral argument, the high court dismissed the appeal as improvidently granted, which means the lower court’s ruling permitting punitive damages will stand.

The Massachusetts Supreme Judicial Court has upheld a substantial award of punitive damages in a wrongful death action against a toy retailer. Aleo v. SLB Toys USA, 2013 WL 4849097 (Mass., Sept. 13, 2013). The court’s reasoning on the amount of the jury’s award largely tracked arguments advanced by CCL Senior Counsel Jeffrey White in an amicus curiae brief filed on behalf of the American Association for Justice and the Massachusetts Academy of Trial Attorneys.

The product was a Banzai Falls inflatable pool slide imported from China and sold by defendant Toys R Us. Robin Aleo, a 29-year-old wife and mother, slid down head-first. At the bottom, the underinflated slide allowed her head to strike to concrete pool edge, severing her spinal cord and resulting in her death a day later. A jury found Toys R Us liable for gross negligence in marketing the slide, which failed to meet federal safety standards, awarding $2.6 million in compensatory and $18 million in punitive damages.

On direct appeal to the Supreme Judicial Court, Toys R Us contended that due process limited punitive damages to no more than the compensatory award, particularly because gross negligence is the least blameworthy conduct triggering punitive liability.

The court noted that the role of the reviewing court is not to substitute its judgment for the moral condemnation expressed by the jury in awarding punitive damages within constitutional limits. The court also emphasized that the U.S. Supreme Court has repeatedly rejected a “bright line” ratio between punitive and compensatory damages. Additionally, although the compensatory award might be viewed as “substantial” in some contexts, “its significance pales when viewed not as compensation for economic loss or emotional distress but for the loss of a young woman's life.” The court concluded, based on the reprehensibility of the misconduct and the possible civil penalties, that the single-digit ratio award was not grossly excessive so as to exceed constitutional bounds. 

An amicus brief filed on April 22 by CCL Senior Counsel Jeffrey White argues against reviewing punitive damage awards for gross negligence differently from awards based on willful or wanton misconduct. Aleo v. Toys R Us involves a fatal head injury to a young mother sliding down an inflatable swimming pool slide sold by Toys R Us.  A Massachusetts jury found the company grossly negligent in failing to ensure compliance with CPSC standards for such slides, awarding $2,640,000 in compensatory and $18 million in punitive damages.  Toys R Us argued on appeal that, because gross negligence is the least reprehensible type of misconduct for which punitives might be awarded, any amount in excess of a 1-to-1 ratio to compensatory damages is unconstitutionally excessive. The Massachusetts Supreme Judicial Court invited amicus participation on the question whether gross negligence awards should be reviewed under a different standard.

CCL filed a brief on behalf of AAJ and the Massachusetts Academy of Trial Attorneys, arguing against a bright-line limit on punitive damages of any category. Instead, allowing a well-instructed jury to assess reprehensibility based on the facts of the particular case carries out the state interest in punishing and deterring misconduct in a manner that is fundamentally fair to defendants.  

Today, the U.S. Supreme Court denied the petition for certiorari in Icicle Seafoods, Inc. v. Clausen, thereby letting a $1.3 million punitive damage award stand. CCL’s Robert Peck represented Dana Clausen, an engineer injured on an Icicle Seafoods’ Bering Star vessel based in Alaska, before the Supreme Court. Under ancient maritime law, the owner of the vessel is responsible for “maintenance and cure,” the admiralty equivalent of workers compensation. After Icicle Seafoods failed to discharge this obligation and falsely filed for injunctive relief against Clausen in federal court to get out of its obligation, Clausen brought suit in Washington state court. A jury awarded Clausen and $37,420 for wrongfully withheld maintenance and cure, $453,100 for negligence under the Jones Act, and $387,558.00 in attorney fees and $40,547.57 in costs. In addition, the jury found Icicle’s misconduct warranted $1.3 million in punitive damages. The Washington Supreme Court upheld the award in all respects. Icicle then petitioned the U.S. Supreme Court for review, claiming that the punitive damages were unconstitutionally excessive and should have been limited to a 1:1 ratio with the maintenance and cure compensation of $37,420. The Court’s denial of the petition allowed the full award to stand.

A report on the case can be found at SCOTUS Blog and California Punitive Damages, An Exemplary Blog.

The Supreme Court has declined to review an $8 million punitive damages verdict against Farmers Insurance Company of Oregon in a class action brought by policyholders, in Farmers Insurance Co v. Strawn. The Oregon courts found that Farmers failed to comply with Oregon personal injury protection (PIP) law and its policy contract by failing to pay all reasonable medical expenses it was required to pay. CCL’s Robert S. Peck, counsel of record for the plaintiffs/respondents, opposed review of Farmers’ petition, which asserted in part that it was denied due process because plaintiffs proved the reliance element of fraud on a class-wide rather than individualized basis. Petitioners were represented by Mr. Theodore J. Boutros of Gibson Dunn.