ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Thursday, January 20, 2005

Be careful what you wish for

Money reports that a Pennsylvania occupational therapy company, CGB, has won a $30 million punitive damage award against Sunrise Assisted Living, Inc., for tortious interference of contract.  A jury found that Sunrise induced two nursing homes to terminate their contracts with CGB, and then hired away five therapists in violation of those agreements.

It was a stunning loss for Sunrise, which had previously convinced the U.S. Court of Appeals for the Third Circuit to reverse an earlier $2 million punitive damages judgment. The first jury had awarded $689,000 in actual damages and $1.3 million in punitives.  The Second Circuit—in an opinion by newly nominated Homeland Security chief Michael Chertoff—reduced the actual damages to $109,000 and ordered a retrial on punitive damages.  The second jury came down with the $30 million penalty.

Jurors later explained that since the evidence was that it took CGB six months to recover from the harm done by Sunrise, Sunrise should have to fork over six months worth of its own profits.

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