January 21, 2013
Skadden Analysis of 2013 Potential Developments in Global Litigation
Skadden has issued a useful analysis of upcoming cases to watch and potential developments for 2013 in class actions and product liability. The analysis includes contributes by Skadden's John Beisner, J. Russell Jackson, and Jessica Miller.
May 17, 2012
$300 Million Punitive Damages Award Against Iran and Syria for Terrorism Injuries
The United States District Court for the District of Columbia has awarded $300 million in punitive damages to plaintiffs bringing tort claims against Syria and Iran in connection with their alleged role in a 2006 suicide bombing attack in Israel; the recovering plaintiffs were all U.S. citizens. The opinion is noteworthy not only for the size of the punitive-damages award, but also for the opinion's application of the terrorism exception to the Foreign Sovereign Immunities Act and the opinion's finding that the organization allegedly responsible for the attack was acting as an agent of Iran and Syria. The Jurist also has an article on the opinion.
Although executing on such a judgment is likely difficult and sensitive matters of foreign policy may be implicated, the use of tort law (here, the claims included battery and intentional infliction of emotional distress) seems promising as a way to hold foreign states responsible for terrorism. Indeed, multiple such claims have been litigated recently in the District of Columbia. Apart from general attempts to execute on assets of the defendants seized abroad, perhaps payment of such claims might be raised by the U.S. Department of State in connection with any future regime change and new government in the defendant countries.
April 08, 2012
Bar on Punitive Damages Against Chrysler For Cars Sold Before 2009 Bankruptcy
The Wall Street Journal has a video describing the bar on punitive damages against Chrysler for new claims in connection with cars sold prior to Chrysler's 2009 bankruptcy. The video features Professor David Skeel (Pennsylvania).
February 06, 2012
Catherine Sharkey on the Vicissitudes of Tort
Professor Catherine Sharkey (NYU) has posted to SSRN her article, The Vicissitudes of Tort: A Response to Professors Rabin, Sebok & Zipursky. Here is the abstract:
This response essay probes three themes that tie together three articles submitted for a tort symposium on “The Limits of Predictability and the Value of Uncertainty.” First, I explore the use of unpredictability as a code word for an assault on tort doctrine in response to an out-of-control tort system. In his historical account of the evolution of tort, Professor Rabin focuses on the canonical “no duty” rules of the nineteenth century and the contemporary rules-based limitations on open-textured liability in the twentieth century. But largely missing from this account is the story of rules promoting tort liability, such as strict liability, vicarious liability, negligence per se, and the like. Second, I probe the link between unpredictability and insurance. I argue that Professor Sebok’s efforts to distinguish champerty from illegal gambling and to analogize it to a form of insurance will inevitably fall short of establishing social acceptance or embrace of the practice. Third, I highlight the role of the U.S. Supreme Court and its incursions into the state law domain of tort in the name of predictability. Professor Rabin is doubtful that the U.S. Supreme Court will achieve great strides in its endeavor to quell unpredictability in punitive damages. Professor Zipursky has considerable angst about the Court’s making inroads into privacy and emotional distress torts. Such incursions are in keeping with the Court’s longer-term project of procedural reform of the civil litigation system in the name of unpredictability, but are novel in their ambition to launch frontal attacks.
January 21, 2012
Chevron Appeals $8.6 billion Judgment to Ecuador's National Court
CNN reports that Chevron has appealed the $8.6 billion environmental judgment to Ecuador's National Court. The case has been closely watched not only for its high dollar amounts, but for the questions raised by Chevron about the integrity of Ecuador's courts. Questions of foreign-court bias may be more frequent as mass tort litigation increasingly becomes global tort litigation, and disputes against large, deep-pocketed corporations are brought by foreign claimants in foreign courts.
January 14, 2012
BP, the Gulf Coast Claims Fund, and MDL Plaintiffs' Lawyers
All that in the recent interesting op-ed from New York Times business columnist Joe Nocera -- BP Makes Amends.
June 27, 2011
McGovern on Punitive Damages Class Actions
I just ran across an article by Francis McGovern entitled "Punitive Damages and Class Actions" 70 Louisiana L. Rev. 435 (2010). Here is a flavor of the piece from the introduction:
Notwithstanding the chilly reception that punitive damages class actions have received from appellate courts, there are several approaches at the micro and macro levels of analysis suggesting that “hope” is still persistent. By disaggregating the United States Supreme Court punitive damages jurisprudence, it is possible to identify a limited number of factual scenarios where a class action for punitive damages could be successful. These micro-level observations can constitute a road map for navigating the current seemingly insurmountable barriers that have severely limited the use of class actions in punitive damages claims. At the macro level, there are two observations that could lead to a revision of punitive damages class actions: the seemingly undaunted, pragmatic desire on the part of trial judges to resolve similar cases collectively, and the powerful support for an economic vision of punitive damages that leads inevitably to a global, rather than individual, procedural approach.
January 21, 2011
Eisenberg and Heise on the Judge-Jury Difference in Punitive Damages Awards
Theodore Eisenberg and Michael Heise (both of Cornell) have posted to SSRN their article, Judge-Jury Difference in Punitive Damages Awards: Who Listens to the Supreme Court? Here's the abstract:
We analyze thousands of trials from a substantial fraction of the nation’s most populous counties as well as a smaller sample of less populous counties. Evidence from four major Civil Justice Survey data sets spanning more than a decade establishes that: (1) compensatory awards are strongly associated with punitive awards and (2) the punitive-compensatory relation has not materially changed over time. But (3) 2005 data suggest, for the first time, systematic differences between judges and juries in the punitive-compensatory relation. Despite claims that the Supreme Court’s State Farm decision changed the punitive-compensatory relation, we present evidence that the 2005 shift is not attributable to the State Farm case or to other possibly relevant likely factors such as the relative flow of personal injury cases to judges and juries, inclusion of 110 small counties in the 2005 data, or changes in the 2005 data coding. The judge-jury difference more likely turns on unobserved factors driving the selection of cases for adjudication before judges and jurors.
April 21, 2010
Sharkey on the Exxon Valdez Litigation
Catherine Sharkey (NYU) has posted "The Exxon Valdez Litigation Marathon: A Window on Punitive Damages" on SSRN.
It looks like one of the things Sharkey discusses in the paper (which I haven't read yet but looks fascinating and important) is the fact that the Exxon case was a punitive damages class action. Notably, it was a punitives class sought by the defendants not plaintiffs. The plaintiffs actually opposed the class certification (and lost). It seems to me that from an economic point of view punitive damages classes make perfect sense because punitives are all about defendants' conduct, not plaintiff's, so individual issues should not predominate. We only start to get concerned about the relationship between plaintiff's harm and defendant's punitive exposure when we know that many other cases are going to come about seeking punitive damages (in other words, the defendant faces duplicative awards for the same conduct). For contrary views see Nagareda, Punitive Damages Class Actions and the Baseline of Tort and Sheila Scheuerman, Two World Collide: How the Supreme Court's Recent Punitive Damages Decisions Affect Class Actions.
Here is the abstract of Sharkey's paper:
The Exxon Valdez litigation marathon - a protracted, two-decade-long battle over the propriety and constitutionality of the jury’s $5 billion punitive damages award - provides a window into the past, present, and future of punitive damages. Acting akin to a common law court under federal admiralty jurisdiction, the U.S. Supreme Court provided a template for lower courts to follow. Free of constitutional constraints, the Court diagnoses the problem with punitive damages - unpredictability - and propose a solution: a 1:1 ratio of punitive to compensatory damages. The flaws in the Court’s statistical analysis provide a reminder that those “unsophisticated in statistics” should proceed with caution. The Court’s single-minded focus on unpredictability almost inexorably drives it to embrace and reinforce an exclusively retributive rationale for punitive damages. The Court invokes the analogy of the sentencing guidelines as a model for achieving greater predictability; once enamored with this model, the linkage between the guidelines and criminal retribution spills over to punitive damages as civil retribution. There is, moreover, an uncanny coincidence between the Court’s common law, policy-laden analysis, and the heavy-handed direction its constitutional excessiveness decisions had been taking.
Three issues loom large on the horizon of punitive damages doctrine and policy. First, the Court’s fixation on unpredictability can be linked with a broader trend in the Court’s jurisprudence of circumscribing the role of the civil jury in the name of certainty, predictability, and efficiency. Second, the Court had before it a case in a unique procedural posture: the plaintiffs were part of a “limited fund,” mandatory, non-opt out class action for resolution of punitive damages only. Because that element of the case was not appealed to the Court, the Court left for another day resolution of the classwide determination of punitive damages. Third, the Court’s quest for a national solution to the punitive damages problem and its equation of punitive damages and criminal fines presage impending federalism battles. By elevating a single punitive damages goal - that of retributive punishment - the Court sets the stage for a clash with state courts and legislatures who might be inspired to define their legitimate state interests in punitive damages differently.
March 19, 2010
Taxing Punitive Damages
Dan Markel and Greg Polsky (both of Florida State) have posted "Taxing Punitive Damages" on SSRN. Here is the abstract:
There is a curious anomaly in the law of punitive damages. Jurors assess punitive damages in an amount that they believe will best “punish” the defendant. But, in fact, defendants are not always punished to the degree that the jury intends. Under the Internal Revenue Code, punitive damages paid by business defendants are tax deductible and, as a result, these defendants often pay (in real dollars) far less than the jury believed they deserved to pay.
To solve this problem of under-punishment, many scholars and policymakers, including President Obama, have proposed making punitive damages nondeductible in all cases. In our view, however, such a blanket nondeductibility rule would, notwithstanding its theoretical elegance, be ineffective in solving the under-punishment problem. In particular, defendants could easily circumvent the nondeductibility rule by disguising punitive damages as compensatory damages in pre-trial settlements.
Instead, the under-punishment problem is best addressed at the state level by making juries “tax aware.” Tax-aware juries would adjust the amount of punitive damages to impose the desired after-tax cost to the defendant. As we explain, the effect of tax awareness cannot be circumvented by defendants through pre-trial settlements. For this and a number of other reasons, tax awareness would best solve the under-punishment problem even though it does come at the cost of enlarging plaintiff windfalls. Given the defendant-focused features of current punitive damages doctrine, this cost is not particularly troubling. Nonetheless, a related paper of ours furnishes a strategy for overcoming this tradeoff through some basic reforms to punitive damages law.
February 22, 2010
Choice of Law in Mass Torts
The folks over at Drug and Device Law have a very interesting post on this subject entitled Choice of Law, Punitive Damages and Harry Truman.
November 27, 2009
Florida Verdict Against Philip Morris
Earlier this week, a Florida jury returned a $300 million verdict in Lucinda Naugle's individual lawsuit against Philip Morris. The jury awarded $56 million in compensatory damages plus $244 million in punitive damages. Here's a WSJ Health Blog post, as well as an editorial in today's NY Times urging that "There should be more lawsuits seeking not only monetary damages, but changes in how the tobacco industry markets its products."
The Naugle action is one of over 8000 post-Engle lawsuits in Florida. Engle was the massive statewide Florida class action against the tobacco industry that resulted in a 12-figure punitive damages verdict against the cigarette companies. When the Florida Supreme Court decertified the class in 2006, the classwide punitive damages verdict was lost, but the Florida Supreme Court held that the classwide factual findings would be given preclusive effect in subsequent individual trials. Thus, when Engle class members (Florida smokers) go to trial on cigarette claims, certain facts are already established without the need for new proof: that nicotine is addictive, that cigarettes cause certain diseases, that the tobacco companies knew of certain dangers but failed to disclose that information, and so on. The post-Engle individual lawsuits began to reach trial this year, and so far they have mostly resulted in big wins for plaintiffs.
As I commented on this blog nine months ago, if the post-Engle plaintiffs continue to win at this rate, it may turn out that the Florida Supreme Court's decertification of the class action -- which at the time seemed like an important victory for the tobacco industry -- was an even greater victory for tobacco plaintiffs.
August 25, 2009
$13.8 Million Smoker Punitive Damages Verdict Against Altria
In the Bullock case in Los Angeles -- more from Bloomberg.
August 15, 2009
Dan Markel on Taxing Punitive Damages
Dan Markel (Florida State) posts on PrawfsBlawg about his forthcoming article on taxing punitive damages.
June 23, 2009
Exxon to Bear Its Own Costs in Punitive Damages Case
BNA Law Week reports that the 9th Circuit has held that each party must bear its own costs in the Exxon punitive damages litigation. (Baker v. Exxon Mobil Corp. (In re Exxon Valdez), 9th Cir., No. 04-35182, 6/15/09). The costs were substantial -- approximately $70 million -- mostly attributable to the bond the company had to put up. The original award was $5 billion and it was reduced to approximately $500 million. While the reduction was substantial, the 9th Circuit held that the results were sufficiently mixed that Exxon was not the "prevailing party" such that costs could be shifted under Fed. R. App. P. 39(a)(4) (stating that "if a judgment is affirmed in part, reversed in part, modified, or vacated, costs are taxed only as the court orders.")
April 05, 2009
Sheila Scheuerman on Statutory Damages and Class Actions
Professor Sheila Scheuerman (Charleston; picture, left) has posted on SSRN her article, Due Process Forgotten: The Problem of Statutory Damages and Class Actions, Mo. L. Rev. (forthcoming 2009). Here's the abstract:
March 31, 2009
Philip Morris Cert Dismissed as Improvidently Granted
As per Scotusblog:
The Court has released the opinion in Philip Morris USA, Inc. v. Williams (07-1216), on tobacco punitive damages. In a per curiam opinion, available here, the writ of certiorari is dismissed as improvidently granted.
February 19, 2009
$8 Million Verdict in First Post-Engle Florida Tobacco Trial
A Florida jury yesterday awarded $8,000,000 ($3 million compensatory plus $5 million punitive damages) to the family of a smoker who died of lung cancer. The case, Hess v. Philip Morris, was the first of 8,000 individual cases that may go to trial in Florida in the wake of the Florida Supreme Court's 2006 rejection of a statewide class action in Engle v. Liggett Group.
In the Engle class action, a jury had found the defendant tobacco companies liable for $145 billion in punitive damages. The Florida Supreme Court (here's that court's decision) found that the class action should not have been certified on punitive damages, but held that certain factual findings on liability would be given issue preclusive effect in subsequent individual trials against the defendants. I believe Florida remains one of the few states that clings to the traditional requirement of mutuality for issue preclusion, but the Engle decision did not actually condone nonmutual use of the trial findings. Rather, it concluded that although certain issues were so individualized that they required decertification of the class on remand, the common liability issues were suitable for classwide determination and thus could stand. The Florida Supreme Court put it this way: "Individual plaintiffs within the class will be permitted to proceed individually with the findings set forth above given res judicata effect in any subsequent trial between individual class members and the defendants, provided such action is filed within one year of the mandate in this case." In other words, despite the decertification of the class, the individual class members would be treated as parties entitled to use the favorable findings on liability.
If yesterday's verdict is any indication of how the remaining trials will go, the defendants' appellate "victory" in Engle offers them scant protection from the prospect of multi-billion dollar liability in Florida. The irony is that after defeating class cert in Engle, the defendants may eventually find themselves wishing to negotiate a settlement class action to resolve the remaining claims.
Here's an excerpt from yesterday's Bloomberg.com report by Jef Feeley and Mort Lucoff:
Altria Group Inc., the biggest U.S. cigarette maker, must pay $8 million to the family of a smoker who died of lung cancer, a Florida jury ruled in the first of 8,000 individual cases to go to trial in the state. A state court jury in Fort Lauderdale ruled today Altria’s Philip Morris USA unit is liable for $3 million in compensatory damages and $5 million in punitive damages over Stuart Hess’s 1997 death. ...
The verdict is the first in thousands of lawsuits filed after the Florida Supreme Court refused to reinstate a $145 billion punitive-damages verdict awarded by a Miami jury to a statewide class of smokers in 2006. Florida’s high court, which ruled the smokers can’t sue as a group, extended the time for individual smokers to sue and allowed them to rely in their individual cases on factual findings by the Miami jury, including that cigarettes are addictive and cause cancer. ...
The 8,000 cases pending in the state are split up among cigarette makers including Altria, Reynolds American Inc. and Vector Group Ltd. The cases are slated to be tried in courthouses across the state in coming months and years.
February 01, 2009
South Carolina Senate Considers Tort Reform Bill
The Charleston Regional Business Journal reports the bill includes limits on punitive and noneconomic damages, class-action reform, and limits bond requirements to appeal extremely large verdicts. (H/t to Torts Prof Blog.)
December 15, 2008
Analysis of the Latest Williams Tobacco Appeal to the Supreme Court
Adam Liptak of the New York Times breaks down the issues in Justices Look Anew at Case in Which Oregon Court Has Twice Rebuffed Them. Here's an excerpt:
The United States Supreme Court takes its name seriously, and it expects lower courts to follow its instructions. But the Oregon Supreme Court has twice refused to reduce a $79.5 million punitive damages award in the face of increasingly blunt directions from the nation's highest court.
When the United States Supreme Court agreed to hear the Oregon case for a third time in June, many legal experts assumed it did so to teach the lower court a lesson about which court has the last word.
''The Oregon Supreme Court really has continued to be defiant in this case,'' Benjamin C. Zipursky, a Fordham law professor, said.