Insurance Defense Blog

Maryland Court of Appeals Holds That A Plaintiff Seeking Punitive Damages Has No Obligation To Establish A Defendant's Ability To Pay

In Darcars Motors v. Silver Spring Inc. v. Borzym, No. 33, Sept. Term, 2003 (Md. Feb. 9, 2004), the Court reviewed a jury award for punitive damages against an automobile dealership, and concluded that the evidence was sufficient to support the jury's finding on actual malice and that the plaintiff had no duty to present evidence of the dealership's financial condition in support of his pursuit of a punitive damages award.

The Court held that when called upon to decide the sufficiency of the evidence in support of an award of punitive damages, judges must consider that the claimant must prove "actual malice" by clear and convincing evidence.

D.C. Court of Appeals Vacates Punitive Damages Award In Light Of State Farm v. Campbell

In Daka, Inc. v. McCrae, Nos. 00-CV-1270 and 01-CV-227 (D.C. Dec. 24, 2003), the D.C. Court of Appeals vacated a jury award for punitive damages in a case involving negligent supervision of a managerial employee and unlawful retaliation against plaintiff for his claims of sexual harassment by that manager. The jury had awarded $187,500 in compensatory damages, $4,812,500 in punitive damages, and $276,493.28 in attorney's fees and costs.

The claim was brought by a male chef based on sexual harassment by a male supervisor.

The Court found that the punitive damages award, reflecting a ratio of 26:1 to the compensatory damages award, lacked the reasonableness and proportionality required for a punitive damages award.

The Court vacated the award and remanded the case to the trial court with directions to reduce the award of punitive damages to a sum consistent with the principles expressed by State Farm v. Campbell and this opinion. The Court noted that an award in this case that multiplies the sum awarded for compensatory damages by more than a factor of five will bear a very heavy burden of justification.

On remand, the plaintiff will not receive the option of accepting the remitted amount or a new trial on punitive damages. That is because the amount to be determined by the judge is the constitutional maximum which the jury could properly award, an amount that is actual award has already exceeded.

Chump Change: Alabama Jury Awards $11.8 Billion In Punitive Damages Against Exxon

The Washington Times today carried a story about this punitive damages award.

A telling quote from one of the jurors:

Despite no mention of it, juror L.A. Wallace said Exxon's size and the state's problems were a actor in the decision to award more than the state's attorneys sought against the oil company. "A billion dollars to them is chump change," said Mr. Wallace, who works at a plastics factory.