Archives: Punitive Damages

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Tort Reform In Texas: Loser Pays Rule Signed Into Law

With a hat tip to the California Civil Justice Blog, earlier this week Texas enacted a "loser pays" system that proponents say will help rid the system of meritless cases. House Bill 274 takes effect September 1, 2011 and directs the Texas Supreme Court to enact rules providing for the early dismissal of "causes of action that have no basis in law or fact on motion and without evidence." For cases that fall within this "no basis in law or fact" category, the trial court may award the prevailing party costs and "reasonable and necessary attorney's fees . . . that the court determines are equitable and just" whenever it grants or denies a motion to dismiss, in whole or in part. Given the rulemaking yet to occur and the discretion vested in the trial courts in whether to award fees, the exact contours of this law will take some development, and it remains to be seen whether Texas civil litigants will be ordered to pay attorneys fees rarely or with some frequency. Still, an interesting experiment in civil justice reform that will bear watching.… Continue Reading

Civil Justice Reform Ideas For California

The California Civil Justice Blog has a link to John Fund's article in The Wall Street Journal "California Dreamin' - Of Jobs In Texas" discussing California lawmakers' recent legislative fact-finding trip to Texas, where they met with businesses that had relocated from California -- and throws a few legal-system reform ideas of its own into the mix, modeled on some changes Texas has made in recent years. Among them: Making the grant of class certification appealable - not just the denial of class certification, and a punitive damages cap.… Continue Reading

China’s New Tort Liability Law Takes Effect on July 1, 2010

China's long-awaited Tort Liability Law, passed on December 26, 2009 by the Standing Committee of the National People's Congress of China, will take effect on July 1, 2010. The law, which serves to provide a stronger basis for the development of tort law and practice in China, offers standard guidance on issues ranging from product liability, environmental pollution, medical malpractice to employee-related liabilities. For example, prior to the enactment of the law, defective product recall obligations were only applied to a limited number of products, including medicine, food, toys and automotive products. The new law, however, expands the recall system to cover all products manufactured or sold in China.… Continue Reading

Santa Delivered A 1:1 Ratio For Punitive Damages

The Third Circuit delivered a Christmas present Dec. 24, issuing an opinion - albeit "not precedential" - that reduced a 3.13:1 ratio for punitive damages down to a 1:1 ratio. Hat tip to for catching the decision. Jurinko v. Medical Protective Co. involved a bad faith insurance lawsuit arising out of a medical malpractice policy. The physician plaintiff was awarded more than $1.6 million in compensatory damages against his insurer, as well as $6.25 million in punitive damages, for the insurer's "bad faith failure to settle" for the policy limits before trial. Although the Third Circuit found sufficient evidence to support the punitive judgment, its analysis of the constitutional limits on the amount of the punitive-damage award led it to reduce the judgment. The court employed a 1:1 ratio as its starting "guidepost," and analyzed the punitive-damage award using the factors from State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 416 (2003). With regard to the reprehensibility of the insurance company's conduct, the court noted that there was no evidence of physical harm to the insured, no evidence of recidivism, nor any reckless disregard of health or safety. In addition, "the compensatory damages [were] substantial, [the insured] suffered only economic harm, and the harm was easily measured" because it was the amount of the judgment that exceeded the policy limits. The amount of punitive damages also far exceeded the civil penalties and sanctions possible for the insurer's conduct. On the other hand, the Third Circuit recognized that the insurer's conduct was intentional, and the insured was financially vulnerable. In finding a 3:13:1 ratio of punitive damages to compensatory to be excessive, the Third Circuit noted that many courts start with a 1:1 guidepost (although the Ninth Circuit is not necessarily one of them). In addition, while the Supreme Court has declined to explicitly set a 1:1 ratio as a constitutional limit, it has employed that ratio in Exxon Shipping Co. v. Baker, ___ U.S. ___, ___, 128 S. Ct. 2605, 2633 (2008), this year's maritime decision (discussed in this prior post). The court concluded that "[i]n light of the substantial compensatory award and the harm being exclusively economic, this guidepost advises a reduced award." While it is not entirely clear why the decision is marked "not precedential," footnote 1 may suggest an answer. It states: "The Honorable Maryanne Trump Barry participated in the oral argument but discovered facts causing her to recuse from this matter prior to filing of the Opinion. The remaining judges are unanimous in this decision, and this Opinion and Judgment are therefore being filed by a quorum of the panel."… Continue Reading

Finding The Proper Ratio For Punitive Damages

Today's posts on include "HIPAA Preemption" about the Georgia Supreme Court's Moreland v. Austin decision requiring defense attorneys to comply with HIPAA before engaging in ex parte communications with treating physicians, and "Finding The Proper Ratio For Punitive Damages" about the Ninth Circuit's Southern Union v. Irvin decision Friday. View the full blog at View the "HIPAA Preemption" entry:… Continue Reading

Exxon Shipping Co. v. Baker: Will the 1:1 Punitive Damages Ratio in Maritime Law Become the Paradigm for a Due Process Evaluation of Punitive Awards?

This article discusses the U.S. Supreme Court's decision in Exxon Shipping Co. v. Baker, 128 S. Ct. 2605 (2008). In Exxon, the Supreme Court established a 1:1 ratio between punitive and compensatory damages under federal maritime law, and implications for applying the 1:1 ratio to limit punitive damages in state court actions. Originally published in the International Association of Defense Counsel's Drug, Device and Biotech Committee Newsletter for September 2008. Reprinted with permission of IADC.… Continue Reading

Who Pays the Bill for Asbestos Claims: Recent Developments in Asbestos-Related Disease Liability in the UK

This post was written by Darren Smith, Julia Dodds, and Claire Hamm. The UK has an estimated 3,000 deaths per year from mesothelioma, the lung cancer caused by inhalation of asbestos fibres. This rate of incidence shows no signs of slackening, a result of the historic exposure of the UK workforce to asbestos, and is … Continue Reading