Carolin K. Shining
Punitive damages post Roby v. McKesson New cases provide roadmap to proving reprehensibility
While some in the defense bar have
heralded the death of punitive damages as a potent weapon in deterring wrong- ful corporate conduct following the approval of a one-to-one ratio of punitive damages to economic damages in Roby v. McKesson Corp. (2009) 47 Cal.4th 686 [101 Cal.Rptr.3d 773] (punitive damages of $15 million reduced to $1.9 million), several post-Roby appellate cases now pro- vide guidance on how to support higher ratios. Most notably, failure to warn fact patterns can be particularly useful to establish a high degree of reprehensibili- ty called for by the Roby court.) See Stewart v. Union Carbide Corp., (2010) 190 Cal.App.4th 23 [117 Cal.Rptr. 791, 804]; see also, Amerigraphics, Inc. v. Mercury Casualty Co. (2010) 182 Cal.App.4th 1538 [107 Cal.Rptr.3d 307, 325-328] (ratio of 3:8 to one approved); Behr v. Redmond 193 Cal.App.4th 517, (original ratio of 1:75 to 1 was justified by the evidence, also note that status changed from unpub- lished to published on March 14, 2011), modified on other grounds in Behr v. Redmond, 2011 Cal.App. LEXIS 355 (Cal.App.4th Dist., March 25, 2011); Sharp v. Kay, 2010 Cal.App. Unpub. LEXIS 8816 (2nd App. Dist., 7th Div., 2010) (4:1 ratio in malicious prose- cution case is affirmed) Given continued corporate miscon-
duct and the “profits over persons” men- tality often found in defective products cases, these facts can and should be developed by plaintiffs’ lawyers in discov- ery and woven into one’s themes at trial.
Stewart v. Union Carbide: Guidelines for supporting punitive damages in excess of 1:1 ratios
While both the United States and
California Supreme Courts have repeatedly 78— The Advocate Magazine JULY 2011
held that there is no “‘mathematical bright line’“ for determining an accept- able ration of punitive damages to com- pensatory damages,” the practical result in many cases has been to suggest that ratios of over 10:1 will be reversed as vio- lating due process. (Simon v. San Paolo U.S. Holding Co., Inc. (2005) 35 Cal.4th 1159, 1181.) The defense bar now rou- tinely argues that unless there are partic- ularly egregious acts, ratios of one-to-one between compensatory and punitive damages findings should be the rule. They will cite Simon, id (quoting BMW of North America v. Gore (1996) 517 U.S. 559, 425 [134 L.Ed.2d 809, 116 S.Ct. 1589]); and Roby v. McKesson Corp. (2009) 47 Cal.4th 686 [101 Cal.Rptr.3d 773].) Simon and Roby explain that there
are three basic guideposts for courts reviewing punitive damages: (1) the degree of reprehensibility of the defendant’s misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the puni- tive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases. (Roby v. McKesson Corp., 47 Cal.4th at p. 712.) Of these three, “the most important is the degree of reprehensibility of the defendant’s conduct.” (Id. at p. 713.) The Roby court continued to set forth factors to evaluate “reprehensibility”: In examining the degree of repre-
hensibility, we “consider whether ‘[1] the harm caused was physical as opposed to economic; [2] the tortious conduct evinced an indifference to or a reckless disregard of the health or safety of others; [3] the target of the conduct had financial vulnerability; [4] the conduct involved repeated
actions or was an isolated incident; and [5] the harm was the result of intentional malice, trickery, or deceit, or mere accident.’ [Citation.]
(Roby, supra, 47 Cal.4th at p. 713. Stewart v. Union Carbide Corp. (2010)
190 Cal.App.4th 23 [117 Cal.Rptr.3d 791, 804] illustrates how to prove “high reprehensibility”. Plaintiff Larry Stewart was a 58-year old plumber/pipefitter diagnosed with mesothelioma, a termi- nal cancer caused by exposure to asbestos. Mr. Stewart alleged that his mesothelioma was caused by asbestos exposure to a variety of products, includ- ing drywall accessory products and joint compounds used around him by drywall tradesmen in the 1970s. Union Carbide Corporation formerly operated an asbestos pit mine near King City, California, milled the asbestos and sold it under the brand name “Calidria” in the 1960s, 70s and 80s. Following nearly six weeks of trial,
the jury ruled for plaintiffs based on all causes of action before them, including negligent and strict liability failure to warn. Union Carbide’s corporate repre- sentative John Myers was on the witness stand for two and a half days of trial, called as an adverse witness in plaintiff’s case in chief. Through Mr. Myers’ testi- mony and corporate documents, admit- ted evidence of Union Carbide’s repre- hensible conduct included: a. Evidence that warnings Union
Carbide gave its customers was weaker than the warnings given to its employ- ees at its mine and mill; b. In 1964 and 1968, ten years
before Mr. Stewart’s harmful exposures to asbestos, Union Carbide had pre- pared a toxicology report and a brochure for the drywall industry, but never gave this report, brochure or
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