A state appeals court vacating of a $15 million award for punitive damages in a construction supervisor’s asbestos lawsuit indicates courts may be more prone to reverse a trial court decision absent satisfactory evidence to prove malice.
The Second Appellate District, which recently issued its unanimous ruling in Morgan vs. J J-M Manufacturing Co., Inc., affirmed the award for compensatory damages but found no evidence presented that showed the defendant’s actions supported an award for punitive damages.
“Courts are realizing that because punitive damage awards involve no direct economic loss and have no precise value, it is not easy for juries to assign a dollar value to these losses, and as a result the awards often tend to be erratic and/or excessive,” Maryann Marino, Southern California regional director of California Citizens Against Lawsuit Abuse (CALA), told the Northern California Record by email. “The broad discretion given juries in awarding these damages is a primary contributor to the inequities and inefficiencies of the tort liability system.”
Citizens Against Lawsuit Abuse has always advocated that one of the most important reforms in terms of the benefit to our economy would be a "cap" on punitive and non-economic damages, or other appropriate safeguards, Marino said.
“California has long been known as a plaintiff-friendly state, and many claimants actually move or travel here just to take advantage of the very favorable litigation environment, though CALA is not suggesting that the plaintiffs in the case in question did that,” Marino said. “It’s no secret that plaintiffs’ attorneys shop their cases in plaintiff-friendly states and courtrooms where verdicts have typically tipped the scale toward large punitive damage awards settlements.
“Every year, California’s legislators propose new laws which will unquestionably increase the number of lawsuits our overburdened court system will need to adjudicate, making it much harder for judges to give each case the attention it deserves.”
As the state prepares to fully reopen, the ruling may help ease apprehension about doing so amid California’s often uncertain legal environment.
“Justice and legal safeguards are still available,” Marino said. “Too often, the considerable sympathy which can apply in cases like this makes one want to find any way to help the claimant, even when the evidence might not support that under applicable law. While appeals can often be time-consuming and costly, they provide critical access to justice, particularly as the workload in California’s already overburdened trial courts increases.”
The appellate docket shows the case could still be heard by the state Supreme Court.
“The legal system needs balance,” Marino said. “Employers and businesses can no longer be targets of lawsuits with excessive verdicts without sufficient evidence. Excessive tort costs in California are already believed to result in the loss of 272,846 jobs, nearly $21 billion in economic activity and a tort tax of $574 per person per year.
“Everyone pays this cost through increased costs, higher taxes and greater unemployment, While CALA does not contend that the lawsuit in question, by itself, necessarily/specifically caused any of those things, Californians should consider the statewide cost of so many attempts to recover damages far in excess of those actually incurred.”