Law Vibe

From May It Please the Court:

Don’t get too excited here; California is not yet stepping back from recent US Supreme Court opinions (Gore v. BMW, etc.) that limit punitive damages to something less than 10 times punitive damages.

The court of appeal, however, is limiting punitive damages in situations where only economic damages are awarded.  In other words, if you didn’t suffer personal injuries, your punitive damages award may not exceed the compensatory damages.

In the case that led up to this decision, a company called Mach I acted as a broker for Jet Source.  Mach I located, inspected and purchased jet aircraft for Jet Source.  Later rather than sooner, Jet Source discovered that Mach I was inflating the purchase price of the planes and keeping an extra profit for itself.  Jet Source sued, and recovered $6.5 million on this issue, and the jury hammered Mach I with some $26 million in punitive damages.

The appellate court believed that Jet Source was a sophisticated buyer (not a vulnerable victim), and while Mach I’s conduct “merits no praise,” its conduct was not so reprehensible that justified a punitive damages verdict that was four times the compensatory award.   In a partially-published opinion, the court held that such an award violated due process, and must be reduced to no more than the compensatory award.