Q: I read about the outcome of the lawsuit against some of the tech companies. The jury awarded initial damages, and that was followed by an award for punitive damages. Are those separate? How do you get punitive damages?
H.G., Toluca Lake
A: Obtaining punitive damages in a civil case is challenging. The proof has to be by clear and convincing evidence. Very egregious misconduct must be proven — fraud, oppression or malice. Often the trier of fact is first presented the main case, to decide if there is liability, and if so, for what kind of wrong and what level of damages. Then there is a question that the trier of fact answers: Has the plaintiff proven by clear and convincing evidence that the defendant is guilty of oppression, fraud, or malice? If so, a second phase determines how much may be awarded for punitive damages.
To seek punitive damages, you start with allegations in your complaint that are sufficient to support them. The other side may contest your inclusion of punitive damages, arguing, for example, there is not enough detail, the allegations are too conclusory, and/or that this is not a case that permits that kind of award. If an entity is involved, you are to set forth that the conduct was carried out or authorized by an officer, director or managing agent thereof.
During the case if you want to obtain information and records about the other side’s financial net worth for punitive damages, you have to file a motion showing the court that you have established a prima facie case. The other side will almost certainly oppose. If your motion is successful then you can seek the financial information.
Should you get to the point where you are permitted to argue for punitive damages at trial, the emphasis often is two-fold: First, the misconduct is of such a nature to offend the very conscience of the community. Second, it is important to impose punitives to set an example (which is why punitive damages are referred to as exemplary damages).
Q: Is there a limit here in California on what can be awarded as punitive damages?
A: There is not a fixed maximum that can be awarded, but courts apply constitutional, due process limits.
Here are basic guidelines: (a) What is the ratio of the compensatory damages awarded to the punitives? Often this is a single-digit multiplier; (b) How reprehensible was the conduct?; and (c) How does the award of punitives compare to civil penalties?
The court does have authority to reduce an excessive award, or possibly strike the award outright if it finds there is not a valid basis for it. For example, if the award is considered too large in view of the party’s actual net worth, or insufficient evidence of net worth was presented, or the amount is determined to be out of proportion to the actual harm, or the jury is deemed to have acted out of prejudice or passion.
Ron Sokol has been a practicing attorney for more than 40 years, and has also served many times as a judge pro tem, mediator, and arbitrator. It is important to keep in mind that this column presents a summary of the law, and is not to be treated or considered legal advice, let alone a substitute for actual consultation with a qualified professional.