In this sexual harassment in employment case, Horvitz & Levy LLP persuaded the Court of Appeal to reduce punitive damages awards totaling $20 million down to $1.5 million.

The case was tried twice to a jury. Each time, the trial court awarded defendant Ralphs Grocery Company (Ralphs) a new trial limited to the amount of punitive damages. The plaintiffs rejected the trial court’s remittitur of the second jury’s $20 million punitive damage awards to $3,750,000 (15 times their compensatory damages for emotional distress) and insisted on a third trial on the amount of punitive damages.

However, in addition to moving successfully for a new trial, Ralphs had also moved for judgment notwithstanding the verdict (JNOV), arguing that recent United States Supreme Court cases have made clear that the maximum constitutionally allowable amount of punitive damages is a legal question that can and should be determined by the court. Ralphs asked the trial court to determine that amount and to enter judgment.

The trial court concluded its authority was limited to offering the plaintiffs a remittitur, which they could reject in favor of a new trial. Ralphs appealed the order denying JNOV, arguing the trial court did have authority to reduce the punitive damages to the constitutionally allowed maximum and then enter judgment, and that the Court of Appeal should exercise the same authority.

The Court of Appeal initially rejected Ralphs’ arguments, but the Supreme Court granted a petition for review and re-transferred the case for further consideration in light of Simon v. San Paolo U.S. Holding Co., Inc. (2005) 35 Cal.4th 1159, where the Supreme Court had reduced an excessive punitive damages award on appeal from a judgment.

In this published decision on remand, the Court of Appeal held that trial courts do have authority to enter a JNOV in the maximum amount of punitive damages allowable, and that the appellate court can determine that amount upon review of an order denying JNOV. The Court of Appeal held that in this case, the maximum permissible amount of punitive damages the plaintiffs could recover against Ralphs was six times their compensatory damages, or only $1.5 million rather than the $20 million originally awarded by the jury.

Home | Firm Directory | About H & L | Practice Areas | H & L News
Seminars | Publications | Recruiting | Directions | Links | Site Map