Client Alerts

California Supreme Court Slashes Punitive Damage Award in Employment Case

December 08, 2009

Katherine C. Huibonhoa and Amy C. Hirsh

In State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003), the United States Supreme Court took up the gauntlet against runaway punitive damage awards, warning that punitive damages are a powerful weapon that pose an acute danger of arbitrary deprivation of property in contravention of the Due Process Clause of the Fourteenth Amendment. In a pair of cases Simon v. San Paolo U.S. Holding Co., Inc., 35 Cal. 4th 1159 (2005) and Johnson v. Ford Motor Co., 35 Cal. 4th 1191 (2005) the California Supreme Court recognized that State Farm tightened the noose considerably around the problem of . . . punitive damages awards run wild and made clear that all punitive damages awards must pass independent federal constitutional review. On November 30, 2009, the California Supreme Court in Roby v. McKesson Corporation took another significant step to rein in massive punitive damage awards, this time in the context of a disability discrimination and harassment case. In a 5-2 decision, the Court slashed the punitive damages awarded to Plaintiff Charlene J. Roby from $15 million to $1.9 million.

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