NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

LOUISE KING, Individually, and as 

Personal Representative of the Estate of 

Timothy King, 

Plaintiff-Appellee, 

 v. 

GEICO INDEMNITY COMPANY, 

Defendant-Appellant.

No. 14-35700 

D.C. No. 1:12-cv-00092-RWA 

MEMORANDUM*

Appeal from the United States District Court

for the District of Montana

Richard W. Anderson, Magistrate Judge, Presiding

Argued and Submitted August 29, 2017

Seattle, Washington

Before: McKEOWN and GOULD, Circuit Judges, and ROTHSTEIN,** District 

Judge.

GEICO Indemnity Company (“GEICO”) appeals multiple district court 

orders in an insurance suit brought by Louise King. Because the parties are 

 

* This disposition is not appropriate for publication and is not precedent 

except as provided by Ninth Circuit Rule 36-3.

** The Honorable Barbara Jacobs Rothstein, United States District Judge 

for the Western District of Washington, sitting by designation.

FILED

NOV 13 2017

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS
2 

familiar with the facts, we do not recite them here. We have jurisdiction under 28 

U.S.C. § 1291. We remit the punitive damages award and affirm all other issues. 

1. Constitutionality of Punitive Damages Award

GEICO argues that the district court erred by not reducing the jury’s $2.5 

million punitive damages award. We review de novo a district court’s 

determination that punitive damages are constitutionally appropriate. Planned 

Parenthood of Columbia/Willamette Inc. v. Am. Coal. of Life Activists, 422 F.3d 

949, 953 (9th Cir. 2005).

Three “guideposts” inform our analysis: (1) the degree of reprehensibility, 

(2) the disparity between the harm suffered and the punitive damages award, and 

(3) the difference between the punitive damages award and comparable authorized

civil penalties. BMW of N. Am. v. Gore, 517 U.S. 559, 574–75 (1996). We 

evaluate each in turn. 

GEICO’s conduct, while not admirable, was of low to moderate 

reprehensibility. See State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 

419 (2003) (listing five factors that inform a reprehensibility analysis, including 

whether the harm was physical or economic, evinced indifference to the health or 

safety of others, or resulted from intentional malice or deceit). On one hand, King 

suffered only economic and emotional harm. She was not physically injured and 

GEICO did not evince indifference to the health or safety of King or anyone else. 
3 

On the other hand, the jury’s verdict regarding GEICO’s liability under the 

Montana Unfair Trade Practices Act (“UTPA”) indicates that the jury believed 

GEICO was acting in bad faith. 

The disparity between King’s actual harm and the level of punitive damages 

awarded her is significant. We are not bound by a particular formula, but where a 

defendant’s conduct “is not particularly egregious” and there are “significant 

economic damages,” a four-to-one ratio is “a good proxy for the limits of 

constitutionality.” Planned Parenthood, 422 F.3d at 962. For purposes of 

calculating the ratio here, we include the $266,070.61 in compensatory damages 

and fees awarded to King for her harm—$100,000 for GEICO’s violation of the 

UTPA, $100,000 under the insurance policy for her emotional distress, and 

$66,070.61 in attorneys’ fees, interest, and costs.1 See Estate of Gleason v. Cent. 

United Life Ins. Co., 350 P.3d 349, 358 (“[W]e hold that where an insurer has been 

found to have violated the UTPA due to delay or refusal to pay benefits in breach 

of the insurance contract, damages resulting from that violation may be considered 

compensatory damages under the UTPA for purposes of pursuing punitive 

damages.”); see also Riordan v. State Farm Mut. Auto. Ins. Co., 589 F.3d 999, 

1007 (9th Cir. 2009) (“[A]n insured is entitled to recover attorney fees, pursuant to 

 

1 GEICO’s obligations to the estate of King’s husband were discharged before trial 

commenced.
4 

the insurance exception to the American Rule, when the insurer forces the insured 

to assume the burden of legal action to obtain the full benefit of the insurance 

contract.”) (quoting Mountain W. Farm Bureau Mut. Ins. Co. v. Brewer, 69 P.3d 

652, 660 (Mont. 2003)) (internal quotation marks omitted). Thus, the ratio 

between King’s actual harm—$266,070.61—and her punitive damages award—

$2.5 million—is roughly nine-to-one. This is significantly higher than the four-toone proxy that we apply in similar contexts. 

Turning to the third guidepost, in Montana, the maximum comparable civil 

penalty is a fine for violation of the Montana insurance code, which may not 

exceed $25,000, and the fine imposed on insurance producers or adjusters may not 

exceed $5,000 per violation. Mont. Code § 33-1-317. Thus, the maximum 

relevant civil penalty is significantly lower than the $2.5 million punitive damages 

award.

Based on our evaluation of the guideposts, we conclude that the punitive 

damages award is unconstitutionally excessive. 2 Given the low to moderate 

reprehensibility of GEICO’s conduct and the disparate ratio between King’s actual 

harm and the punitive damages award, we follow the guidance in Planned 

 

2 The $2.5 million verdict in this appeal complies with Montana law, which limits 

punitive damages to the lesser of $10 million or 3% of the defendant’s net worth, 

Mont. Code § 27-1-220(3); however, the award is nonetheless unconstitutionally 

excessive.
5 

Parenthood and apply a four-to-one ratio and direct the district court to remit the 

punitive damages award to $1,064,282.44. 

2. Admission of Expert Testimony

The district court did not abuse its discretion by admitting the testimony of 

King’s expert, Randy Nelson. A jury verdict will not be reversed for evidentiary 

error unless the district court abused its discretion and the error was prejudicial. 

Hangarter v. Provident Life & Accident Ins. Co., 373 F.3d 998, 1015 (9th Cir. 

2004). 

Although it is well established that experts may not give opinions as to legal 

conclusions, experts may testify about industry standards, and the reasonableness 

of an insurer’s claims handling is generally an issue of fact. Id. at 1010, 1016 

(disagreeing that testimony that an insurance company deviated from industry 

standards offered a legal conclusion). Nelson’s testimony fell well within these 

parameters. Nelson did not address an ultimate issue of law, but rather testified to

GEICO’s handling of the claim in relation to industry standards and GEICO’s own 

claim manual. The fact that GEICO’s claim manual incorporated the UTPA does 

not lead to a different result. See id. at 1016-17 (an expert may refer to law in 

expressing an opinion without such reference rendering the opinion inadmissible). 

3. Post-Trial, Discovery-Related Motions

Finally, GEICO argues that the district court erred by denying its motion for 
6 

a new trial and motion to compel or reopen discovery based on King’s failure to 

produce certain documents during discovery. GEICO also challenges the district 

court’s award to King of attorneys’ fees for opposing GEICO’s motion to compel. 

We affirm the district court on each of these challenges. A district court’s 

determination regarding whether to grant a new trial or reopen discovery is 

reviewed for abuse of discretion. See Hangarter, 373 F.3d at 1005 (new trial); 

Sablan v. Dep’t of Fin. of Com. of N. Mariana Islands, 856 F.2d 1317, 1321 (9th 

Cir. 1988) (discovery). The decision to award reasonable fees under Federal Rule 

of Civil Procedure 37(a)(5) is also reviewed for abuse of discretion. Balla v. 

Idaho, 677 F.3d 910, 918, 920 (9th Cir. 2012). 

Under Federal Rule of Civil Procedure 59, a new trial may be warranted for 

discovery misconduct when the movant can: “(1) prove by clear and convincing 

evidence that the verdict was obtained through . . . misconduct,” and “(2) establish 

that the conduct complained of prevented the losing party from fully and fairly 

presenting his case or defense.” Jones v. Aero/Chem Corp., 921 F.2d 875, 878–79 

(9th Cir. 1990). Failure to produce materials requested in discovery can constitute 

“misconduct” for Rule 59 purposes. See id. at 879. GEICO knew there was no 

attorney-client relationship before May 2012 at least as early as trial, when both 

King and Randy Bishop testified that they had only conferred as friends until that 

point. Despite this knowledge, GEICO did not request the documents or object to 
7 

what King produced during discovery. Instead, GEICO waited until after the

verdict and entry of judgment. There is no clear or convincing evidence that the

verdict was obtained through misconduct. Thus, the district court did not abuse its 

discretion in denying GEICO’s motion for a new trial. 

The same is true of the district court’s denial of GEICO’s motion to compel 

and reopen discovery. The district court explained that GEICO filed its motion to 

compel after the discovery deadline and, regardless, its motion was futile because 

the jury had returned a verdict and judgment already had been entered. 

Accordingly, we agree there was no compelling reason—as required by the 

scheduling order for a deadline continuance—to grant GEICO’s untimely motion. 

The district court did not abuse its discretion by denying GEICO’s motions.

Finally, we agree with the district court that GEICO’s motion for leave to 

file a motion to compel was “at its core, a motion to compel,” and was not 

substantially justified. The district court did not abuse its discretion in awarding 

King reasonable fees to oppose the motion under Federal Rule of Civil Procedure 

37(a)(5). 

AFFIRMED IN PART; REVERSED AND VACATED IN PART. 

Each party shall bear its own costs on appeal.