Source: https://theprincefirm.wordpress.com/tag/damages/
Timestamp: 2018-12-11 04:07:29
Document Index: 382831360

Matched Legal Cases: ['§ 895', '§ 895', '§ 895', '§ 895', '§ 893', '§ 907', '§ 895']

Damages | The Prince Firm, LLC
Posted on April 25, 2011 by Paulana
Employees bringing suit for discrimination under the New Jersey Law Against Discrimination (LAD) frequently bring a common law claim for intentional infliction of emotional distress. What happens to a plaintiff’s claim for punitive damages under the LAD when a jury (i) determines that defendants did not act with willful, wanton and reckless conduct to sustain the claim for intentional infliction and (ii) does not award the plaintiff any damages for emotional distress? In Rusak v. Ryan Automotive, L.L.C., 2011 N.J. Super. LEXIS 24 (App. Div. Feb. 8, 2011), New Jersey’s Appellate Division ruled that discrimination plaintiffs are not necessarily foreclosed from recovering punitive damages by such jury findings. The proofs for punitive damages under the LAD are not the same as those for recovery under an intentional infliction cause of action.
Rusak v. Ryan Automotive, L.L.C.
Judith Carrie Rusak was a salesperson for a car dealership that was acquired in 2003 by Ryan Automotive, L.L.C. (Ryan). In 2005, Ryan hired a general manager who, according to Rusak, subjected her to insults, crude comments, and graphic sexual stories. Rusak also claimed that when she told that general manager that a co-worker (and one of the general manager’s hires) showed her and another female employee pornographic material, the general manager cursed at her and told other employees that he was going to fire her. Rusak did not return to work and alleged that as a result of this conduct, she experienced anxiety attacks.
Rusak sued Ryan and the general manager, alleging that she was discriminated and harassed in violation of the LAD on the basis of gender, was retaliated against in violation of the LAD, and was the victim of intentional infliction of emotional distress. She sought compensatory damages for lost wages and emotional distress, punitive damages, and counsel fees.
The jury concluded that Ryan was subjected to a sexually hostile work environment and that her report about receiving a pornographic email was a substantial or motivating factor in the general manager’s decision to discharge her. The jury did not find that defendants’ acts constituted “willful, wanton or reckless” conduct for purposes of the intentional infliction count and further decided that Ryan should not be awarded emotional distress damages. It did award Ryan $80,108.80 to compensate her for lost wages and back pay. In light of the jury’s findings on the intentional infliction claim, the trial judge did not proceed to the punitive damages phase of the trial. Ryan appealed.
The Appellate Division concluded that the evidence supported submission of Ryan’s punitive damage claim to the jury. The Court found that Ryan’s proofs demonstrated a continuous pattern of hostility directed at her because of her gender and that the general manager was in an upper management position. The Court acknowledged that there was proof to the contrary, but further determined that such contrary proof did not warrant taking the punitive damage question from the jury. The Court buttressed its conclusion by reviewing other cases in which much less egregious conduct supported submission of punitive damages to the jury.
The Appellate Division then considered the effect, if any, on the jury’s answer to the interrogatory on the verdict sheet that defendants’ conduct was not willful, wanton and reckless. The Court concluded that the trial judge erred by interpreting the jury’s negative answer as the equivalent of a factual finding under the Punitive Damages Act with respect to defendants’ state of mind. First, the Court ruled that it was improper to read that question as incorporating within its terms the requisite state of mind necessary to support any award of punitive damages because the tort of intentional infliction did not require anything more than intentional or reckless conduct. Second, the Court determined that Ryan never consented to that question acting as a necessary predicate on which her punitive damage claim was based. The Court also found that the jury could have answered the question in the negative, because it concluded that Ryan did not suffer emotional distress as a result of defendants’ discrimination.
The Appellate Division remanded for a trial on punitive damages. Should that trial go forward, the Court offered guidance on what the jury should be told so that the jury’s attention would be focused only on those issues relevant to the punitive damage phase of the trial. First, the jury should be instructed that it had already been determined that defendants engaged in unlawful harassment and retaliation under the LAD and that Ryan was awarded compensatory damages for lost wages and back pay, along with the amount of that award. The Court also directed the jury be told that it had been determined that Ryan did not suffer emotional distress damages under the LAD and that the purpose of punitive damages was different from the purpose of compensatory damages.
Posted on March 11, 2011 by Paulana
On Thursday, January 27, 2011, Governor Walker signed into law Wisconsin’s Omnibus Tort Bill. The new laws will take effect no later than February 11, 2011 – 11 business days after January 27, 2011.
Strict Product Liability (Wis. Stat. § 895.047):
Sellers and distributors of defective products are not subject to liability unless: (a) they assume, through contract, a duty of the manufacturer; or (b) the manufacturer and its insurer are not subject to service of process in Wisconsin; or (c) a court concludes that a judgment against the product manufacturer or its insurer could not be enforced. Further, the principles of comparative negligence embodied in Wis. Stat. § 895.045 now apply to strict product liability claims.
Common-Law Risk Contribution Doctrine Limited (Wis. Stat. § 895.046):
With certain exceptions, when a claimant alleges claims of design defect or failure to warn, a product defendant may be held liable only if the claimant proves—in addition to other elements required—which specific product allegedly caused the injury. If the claimant cannot meet this proof requirement, a product defendant may be held liable only if: no other lawful process exists for the claimant to seek redress; the claimant’s injury could be caused only by a product that is chemically and physically identical to the allegedly offending product; the defendant manufactured, distributed, sold, or promoted a complete integrated product; and the claimant names as defendants the manufacturers that collectively manufactured 80% of the chemically and physically identical products sold in Wisconsin during the relevant production period.
Punitive Damage Caps (Wis. Stat. § 895.043(6)):
Punitive damages may not exceed twice the amount of compensatory damages recovered or $200,000, whichever is greater. However, the cap does not apply to drunk drivers. In addition, the cap does not apply to cases already pending at the time of the effective date.
Non-Economic Damage Caps for “Long-Term Care Providers” (Wis. Stat. § 893.555):
Non-economic damages for bodily injury arising from the care or treatment (or any omission) by a “long-term care provider”—which includes nursing homes, hospice centers, and assisted living centers—are capped at $750,000.
Move Toward Daubert Standard of Expert Testimony (Wis. Stat. § 907.02(1)):
Expert testimony is now limited to testimony that is: (a) based on sufficient facts or data; (b) the product of reliable principles and methods; and (c) based on the witness’ applying those principles and methods to the facts.
Mandatory Monetary Sanctions for Frivolous Claims or Filings (Wis. Stat. § 895.044):
Courts now must award as sanction actual costs, including reasonable attorney fees, when they find that a party or its attorney knew that an action it filed or continued was frivolous and does not correct the improper conduct within 21 days.
Posted on January 28, 2011 by Paulana
Governor Scott Walker signed the OmnibusTort Reform Act (the “Act”) today, January 27, 2011. The Act addresses several areas of interest for Wisconsin companies.
Limits Punitive Damages.
Punitive damages are capped at to $200,000 or double the amount of compensatory damages, whichever is higher. The cap does not apply to lawsuits related to operating a motor vehicle while intoxicated.
Raises the Standards for Expert Testimony.
This Act adopts the standard set forth in Federal Rule of Evidence 702, also known as the “Daubert standard.” The Daubert standard allows the admission of expert testimony only if it is based on sufficient factors or data and is the product of reliable principles and methods.
Limits the Application of the Risk Contribution Theory.
This provision is a response to the Wisconsin Supreme Court’s 2005 decision in Thomas v. Mallett, 2005 WI 129, 285 Wis. 2d 236, 701 N.W.2d 523, where the Court permitted a case to proceed against seven paint manufacturers despite the fact that the plaintiff could not prove who made the lead-based paints that he claimed poisoned him as a child. The Act limits the holding in Thomas. If the claimant can not identify the specific product that allegedly caused the injury, a manufacturer, distributor, seller, or promoter of a product may be held liable only if all of the following apply: (1) the claimant proves: (a) no other lawful process exists for the claimant to seek any redress from any other person for the injury or harm; (b) that the claimant has suffered an injury or harm that can be caused only by a manufactured product chemically and physically identical to the specific product that allegedly caused the claimant’s injury or harm; and (c) that the manufacturer, distributor, seller, or promoter of a product manufactured, distributed, sold, or promoted a complete integrated product, in the form used by the claimant or to which the claimant was exposed, and that meets all of the following criteria: (i) is chemically and physically identical to the specific product that allegedly caused the claimant’s injury or harm; (ii) was manufactured, distributed, sold, or promoted in the geographic market where the injury or harm is alleged to have occurred during the time period in which the specific product that allegedly caused the claimant’s injury or harm was manufactured, distributed, sold, or promoted; and (iii) was distributed or sold without labeling or any distinctive characteristic that identified the manufacturer, distributor, seller, or promoter; and (2) the action names, as defendants, those manufacturers of a product who collectively manufactured at least 80 percent of all products sold in this state during the relevant production period by all manufacturers of the product in existence during the relevant production period that are chemically identical to the specific product that allegedly caused the claimant’s injury or harm.
Limits Strict Product Liability Claims.
Under the Act, Wisconsin is now in line with the majority of other states that have adopted the “reasonable alternative design” test instead of the broader “consumer expectation” test. Accordingly, a manufacturer will be liable for damages caused by the manufacturer’s product based on a claim of strict liability only if the injured claimant proves that the product was defective, the defective condition made the product unreasonably dangerous, the defective condition existed at the time the product left the control of the manufacturer, the product reached the user or consumer without substantial change, and the defective condition caused the claimant’s injuries. If the injured party’s percentage of total causal responsibility for the injury is greater than the percentage resulting from the defective condition of the product, the injured party may not, based on the defect in the product, recover damages from the manufacturer, distributor, seller, or any other person responsible for placing the product in the stream of commerce. If the injured party’s percentage of total causal responsibility for the injury is equal to or less than the percentage resulting from the defective condition of the product, the injured party may recover but the damages recovered by the injured party shall be diminished by the percentage attributed to that injured party.
Toughens State Rules Relating to Damages for Frivolous Claims.
In civil cases, a party or his or her attorney may be liable for costs and fees for actions that are done (1) in bad faith, solely for the purpose of harassing or maliciously injuring another; or (2) was without a reasonable basis in the law. If the offending party withdraws or corrects the improper conduct within 21 days of receiving the other party’s motion for fees, the court can decide whether to award actual costs taking into consideration the offending party’s mitigating conduct. If the offending party does not timely withdraw or correct the conduct, actual costs shall be awarded. If the decision is appealed and the appellate court affirms the award of fees, the offending party must also pay the attorney fees incurred in the appeal.
In addition to the tort reform provisions outlined above, the Act includes several health care related provisions previously discussed in a client alert dated January 10, 2011, also available here.
Posted on January 27, 2011 by Paulana
Federal Circuit Breaks the 25 Percent Rule of Thumb
Last week, in Uniloc USA, Inc. v. Microsoft Corp., Nos. 2010-1035, 2010-1055 (Fed. Cir. Jan. 4, 2010) (hereinafter, “Uniloc“), the Federal Circuit declared that the “25 percent rule of thumb,” which has been widely used for calculating damages in patent infringement cases, is “fundamentally flawed.” Accordingly, the Federal Circuit held that any evidence relying on the 25 percent rule is inadmissible as a matter of law. This holding represents a significant shift in Federal Circuit precedent. Indeed, the Federal Circuit upheld a jury verdict based on the use of the 25 percent rule as recently as March 10, 2010. Although the underlying technology that is the subject of Uniloc deals with a software registration system to deter copying of the software, the decision will be felt across all industries.
In calculating damages for patent infringement, a reasonable royalty rate should reflect the anticipated result of a hypothetical negotiation at the time of first infringement. The 25 percent rule suggested that a licensee would pay a royalty rate equivalent to 25 percent of the expected profits from products that incorporate the intellectual property at issue. Consequently, when the 25 percent rule was used, an alleged infringer’s profit margin (profits divided by net sales) was multiplied by 25 percent to arrive at a reasonable royalty rate. That royalty rate was then multiplied by the royalty base (revenue from the sale of infringing products) to arrive at an alleged reasonable royalty.
The criticism of the 25 percent rule did not begin with Uniloc. Indeed, the rule had previously received criticism as an arbitrary and crude tool. Specifically, scholars criticized the rule because it did “not take into account specific circumstances that will determine the actual value of the patent at issue[,]” and because “multiplying by an arbitrary fraction to derive the value of a patent is an exercise in arbitrary business analysis.” Nevertheless, the Federal Circuit had tolerated its use in calculating damages for patent infringement. For example, in i4i Ltd. Partnership v. Microsoft Corp., the Federal Circuit affirmed the district court’s admissibility of a damage expert’s opinion based on the 25 percent rule because it met the “minimum standards of relevance and reliability.” In support of his opinion’s admissibility, the damages expert “testified that the 25-percent rule was ‘well recognized’ and ‘widely used’ by people in his field.”
Notwithstanding the 25 percent rule’s prior use, in Uniloc, the Federal Circuit directly addressed the admissibility of the rule for the first time. The Federal Circuit started its analysis of the 25 percent rule by addressing the rule’s previous criticisms, placing them into three general categories: (1) it fails to account for the unique relationship between the patent and the accused product; (2) it fails to account for the unique relationship between the parties, such as the different levels of risk assumed by the licensor and licensee; and (3) it fails to fit within the model of the hypothetical negotiation within which it is based due to its arbitrary characteristics. With these criticisms in mind, this ruling of the Federal Circuit puts a definitive stop to the use of the 25 percent rule in calculating damages for patent infringement:
as a matter of Federal Circuit law[,] the 25 percent rule of thumb is a fundamentally flawed tool for determining a baseline royalty rate in a hypothetical negotiation. Evidence relying on the 25 percent rule of thumb is thus inadmissible under Daubert and the Federal Rules of Evidence, because it fails to tie a reasonable royalty base to the facts of the case at issue.
If this was not clear enough, the Federal Circuit further held that even when the 25 percent rule is “offered merely as a starting point[,]” any opinion derived therefrom is still inadmissible because “[b]eginning from a fundamentally flawed premise and adjusting it based on legitimate considerations specific to the facts of the case nevertheless results in a fundamentally flawed conclusion.” In support of its holding, the Federal Circuit stated that “the 25 percent rule of thumb as an abstract and largely theoretical construct fails to satisfy” the fundamental requirement that “there must be a basis in fact to associate the royalty rates used in prior licenses to the particular hypothetical negotiation at issue in the case.” In other words, a damages calculation “must be tied to the relevant facts and circumstances of the particular case at issue and the hypothetical negotiations that would have taken place in light of those facts and circumstances at the relevant time.”
The Federal Circuit did not leave litigants without a mode for calculating damages in patent infringement cases, however. Indeed, the Federal Circuit reaffirmed the use of the Georgia-Pacific factors for determining a reasonable royalty rate. Specifically, the Federal Circuit pointed to Georgia-Pacific factors one and two, “looking at royalties paid or received by in licenses for the patent in suit or in comparable licenses[,]” and factor twelve, “looking at the portion of profit that may be customarily allowed in the particular business for the use of the invention or similar inventions[,]” as still “valid and important factors for determining a reasonable royalty rate.” The Federal Circuit further stated that it requires “evidence purporting to apply to these, and any other factors,” to be “tied to the relevant facts and circumstances of the particular case at issue.”
The total impact of this decision on the “size” of future damage awards may be uncertain, but it is certain that the Federal Circuit is sending a clear message that abstract methodologies for calculating damages are not acceptable. By forcing damage calculations to be tied to the relevant facts and circumstances of the particular case, the Federal Circuit continues its efforts to require damage awards in patent cases to bear a direct relationship between the claims of the patent at issue and the accused products.
Posted on January 14, 2011 by Paulana