Opinion ID: 663715
Heading Depth: 2
Heading Rank: 3

Heading: Counsel's Argument Regarding the City's Indemnification of Holcomb for Punitive Damages

Text: 29 Holcomb also challenges a statement made by Larez's counsel during his closing argument that the City of Los Angeles was authorized to indemnify Holcomb for any punitive damages assessed against him. 7 The reasons that lead us to find the compensatory damages indemnification instruction improper apply with equal force in the punitive damages context. We conclude that the district court erred when it allowed the information on potential punitive damages indemnification to come before the jury. 30 We note at the outset that the statement of Larez's counsel was prompted by the district court's decision to give a jury instruction informing the jurors that the City would indemnify the defendant. Before closing argument, while settling the jury instructions, the court indicated to counsel that it would instruct the jury on the City's indemnification of both compensatory and punitive damage awards. Defense counsel objected to both instructions. After closing argument, however, when the court instructed the jury, it only gave the compensatory damages indemnification instruction. For some inexplicable reason, the court overlooked giving the instruction on punitive damages. In the meantime, Larez's counsel already had told the jury in his closing argument that the City was authorized to pay punitive damages assessed against Holcomb. We will review for abuse of discretion the argument of Larez's counsel, encouraged by the court, concerning the City's indemnification of punitive damages. See United States v. Johnson, 956 F.2d 197, 199 (9th Cir.1992) (applying abuse of discretion standard to jury instructions); United States v. Diaz, 961 F.2d 1417, 1418 (9th Cir.1992) (applying abuse of discretion standard to court's control of closing arguments). 31 The fact that the City is authorized to indemnify officers for punitive damages was no more relevant to the jury's calculation of an appropriate punitive award against Holcomb than the fact that the City pays compensatory damages was relevant to the jury's determination of the actual damages suffered by Larez. The same common law principle and equitable considerations apply. The City was not a party to this suit, and allowing the jury to hear that the City might cover Holcomb for any punitive damages award could only have distracted the jury from its task of arriving at a punitive award appropriate to the wrongdoing of Holcomb. 32 Although it is true that one important function of punitive damage awards in the Sec. 1983 context is to create a strong incentive for police officers and other officials to respect the Constitution and federal laws, the sting of any given award should reflect the jury's determination of what level of damages would deter the individual defendant, and others in his or her position, from future violations. See Restatement (Second) of Torts Sec. 908(1) (1979) (Punitive damages are damages ... awarded against a person to punish him for his outrageous conduct and to deter him and others like him from similar conduct in the future.). The fact that taxpayers have decided through their representatives that it is to their benefit as taxpayers to help out the officers, Cornwell v. Riverside, 896 F.2d 398, 400 (9th Cir.1990), is irrelevant to the determination of a suitable award. When a city pays for punitive damages, of course, the deterrent effect of the sanction is diminished considerably, but, from the perspective of the wrongdoer, who pays nothing regardless of the size of the award, this reduction in sting occurs no matter what amount the jury assesses. Informing the jury of indemnification thus would provide a windfall to plaintiffs at taxpayers' expense, with little appreciable increase in deterrence. Cf. Keenan v. Philadelphia, 983 F.2d 459, 477-484 (3rd Cir.1992) (Higginbotham, J., dissenting) (pointing out tension between deterrent rationale for punitive damages and taxpayer indemnification of punitive awards, and contending that, even where city will ultimately foot the bill, evidence of defendant's personal economic worth should be prerequisite to award of punitive damages in Sec. 1983 context). 8 33 Accordingly, we remand for a new trial on punitive damages. 9