Mississippi Litigation Review & Commentary : Mississippi Personal Injury Lawyer & Attorney : Phillip W. Thomas Law Firm : MS Litigation Review & Commentary

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On Thursday a federal court jury in Gulfport awarded no punitive damages in the latest State Farm Katrina wind vs. water trial. The jury, which had previously awarded the plaintiffs $52,300 in compensatory damages, took 80 minutes to reach its decision.

This is the kind of result where there is no real winner. The plaintiffs cannot be happy with $52,300 for a destroyed home, especially since they may have had over $50,000 in litigation expenses in the case.

State Farm is no doubt happier than the plaintiffs, but having a jury find that State Farm should have paid over $50,000 more than it did may not be good for State Farm's long-term sales. State Farm also would have had $50,000 or more in litigation expenses, plus well over $100,000 in attorney's fees. If you told me that State Farm paid its attorneys $300,000 in fees in the case I would not be surprised.   

Earlier posts on trial:

Judge Senter Encourages State Farm to Settle Latest Wind vs. Water Trial

Split Decision in Wind vs. Water Trial

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The Supreme Court issued a one sentence order today dismissing the appeal of an $80 million punitive damages verdict in a tobacco case against Philip Morris. There are stories on the decision here and here. The plaintiff's actual damages were $800,000.

Business interests hoped that the Court would use the case to set a firm limit on punitive damages. The Court did not, however, apparently accepting the Oregon Supreme Court's finding that Philip Morris' conduct was "extraordinarily reprehensible." 

The practical effect of the ruling is that it will weaken defense arguments that punitive damages are limited to a single digit ratio compared to the plaintiff's actual damages. Here, the actual-punitive ratio was about 100 to 1. This makes it hard for a defendant in a case with a modest actual damages award to argue that its punitive exposure is capped no matter how bad its conduct was. I like the flexibility that the decision leaves courts to evaluate punitive damages awards.