Due Process and All That

Behm v. Clear View Techs., No. H040032 (D6, as modified Oct. 16, 2015)

A trial court entered terminating sanctions against Defendant after it failed to comply with discovery orders. The complaint prayed only for damages “in excess of $200,000.” But Plaintiff moved for and obtained a default judgment of $1.26 million, including $970k in punitives and compensatory damages that were more than $100k over the prayer. Defendant moved for mandatory relief from default under Code of Civil Procedure § 473(b) on the grounds that its attorney’s mistake was the cause of the default. The court denied the § 473(b) motion, but vacated the default judgment on the grounds that it shouldn’t have awarded more than what was demanded in the complaint. It invited plaintiff to file a new default judgment motion limited to $200k in damages. Both parties appealed.

A $32.5 Million Discovery Mistake

Soto v. Borgwarner Morse Tec Inc., No. B252995 (D2d4, as modified August 20, 2015)

Although some law-and-economics attuned federal judges have doubted the rationale behind the rule,* in California, the defendant’s economic condition and ability to pay are matters a jury must assess in awarding punitive damages. Indeed, the California Supreme Court considers them so important that if the trial record doesn’t contain meaningful evidence of the defendant’s economic condition, punitive damages can’t be awarded. See Adams v. Murakami, 54 Cal. 3d 105, 112 (1991).