Posts belonging to Category Judgments

The Missouri Supreme Court, sitting en banc, has issued a potentially groundbreaking decision, overruling one of its own cases and rejecting a statute that limits the award of noneconomic damages to plaintiffs. See Watts v. Lester E. Cox Med. Ctrs., No. SC91867 (Mo. Jul. 31, 2012) (available here). In a 4-3 decision, the court determined that the state’s $350,000 statutory cap on noneconomic damages conflicts with the right to a jury trial guaranteed by the Missouri constitution.

The plaintiff, a child born with severe brain damage caused by medical negligence, was awarded $3.371 million in compensatory medical damages and $1.45 million in noneconomic damages by the jury at the trial level. However, the trial court reduced the noneconomic damages to $350,000, consistent with the statutory cap. The trial court also approved defendants’ payment plan as to the compensatory damages, which the plaintiff contended was unreasonable due to its extremely low interest rate and 50-year payment schedule.

On appeal, the defense relied heavily on Adams v. Children’s Hospital, 832 S.W.2d 898 (Mo. 1992), where the Missouri Supreme Court clearly stated that a statutory cap on damages is not violative of the right to a jury trial under the state constitution. The plaintiff argued that Adams was wrongly decided and should be overturned. In a bold and surprising move, the court agreed with the plaintiff, holding its own precedent to be unconstitutional. Thus, Adams was overruled, and the court remanded Watts back to the trial level to have the damages award reinstated, and also instructed the lower court to adopt a new payment plan that will ensure full recovery for the plaintiff.

The Watts case was featured in the 2011 documentary Hot Coffee, a film which explores the dangers of “tort reform” and how it can undermine the role of the jury and lead to unjust results for injured plaintiffs.

Last week, in one fell swoop, a Los Angeles Superior Court Judge denied a defendant’s motion for summary adjudication and motion to decertify the plaintiffs’ rest break class, granted plaintiffs’ motion for summary judgment, and issued a $90 million award to a class of 15,000 plaintiffs, while following the California Supreme Court’s landmark ruling in Brinker v. Super. Ct., 42 Cal. 4th 1004 (2012).  See Augustus v. Amer. Commercial Sec. Servs., No. BC336416 (Los Angeles Super. Ct. Jul. 6, 2012) (order granting summary judgment) (available here).  The Brinker decision, initially touted as a win for defendants, continues to favor plaintiffs alleging meal and rest break violations.

Here, the plaintiff class, made up of security guards, sought damages for missed rest periods, claiming that they were “on call” during their breaks and therefore not “relieved of all duty” as required under Brinker.  Defendants contended that, because plaintiffs were not required to carry radios during rest breaks, they were per se off duty.  See Order at 2-3.  Judge John Shepard Wiley, Jr. countered defendant’s argument, pointing out that “[t]here are many alternatives to the radio for hailing a person back to work,” and categorically agreed with plaintiffs, stating, “[p]ut simply, if you are on call, you are not on break” and “these on-call breaks are all legally invalid.”  Id. at 2-3.

Judge Wiley took the defendant to task several times in the order (to great comic effect), for citing to an unpublished opinion (id. at 2); for being critical of the length of plaintiffs’ reply brief despite having submitted an opposition brief that “included 21 small font footnotes” (id. at 3); and for arguing a due process violation despite having “had an opportunity to be heard — repeatedly, and at length” (id. at 4).

An Ohio court has ordered Ford Motor Co. to pay $2 billion to a class of more than 3,000 Ford-franchised truck dealers who allege that Ford unfairly concealed wholesale price discounts from certain dealers, causing them to overpay for large commercial trucks.  See Westgate Ford Truck Sales, Inc. v. Ford Motor Co., No. CV-02-483526 (Ohio Ct. Common Pleas June 10, 2011) (ruling re: motions for summary judgment) (available here).

The dealers sued Ford in 2002, alleging that the company breached its agreement to sell trucks at published prices, which forced them to overpay for the trucks from 1987 through 1998 and resulted in lost profits.  Following a trial that adjudicated the claims of only the named plaintiff, Ford attempted to revive ten separate summary judgment motions and to decertify the class represented by the named plaintiff.  Judge Peter J. Corrigan rejected all of Ford’s post-trial motions; upheld a $4.5 million verdict awarded to the named plaintiff; and ordered Ford to pay similar damages, plus interest, to a class of approximately 3,000 other dealers, resulting in the roughly $2 billion total judgment.

In arguing for decertification, Ford contended that the named plaintiff had abandoned the damages model that had been the basis for class certification, and that the damages model actually used created conflicts within the certified class (thus warranting decertification).  See Id. at 5.  The court rejected both arguments, holding that the damages model proffered by plaintiffs was based upon the same methodology as the one relied upon at the certification stage, and in any event was not a source of conflict.  See Id. at 5-6. 

The damages model employed was quite straightforward, and likely has considerable application to consumer class actions alleging misrepresentations or omissions.  The court described a dealer’s damages as simply “the total of the differences between the discounts he should have received and the discounts he actually received.”  Id. at 6.  Likewise, where a consumer alleges that a manufacturer or retailer has omitted material information about a product, the determination of damages is easily amenable to class treatment as the difference between the amount that consumers paid and the amount by which the omitted information would have diminished the price of the at-issue product for a reasonable consumer.

Pennsylvania’s Superior Court has affirmed the jury verdict against Wal-Mart in a rare class action trial. The class members alleged that, as hourly workers, they regularly and systematically were not paid by Wal-Mart for “off-the-clock” work and they were not provided with rest breaks in compliance with Pennsylvania law. See Braun v. Wal-Mart Stores, No. 3373 EDA 2007 (Pa. Super. Ct. June 10, 2011) (opinion available here).

The named plaintiffs sought to represent a class of approximately 187,000 current and former Wal-Mart employees in Pennsylvania, and the court granted the plaintiffs’ class certification motion. When the parties did not reach a settlement, the case went to trial, and the jury found in favor of the class as to both the off-the-clock and rest break claims. The total award of $187,648,589 included statutory penalties and attorneys’ fees. But for the correction of a minor mathematical error, the portion of the award to be paid to class members was unaltered by the Superior Court’s decision. The attorneys’ fees portion of the decision was remanded to the trial court with instructions that a proper calculation of the lodestar multiplier be conducted.

The rest break claim is notable because it was grounded in a contract theory, rather than relying solely on a statutory violation. The class alleged that Wal-Mart had promised employees paid rest breaks but systematically failed to provide those breaks. On appeal, Wal-Mart argued that both the promise of paid breaks and any failure of Wal-Mart to have delivered them raised individual issues, rendering class treatment inappropriate. The appellate court disagreed, affirming the trial court’s grant of certification.

Wal-Mart also unsuccessfully challenged the jury’s findings of fact. In finding liability on the rest break claim, the jury accepted as credible plaintiffs’ evidence showing that pressure from Wal-Mart’s home office in Arkansas to reduce labor costs directly resulted in the deprivation of paid rest breaks that Wal-Mart was contractually obligated to provide. The appellate court affirmed this as a reasonable and thus permissible factual inference.