Punitive damages shrink as court reins in lawyers

Daily Record and the Kansas City Daily News-Press, Jan 21, 2008 by Margaret Cronin Fisk

Nealey said his jury was told to punish only for harm to his clients, the family and estate of a man run over by a truck he had just stepped out of. That instruction will drive down punitive awards, said Boutrous, the Ford attorney. "Once the focus is directed to the parties before the court, it necessarily means the award must be lower," he said.

Ford wins

Ford's overturned awards are $55 million for an Explorer rollover accident that left a woman paralyzed, which is being reconsidered, and $52 million for the death of a child run over by a pickup truck a jury said had a faulty parking brake. That case will be retried on punitive damages.

"Corporate America has done a great job of convincing people that punitive damages have threatened the American way of commerce," said attorney Shanin Specter of Philadelphia, who represents the family of the child, 3-year-old Walter White.

Besides the Ford cases, punitive judgments returned to lower courts since the decision included $112.3 million against Exxon Mobil Corp. in 2001 for radioactive contamination of property near New Orleans. A Louisiana court subsequently said Exxon's due process rights hadn't been violated and didn't change the amount. Exxon appealed again.

Some lawyers say they have changed their approach in trials.

"The traditional punitive argument hits very hard on the blood and gore to others," said Nealey, of Lieff, Cabraser, Heimann & Bernstein in San Francisco. "That clearly isn't going to fly any more."

Trial lawyers, who typically receive one-third of jury awards, are taking fewer cases with the possibility of punitive damages, he said.

"The major effect is on a case with small damages, but large potential punitives," he said. "You're much less likely to take it."