January 8, 2009 2:37 PM
Bloomberg: Death of the Billion-Dollar Verdict?
Posted by Zach Lowe
The beginning of a new year mean's Bloomberg's crack research department starts cranking out its year-end rankings in various categories. Today they released their list of the biggest jury verdicts of the year.
The finding that stood out: For the second time in three years, there was not a single $1 billion verdict in 2008. Between 1992 and 2006, there were 26 such verdicts, though several of those were scrapped or cut on appeal--part of an anti-punitive damages trend experts say is responsible for the gradual decline in billion-dollar verdicts. The only billion-dollar verdict in the last two years came in a patent case against Microsoft, and that verdict was reversed on appeal, Bloomberg says.
The biggest win of the year belonged to Manatt, Phelps & Phillips. The firm won a $606 million verdict (including $236 million in punitives) against Boeing. (Barry Lee and Robert Zeavin, the two partners on the deal, have told The Am Law Daily the verdict comes to about $707 million with interest). A jury found that Boeing violated the terms of a deal with ICO Global Communications under which Boeing agreed in the mid-1990s to build a dozen communications satellites. ICO terminated the deal in 2004, when Boeing asked for $400 million in additional funding to complete the project.
The Manatt team had asked for $1.5 billion in damages at the end of the trial and nearly $950 in punitives after the jury determined the compensatory award. (Munger, Tolles & Olson represented Boeing; the company has said they plan to appeal.)
Overall, the top ten punitive awards in 2008 totaled $960 million, down 30 percent from 2007 and 63 percent from 2006.
The U.S. Supreme Court has joined the broader attack on punitives. In 2003 the Court ruled that the punitive-to-compensatory damages ratio should never exceed 10-to-1, except in "particularly egregious" cases. And in June, they decided the Exxon Valdez spill didn't qualify, when they lowered a $2.5 billion punitive award to $500 million and came very close to explicitly endorsing a 1-to-1 damages ratio.
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