Someone just leaked this confidential memo to ThePopTort. We had to reprint it! (Hope we don't get sued.)
To: U.S. Chamber of Commerce Board of Directors
From: Chairman, U.S. Chamber Litigation Center
Re: It's a comeback!
Date: April 5, 2016
For those of you who may have missed my motivational speech last week at our off-shore retreat in the Cayman Islands, I would like to start by observing our incredible good luck: our tax havens of choice aren’t running around leaking documents like they’re doing in Panama. (And by the same token, thank goodness for the 2010 Panama Trade Promotion Agreement, which as you know, has made Panama an “unattractive destination” to stash our off-shore money.)
As you know, the purpose of our emergency retreat was to assess where we are with our pals at the U.S. Supreme Court. And as you also know, we had more or less owned the Court of late. Not that I make a habit of quoting that communist network MSNBC, but they did an awfully nice piece about us a couple years ago, noting,
Since the start of the Roberts Court in 2005, the Chamber has won more than two-thirds of the cases in which it’s gotten involved. …
Just as important, it’s been more active than any other organization in working to shape the court’s agenda by pushing it to take up favored cases.…
The major result of the Chamber’s success, legal scholars say, has been a string of rulings that threaten to block the courthouse door to ordinary Americans looking to hold corporations accountable.
But then, as we all know, the sky fell. We unexpectedly lost our longest serving ally, “a fervent critic of class actions.” And I’m not saying that’s why, but we’ve started to lose cases.
First was Tyson Foods, Inc. v. Bouaphakeo, where we lost a, “challenge to an almost $5.8 million class action judgment in a case won by workers at an Iowa pork-processing facility who contended they were underpaid.” Sure, we probably would have lost it anyway, but then this week things got even worse.
Yesterday, just two weeks later, the Supreme Court,
[R]ejected two corporate challenges in class action cases, refusing to hear bids by Wal-Mart Stores Inc. and Wells Fargo & Co to throw out large judgments against them.
Wal-Mart had sought to get rid of a $187 million class action judgment over the retailer's treatment of workers in Pennsylvania. Wells Fargo & Co wanted the justices to toss a $203 million judgment over allegations the bank had imposed excessive overdraft fees.
I know, right about now you’re thinking about running away to a new life in Bermuda. But please don’t. I now have some incredibly good news to share, and we have the U.S. Court of Appeals for the 10th Circuit – in Wyoming - to thank.
On Friday, and at our request, the 10th Circuit (by a vote of 2 to 1) slashed a $25.5 million punitive damages award to $1.95 million, in a case where the landlord “recklessly risked the life of every tenant in the entire apartment complex” by poisoning them with carbon monoxide. I know, sounds pretty bad. That’s why this is soooo amazing!
The panel vacated punitive damages as to one defendant and reduced the award against the other so that the ratio of compensatory damages to punitive damages was 1:1.
The Court said that any punitive damages award higher than this was “excessive and arbitrary” in violation of the Fourteenth Amendment’s due process clause.
We’ve been "pushing for a 1:1 ratio in cases involving punitive damages since the U.S. Supreme Court’s 2003 opinion in State Farm v. Campbell, which provided general guideposts for apportioning punitive damages.”
“The Chamber has been arguing that 1:1 should be the presumptive maximum,” said Evan Tager, a partner at Mayer Brown in Washington who filed the Chamber’s brief in the case. “That was the centerpiece of our amicus brief in State Farm, and we have continued to bang that drum ever since.”
Can you believe a Court actually went for that? It was less than 10 years ago that the Supreme Court let stand (or at least failed to find excessive) a $79.5 million award against a tobacco company with a much much higher (like 100 to 1) ratio, where it was argued that the defendant’s misconduct was particularly reprehensible causing physical harm. You know, the usual.
Our goal all along has been to change the law so that corporate lawbreakers can precisely budget their potential liability as a cost of doing business. We want it to be cost-effective for all of you - our members - to simply pay victims and their families for deaths or injuries rather than fix the "problem". This Circuit Court decision gets us further along than we ever thought possible.
So let’s just relish in our ridiculous good luck for a moment. And until we can properly stack the Supreme Court again, maybe we should hope that SCOTUS looks the other way. At least for now.