Bankhead v. Arvinmeritor, Inc.
205 Cal. App. 4th 68
Cal. Ct. App.2012Background
- In an asbestos personal injury case, a jury held ArvinMeritor liable to Bankhead for compensatory and punitive damages.
- The punitive damages award was $4.5 million; the case later involved post-trial motions and an appeal challenging only the punitive award.
- ArvinMeritor argued the punitive award was excessive given its financial condition, including a negative net worth, and challenged the ratio to compensatory damages under due process limits.
- Expert Robert Johnson testified that ArvinMeritor’s net worth was not a reliable measure of its ability to pay; other financial indicators supported paying the award.
- Bankhead had mesothelioma from decades of exposure to asbestos-containing brake lining products; ArvinMeritor and others allegedly failed to warn adequately.
- The trial court and appellate court ultimately affirmed the punitive damages award, upholding the award as constitutional and not excessive under California law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the punitive award is excessive relative to wealth | Bankhead contends wealth signals justify the high award. | ArvinMeritor argues net worth should cap punitive damages and the award is excessive. | No strict net-worth cap; award not excessive. |
| Whether the punitive award violates due process under State Farm framework | State Farm guideposts support upholding the award given reprehensibility and harm. | The ratio to compensatory damages is too high and violates due process. | Award satisfies due process; ratio within constitutional range. |
Key Cases Cited
- State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (U.S. Supreme Court 2003) (three guideposts for punitive damages: reprehensibility, disparity, and ratio)
- BMW of North America, Inc. v. Gore, 517 U.S. 559 (U.S. Supreme Court 1996) (guidepost framework for punitive damages review)
- Roby v. McKesson Corp., 47 Cal.4th 686 (California Supreme Court 2009) (constitutional maximum ratio for certain emotional distress cases)
- Simon v. San Paolo U.S. Holding Co., Inc., 35 Cal.4th 1159 (California Supreme Court 2005) (recognizes presumption against ratios >9-10 to 1 absent special justification)
- Gober v. Ralphs Grocery Co., 137 Cal.App.4th 204 (California Court of Appeal, 2006) (six-to-one ratio deemed constitutionally permissible in harassment case)
- Bullock v. Philip Morris USA, Inc., 198 Cal.App.4th 543 (California Court of Appeal, 2011) (upholds a high ratio due to extreme reprehensibility of conduct)
- Rufo v. Simpson, 86 Cal.App.4th 573 (California Court of Appeal, 2001) (wealth considerations in punitive damages; not solely net worth)
- Lara v. Cadag, 13 Cal.App.4th 1061 (California Court of Appeal, 1993) (net worth not the only measure of wealth for punitive awards)
- Devlin v. Kearny Mesa AMC/Jeep/Renault, Inc., 155 Cal.App.3d 381 (California Court of Appeal, 1984) (no fixed formula; wealth indicators vary by case)
- Zaxis Wireless Communications, Inc. v. Motor Sound Corp., 89 Cal.App.4th 577 (California Court of Appeal, 2001) (ability to pay can be shown by cash, lines of credit even with negative net worth)