OPINION AND ORDER
Fаmiliarity with the Court’s factual findings in this case, as set forth in the Court’s prior reported decision,
Motorola Credit Corp. v. Uzan,
In Uzan I, the Court awarded plaintiff Motorola Credit Corporation (“Motorola”) *349 $2,132,896,905.66 in compensatory damages, and an equal sum in punitive damages. See Uzan I at 580. The Court of Appeals affirmed the compensatory damages, see Uzan II, at 59, but, while noting that “on this reсord, some punitive damages award is appropriate,” id. at 63, remanded for reconsideration of the size of the punitive award. 2 Following briefing and oral argument by the parties, see transcript, 8/18/05, the Court now determines what amount of punitive damages must be awarded Motorola from the individual defendants pursuant to the applicable laws of Illinois and the Unitеd States.
As the Court’s prior findings evidence, at length, the individual defendants, jointly and severally, engaged in a coordinated campaign of lies and misrepresentations in order to swindle Motorola of more than $2 billion, which they then converted to their own joint and several benefits. When threatened with exposure, they rеsorted not only to further lies and corporate manipulations but even to obstruction of justice and, ultimately, misrepresentations to this Court. They also engaged in knowing contempt of this Court’s orders and criminal contempt of the parallel orders of a British court.
It is obvious, therefore, that defendants’ conduсt was fraudulent, willful, and malicious, evincing a wanton and deliberate disregard for Motorola’s rights, and well warranting punitive damages under Illinois law.
See, e.g., Kelsay v. Motorola, Inc.,
In determining the size of the punitive award under Illinois law, the Court should consider “the nature and enormity of the wrong, the financial status of the defendant, and the potential liability of the defendant.”
Deal v. Byford,
As to the second prong, “punitive damages should be large enough to provide retribution and deterrence but should not be so large that the award destroys the defendant.”
See Hazelwood,
In 2003, Forbes estimated the Uzan defendants’ net worth at $1.3 billion. Forbes World’s Richest People, Forbes, Mar. 2003. In 2004, it estimated that their net worth had increased to $1.5 billion. Forbes Billionaires List, Assoc. Press, Feb. 27, 2004. These, obviously, are rough estimates at best, but were made by a disinterested third party. However, they were almost certainly under-еstimates because they did not take account of the evidence that subsequently came to light of the defendants’ huge embezzlements.
Specifically, this Court determined in Uzan I that the individual defendants had converted to their own use a substantial *351 part of the $2 billion stolen from Motorola. Uzan I at 558-61. Thereafter, the Turkish government charged certain of the Uzans with embezzling more than $5 billion in connection with аn entirely separate $6 billion bank fraud. See, e.g., Uzan says he sought deals; Motorola lawyer dismisses offers, Chi. Trib., Mar. 2, 2004 (“Uzan’s father, Kemal, and his brother, Hasan, have been fugitives since the Turkish government last summer accused them of pilfering the $5.8 billion from Imar Bank.”); Tzurkish Regulator Rejects Uzan’s Debt Repayment Plan, Dow Jones Int’l News, Mar. 12, 2004 (“An investigation found that some $6 billion in Turkish lira and foreign currency had been deposited at the bank without any record and was used by the controlling shareholders. The government started repaying depositors in January, labelling the Imar case as ‘the biggest bank robbery in history.’ ”); Turkey Seizes 219 Companies Of Uzan Family, N.Y. Times, Feb. 16, 2004 (“Turkey has accused leading members of the family, including the patriarch Kemal Uzan, of involvement in a multibillion-dol-lar bank fraud.”); Motorola, Turkey Chase Family for Missing Billions, Chi. Trib., Dec. 28, 2003 (“The Turkish government believes the Uzans siphoned $5.2 billion from a bank they owned, Imar Bankasi.”); WEEK, Turkish Probe, Dec. 14, 2003 (“Foreign Minister Abdullah Gul says Turkey has asked the United States to extradite members of the controversial Uzan family, accused in Turkey of involvement in a multi-billion dollar fraud in the collapsed Imar Bank.”). Although, in this cоnnection, the Turkish Government has seized certain of the defendants’ assets in Turkey — notably the telecommunications company Telsim — the secretive and labyrinthine manner in which the individual defendants operated their complex financial empire, see Uzan I at 526-537, makes it likely that they retain access to substantial assets even while some of them are occupying fugitive status. See, e.g., Press Scanner, Turkish Daily News, Jan. 17, 2006 (summarizing reports that the Uzans are currently ‘living like kings’ in Jordan, where a Yatan reporter says he has uncovered evidence of six new companies formed by the Uzan family.).
All of this suggests that the individual defendants, jointly and severally, remain billionaires and should bе able to satisfy a very substantial punitive damages award. Given the reprehensibility of the individual defendants’ concerted conduct, the size of their fraud, and their seeming ability to pay, and taking account the goals of punishment and deterrence, the Court finds that an award of $1 billion in punitive damages is necessary and permissible under Illinois law. Because the concerted manner in which the individual defendants carried out the original fraud, as well as their ties of blood or (in the case of Mr. Betancourt) long-term close association, strongly suggests that they maintain joint and several access to their assets, liability for such damages shоuld be joint and several.
This penalty is well within accepted bounds under applicable Illinois law. Based on the data set forth above, the individual defendants’ collective net worth remains at least $5 billion, so that the award is 20% of their net worth, considerably less than Illinois courts have approved.
See, e.g., Motsch v. Pine Roofing Co.,
As for federal due proсess considerations, “[s]tates necessarily have considerable flexibility in determining the level of punitive damages that they will allow in different classes of cases and in any particular case.... Only when an award can fairly be categorized as ‘grossly excessive’ in relation to these interests [of punishment and deterrence] does it enter the zone of arbitrariness that violates the Due Process Clause of the Fourteenth Amendment.”
BMW of N. Am. v. Gore,
From a due process standpoint, “[p]erhaps the most important indicium of the reasonableness of a punitive damages award,” according to the Supreme Court, is the nature and extent of “reprehensibility,” as indicated by such factors as whether “the harm caused was physical as opposed to economic; the tortious conduct evinced an indifference to or reckless disregard of the health or safety of others; the target of the conduct had financial vulnerability; the сonduct involved repeated actions or was an isolated incident; and the harm was the result of intentional malice, trickery, or deceit, or mere accident.”
State Farm,
In addition to evaluating the reprehensibility of defendants’ conduct, the Court of Appeals directed this Court to consider the extent to which an award of punitive damages is necessary to deter defendants and future wrongdoers.
See Uzan I,
The same rationale that supports awarding punitive damages when an injury is difficult to detect also supports awarding punitive damages when damages are difficult to recover, as they are here. In both cases, a wrongdoer may not bear the full cost of his actions, and so will engage in a socially inefficient cost-benefit calculus. Cf. id. at 243 (“Punitive damages can ensure that a wrongdoer bears all the costs of its actions, and is thus appropriately deterred from causing harm, in those categories of cases in which compensatory damages alone result in systematic under-assessment of costs, and hence in systematic underdeterrence.”). For this reason, “charging a thief the cost of what he had stolen would not adequately deter theft unless the thief was caught every time.” Id. at 244. Similarly, the individual defendants here, who have contemptuously resisted enfоrcement of this Court’s prior judgment in every respect, are not likely to voluntarily pay much, if any, of the compensatory damages awarded. The Court therefore elects to impose punitive damages that will, among other things, help to deter this sort of behavior.
Given the reprehensibility of defendants’ conduсt and the scope of their fraud, the Court has no doubt that defendants had adequate notice that they would be subject to such a punishment if caught. Thus, this $1 billion award is not “grossly excessive” under the Due Process Clause. Furthermore, for the reasons articulated above, this punitive award will ensure that defendants and future wrongdоers who hope to escape liability know that, if caught, they will face an appropriately stiff penalty.
For the foregoing reasons, the Court hereby awards Motorola the sum of $1 billion in punitive damages from the individual defendants, jointly and severally.
SO ORDERED.
Notes
. Subsequent to the Court’s decision, several of the individual defendаnts were indicted by the Turkish Government for their participation in a separate multi-billion-dollar fraud, and certain of their assets, including those of the corporate defendants, were seized. See Press Release, Office of the Prime Minister of Turkey, Police Seek Five Uzan Family Members in Imar Bank Corruption Case (Aug. 18, 2003), http:/ /www.byegm.gоv.tr/ YAYINLARIM-IZ/CHR/ING 2003/08/03x08x18. HTM# S; Turkish Plan to Sell Seized Telsim May Snag on Mobile Firm's Debts, Wall Street J. Europe, Apr. 16, 2004 ("Patriarch Kemal Uzan and Hakan are being tried in absentia by an Istanbul court on charges of fraud at Imar Bank. The Turkish government has issued in *349 ternational warrants for their arrest.”); Imar Bank Case Suspects Go To Court For the First Time, Turkish Daily News, Oct. 14, 2003 ("In the indictment it is reported that the suspects knew that the bank was in bad shape but despite this hid and destroyed bank records to prevent anyone from finding out they illegally embezzled funds.... Kemal Uzan, Yavuz Uzan and Hakan Uzan are among 22 suspects.”); Turkey's Imar Bankasi Violated Banking Law, Dow Jones Int'l Newswire, Aug. 19, 2003. Thereafter, a settlement was reached between Motorola and the Turkish governmental representatives, see Motorola to recoup $500 million over Telsim, Chi. Trib., Oct. 29, 2005; Motorola gets $500 million cash in Telsim settlement, Assoc. Press, Oct. 28, 2005, that, once effectuatеd, will moot all remaining issues concerning the corporate defendants, Business Brief-Motorola Inc.: Settlement Is Reached in Suit Against Turkish Wireless Firm, Wall Street J., Oct. 29, 2005.
. With respect to co-plaintiff Nokia Corporation, this Court, having found that the individual defendants wrongfully converted to their benefit and control most of the value of Nokia’s prоmised collateral of approximately 7.5% of Telsim's outstanding shares, awarded Nokia a constructive trust over 7.5% of the shares of Telsim in its July 31, 2003 Order (in addition to awarding Motorola a constructive trust over 66% of the shares of Telsim). Uzan I at 581. Furthermore, since the individual defendants had already been found in contempt of the Cоurt's prior orders regarding the transfer of stock, the Court entered a self-executing contempt sanction, whereby judgment would be automatically entered for $1,707,415,278.26, double the amount outstanding on the loans extended by Nokia to Telsim, should defendants fail to comply with the order. Uzan I at 582.
The Individual Defendants filed their notice of аppeal from the July 31 Order and August 1 judgment on August 13, 2003. In the course of prosecuting that appeal, they failed to raise any arguments challenging the self-executing contempt sanction. When they filed a second appeal challenging the self-executing contempt sanction, they argued that the issue was not riрe at the time of the first appeal since the Clerk of this Court had not yet issued a judgment of contempt when the individual defendants filed their notice of appeal from the July 31 Order and August 1 judgment. The Court of Appeals held that defendants had waived their right to appeal, since, notwithstanding the absence of a judgment of contempt, the sanction had already matured into a final order at that time.
See Nokia Corp. v. Uzan,