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The size of California’s largest jury verdicts skyrocketed in 2002 as the corporate crime wave continued to dominate the headlines and court dockets. The cutoff to get into the top 10 plaintiffs awards has shot up 400 percent over the past five years. In 1998, the cutoff was only $15 million. In contrast, the top 10 plaintiffs of 2002 received awards above $75 million, a 50 percent increase over 2001′s $50 million. But the types of cases are little changed from 2001. Fraud, breach of contract and other varieties of corporate skullduggery were the causes of action in 60 percent of the 25 largest verdicts in the state in 2002; and if asbestos and tobacco cases are considered corporate misbehavior, that number climbs to almost 75 percent. The list of the 25 largest verdicts was compiled by The National Law Journal and VerdictSearch, both affiliates of The Recorder. The list represents initial verdicts from juries. Many awards were reduced or thrown out on post-trial motions, have been settled or are being appealed. The size of verdicts across the top 25 took a huge leap in 2002. The 25th-largest award, which has hovered around $8 million for the past five years, was $14.3 million in 2002. The across-the-board increase was reflected by the largest verdict of the year. Los Angeles solo practitioner Michael Piuze sat atop the list for the second year in a row. After winning a $3 billion award in 2001 for an ill smoker — at the time the largest-ever award to an individual — Piuze brought home a $28 billion award last year in another tobacco case, Bullock v. Phillip Morris, BC 249171. “If you want to look at tobacco cases as corporate malfeasance, it is on the most gigantic scale possible,” said Piuze. “Not only were they lying, cheating and stealing, people were dying. People beyond counting.” The jury awarded $750,000 in economic damages, $100,000 in non-economic damages and $28 billion in punitive damages. Although the award put punitive damages in a national spotlight, Piuze argued that the jury’s award was reasonable. “They knew that for every one lawsuit filed [against the tobacco companies], 28,000 Californians lost their lives to tobacco. If the average case was worth $1 million and if the odds of getting caught were only 1 in 28,000, then they should multiply the odds by the average worth: $28 billion.” Judge Warren Ettinger of Los Angeles Superior Court disagreed with this logic and reduced the jury award by 99.9 percent, to $28 million. Both parties are appealing. One issue expected to be raised on appeal is the decision in State Farm v. Campbell, 123 S.Ct. 1513, an April ruling from the U.S. Supreme Court that limits punitive damages to 10 times compensatories in most cases. Huge awards for corporate misdeeds fill the next seven slots in the top 10. In second position, Genentech, the South San Francisco biotech behemoth, was handed a $500 million defeat in City of Hope National Medical Center v. Genentech Inc., BC 215152 , for failing to pay royalties on $16.7 billion in medicine sales. City of Hope, the Southern California medical research center, was hired by Genentech in the 1970s to find a manufacturing process for proteins used to make medicines, such as a hepatitis vaccine. Under the terms of the contract, Genentech kept the patents and City of Hope received royalties on medicine covered by the patents. Irell & Manella partner Morgan Chu, who argued the case for City of Hope, doesn’t think anger at corporate wrongdoing generally affected jurors in his case. “We did not argue to the jury that what happened to Enron was to be considered by them. We stuck to the facts, and it’s facts that win cases.” The jurors awarded less than his demand for compensatory damages, Chu noted. “The majority of the judgment is the breach of contract,” he said. “There was a $200 million punitive damages award, but there were no shareholders; the company did not go bankrupt like with Enron, and it wasn’t a tobacco case.” JURY DROPS PUNITIVE BOMB In Claghorn v. Edsaco Ltd., 98-3039,the fourth-highest award, shareholders claimed they got stung when they bought shares in Scorpion Technologies, a nonexistent company selling nonexistent software to nonexistent clients. They sued Edsaco Ltd. for setting up a series of overseas companies — purposefully designed to mask their true ownership — that fraudulently confirmed those nonexistent sales to auditors. The jury returned three hours after the end of the two-week trial and dropped a $165 million punitive bomb on top of the almost $6 million compensatory award. San Francisco attorney Richard Heimann, of Lieff Cabraser Heimann & Bernstein, represented the aggrieved shareholders in the two-week trial. After the verdict, the case settled for an undisclosed sum. Third and fifth places were claimed by class actions . In re Real Estate Associates Limited Partnership Litigation, 98-7035, involved self-dealing by a partnership’s managing partners, and Reiss v. Norcal Mutual Insurance Co., BC-190516, involved doctors who claimed they were defrauded by their insurance company. Both cases settled after the verdicts were entered. One of the few cases to make the list without a punitive damages award was Atlantic Recording v. Media Group Inc. and Jimmy Chan., 00-06122 . A coalition of 23 record companies sued Taiwanese company Media Group for producing and distributing pirated copies of more than 1,500 songs by the likes of Elvis Presley, Michael Jackson, James Brown and Madonna. Once the jury found Media Group guilty, the jurors had statutorily limited discretion in awarding damages for the infringement. Forced to pick a number between $750 and $150,000 in damages for each violated copyright, they returned with an average $90,000 per act, for a total of $136 million, a substantial increase over the plaintiffs’ original $3 million demand. Media Group filed for bankruptcy. The company’s former CEO, Jimmy Chan, is appealing the ruling. After a no-show in 2001, medical malpractice returned with a vengeance to the top 25, snagging four places, the second most popular cause of action after corporate misdeeds. Two of those cases were tried by the Law Office of Bruce Fagel & Associates in Beverly Hills and returned combined verdicts of almost $100 million. In Greenwell v. Kaplan and John Muir Medical Center, 0002889, a hospital was found to have caused cerebral palsy in a newborn, while the doctor was acquitted. In Brown v. Community Hospital of San Bernardino, 07620, a baby suffered severe neurological damage after the equipment monitoring his respiration was shut off. And the largest ever sexual harassment award in California made the list. In Gober v. Ralphs Grocery Co., N72142, six plaintiffs who worked at Ralphs supermarkets alleged they were subjected to inappropriate touching, foul language, even thrown objects, by their store director, Roger Misiolek. The six women were awarded compensatory damages ranging from $50,000 to $200,000, and a total punitive damages award of $3.3 million in 1998, but the punitive award was thrown out due to juror misconduct. A new trial was held solely to decide punitives, and the new jury awarded $30 million. Judge Michael Anello of the San Diego County Superior Court offered the women a choice: accept reduced punitive awards or the judgment would be vacated. Two of the women accepted; four are appealing to the Fourth District Court of Appeal. Ralphs has not appealed. “We were only trying damages, so from voir dire, I was able to talk to the jury about damages,” said Gober’s attorney, Philip Kay, of San Francisco’s Law Offices of Philip Kay. “And I was talking about millions from the very beginning.” A SERIES OF NEGATIVE RESULTS Further down the list, in 22nd place, is the story of Jeff McCardle, who sued Greyhound Motor Lines. In January 2000, the plaintiff in Jeff McCardle v. Greyhound Motor Lines, BC 241699, was getting up to get his briefcase and raincoat when the bus he was riding came to a sharp stop to avoid hitting another vehicle. The plaintiff felt a snap in his neck. He was in some pain and complained about it at the time. From there, a series of negative medical results followed, starting with a few aspirin that night and finishing with two neck and back surgeries that left the plaintiff a quadriplegic. The plaintiff’s counsel, Garo Mardirossian of Los Angeles’ Mardirossian and Associates, argued there was an unbroken chain of causality between the bus braking and the quadriplegia, and that there was no malpractice in either surgery. The jury voted 12-0 that Greyhound was 100 percent at fault and returned an award of nearly $16 million. Mardirossian’s Joseph Barrett, who helped try the case, said the jury verdict was nothing less than stunning. “The odds were against us. It is one thing to tweak your neck, and another to take it to a jury,” said Barrett. Pursuant to a high-low settlement agreement, Greyhound paid $14.5 million to McCardle. Besides the Law Office of Bruce Fagel & Associates, four other firms had two wins in the top 25. They are Fogel, Feldman, Ostrov, Ringler & Klevens; Hornberger & Brewer and Engstrom Lipscomb & Lack — all of Los Angeles — and the Law Offices of William Veen in San Francisco. No attorney or law firm had the ignominious distinction of appearing twice on the sharp end of these cases.

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