On the other hand, defendants may cite Simon and Johnson to support the following positions:

  1. Disgorgement of profit from similar conduct is not a proper basis for punitive awards.
  2. The damages of which punitive damages are a multiple may be only those damages actually caused by, or the goal of, the defendant’s acts.
  3. Punitives may be lower or nonexistent in a case not involving a “repeated practice,” and so lower and less likely in single transactions than in consumer-type actions (though Simon, involving a single transaction, awarded punitive damages 10 times compensatory damages).
  4. $50,000 may be a sufficient deterrent for “even a prosperous company.”
  5. The only “wealth” relevant to a punitive damage analysis is the profitability of similar, repeated, tortious conduct, if any, and not wealth unrelated to the acts that caused the plaintiff harm. Discovery ought to be limited accordingly.

Because Johnson was remanded, it is possible that it will reappear at the California Supreme Court, and maybe even go to the U.S. Supreme Court. This is not the last word on these cases or these issues.

Don Willenburg’s practice focuses on appeals, punitive damages, insurance coverage and expert witnesses. He is vice-chair of the Appellate Practice Section of the Bar Association of San Francisco. He can be reached at [email protected]. Raymond Tittman focuses on insurance coverage matters. Both practice in Carroll, Burdick & McDonough’s San Francisco office. He can be reached at [email protected].

Practice Center articles inform readers on developments in substantive law, practice issues or law firm management. Contact Associate Editor Candice McFarland with submissions or questions at [email protected] or www.callaw.com/submissions.