Breaking NewsLaw.com and associated brands will be offline for scheduled maintenance Friday Feb. 26 9 PM US EST to Saturday Feb. 27 6 AM EST. We apologize for the inconvenience.

 
X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
The full Georgia Court of Appeals has reaffirmed a $257 million punitive damages award against Time Warner Entertainment. Combined with $197 million in compensatory damages, the decision upholds the largest civil jury verdict in Georgia history — $454 million. The court’s decision, released late Friday, was a victory for investors of Six Flags Over Georgia in a decade-long dispute with the theme park’s former operator, Time Warner Entertainment Co., a partnership principally owned by AOL Time Warner. In October, the U.S. Supreme Court remanded the case to the Georgia court for review. The unanimous ruling Friday by 10 judges struck down a precedent created in January by a three-judge panel of the same court. That decision, Kent v. White, had established a new standard for reviewing the constitutionality of punitive damages awards. Kent v. White, No. A01A0756 (Ct. App. Ga. Jan. 29, 2002). In that case, the Georgia appeals panel concluded the Georgia Supreme Court had adopted the U.S. Supreme Court’s new approach to reviewing punitive awards. That new approach came last year when the high court said in Cooper Industries v. Leatherman Tool Group that appeals court judges should review anew district court decisions on punitive damages, rather than apply a less demanding abuse-of-discretion standard. But in the Time Warner decision, Judge John J. Ellington, writing for the whole appeals court, said the January panel misinterpreted the Georgia Supreme Court’s intent. Ellington said the Georgia justices merely wanted the appeals court to consider the new Leatherman standard but that they had not necessarily adopted it as Georgia law. Time Warner Entertainment v. Six Flags Over Georgia, No. A00A0120 (Ct. App. Ga. March 29, 2002). Curiously, two of the three judges who made the January decision in Kent — Judge Frank M. Eldridge, who wrote it, and Judge M. Yvette Miller — joined Friday’s decision without issuing a word in dissent. Presiding Judge Gary B. Andrews was the third judge on the Kent panel, but he recused himself from the Time Warner case. The reason, according to the appeals court clerk, was that Andrews’ son is a lawyer with one of Time Warner’s law firms, Troutman Sanders. Presiding Judge Edward H. Johnson also recused himself, but it is not clear why. ACCUSED OF CHEATING INVESTORS The Time Warner decision stemmed from claims by Six Flags investors that Time Warner had, as Six Flags’ general partner and manager, systematically short-changed the park on capital investment, including delaying installation of the high-tech Batman roller coaster until 1997. The investors are limited partners who claim that as a result of Time Warner’s action their investment yielded millions of dollars less than it should have. Time Warner and its partners sold all seven Six Flags parks in 1998 to Premier Parks. Time Warner denied the investors’ allegations, but in 1998, a Gwinnett Superior Court jury awarded them $197 million in compensatory damages and $257 million in punitives. In 2000, a three-judge panel of the Georgia Court of Appeals affirmed the whole award. Time Warner continued to challenge the punitive damages as excessive. Last year, Time Warner won a remand from the U.S. Supreme Court, which told the Georgia appeals court to review the verdict in light of the high court’s recent ruling in Leatherman. The appeals court did so, but found the decision did not apply to this case because, the court said, Time Warner had failed to assert that the punitive damages award violated the U.S. Constitution, the subject of the Leatherman decision. Even though the appeals court had reasoned it did not have to apply the high court’s standards, it appeared to take issue with the U.S. justices’ decision in Leatherman. Ellington noted that since 1763, English common law had held it was dangerous for judges to meddle in lower court rulings of damages. “The U.S. Supreme Court, however, broke with common law tradition (and avoided the application of the Seventh Amendment) by characterizing a jury’s decision to award a certain amount of punitive damages as a question of law,” Ellington wrote. He added that some scholars had considered the Leatherman decision a “dangerous development.” Heading off the possibility that higher courts will disagree and order the appeals judges to apply Leatherman, Ellington reviewed the Time Warner punitives under the Leatherman standard. Leatherman, Ellington noted, instructs appeals courts to review, among other things, how reprehensible the conduct at issue is. Although the harm to Six Flags was only economic, Ellington wrote, “it was caused by conduct we find especially reprehensible.” Time Warner’s “intentional breach of its fiduciary duty revealed a callous indifference to the financial well-being of its limited partners and their individual investors,” he added. Speaking for Time Warner, Troutman Sanders partner John J. Dalton said the appeals court decision “fails to apply the mandated standards that would call for a dramatic reduction in the punitive damages award.” Dalton said Time Warner would seek further review, but he declined to elaborate. Presumably, Time Warner would ask the appeals court to reconsider its ruling or ask the state supreme court to grant certiorari on the matter. Also representing Time Warner were Norman L. Underwood of Troutman Sanders, who argued the case last month, Walter M. Britt of Buford’s Chandler & Britt; Ronald L. Reid of Alston & Bird; and Evan R. Chesler and Keith R. Hummel of New York’s Cravath, Swaine & Moore. James E. Butler, George W. Fryhofer III, Joel O. Wooten and Cale H. Conley of Columbus’ Butler, Wooten, Overby, Fryhofer, Daughtery & Sullivan represented the Six Flags investors, along with Albert M. Pearson III of Moraitakis, Kushel & Pearson; and H. Lamar Mixson, Michael B. Terry, Nancy J. Walsh and Joshua F. Thorpe of Bondurant, Mixson & Elmore. Butler said in a statement faxed to the news media, “This is an important decision both to the clients and to all businesses in Georgia and the country. “It proves that predatory misconduct will not be tolerated by the courts, no matter how powerful the culprit may be.”

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.