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The roller-coaster ride of litigation between investors in the Six Flags Over Georgia theme park and Time Warner Entertainment Co. came to a screeching stop on Monday when the U.S. Supreme Court denied certiorari in the case, meaning Time Warner will have to pay a $257 million punitive damages award. The high court’s refusal to hear Time Warner’s appeal of the award cements the largest civil jury verdict in Georgia history — $454 million delivered by a Gwinnett County jury in 1998. The punitive damages came on top of $197 million in compensatory damages the jury awarded after hearing the investors’ claims that Time Warner short-changed the park on capital investment, thereby lowering its sale value. The Time Warner entertainment company was a partnership that formerly operated Six Flags and is now principally owned by AOL Time Warner. The Supreme Court’s decision was a big win for the investors and a large team of lawyers from three Georgia firms: Butler, Wooten, Fryhofer, Daughtery & Sullivan; Bondurant, Mixson & Elmore; and Davidson & Tucker. James E. Butler Jr., one of the lawyers who tried the 1998 case, would not say how big the win was for the lawyers, only that their fee “doesn’t even come close” to being as large as the standard plaintiffs’ lawyers’ arrangement. Butler said he learned of the win from a Washington, D.C.-based lawyer at Gibson, Dunn & Crutcher who was assisting with the case and who went to the Supreme Court to see the certiorari orders when they were released at 10 a.m. on Monday. “There was a spontaneous explosion across two offices,” Butler said of the reaction to the announcement. Soon after, Butler said he received “a very nice e-mail” from John J. Dalton of Troutman Sanders, who has represented Time Warner throughout the case. “Jack is a class act,” Butler added. Dalton referred comment to AOL Time Warner, as did Henk J. Brands of Paul, Weiss, Rifkind, Wharton & Garrison in Washington, D.C., who represented Time Warner at the Supreme Court. The company released a statement Monday that said it had “previously reserved appropriately for this contingency” — the $257 million payment plus interest — “and has factored the obligation into its plans.” DELAYED INSTALLATIONS The 1998 trial dealt with complicated business arrangements, but it also revolved around the most basic and visible element of the park — the thrill rides. Among other things, the plaintiffs charged that Time Warner delayed installing popular attractions such as the Batman roller coaster and sold them used rides from other Six Flags parks at inflated prices. Time Warner brought in top executives such as Ted Turner and Richard D. Parsons, now chairman and chief executive officer of AOL Time Warner, to testify in its defense. After losing at trial, Time Warner launched a series of appeals, winning in 2001 a remand from the U.S. Supreme Court. The justices told the Georgia Court of Appeals to review the Six Flags verdict in light of a recent ruling that required appeals judges to review punitive damages awards strictly, thereby increasing the chances of a reversal. But the Georgia appeals court found that the U.S. high court’s decision did not apply because Time Warner failed to assert that the punitive damages award violated the U.S. Constitution. Time Warner Entertainment v. Six Flags Over Georgia, 254 Ga. App. 598 (2002). The Georgia Supreme Court last fall voted 5-2 against reviewing the latest appeals court decision, leaving Time Warner one more shot at the U.S. Supreme Court. On April 7, the court issued a decision in another case that appeared to have great implications on the Time Warner case. By a 6-3 vote in State Farm Mutual Automobile Insurance Co. v. Campbell, No. 01-1289, the court overturned a $145 million punitive damages award against an insurer and imposed new limits on punitive damage awards in other cases. Writing for the majority, Justice Anthony M. Kennedy said the ratio of punitive damages to compensatory damages almost never should exceed nine to one and that in many cases punitive damages should not exceed compensatory damages. Accordingly, Kennedy said the $145 million punitive damages in the case were out of whack with the $1 million in compensatory damages awarded. The State Farm decision prompted last-minute briefing by both sides in the Time Warner-Six Flags dispute, with Time Warner arguing that the new decision helped its cause and Six Flags arguing that the decision was inapplicable. Emmet J. Bondurant, counsel of record for the Six Flags investors at the Supreme Court, said he was not terribly worried about the impact of the State Farm decision. He noted, among other things, that the $254 million punitives verdict was only 28 percent larger than the compensatory damages verdict. Bondurant credited his partners Michael B. Terry and H. Lamar Mixson with writing the appellate briefs.

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