Supreme Court Upholds $1.45 Million Punative Damages Award

July 12, 2016

 

Kentucky_state_capitol_buildingThis is a decision that was actually rendered in May by the Kentucky Supreme Court.  However, it has serious implications as the most recent opinion the Court has issued on punitive damages and it’s worth your time.

Saint Joseph Hospital appealed from an opinion of the Court of Appeals that affirmed a Fayette Circuit Court judgment awarding $1,450,000.00 in punitive damages to the Estate of James Milford Gray. The award was based upon a jury verdict finding that the Hospital had engaged in gross negligence in its treatment of Gray following two visits to the Hospital’s emergency room after which he ultimately died.

The Hospital raised the following arguments for relief: (1) the trial court erred in failing to grant a directed verdict on the Estate’s claim for punitive damages; (2) the evidence failed to establish that the Hospital ratified its staffs misconduct so as to authorize an award of punitive damages against it pursuant to KRS 411.184(3); (3) the jury instructions provided for the Hospital’s liability based upon tortious conduct of the independent contractor
physicians engaged to provide emergency room services; (4) the punitive damage award was excessive and violated the Due Process provisions of the Fourteenth Amendment; and (5) the trial court’s failure to dismiss a sleeping juror deprived the Hospital of a fair trial.

This case endured a tortuous course through the courts. The verdict now under review was the second jury verdict awarding punitive damages against the Hospital. In the initial verdict, all the other defendants settled and the case went to trial on the claims against the Hospital and its employees. The jury returned a verdict in favor of the Estate, assessing compensatory damages in the sum of $25,000.00. The jury allocated 15% of the fault to the Hospital for a compensatory award was $3,750.00. The jury also assessed $1,500,000.00 in punitive damages entirely against the Hospital.

The verdict was appealed. The Court of Appeals affirmed the award of compensatory damages, but set aside the punitive damages as excessive and remanded the case for a new trial on punitive damages. On retrial, the jury again awarded punitive damages, this time
in the amount $1,450,000.00. The Court of Appeals affirmed the award.

The Supreme Court affirmed the ruling by the Court of Appeals.  It found that the evidence was sufficient to support an award of punitive damages, that sufficient evidence was presented that the hospital ratified the conduct of its emergency room staff, that the jury was properly instructed regarding the hospital’s statutory liability for the conduct of its emergency room physicians, that the punitive damages award did not violate the due process clause of the 14th amendment, and that the trial court did not abuse its discretion in failing to remove an alleged sleeping juror.

This case is extremely interesting for a variety of reasons but most importantly for the factual pattern it involved and the Court’s discussion of the challenge to the award based on Due Process.  The fact pattern cited some of the most egregious and callous actions I have ever read in a case and more than warranted the award of punitive damages in my opinion.  I encourage you to read the facts.  I am almost sure you will find them worthy of the punitive damages award.  Obviously, two separate juries found them so warranted.  Second, I encourage you to read the part regarding the Due Process argument, because it is not only very comprehensive, but the most recent decision by the Kentucky Supreme Court based on a recent case by the United States Supreme Court that upheld an even more disproportionate punitive damages award.

Why the hospital tried this case and even tried the punitive damages portion twice is beyond me.  They clearly believed that the low compensatory damages award could never warrant such a finding of punitive damages under federal Due Process cases.  While they can certainly appeal the result to the federal level, I’m not sure they will have much success.  Frankly, in my opinion they shouldn’t.

 

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