- Multimillion Dollar Punitive Damage Award Affirmed
- June 5, 2013 | Authors: W. Brett Mason; Saul R. Newsome
- Law Firm: Breazeale, Sachse & Wilson, L.L.P. - Baton Rouge Office
April 3, 2013, the Louisiana Third Circuit Court of Appeals affirmed a $12,000,000 punitive damage award against three major oil companies in favor of a petroleum inspector in McWilliams v. Exxon Mobil Corp. This case demonstrates the court's ability to impose draconian sanctions when a party disregards a court order in bad faith.
Plaintiff, Monte McWilliams, filed suit under the Jones Act and maritime law claiming that as a result of exposure to benzene on the defendants' vessels, he developed acute promyelocytic leukemia. Despite denying liability for McWilliam's illness, the court prohibited the defendants from asserting all defenses, paving the way for a significant adverse judgment.
Plaintiff filed suit in July 2009 and requested dates for depositions of defendants' corporate representatives, but the request was ignored for more than six months. Plaintiff scheduled the corporate depositions and defendants sought a protective order. The trial court denied defendants' motion for protective order and ordered that the depositions be set within ten days. The judge warned defendants "if something like this happens again I'm not going to have any sympathy whatsoever."
The depositions were not set within the ten day deadline and defendants did not produce documents in advance of the depositions as ordered by the judge. The witnesses deposed were not familiar with the relevant documents. Plaintiff filed a motion to compel discovery and sought sanctions.
At the hearing on plaintiff's motion for sanctions the trial court found that defendants were in bad faith violation of multiple court orders and that defendants' conduct resulted in a continuance of the trial, prejudiced plaintiff, and caused a year of discovery to be lost. The trial court invoked article 1471 of the Louisiana Code of Civil Procedure and struck all defenses asserted by defendants, "leaving only the issue of damages."
At trial the jury was instructed that "the amount of damages is solely for you to determine." As a result, defendants were found liable for $5.5 million in actual damages and $12 million in punitive damages.
Two of the issues raised by defendants on appeal were:
1. The trial court's ruling striking all of their defenses for failure to follow the court's discovery orders.
The Court of Appeal found that the trial court did not abuse its discretion in striking all defendants' defenses and didn't err in precluding defendants from offering proof of the liability of others at trial.
2. The $12 million punitive damage award violated federal maritime law and the United States Constitution.
The Court of Appeal affirmed the trial court's determinations as to punitive damages and rejected defendants' argument that the punitive damage award violated their constitutional rights stating:
[Defendants] forfeited their opportunity to present defenses when they incurred sanctions imposed by the trial court. Due to their own actions, Defendants' defenses to all aspects of liability were stricken, including punitive damages.
E. Why is this important?
Drastic sanctions may be imposed in Louisiana state court for failure to obey a court's order. Depending on the severity of the violation a court's sanction could include striking all defenses. If the jury does not get to consider your defenses or the fault of others the result could be staggering.