Wednesday, January 12, 2011

Take the money and run

Kenneth Thomas went to trial against his former employer, iStar Financial, claiming wrongful termination under Title VII. He won the trial, and the jury awarded him various damages, including $1.6 million in punitives. That's big money. So much money that the district court held that it was unconstitutionally excessive. The parties then filed a joint submission to reduce the punitive damages to $190,000 without option for a new trial. Of course, the district court accepted that joint submission. Thomas now complains that the district court improperly vacated the punitive damages award.

The case is Thomas v. iStar Financial, decided on December 17. This is a strange set of legal issues. Normally, if the jury awards you too much money, the trial court will reduce it in the form of a remittitur. The plaintiff then has a choice: she can take the reduced amount or go to trial again on the damages claim. Most plaintiffs take the reduced amount rather than seek another trial.

The Court of Appeals (Hall, Livingston and Bianco (D.J.]) thinks that Thomas is trying to get around the well-settled rule that once the plaintiff agrees to the remittitur he cannot appeal that remittitur. The Court says: "The joint submission ... appears to have been an effort to evade the rule banning appeals of accepted remittiturs. There is no real distinction, however, between a plaintiff who accepts a remittitur rather than face the uncertain outcome of an appeal, and possibly a new trial, and one who petitions the district court to order an identical reduction in damages without the possibility of a new trial."

This means Thomas will have to live with the $190,000 punitive damages award. I know many people who wouldn't mind that kind of pocket change. The lesson here is that a remittitur by any other name is still a remittitur. You can't take the money and then appeal. There's no poetic ring to that. As Woody Allen said, you have to take the money and run.

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