News & Views - Faraci Lange » Joseph A. Regan

Punitive Damages [Part 2]

Joseph Regan — Thu, 29 Sep 2011 11:27:13 +0000

Within the past 15 years or so, the U.S. Supreme Court has issued several opinions setting out restrictions on punitive damages. Because punitive damages can be viewed as a taking of property, they implicate the Due Process Clause of the U. S. Constitution. The first of these cases, and perhaps the most interesting, was BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996). Dr. Ira Gore purchased what he thought was a brand new BMW, only to find out months later that the vehicle had been damaged slightly when being transported, and had been repaired and repainted prior to its delivery to him. He was not told about the repairs, and only learned the vehicle had been repainted months after the transaction. BMW had an internal policy of selling those vehicles as new without informing the dealer or purchaser, when the cost to repair was less than 3% of the value of the vehicle. The paint job on the Gore vehicle cost less than $1,000. Nonetheless, an Alabama jury found that BMW had engaged in fraud and awarded Dr. Gore $4,000 in compensatory damages, and $4,000,000 in punitive damages. Though the Alabama Supreme Court later reduced the amount to $2,000,000, even that number was a bit too breathtaking for the U. S. Supreme Court. In sending the case back to the Alabama courts, the Supreme Court issued several guidelines for all states to follow on the issue of punitive damages. The court held that such an award must bear a relationship to the nature of the conduct, must bear some reasonable ratio to the amount of compensatory damages (here the ratio was 1,000:1!), and take into account existing state civil and criminal penalties for similar conduct. In subsequent cases, the Supreme Court has held that only in extraordinary cases will punitive damages exceeding double digit ratios to compensatory damages be considered appropriate.

The interesting case of Fordham-Coleman v. National Fuel Gas Distribution Corporation, 42 A.D.3d 106 (4^th Department, 2007) decided by the Appellate Division, Fourth Department (which covers Western New York), upheld a potential claim for punitive damages in connection with the wrongful death of a woman who froze to death in her home after being denied natural gas service by the National Fuel Gas Distribution Corporation in Buffalo. As winter began, the decedent had been told (erroneously) that she would have to satisfy a judgment for failure to pay a prior gas bill before service could be turned on. Later, through a series of bureaucratic snafus, her application for heat was simply ignored and she was found dead in her home several months later, a victim of hypothermia. The Appellate Division, citing among other things the defendant’s apparent violation of important state regulations regarding utility service, reversed a lower court’s ruling that punitive damages could not be award under the circumstances. The court held that a jury was entitled to hear the case and award punitive damages if under the facts the jury found them to be warranted.

Bottom Line: Each case must be evaluated on its own merits. However, punitive damages, though rarely awarded, can be rendered in addition to compensatory damages under circumstances where a jury finds the defendant’s conduct to be so outrageous or so willful, wanton or reckless that it needs to be punished and deterred.

Punitive Damages

Joseph Regan — Wed, 14 Sep 2011 10:52:00 +0000

Periodically, a client will ask about punitive damages. The topic often arises in situations where the other party’s negligence had the potential to create much greater harm than actually occurred. Example: A company’s defectively designed product which could have caused death or serious injury did not, but only due to sheer luck. The client learns that they are not entitled to recover for an injury that could have occurred, only for what did occur. Most clients accept this, but are genuinely concerned that something worse does not happen to someone else. This sometimes leads to questions about punitive damages.

Punitive damages are distinct from compensatory damages, which are awarded to compensate the injured party for his/ her losses. Punitive damages cannot be awarded without some recovery for compensatory damages. They are assessed in addition to compensatory damages as an expression of a jury’s outrage over the conduct of the defendant. However, ordinary negligence, even gross negligence, will not result in recovery of punitive damages.

Recovery of punitive damages is difficult in New York, and there are public policy reasons for that. Even though it is the plaintiff who recovers the punitive damages, they are assessed against a party not for the sake of the plaintiff, but for the good of the public at large. Behavior leading to punitive damages must border on the criminal. Punitive damages are thought to serve a number of purposes: to punish the defendant, to act as a deterrent, and to serve as a warning to others. A jury may award punitive damages against a party who consciously disregards the rights of others or engages in conduct that is so reckless that it amounts to the same thing. However, the conduct does not have to be intentional; if a jury decides that it is willful, wanton or reckless, it may award punitive damages.

Even if a jury awards punitive damages, however, they may be difficult to recover from a party without money. This is because liability insurance policies in New York State will not cover them. There are sound public policy reasons behind this, although to a person unable to recover punitive damages from an impecunious defendant the policy reasons may seem rather thin. However, if one could insulate oneself from punitive damages by insuring against them, the purpose behind punitive damages would be lost. A company knowingly putting dangerous drugs on the market might feel less compelled to change things knowing that any punitive award is fully covered by someone else and not the company’s own bottom line. However, lack of insurance coverage can make an award of punitive damages against a party without the ability to pay something of a hollow victory.

New York Super Lawyers Recognizes Eight Faraci Lange Attorneys

Faraci Lange — Mon, 22 Aug 2011 15:04:57 +0000

Eight attorneys from Faraci Lange LLP have been selected for inclusion in the 2011 Upstate Edition of New York Super Lawyers.

The attorneys recognized are:

Matthew F. Belanger, in the practice area of personal injury plaintiff: general. The Brighton resident is listed for the second time.
David L. Cook, in the practice area of business litigation. Cook, of Pittsford, has been named to New York Super Lawyers in three previous years from 2007 – 2009.
John A. Falk, in personal injury plaintiff: general. A Brighton resident, Falk is listed for the second time.
Angelo G. Faraci, in personal injury plaintiff: medical malpractice. Faraci, who resides in Rochester, has been listed in New York Super Lawyers since 2007.
Paul K. Lange, in personal injury plaintiff: general. First named to New York Super Lawyers in 2007, Lange resides in Rochester.
Joseph A. Regan, of Rochester, in personal injury plaintiff: medical malpractice. Regan has been named to New York Super Lawyers since 2008.
Stephen G. Schwarz, of Fairport, in personal injury plaintiff: medical malpractice. He was first named to New York Super Lawyers in 2007.
Brian M. Zorn, in personal injury plaintiff: medical malpractice. Zorn, of Victor, has been named to New York Super Lawyers since 2007.

Only five percent of the attorneys in Upstate New York are named to the Super Lawyers list. Super Lawyers selects attorneys using a multi-phase process combining peer nominations and evaluations with third-party research. Candidates are evaluated based on peer recognition and professional achievement. The publication aims to provide a credible, comprehensive and diverse listing of outstanding attorneys that can be used as a resource for attorneys and consumers searching for legal counsel.

Seven Faraci Lange LLP Attorneys Named to 2011 Best Lawyers Listing

Faraci Lange — Wed, 18 Aug 2010 12:17:34 +0000

Seven lawyers from Faraci Lange LLP have been selected by their peers for inclusion in the 2011 edition of Best Lawyers in America^®.

The attorneys named are:

Matthew F. Belanger, in the practice areas of personal injury litigation and product liability litigation. Belanger, a resident of Brighton, has been named to Best Lawyers since 2008.
John A. Falk, in medical malpractice law, personal injury litigation and product liability litigation. The Brighton resident also was named to Best Lawyers in 2009.
Angelo G. Faraci, in legal malpractice law, medical malpractice law, personal injury litigation and product liability litigation. Faraci, who resides in Rochester, has been listed in Best Lawyers since its inception in 1983.
Paul K. Lange, in medical malpractice law, personal injury litigation and product liability litigation. First named to Best Lawyers in 2001, Lange resides in Rochester.
Joseph A. Regan, in medical malpractice law, personal injury litigation and product liability litigation. The Rochester resident has been named to Best Lawyers since 2005.
Stephen G. Schwarz, in medical malpractice law, personal injury litigation and product liability litigation. The Fairport resident was first named to Best Lawyers in 1999.
Brian M. Zorn, in medical malpractice law, personal injury litigation and product liability litigation. Zorn, who resides in Victor, has been named to Best Lawyers since 1995.

Best Lawyers, the oldest and most respected peer-review publication in the legal profession, is based on an exhaustive annual survey in which more than 39,000 leading attorneys cast almost 3.1 million votes on the legal abilities of other lawyers in their practice areas. Since its inception in 1983, Best Lawyers has become universally regarded as the definitive guide to legal excellence.

Because Best Lawyers is based on a peer-review survey, and because lawyers are not required or allowed to pay a fee to be listed, inclusion in Best Lawyers is considered a singular honor. Corporate Counsel magazine has called Best Lawyers “the most respected referral list of attorneys in practice.”

Steven Naifeh, president of Best Lawyers, said, “We continue to believe – as we have believed for 28 years – that recognition by one’s peers is the most meaningful form of recognition in the legal profession.”

Faraci Lange Attorneys Recognized In 2009 Superlawyers Listings

Faraci Lange — Thu, 15 Oct 2009 21:26:54 +0000

The 2009 SuperLawyers Listings have been released and once again Faraci Lange attorneys are right at the top. Five Faraci Lange attorneys (Angelo G. Faraci, Paul K. Lange, Joseph A. Regan, Stephen G. Schwarz and Brian M. Zorn) were selected in the category of Plaintiff Medical Malpractice, representing all but one of the six lawyers from Rochester selected in this category. The same five attorneys from Faraci Lange were the only attorneys from Rochester selected in the Plaintiff Product Liability category. Four Faraci Lange attorneys (Faraci, Lange, Regan and Zorn) were selected in the Personal Injury – General category and Schwarz was also listed in the Environmental Litigation category.

Two Faraci Lange attorneys (Faraci and Schwarz) were in the Top Fifty Upstate New York SuperLawyers listing for the second consecutive year. This listing is comprised of the highest rated 50 attorneys in Upstate New York which includes all specialties.

Faraci Lange is proud of the attorneys selected by their peers for this distinction.

John A. Falk of Faraci Lange, LLP named to Best Lawyers in America Directory

Faraci Lange — Wed, 01 Oct 2008 19:47:21 +0000

John A. Falk has been listed in the Best Lawyers in America Directory for 2009. He joins, Angelo G. Faraci, Paul K. Lange, Stephen G. Schwarz, Brian M. Zorn, Matthew F. Belanger and Joseph A. Regan of Faraci Lange in this prestigious directory, which is the oldest and most respected peer-reviewed publication in the legal profession. Angelo Faraci has been listed for the past 25 years and Brian Zorn and Stephen Schwarz have been listed for more than ten years each.

Faraci Lange also continues to hold the #1 ranking in all of New York State for the Personal Injury Litigation category with 7 attorneys listed and in the Product Liability Litigation category with 6 attorneys listed. This means that no law firm of any size in the entire State of New York has more lawyers listed in these categories than Faraci Lange. Faraci Lange also continues to be the #1 ranked law firm in Rochester for 2009 in the Medical Malpractice Law, Personal Injury Litigation and Product Liability Litigation categories.

Faraci Lange is proud to be ranked #1 in New York State and in Rochester in all of these legal categories by its peers in the legal profession.