Nov. 18, 2016
Weekly Appellate Report #28
Mitchell Keiter (Keiter Appellate Law) on why Prop 57's passage threatens public safety and 'fundamental notions of democracy and justice;' Royal Oakes (Hinshaw & Culbertson) describes how Nickerson v. Stonebridge foretells higher punitives in insurance bad faith actions
This week's show regards an electoral result of statewide consequence in the area of criminal law, and an appellate ruling that stands to raise the allowable limit of punitive damages in insurance bad faith claims.
First, Mitchell Keiter, of Keiter Appellate Law, will tell us why last week's passage of Proposition 57, a ballot initiative that garnered nearly two-thirds of the electorate's support, stands to threaten public safety, the proper administration of criminal justice, and, in his words, even fundamental notions of democracy. The measure makes eligible for parole a class of California inmates convicted on non-violent crimes and who have completed their base sentences. Mr. Keiter contends that many crimes categorized as non-violent are anything but, and thus that the measure could release a decidedly dangerous set of inmates. Mr. Keiter also worries that a separate provision under the initiative, one that introduces more opportunities for inmates to earn rehabilitative, good-behavior credits, could allow the state's most violent offenders, including those convicted of homicide, to unduly lessen their sentences.
Then, Royal Oakes, of Hinshaw and Culbertson, discusses the case of Nickerson v. Stonebridge Life Ins. Co., which raises the allowable limit of punitive damages in insurance bad faith claims, by deciding that attorney fees in such matters, called Brandt fees, should be included in awarded compensatory damages. Since punitive damages are regarded as constitutional by state and federal courts up to, roughly, ten times a compensatory award, the inclusion of Brandt fees in the denominator of the punitive/compensatory ratio will give juries slight more latitude when it comes to punitive awards. Here, the inclusion of the Brandt fees raised a $350,000 award to over $470,000. Interestingly, the original jury in the case awarded the plaintiff $19 million before the trial judge reduced that award to $350,000, ten times the $35,000 compensatory amount.
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