A
California jury has returned a $165 million verdict
for punitive damages-nearly 29 times the actual
damages awarded-against a corporate defendant to
deter fraudulent business practices, according
to two members of that jury. The $170.7 million
verdict on April 16 is the fourth highest of 2002,
according to The National Law Journal's running
tally of top 10 verdicts.
The
case involved a British company named Edsaco Ltd.,
which was sued for intentional fraud and conspiracy.
The jury found Edsaco liable on both counts for creating
five shell companies that pretended to purchase nonexistent
software from a Silicon Valley firm, Scorpion Technologies
Inc. Scorpion shareholders, who lost some $55 million
when the fraud was exposed, brought the class action
in U.S. District Court in San Francisco.
The
investors' attorney, Richard Heimann of Lieff Cabraser
Heimann & Bernstein in San Francisco, conceded
that punitive damages usually run three to six times
the compensatories, and this award at 29 times the
compensatories was highly unusual. "I haven't
talked to any jurors, but if you look at the case
you see the class suffered over $50 million worth
of damages. I'm pretty sure what the jury did was
treble actual damages. I think that might stand on
appeal."
Following
the Edsaco trial, the parties reached a settlement
of the action on favorable monetary terms to the
class, which included Edsaco's relinquishment of
its right to appeal and plaintiffs' agreement to
vacate the jury verdict. |
