"Oopsies. I guess we shouldn't have asked for a new trial after we lost the first time. Then I guess we shouldn't have messed up the appeal after we lost the second time. Sorry that our mistakes cost you millions of dollars in additional punitive damages. My bad." These are the kinds of things that you hope you never have to say to your clients. But it's apparently what counsel for Ralphs has to say to their client in this case.
Full disclosure up front. I know a fair amount about this litigation in part because, back in 1999, I represented a witness who was deposed in this matter, and -- successfully -- opposed the request by counsel for plaintiff in this case to hold her in contempt. (Actually an interesting story by itself, but I'll refrain from digressing.) My client was one of the people who allegedly witnessed misconduct by the main player in the litigation, Roger Misiolek, and I successfully quashed the subpoena that was -- allegedly (but not in fact) -- served on my client.
That disclosure made, I'm not revealing any confidential information when I say that the lawyers in this case are eventually going to have to answer to Ralphs, which will probably be more than a bit irate at them. This was a sexual harassment case, and, at the first trial, Ralphs' lawyers lost. Big time. Plaintiffs were awarded a total of $550,000 in compensatory damages and $3.3 million in compensatory damages. Ralphs decided to request -- and received -- a new trial on the punitive damages. So good so far, right?
Wrong. At the retrial, plaintiffs were awarded a total of $30.0 million in punitive damages -- almost 10 times more than the original judgment! Oops. Admittedly, Ralphs persuades the trial judge to reduce those a little bit, which orders each plaintiff to either accept a remittitur to 15 times their compensatory damages or deal with a new trial. At which point two of the plaintiffs -- the two with the biggest compensatory damage awards -- agree to accept the remittitur, and four don't. They want a third trial. Presumably because they fully expect even more after the third trial!
So now Ralphs is on the hook for $550,000 in compensatory damages -- with no way out -- as well as $4.5 million in punitives to the two plaintiffs who accepted the remittitur. So it's already $1.2 million worse off (plus interest and fees!) than it was after it lost the first trial. Plus it still has $20 million extra of exposure to the four plaintiffs who didn't accept the remittitur! Which is $18.7 million more than these guys had won at the first trial. And remember -- whereas, at the first trial, these four plaintiffs only got a total of $1.325 million in punitive, after the second trial, they rejected a remittitur that would have given them $3.84 million! They obviously think they're going to get even more at Trial #3. Someone should admittedly check my math on all this, since these figures aren't precisely expressed in the opinion. But I'm pretty sure I'm right. Which means that Ralphs is worse off $1.2 million with respect to two plaintiffs and -- if counsel for the four plaintiffs is acting at all rationally -- at least $2.5 million worse off with respect to the other four. So they've thrown out another $3.7 million, plus costs and fees (both theirs and the other sides!), than had they simply sucked up the result of the first trial.
Pretty bad, eh? But wait. It gets worse! Ralphs files an appeal from the results of the second trial, arguing that the punitive damages are excessive. But Justice McIntyre dismisses their appeal on the ground that they terroneously appealed from the judgment and didn't appeal the new trial order. Which means that the Court of Appeal doesn't reach any of their arguments, and Ralphs is bound. Ouch!
So you've got a slew of strategic and procedural mistakes by the lawyers here. That end up costing the client many, many millions of dollars. That's gotta hurt.
Justice McIntyre doesn't talk about the strategic errors here. But they're definitely worth mention.
P.S. - I'll refrain from listing the lawyers for Ralphs, partially because I'm nice (yeah, right) and partially because it's not entirely clear which sets of lawyers are responsible for which set of mistakes. However, I will mention -- since I was quite surprised to discover -- that three of the lawyers for the plaintiffs (Sanford Rosen, Ernest Galvan, and Sarah Zimmerman) are graduates of Yale Law School, my wife's alma mater. It's not often you see Yalies doing actual legal work. Much less on the plaintiff's side. So I thought I'd mention it.
