Friday, April 20, 2012

Bankhead v. ArvinMeritor (Cal. Ct. App. - April 20, 2012)

This is the most obviously correct published opinion in the history of mankind.

The defendant corporation (ArvinMeritor) contends that a punitive damages award of $4.5 million against it must be reversed because it had a negative net worth, so no -- or only relatively trivial -- punitive damages are allowed.

But the punitive damages award is only 2.4 times the compensatory damages.  And the corporation had $211 million in cash flow profits, and $3.59 billion of sales, in 2010.  It's financial solvency was strong enough such that banks allowed it to borrow almost a quarter billion dollars that same year.  It has $343 million in cash and cash equivalent investments.  It's market capitalization is multiple billions of dollars.

Given those facts, it's simply absurd -- bordering on the frivolous, even -- to say that a jury can't spank you for several million on the grounds that you're poor.

But in my view, one simple fact alone is sufficient refutation of defendant's claims.  In 2010, its CEO was paid $7.6 million.  And stood to receive over $20 million more after he left the company.

If you can afford to pay your CEO those sums of money, then you can afford to pay the person you killed in conscious disregard of his rights a fraction of that amount.  End of story.

Not a hard one in the slightest.