Ashley Andrews v. Robert Raphaelson ( 2012 )

FILED
NOT FOR PUBLICATION APR 27 2012
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S . CO U RT OF AP PE A LS
FOR THE NINTH CIRCUIT
ASHLEY ANDREWS; ASHTONWOOD No. 11-16287
STUD ASSOCIATES, L.P.,
D.C. No. 2:06-cv-00209-RCJ-
Plaintiffs - Appellants, GWF
v.
MEMORANDUM *
ROBERT B. RAPHAELSON; LUCILLE
R. RAPHAELSON; KENTUCKY BLUE
STABLES,
Defendants - Appellees.
Appeal from the United States District Court
for the District of Nevada
Robert Clive Jones, Chief District Judge, Presiding
Submitted December 14, 2011**
San Francisco, California
Before: RAWLINSON and BYBEE, Circuit Judges, and BURNS, District
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Judge.***
Ashley Andrews and Ashtonwood Stud Associates, L.P. (collectively,
'Andrews') appeal the district court's order reducing the jury's punitive damages
award against Robert Raphaelson. We previously reversed the district court's
reduction of punitive damages, Andrews v. Raphaelson, 346 F. App'x 198 (9th Cir.
2009), and on remand, the district court entered a second order reducing punitive
damages as excessive, in nearly the same amount. We reverse again.
'We review for abuse of discretion a district court's decision to grant or
deny a motion for a new trial or remittitur because of the size of a punitive
damages award.' Morgan v. Woessner, 997 F.2d 1244, 1266 (9th Cir. 1993).1 A
district court abuses its discretion when it applies an incorrect legal rule. See
Ahanchian v. Èenon Pictures, Inc., 624 F.3d 1253, 1258 (9th Cir. 2010). In this
case, the district relied on a excessiveness standard under Nevada state law which
the Nevada Supreme Court has expressly abrogated. See Bongiovi v. Sullivan, 138
***
The Honorable Larry A. Burns, District Judge for the U.S. District
Court for Southern California, sitting by designation.
1
Although the basis for the district court's second reduction of damages is
unclear, remittutur was liµely the only procedural tool available to it once we
clarified that Nevada Revised Statute y 42.005 did not apply to limit the jury's
punitive damages award. Since neither party raised the issue, we assume without
deciding that a trial court may order remittutur sua sponte.
2
P.3d 433, 452 (Nev. 2006) (adopting the federal standard articulated in State Farm
Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003)), abrogating Ace Trucµ v.
Kahn, 746 P.2d 132 (Nev. 1987).2 The district court therefore abused its discretion
when reducing the damages award under Nevada state law using the now-
abrogated excessiveness standard.
Because both parties have briefed the issue under the correct standard and
the issue is purely one of law, we may address the merits of this issue on appeal.
Cf. Weissburg v. Lancaster Sch. Dist., 591 F.3d 1255, 1259 n.3 (9th Cir. 2010).
Under Bongiovi, courts are to consider '(1) the degree of reprehensibility of the
defendant's conduct, (2) the ratio of the punitive damage award to the actual harm
inflicted on the plaintiff, and (3) how the punitive damages award compares to
other civil or criminal penalties that could be imposed for comparable
misconduct.' 138 P.3d at 452 (footnotes omitted) (internal quotation marµs
omitted). If the district court had applied this test, its application of these factors
would be reviewed de novo. Id.
First, there is evidence that Raphaelson engaged in a pattern of deliberate
misconduct toward Andrews repeatedly over the course of five years. Additionally,
2
Because Bongiovi applied its new rule to the parties before it, the rule
clearly has retroactive application. Cf. Harper v. Va. Dep't of Taxation, 509 U.S.
86, 97 (1993).
3
the district court indicated after trial that despite some evidence that Raphaelson
had produced fabricated documents in discovery and gave false deposition
testimony, it would not award sanctions for this misconduct because of the
substantial punitive damages award. We conclude this satisfies the first factor.
Second, because the ratio of compensatory damages to punitive damages is barely
over 2:1, the second factor is satisfied here. Cf. State Farm, 538 U.S. at 425
(referencing a 4:1 ratio as a possible upper limit). Lastly, the award compares
favorably to other civil or criminal penalties that could have been imposed because
it was only two-thirds of the statutory cap of Nevada Revised Statute y 42.005, and
although hypothetical criminal penalties would have been much smaller than the
punitive damages award here, no criminal charges were ever brought against
Raphaelson. Cf. Bongiovi, 138 P.3d at 452 n.86 ('[W]e conclude that being
criminally charged, convicted, and/or incarcerated far outweighs any monetary
penalty.').
'[T]he mere fact that a verdict is large is not conclusive that it is the result of
passion or prejudice. The trial court is precluded from substituting its view of the
evidence for that of a jury in a case where the losing party is not entitled to
judgment as a matter of law.' Beccard v. Nev. Nat'l Banµ, 657 P.2d 1154, 1156
(Nev. 1983) (internal quotation marµs omitted) (citation omitted).
4
REVERSED and REMANDED with instructions to reinstate the jury's
punitive damages award.
5
FILED
Andrews v. Raphaelson, Case No. 11-16287 APR 27 2012
Rawlinson, Circuit Judge, concurring: MOLLY C. DWYER, CLERK
U.S . CO U RT OF AP PE A LS
I concur in the result.