3rd Circuit Slashes Punitives

Pennsylvania lawyer David G. Concannon says his client’s quest for punitive damages against a nursing home management company has been “a nauseating roller coaster ride.”

It’s no wonder that Concannon is feeling queasy since a federal appeals court’s decision to slash a $30 million punitive award for the lawyer’s client to $750,000 on constitutional grounds. He told the Legal Intelligencer that the ruling, capping seven years of litigation, was a “crushing disappointment.”

Concannon represented CGB Occupational Therapy Inc., which obtained the big punitive verdict in a retrial of a suit against the management company. The suit claimed the defendant induced two nursing homes to fire CGB and hire five of its therapists. Compensatory damages in the case were set at $109,000.

After the retrial, a trial judge slashed punitives from $30 million to $2 million, saying the 19-to-1 ratio of punitives to compensatories was not constitutionally excessive. The Philadelphia-based 3rd U.S. Circuit Court of Appeals disagreed (PDF). It set punitives at $750,000, a ratio of about 7-to-1.

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