A New Jersey federal judge has ordered Starbucks to pay a former employee who was awarded $25.6 million in a wrongful termination suit an extra $2.7 million in damages.
A jury previously awarded Shannon Phillips $25.6 million.
Disclaimer that I have not followed this case and I’m not a lawyer.
In the US civil cases can have both compensatory and punitive damages. Compensatory is meant to “right the wrong” where you get reimbursed for financial losses, lost time, things you had to pay for as a result of the incident, etc. Punitive is meant to punish the offender if the case finds they acted with some negligence, and ultimately get them and others to change their behavior.
Take the infamous McDonald’s coffee case. The woman who was injured originally only asked for McDonald’s to pay for her medical treatment. She required skin grafts. The jury found that McDonald’s knowing let this circumstance exist where someone was going to get a serious injury and added on punitive damages. Which the judge cut back.
An important caveat is that she was not the first person seriously injured by the temperatures they were keeping the coffee at.
McD decided the money they were saving on free coffee refills was more important than injuring their customers, which is why the punitive damages were awarded.
The lady who got the money was just the one a judge actually paid attention to.
Somewhat paid attention. The jury awarded two days of coffee revenue. The judge cut it to 3x the compensatory damages, about a half day of coffee revenue. I don’t recall if there was a law on the books about that. Some states have “tort reform” laws that limit punitive damages.
As an European, it’s kinda strange to me that the punitory damages are awarded to the person in question, for two reasons.
Punitory damages aren’t meant to protect that one person (it’s highly unlikely that Starbucks is going to wrongfully fire the same woman a second time) but instead they are meant to protect society
Punitory lawsuits should not depend on the legal budget of one individual
The way it works over here is like this:
There would be two lawsuits:
The regular civil lawsuit between the wronged person and the company. The result will be compensatory measures awarded to the wronged person.
The chamber of labour will run a separate lawsuit regarding law violations/structural issues of the company. The result will be a change in the company and punitory measures. If these include fees, they are awarded to the government.
I happen to be one of those Americans that think despite their many flaws, the authors of the Constitution had some fundamentally good ideas. And we used the Constitution as intended to expand individual rights after the Civil War with the 14th Amendment. Shamefully we never got around to the Equal Rights Amendment to include women.
What most Americans don’t realize is that the vast majority of what we consider foundational principles are not actually in the Constitution but are instead case law, and how recent much of that is. It wasn’t until 15 years after the Civil War that there was a Supreme Court case which established the idea that corporations are persons under the law and deserving of many of the rights granted under the Constitution using (or mis-using in my opinion) that same 14th Amendment.
Why does that matter? Because it gave corporations an “equal” seat at the table when it comes to disputes. The problem, as you point out, is that our civil dispute resolution system DOES depend on the resources of the “person” and corporations will ALWAYS have more resources. Lots and lots of cases have given corporations more rights and the result is the corportacracy we have now. In other words we went fundamentally the wrong direction diluting the power of the individual. And because corporations have such disproportionate influence on the laws and administrative procedures, we diluted the power of government to represent the people. This has been going on for ~120 years but it kicked into high gear in the 80s (Reagan era).
I’m glad that you guys are still somewhat rational about this, but unfortunately the anti-democratic trend in the US is replicating in the rest of the world. I worry that future histories will compare the rise of this garbage in the US to the start of fascism in Italy in the 1930s.
Sorry, went off on a tangent deep in the comments, but I spend too much time thinking and worrying.
From the patterns I see in the world, social structures (governments, organisations, …) are mostly on a downward trend. People in power are mostly concerned with keeping and extending their power, to the detriment of the people they are ruling.
Until it goes to far and there is a crisis so massive, that the people who are in power get swapped out and replaced by a completely different set of people. Then they spend a few years improving the situation until business as usual sets in and the downward trend sets in again.
You can see that e.g. in the founding of America, the time after the US civil war, the time after WW2 in most of Europe and in many other instances. Newly formed countries often take that chance to improve their constitution and government principles.
The thing is, contrary to e.g. Europe, the USA hasn’t had a reset like this in a very long time. Hence, corruption is handled almost as if the constitution prescribed it. Compare e.g. how funding for the election campaign of presidential candidates is handled.
In my country, candidates are severely limited in how much they can totally spend on the campaign. The current limit is at €7mio. They have to declare all donations to parties, which are also limited.
In the USA, on the other hand, there is hardly a point trying to become a candidate if you don’t have a few billionaires backing you.
Disclaimer that I have not followed this case and I’m not a lawyer.
In the US civil cases can have both compensatory and punitive damages. Compensatory is meant to “right the wrong” where you get reimbursed for financial losses, lost time, things you had to pay for as a result of the incident, etc. Punitive is meant to punish the offender if the case finds they acted with some negligence, and ultimately get them and others to change their behavior.
Take the infamous McDonald’s coffee case. The woman who was injured originally only asked for McDonald’s to pay for her medical treatment. She required skin grafts. The jury found that McDonald’s knowing let this circumstance exist where someone was going to get a serious injury and added on punitive damages. Which the judge cut back.
An important caveat is that she was not the first person seriously injured by the temperatures they were keeping the coffee at.
McD decided the money they were saving on free coffee refills was more important than injuring their customers, which is why the punitive damages were awarded.
The lady who got the money was just the one a judge actually paid attention to.
Somewhat paid attention. The jury awarded two days of coffee revenue. The judge cut it to 3x the compensatory damages, about a half day of coffee revenue. I don’t recall if there was a law on the books about that. Some states have “tort reform” laws that limit punitive damages.
As an European, it’s kinda strange to me that the punitory damages are awarded to the person in question, for two reasons.
The way it works over here is like this:
There would be two lawsuits:
Well that sounds like socialism! /s
I happen to be one of those Americans that think despite their many flaws, the authors of the Constitution had some fundamentally good ideas. And we used the Constitution as intended to expand individual rights after the Civil War with the 14th Amendment. Shamefully we never got around to the Equal Rights Amendment to include women.
What most Americans don’t realize is that the vast majority of what we consider foundational principles are not actually in the Constitution but are instead case law, and how recent much of that is. It wasn’t until 15 years after the Civil War that there was a Supreme Court case which established the idea that corporations are persons under the law and deserving of many of the rights granted under the Constitution using (or mis-using in my opinion) that same 14th Amendment.
Why does that matter? Because it gave corporations an “equal” seat at the table when it comes to disputes. The problem, as you point out, is that our civil dispute resolution system DOES depend on the resources of the “person” and corporations will ALWAYS have more resources. Lots and lots of cases have given corporations more rights and the result is the corportacracy we have now. In other words we went fundamentally the wrong direction diluting the power of the individual. And because corporations have such disproportionate influence on the laws and administrative procedures, we diluted the power of government to represent the people. This has been going on for ~120 years but it kicked into high gear in the 80s (Reagan era).
I’m glad that you guys are still somewhat rational about this, but unfortunately the anti-democratic trend in the US is replicating in the rest of the world. I worry that future histories will compare the rise of this garbage in the US to the start of fascism in Italy in the 1930s.
Sorry, went off on a tangent deep in the comments, but I spend too much time thinking and worrying.
From the patterns I see in the world, social structures (governments, organisations, …) are mostly on a downward trend. People in power are mostly concerned with keeping and extending their power, to the detriment of the people they are ruling.
Until it goes to far and there is a crisis so massive, that the people who are in power get swapped out and replaced by a completely different set of people. Then they spend a few years improving the situation until business as usual sets in and the downward trend sets in again.
You can see that e.g. in the founding of America, the time after the US civil war, the time after WW2 in most of Europe and in many other instances. Newly formed countries often take that chance to improve their constitution and government principles.
The thing is, contrary to e.g. Europe, the USA hasn’t had a reset like this in a very long time. Hence, corruption is handled almost as if the constitution prescribed it. Compare e.g. how funding for the election campaign of presidential candidates is handled.
In my country, candidates are severely limited in how much they can totally spend on the campaign. The current limit is at €7mio. They have to declare all donations to parties, which are also limited.
In the USA, on the other hand, there is hardly a point trying to become a candidate if you don’t have a few billionaires backing you.