Duane Morris Class Action Review - 2023 - Report - Page 124
claims proceeded to trial where the jury found Premier liable for falsely representing
Joint Juice could relieve arthritis pain in violation of New York General Business Law
(GBL) Sections 349 and 350. Id. at *3. The jury awarded the class approximately $1.4
million in statutory damages under GBL § 349 for the actual money class members
spent on Joint Juice. Id. The plaintiffs moved for entry of judgment seeking an additional
$91 million in statutory damages based on what class members would have paid for
Joint Juice without the defendant’s false representations, and prejudgment interest. Id.
The defendant argued that if statutory damages were available at all, they should be
limited to $50 per person, not per unit sold. The defendant also argued against an
imposition of prejudgment interest. Id. at *7.
The court grappled with whether the jury’s statutory damages award implicated due
process issues. Id. at *3-4. The court looked to the U.S. Supreme Court’s long history of
jurisprudence considering whether statutory damages violated the due process clause
of the Fourteenth Amendment. Id. In weighing the interests of the public, the countless
opportunities for committing the offense, and the need for securing uniform adherence
to the laws, the court reasoned that an award of statutory damages cannot be “so
severe and oppressive as to be wholly disproportionate to the offense of obviously
unreasonable.” Id. at *3 (quoting St. Louis, I.M. & S. Ry. Co. v. Williams, 251 U.S. 63,
67 (1919)). The court also cited Ninth Circuit case law explaining the line between a
constitutional statutory penalty and one violative of due process is crossed where “the
penalty prescribed is so severe and oppressive as to be wholly disproportionate to the
offense and obviously unreasonable.” Id. at *4 (quoting United States v. Citrin, 972 F.2d
1044, 1051 (9th Cir. 1992)).
To determine whether the jury’s statutory damages award was “obviously
unreasonable” for being “wholly disproportionate to” the defendant’s false advertising
offense, the court reviewed the unavailability of statutory damages to class actions
under New York law. Id. It heeded the legislature’s explicit concern - for the aggregation
of penalties available individually to punish a defendant on a class-wide basis - and
found this case was distinguishable from others wherein courts analyzed statutory
damages reductions under federal statutes whose legislative histories actually
supported punitive aggregation of individual damages on a class-wide basis. Id. at *4-5.
Ultimately the court employed the following framework,
“The Supreme Court has set out three guideposts for assessing whether an award of
punitive damages is unconstitutionally large: (1) the degree of reprehensibility of the
defendant's misconduct; (2) the disparity between the actual or potential harm suffered
by the plaintiff and the punitive damages award; and (3) the difference between the
punitive damages awarded by the jury and the civil penalties authorized or imposed in
comparable cases.”
Id. at *5. Regarding the first element, the court found the defendant’s false advertising
highly reprehensible because it repeatedly “evinced an indifference to or reckless
disregard of the health or safety of others” despite the defendant’s knowledge that Joint
Juice did not provide the benefits Premier advertised it dId. Id. at *6. As for the second
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Duane Morris Class Action Review – 2023
