HOUSE OF VELEZ PART 2 NO COMMENTARY TRIAL

The leading case analyzing this issue and not allowing certification of a punitive damages class is Colindres, et al. It has been unclear whether certification of a “punitive damages only” class is appropriate, and the Velez verdict is inconsistent with the majority of cases which say that liability for punitive damages and assessment of the amount is not an issue capable of determination on a class-wide basis. The punitive damages verdict is also significant because it further highlights the uncertainty in this area of the law.

As a result of orders the Court entered earlier in the litigation, members of the class can apply for compensatory damages in a post-verdict process that will likely include a magistrate or special master who will decide each woman’s claim. revenue for 2009 (or between $190 and $285 million). Plaintiffs’ counsel argued that the jury should award 2% to 3% of Novartis’s stipulated $9.5 billion U.S. Once the jury answered “Yes,” it considered evidence concerning the amount to be awarded, including Novartis’s financial condition.

After discovery closed, and the case proceeded to trial.įollowing a finding for Plaintiffs on liability, the verdict sheet asked the jury to answer “Yes” or “No” to a question regarding the propriety of an award of punitive damages. The Court granted class certification of Plaintiffs’ claims on July 31, 2007, including claims for back pay and punitive damages. Plaintiffs in Velez were nineteen women presently or formerly employed by Novartis in sales-related positions, who claimed that Novartis discriminated against them in various ways, in violation of Title VII of the Civil Rights Act of 1964, including by disadvantaging them in compensation and promotional opportunities, as well as giving them negative performance appraisals, and otherwise subjecting them to adverse treatment for taking pregnancy-related leaves. For more information on the Dukes case and the Ninth Circuit’s Apen banc ruling, see Seyfarth Shaw’s previous Management Alert. April 26, 2010), currently the largest pending gender discrimination class action in the nation. It also could lend support to the “punitive damages only” class certification theory, recently rejected in part by the Ninth Circuit’s en banc decision in Dukes v. It is likely that corporate defendants will continue to see inflated settlement demands from plaintiffs touting the possibility of extremely large punitive damages awards. The punitive damages award in Velez raises the stakes for employers in employment discrimination class actions.

HOUSE OF VELEZ PART 2 NO COMMENTARY TRIAL

Where, as in this case, the 13 plaintiffs were deemed to represent a class of over 5,600 female sales representatives, and plaintiffs’ attorneys used their testimony to secure a huge class damages award, the key issue is whether a Title VII defendant can receive a fair trial under that procedure or whether it compromises the ability to raise available defenses. Those issues include the subsidiary question of whether Title VII cases that predominantly involve individual claims for damages based on distinct factual scenarios should be certified as class actions. It is expected that post-trial proceedings will focus on challenges to the propriety of allowing a class action over punitive damages, as well as the basis for the verdict. The verdict represents the largest punitive damages award in history in any class action employment discrimination case. The jury found for Plaintiffs-who represent a class of approximately 5,600 women who have held sales-related job positions with Novartis in the United States since 2002-as to liability, and awarded approximately $3.3 million in compensatory damages to the named Plaintiffs, and $250 million in punitive damages to the entire class. The $250 million verdict stemmed from a month-long trial and four days of deliberations.

Given the stakes in class actions and the enormous costs for trying such complex litigation, such verdicts are extremely rare.

The verdict is noteworthy for numerous reasons, not the least of which is trials of class actions are uncommon. On May 17, 2010, a jury found against Novartis Pharmaceuticals Corporation and entered a verdict of $250 million in punitive damages in one of the largest employment discrimination class actions in the nation-Velez v.

House of velez part 2 no commentary