A federal judge has thrown out a $700 million (Ђ586 million) award for punitive damages won by the state of California in a lawsuit stemming from the takeover of failed insurer Executive Life by French investors.
U.S. District Court Judge A. Howard Matz concluded Tuesday that the state's Department of Insurance was not entitled to receive the $700 million (Ђ586 million) awarded by jurors in July as part of their judgment against French company Artemis SA, according to a summary of the order posted on the court's Web site.
"This order addresses only the question of whether plaintiff (Insurance Commissioner) John Garamendi is entitled to the judgment he seeks, which would include the $700,000,000 punitive damages award. He is not," the order summary said. "The court will not include any punitive damages award in the ultimate judgment."
Norman Williams, a spokesman for Garamendi, said Wednesday the department's lawyers had yet to review the complete ruling. "Obviously, we're disappointed that the judge has rejected the jury's finding," Williams said. Matz was forced to rule on the jury's award because the panel ordered only punitive and not compensatory damages, raising questions about whether the punitive award would stand.
Lawyers for Artemis argued U.S. Supreme Court precedent established punitive damages had to be based on compensatory damages, reports the AP. I.L.