Segal McCambridge Legal Blog

In the case of Slovinski v. Elliot, the Illinois Supreme Court upheld the Appellate Court’s decision to reduce a punitive damages award from $1 million to $81,600 (the same amount as the compensatory damage award given by the trial court after the entry of a default judgment in a defamation lawsuit).

The original jury verdict was for Plaintiff in the amount of $81,600 in damages for emotional distress and $2 million in punitive damages. The circuit court of Cook County remitted the punitive damage award to $1 million. On appeal, the appellate court affirmed the default judgment and the award for emotional damage but remitted the punitive damage award further, to $81,600. On appeal to the Illinois Supreme Court, the plaintiff challenged only the appellate court’s judgment remitting the punitive damage award.

The Illinois Supreme Court opinion can be found here

Justice Scalia authored an opinion (5-4 with Justice Stevens in dissent) that relied principally on a 1967 decision called Prima Paint Corp. v. Flood & Concklin Mfg., Co., the Court held that if the employee had raised a challenge that was specific to the second part alone – that is, to the agreement to arbitrate validity – then a court would have had to decide the challenge. But because the employee’s grounds for unconscionability applied equally to the initial agreement to arbitrate all employment disputes, the general unconscionability question should be decided by an arbitrator.

This is a new rule for determining who decides challenges to the validity of an agreement to arbitrate the validity of an arbitration agreement. The Court held that, depending on what kind of challenge to the arbitration agreement is made, that determines who (e.g. either the judge or an arbitrator) can hear the question. If the party resisting arbitration does so on grounds that go to the validity of the entire agreement, then the validity question goes to the arbitrator. But if the challenge is specific to the arbitration provision at issue in the case, then a court must decide that challenge.

The SCOTUS wiki page for his case is here
The SCOTUS opinion is here

From Reuters

NEW YORK, May 17 (Reuters) – Pharmaceutical company Novartis AG (NOVN.VX) (NVS.N) engaged in a pattern of discrimination against women at one of its divisions, a U.S. jury ruled on Monday, awarding compensatory damages of $3.3 million to 12 women and soon to be determined punitive damages to a larger group.

Some 5,600 current and former employees of Novartis Pharmaceuticals Corp, a U.S. division of the Swiss company, alleged in a class-action lawsuit that they were systematically denied promotions, paid less and subjected to discrimination while working at the company.

The jury awarded compensatory damages to 12 women of the group who testified at trial. It also said Novartis should pay punitive damages to the entire class of 5,600, delivering the verdict after a six-week trial in U.S. district court in New York.

The amount of the punitive damages would be decided by the jury on Tuesday after separate arguments before presiding Judge Colleen McMahon.

Plaintiff Marjorie Salame, to whom the jury allotted $540,500, testified that after she reported being raped by a doctor during a company outing, managers started questioning her work performance and one supervisor blamed her for what happened.

Most of the women worked as sales representatives for the drugmaker. The lawsuit was filed in 2004.

In court papers, other women said complaints made to the company’s human resources division were routinely ignored, and pregnancies were often the source of discrimination.

Novartis said it was disappointed by the verdict and will consider an appeal.

“Throughout our history and, in particular, in the time frame of this lawsuit, (Novartis) has continued to be recognized for its commitment to an inclusive environment that fosters the career goals of all employees,” a company spokeswoman said.

Plaintiffs’ attorney Steven Wittels on Monday praised the verdict, saying “this jury has sent a message to Novartis —- Get your house in order! Change your culture: the ‘old boys network’ will not be tolerated.”

The plaintiffs sought up to $200 million in damages, including back pay, lost benefits and adjusted wages.

Novartis attorney Richard Schnadig said in his summation on May 10 that “this case, at bottom, is meritless; has no merit whatsoever, statistically or anecdotally.”

Other plaintiffs attorney David Sanford, in his summation the next day, said the case was about “Novartis’ culture of indifference.”

“That environment allowed discrimination to reign for years unabated, without controls, without training, without supervision, without oversight, without leadership to do the right thing, in the right way, at the right time,” Sanford said.

The case is Velez et al v Novartis Corporation, U.S. District Court for the Southern District of New York, No. 04-09194.