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PUNITIVE DAMAGES - TARGET MEDIA PARTNERS OPERATING COMPANY, LLC V. SPECIALTY MARKETING CORP.

Target Media Partners Operating Company, LLC v. Specialty Marketing Corp., [Ms. 1091758, Aug. 29, 2014] __ So. 3d. __ (Ala. 2014). In its September 6, 2013, opinion in this case, the Supreme Court remanded for a reconsideration of punitive damages. On Specialty Marketing's promissory-fraud claim against Target Media, the jury returned $210,000 compensatory and $630,000 punitive damages. On Specialty Marketing's fraudulent-misrepresentation claim, the jury returned a verdict again Target Media and its employee Ed Leader, awarding $167,800 compensatory and $503,400 punitive damages. The Court here quotes the circuit court's order on remand to the extent of eleven pages of the opinion. That order tracks the appropriate factors to be considered and determines that the punitive damages were not excessive. For example, the trial court held that Target Media's conduct was highly reprehensible, was consistent and continuous throughout the relationship between the parties, and resulted in it receiving $400,000 for services that were not performed. Leader earned between $400,000 and $600,000 from Target Media during the period of the fraud, and he "was established to be one of the point men in accomplishing the fraud." Target Media and Leader emphasized the impact on their financial position, but the circuit court noted that "[t]he company continues to generate several million dollars in revenue each year." The arguments that the punitive damages should be reduced to zero "shocks the conscience of the court." The court emphasized the deterrent effect of denying a remittitur. The court also noted that the ratio of punitive to compensatory damages is 3 to 1. Thus, concluded the trial court, the $1,133,400 in punitive damages was not excessive. The Supreme Court concluded that it "need add nothing to the trial court's detailed analysis" and agree[d] that the awards "are sufficient to punish Target Media and Leader and to deter them from further misconduct, without compromising their due-process rights."

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