The Power of Remittitur - Jury Award in FEHA Action Reduced by $5 Million

The Court of Appeals for the Second District held this week that a trial court’s use of its power of remittitur to reduce excessive damages was not an abuse of discretion where the court found aspects of the jury’s award for past noneconomic damages against a public employer to be improperly punitive. (see, Pearl v. City of Los Angeles - filed June 18, 2019, Second District, Div. Seven - 2019 S.O.S. 2876.)

In Pearl v. City of Los Angeles, a jury awarded James Pearl $17,394,972, including $10 million in past and $5 million in future noneconomic damages, in his employment action against the City of Los Angeles for harassment and failure to prevent harassment and retaliation in violation of the Fair Employment and Housing Act (FEHA) (Gov. Code, § 12940 et seq.). The City moved for a new trial, arguing the damages were excessive. Finding that at least some of the jury’s award for past noneconomic harm was intended to punish the City rather than to compensate Pearl, the trial court conditionally granted the City’s new trial motion unless Pearl agreed to a remittitur reducing past noneconomic damages by $5 million. Pearl accepted the remittitur; and the trial court denied the City’s new trial motion and entered an amended judgment in the amount of $12,394,972, exclusive of attorney fees and costs. On appeal the City contends the court abused its discretion in utilizing the remittitur procedure to reduce damages. Without challenging the jury’s liability findings, the City argues that, once the court found that aspects of the jury’s award were punitive, it had no choice but to grant a new trial on the limited issue of damages. The Court of Appeal disagreed with the City and ruled that the trial court did not abuse its discretion.