The Second Appellate District reversed a judgment in part. The court held that a punitive damages award violated due process where the jury was effectively invited to punish an oil company for environmental contamination that injured persons not a party to the suit and for disreputable conduct unrelated to that which harmed the plaintiff property owners. The court held further that in order to comply with due process the proscription against “dissimilar acts” evidence in punitive damages cases must apply to both the jury’s predicate determination of punitive damages liability and its subsequent assessment of the amount of punitive damages to be awarded.
Garry and Evelyn Holdgrafer (Holdgrafers) sued Unocal Corp. on multiple causes of action including claims for private nuisance, trespass, negligence, and unfair business practices. The claims stemmed from a plume of soil and groundwater contamination under a portion of the Holdgrafers’ property. The contamination was associated with either past pipeline leaks in the area or migration from a nearby tank farm.
