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Pennsylvania top court urged to cap punitive damages

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Pennsylvania top court urged to cap punitive damages


  • Pennsylvania courts haven’t capped punitive-to-compensatory damages ratio earlier than
  • Dispute stems from lawsuit between insurers over non-solicitation settlement

(Reuters) – Pennsylvania’s highest courtroom on Tuesday weighed whether or not to cap punitive injury awards in some instances, a problem that has divided state courts across the nation and will have wide-reaching implications in client and enterprise litigation.

The dispute stems from a lawsuit by insurer Northwest Insurance coverage Providers within the Warren County Court docket of Frequent Pleas towards rival First Nationwide Insurance coverage Company and a number of other workers who left Northwest for First Nationwide. Northwest accused the staff and First Nationwide of breaching the staff’ agreements to not solicit Northwest’s clients, leading to tons of of hundreds of {dollars} in misplaced enterprise.

A jury awarded $250,000 in compensatory damages and $2.8 million in punitive damages, and the decision was upheld on enchantment.

Scott Cessar of Eckert Seamans Cherin & Mellott, a lawyer for First Nationwide, argued Tuesday that the state’s Supreme Court docket ought to cap punitive damages awards in instances with “substantial” compensatory damages at not more than the quantity of the compensatory damages, that means that the punitive damages ought to be slashed to $250,000. He stated larger damages have been extreme and violated the U.S. Structure’s due course of clause.

Cessar cited the U.S. Supreme Court docket’s 2003 resolution in State Farm Mutual Car Insurance coverage Co. v. Campbell holding that the ratio of punitive damages to compensatory damages ought to typically be within the single digits, overturning a punitive damages award with a 145-to-1 ratio to compensatory damages.

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The courtroom stated in that call that in instances with “substantial” compensatory damages the ratio is likely to be decrease, “maybe solely equal to compensatory damages.” Cessar stated {that a} mounted punitive damages ratio can be a greater deterrent to potential wrongdoing than one that might arbitrarily fluctuate from case to case.

“Frankly, if we do not have some type of ratios which have some type of limits or specificity, then we do not have deterrence,” he stated.

Kenneth Africano of Harter Secrest & Emery, a lawyer for Northwest, stated First Nationwide was wrongly asking the courtroom lump collectively totally different punitive damages awards towards totally different company entities affiliated with First Nationwide, based mostly on particular acts by their officers. He stated the courtroom ought to contemplate these awards individually, quite than calculating a ratio based mostly on the full award.

Africano stated that vacating the award can be a “gross injustice.”

“The jury did an excellent job,” he stated. “There may be nothing grossly extreme about this award.”

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The case is The Burt Co al v. Turk, Supreme Court docket of Pennsylvania, No. 13 WAP 2022.

For First Nationwide and particular person defendants: Scott Cessar of Eckert Seamans Cherin & Mellott

For Northwest: Kenneth Africano of Harter Secrest & Emery

Our Requirements: The Thomson Reuters Belief Rules.

Brendan Pierson
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Thomson Reuters

Brendan Pierson reviews on product legal responsibility litigation and on all areas of well being care legislation. He may be reached at brendan.pierson@thomsonreuters.com.



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Pennsylvania

Red Lobster Files For Bankruptcy, Leaving PA Locations In Doubt

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Red Lobster Files For Bankruptcy, Leaving PA Locations In Doubt


YOUR PATCH — Red Lobster, which has 31 restaurants in Pennsylvania, has filed for Chapter 11 bankruptcy protection as part of a strategy to recoup losses from its endless shrimp promotion that included the abrupt closing last week of more than 50 locations nationwide.

Some of the restaurants in the Philadelphia metro area include:

  • 1 Baltimore Pike Springfield, PA 19064
  • 9140 Roosevelt Blvd E., Philadelphia, PA 19115
  • 425 W. DeKalb Pike, King of Prussia, PA 19406
  • 640 Cowpath Road, Lansdale, PA 19446
  • 2275 E. Lincoln Highway, Langhorne, PA 19047

Red Lobster’s bankruptcy was expected. Its “Ultimate Endless Shrimp” promotion last year was intended as a limited-time offer but brought in enough new customers that the chain added it to its permanent menu in June. Customers gobbled it up, and the chain reported fourth-quarter 2023 losses of $12.5 million, the outlet reported.

Red Lobster said the remaining restaurants will remain open and continue operating as usual during the bankruptcy process. The chain currently has 578 restaurants in 44 U.S. states and Canada.

“This restructuring is the best path forward for Red Lobster. It allows us to address several financial and operational challenges and emerge stronger and re-focused on our growth,” CEO Jonathan Tibus said in a news release. “The support we’ve received from our lenders and vendors will help ensure that we can complete the sale process quickly and efficiently while remaining focused on our employees and guests.”

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Costs for Pa. prisons soar despite facility closures

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Costs for Pa. prisons soar despite facility closures


Spotlight PA is an independent, nonpartisan, and nonprofit newsroom producing investigative and public-service journalism that holds power to account and drives positive change in Pennsylvania. Sign up for our free newsletters.

HARRISBURG — The Pennsylvania Department of Corrections wants more than $300 million in next year’s budget despite a declining population of incarcerated people and the recent closure of two facilities, sparking tough questions from lawmakers.

Democratic Gov. Josh Shapiro’s budget proposal to the state legislature included more than $200 million in additional funding for the department, which would bring the agency’s full request to roughly $3.3 billion. The department is also asking the legislature to approve an additional $100 million in supplemental funds to cover spending beyond last year’s projections.

Officials contend the increase is needed to address both additional federal requirements and dwindling federal funds; obligations to employee union contracts; and overtime driven by staffing vacancies.

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But lawmakers questioned how such a substantial increase was needed after the prison system promised savings following the closure of two facilities in 2017 and 2020. State Sen. Lisa Baker (R., Luzerne) noted the request was twice what taxpayers were supposed to save.

“What happened with the cost savings that we expected from those closures?” Baker asked during a February appropriations meeting. “As we look at the cost to carry forward, it doesn’t seem like saving. Taxpayers are going to ask how did we propose $120 million in closures and we’re looking at a double increase currently.”

The simple answer? It costs more to do the same thing.

The corrections department oversees nearly 38,000 incarcerated individuals across 24 prisons and employs more than 17,000 people in both the prison and parole systems. Its budget includes the cost of running the prisons, which is its largest expense, and operating the state’s parole and pardons boards, the Office of Victim Advocate, and the parole system.

About 85% of the corrections budget increase is due to cost-to-carry increases, Harry told legislators at the hearing, or the cost to continue the same level of services the department currently provides.

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State prisons are the biggest cost driver, both in overspending last year and additional spending next year. The agency’s proposed budget includes a $169 million increase for the prisons alone, funds that will go toward growing expenses like utilities, food and facility maintenance, and contract-mandated pay increases for the unionized staff and security officers.

The agency also wants the legislature to approve $53 million to cover similar contract-mandated increases during the prior fiscal year.

Medically assisted treatment

The department also saw significant increases in the cost of providing medication-assisted treatment, or MAT, to people who are incarcerated and suffering from opioid use disorder.

MAT uses a combination of counseling, behavioral therapy, and pharmaceutical drugs to help people recover from opioid addiction. In April 2022, the U.S. Department of Justice ruled that opioid use disorder qualifies as a disability under federal law, which required the state prison system to grow its decade-old MAT program to provide proper accommodation.

Despite the mandate, available federal grants don’t cover the full cost of Pennsylvania’s expanded program, which went $10.5 million over budget. Medication and treatment will cost $30 million in the next fiscal year.

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In Pennsylvania state prisons, there about 1,800 people receive this type of treatment, Harry said, but the department expects that number to grow as some county jails begin to provide their own therapies to people who are incarcerated before trial.

Staffing issues

Years after the height of the coronavirus pandemic, staff vacancies still troublePennsylvania’s prisons, and caused overtime costs to exceed last year’s projections by $30 million.

Across the prisons, about 8% of positions were unfilled as of April, including 779 corrections officer vacancies.

“Last year, in 2023, the number I see is that there were 40 employees in your department that had received over $100,000 in overtime pay,” said state Sen. Greg Rothman (R., Perry). “Is that acceptable?”

Harry told legislators the department is focused on recruiting and retaining employees to reduce the number of overtime shifts needed to properly staff the prisons. The department has expanded its hiring beyond state borders and to people as young as 18 years old, though only 16 corrections officers under the age of 21 have been hired so far.

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At the same time, the population is smaller than it was before the pandemic, which saw numbers dwindle from more than 45,000 people in 2020 to about 36,000 people in 2022.

The population has slowly increased over the past two years, and the agency expects it to plateau around 40,000 people.

But the department does not necessarily adjust staffing levels in lockstep with fluctuations in the incarcerated population because staffing needs vary by institution and account for the physical layout of the prison, the programs offered, and more, said department spokesperson Maria Bivens.

“In addition, the DOC conducts regular staffing surveys at its facilities to ensure effective allocation of personnel,” she said.

Unplanned absences still drive corrections officers to volunteer for additional shifts even as the department has lowered its mandatory overtime rate. Corrections officers are also required to staff hospital posts when an incarcerated person is being treated at a medical facility outside the prison, Bivens said.

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“And while the prison population is down from the highs of several years ago, the remaining population is older, and requires more medical care, necessitating additional staff,” she said.

BEFORE YOU GO… If you learned something from this article, pay it forward and contribute to Spotlight PA at spotlightpa.org/donate. Spotlight PA is funded by foundations and readers like you who are committed to accountability journalism that gets results.



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Pennsylvania university on lockdown following pro-Palestinian encampment – KYMA

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Pennsylvania university on lockdown following pro-Palestinian encampment – KYMA


PHILADELPHIA (NBC, KYMA/KECY) – A group of pro-Palestinian protesters set up tents on Drexel University’s campus in West Philladelphia Saturday, forcing the school’s buildings to be placed on lockdown.

The protest is mainly organized by the Philly Palestine Coalition. They started at 4:00pm Eastern at City Hall, marching down JFK Boulevard into West Philly.

By 7:00pm, they were setting up tents on Drexel’s Academic Quadrangle. and around 8:00pm Eastern, police set up barricades and came out in riot gear.

Similar to the Penn protests, their two main demands are for Drexel to disclose its investments and redirect any money going to the Israeli military.

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“We wanna keep it peaceful. At the same time, we don’t want anyone to get hurt…just want people to be heard,” said Kendell Lewis, a student of the university.

“Open the books, let us see what it is…Let us see where you’re actually spending your money, and democratically, we should be able to decide, as students who go to the area, who work for the schools, we should be the ones to decide where that money goes and what’s done with it.”

Marie Gioulis, Drexel alumni

The encampment at Penn was disbanded eight days ago when 33 people were arrested, but protesters returned to campus Saturday night, trying to occupy Fisher-Bennett Hall and start a new encampment.

Police arrested 19 people, including six students, one for one for assaulting a police officer. Penn said police found lockpicking tools and homemade metal shields while adding:

“The exit doors had been secured with zip-ties, barbed wire, and barricaded with metal chairs and desks, and the windows were covered over with newspaper and cardboard. Bike racks and metal chairs were also found blocking outside entrances. Penn remains focused on maintaining the safety and security of our campus.”

Now, protesters at Drexel said they’d like to combine with folks from the Penn protest to create a bigger footprint. They also want to encourage the university unions to go on strike in solidarity.

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“Seeing it finally trickle down from our next-door neighbor to finally here, I hope it is more fruitful, and then more organizations around the area will also step up and also collab,” Lewis expressed.

In a statement, Drexel says its buildings are on lockdown and people unaffiliated with drexel are not allowed to trespass on campus. They also added:

“We will be prepared to respond quickly to any disruptive or threatening behavior by anyone against anyone… We will not tolerate the destruction of property…or threatening behavior of any kind, including speech.”



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