In Los Angeles Unified School District v. Superior Court (Jane Doe), published June 1, 2023, the California Supreme Court affirmed a lower appellate court case reversing denial of a motion to strike a damages claim. An alleged victim of sexual abuse by an employee of the school at which she was a student sued the defendant school district alleging negligence and failure to report suspected child abuse. She sought an award of up to treble damages from the district under Code of Civil Procedure section 340.1(b)(1), as amended in 2019. The district moved to strike from the complaint allegations of a cover-up and the request for treble damages, under Government Code section 818, which bars punitive and exemplary damages from being awarded against public entities. The trial court denied the motion, and concluded that section 340.1(b)(1)'s treble damages provision was intended to be compensatory, not punitive. The court of appeal granted the district's writ petition reversing the trial court's decision. The appellate court determined that the treble damages were primarily punitive and thus barred by section 818. The California Supreme Court granted review of the ruling. While review was pending, other court of appeal agreed that enhanced damages under section 340.1(b)(1) are not recoverable against public entities.
The Supreme Court unanimously agreed with the appellate court's conclusion. Government Code section 818 provides, “Notwithstanding any other provision of law, a public entity is not liable for damages awarded under Section 3294 of the Civil Code or other damages imposed primarily for the sake of example and by way of punishing the defendant.” While the statute clearly shields public entities from punitive damages, also referred to as exemplary damages, its language establishes that its prohibition can extend to more than just what are conventionally referred to as punitive damages. It applies to other damages imposed primarily for the sake of example and by way of punishing the defendant. It therefore also applies to other kinds of damages when they function, in essence, as awards of punitive or exemplary damages. This comports with the purpose of the statute, which codifies the common law rule exempting public entities from punitive damages because such damages impoverish the public treasury without serving any admonitory function. Based on past case law, considerations relevant to determining whether a particular award is barred under section 818 may include whether the damages involved go beyond those necessary to fully compensate the plaintiff; whether a damages remedy functions to offset some otherwise applicable restriction on compensatory
damages; whether there is an element of discretion by the fact finder in the award of damages; and whether in the normal course actual damages are likely to be difficult to establish or quantify. The ultimate question remains whether the damages function in essence as a form of punitive or exemplary damages. The court noted previous decisions it had made reading section 818 narrowly, as only applying to damages that are "simply and solely" punitive: People ex rel. Younger v. Superior Court (1976) 16 Cal.3d 30; San Francisco Civil Service Assn. v. Superior Court (1976) 16 Cal.3d 46; and Kizer v. County of San Mateo (1991) 53 Cal.3d 139. The court overruled those decisions insofar as they articulated the "simply and solely" or "simply or solely" punitive standard. The court then concluded that the enhanced damages that section 340.1(b)(1) authorizes amount to punitive damages for purposes of section 818. Section 340.1(b)(1) provides that, in an action seeking damages suffered due to childhood sexual assault, “a person who is
sexually assaulted and proves it was as the result of a cover up may recover up to treble damages against a defendant who is found to have covered up the sexual assault of a minor, unless prohibited by another law.” The court interpreted "unless otherwise prohibited by another law" as referring to Government Code section 818. Section 340.1(b)(1) authorizes treble damages only upon proof of morally offensive behavior on behalf of the defendant. The decision to increase the award lies entirely with the fact finder. If the fact finder decides to increase the damages award, the amount by which it does so, although capped at treble damages, is not fixed. The awards require the existence of actual injury, but may go substantially beyond the amounts necessary to fully compensate plaintiffs for the injuries they have suffered. The court did not find any nonpunitive characteristic or function that sufficiently distinguishes the enhanced damages from punitive damages. The court further noted that the language of section 340.1(b)(1).
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