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CA Prison Guards’ Union Loses Appeal, Must Pay $4.96 Million Judgment

A federal lawsuit filed against the California Correctional Peace Officers Association (CCPOA), the union that represents state prison guards, resulted in a $12.5 million damages award in October 2010. The award was reduced by the district court to $4.96 million and the CCPOA appealed, placing $3 million in an escrow account and putting up its headquarters building in West Sacramento as collateral pending the disposition of the appeal.

The suit resulted after Brian Dawe, a board member of a non-profit organization for prison guards called Corrections USA (CUSA), was summarily discharged based on allegations of misconduct – including misuse of CUSA funds for personal gain. Dawe sued for breach of contract and defamation of character, claiming that CCPOA and CUSA officials had ruined his reputation and livelihood; he was joined by two other plaintiffs who were dismissed from CUSA, Richard Loud and Gary Harkins, as well as Flat Iron Mountain Associates, a business entity owned by Dawe.

On October 18, 2010, a federal jury awarded $2,591,409 in compensatory damages and $10,085,000 in punitive damages against CUSA and the CCPOA. The district court reduced the punitive damages award to $2,368,406 and left the compensatory award intact. See: Dawe v. Corrections USA, U.S.D.C (E.D. Cal.), Case No. 2:07-cv-001790-LKK-EFB; 2011 WL 1047638. The defendants appealed the jury verdict and damages award, while Dawe and the other plaintiffs appealed the court’s remittitur of the punitive damages.

Representing over 30,000 California prison guards and parole agents who pay monthly dues, the CCPOA had been flush enough for decades to generously fund statewide election campaigns to support elected officials willing to approve prison construction, increase wages for prison staff and boost their retirement benefits, thereby protecting the interests of the union’s members. However, in the most recent elections the CCPOA was strangely silent, possibly due to the potential financial impact of the multi-million-dollar jury award.

That impact became apparent on February 1, 2013, when the Ninth Circuit Court of Appeals upheld the district court’s reduced total award of $4.96 million. The appellate court found that the defendants’ defamatory statements were not subject to litigation privilege under state law; that a statute of limitations defense had not been properly preserved; that Dawe was not a “limited purpose public figure”; that there was sufficient evidence for the jury’s finding of tortious interference with Flat Iron Mountain Associates’ contract; and that there was no double recovery based on the plaintiffs’ breach of contract and tortious interference claims.

The Court of Appeals also rejected the defendants’ argument that the compensatory and punitive damages award “against CUSA is unconstitutional because it is nearly four times the organization’s ‘net worth,’” noting that “[t]here is no constitutional prohibition of awards in excess of a party’s net worth.”

On the cross-appeal by Dawe and the other plaintiffs, the Ninth Circuit declined to reverse the district court’s remittitur of the jury’s $10.08 million punitive damages award, finding that the reduction was proper. “Plaintiffs did not suffer physical harm and CCPOA’s conduct did not evince a reckless disregard of bodily health. Further, four defamatory publications within the context of the same dispute do not evidence a high level of recidivism,” the appellate court wrote.

Accordingly, the jury verdict and reduced $4.96 million award were affirmed. See: Dawe v. Corrections USA, Ninth Circuit Court of Appeals, Case No. 11-16284 (Feb. 1, 2013); 2013 WL 388769 (unpublished).

CCPOA spokesman JeVaughn Baker stated that the union would pay the award and that it had the funds to do so. According to Baker and Dawe’s attorney, as of March 2013 the parties were in the process of negotiating the payment. Dawe is also seeking payment of costs in the amount of $25,386.28.

Additional source: Sacramento Bee

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Related legal cases

Dawe v. Corrections USA

Dawe v. Corrections USA