$20 Million Damages Award to Mark Geragos Reduced in “Michael Jackson Video” Case

In Geragos v. Borer, the California Court of Appeals significantly reduced a damages award in favor of Los Angeles attorney Mark Geragos and his partner related to representation of Michael Jackson in the singer’s 2003 sex abuse trial. The case arose when Jeffrey Borer, the owner of a private jet company XtraJet, had installed audio-video recording equipment on the airplane chartered by Jackson. Borer then created a video recording of Jackson and his attorneys, intending to sell the video to the media. When Geragos later found out about the video, he called XtraJet’s attorney, Lloyd Kirschbaum, to demand the video not be used. Kirschbaum told Geragos that his clients were going to “hit the lottery” or that it was their “pay day.” Kirschbaum further stated that the videotape was worth “more than a million” or “millions” of dollars. Kirschbaum also told Geragos that he could place a “bid” on the videotape.

Based on this ill-advised videotape recordings scheme, the trial court entered judgment in favor of Geragos $2 million in compensatory damages $8 million in punitive damages against Borer, and $16 million in punitive damages. The Court of Appeals, however, thought this amount was far too much.

While explaining that plaintiffs had good reason to be very upset about Borer’s outrageous and illegal conduct, the Court explained that: “the amount of compensatory damages awarded went far beyond any reasonable amount in light of the evidence presented.”

The most serious gap in plaintiffs’ evidence is that there was virtually no evidence that anyone actually viewed the videotape. There was no evidence, however, that Borer used the videotape or plaintiffs’ likeness for commercial purposes, i.e., on or in products, merchandise, or goods, or for purposes of advertising or selling, or soliciting purchases of, products, merchandise, goods or services. Defendants did not sell the videotape or make profits from the videotape or use it to their advantage in any manner.

The appeals court gave Geragos two options: (1) a new trial on the proper amount of damages; or (2) reduction of damages to $100,000 compensatory damages and $400,000. Likewise, Geragos’ law partner, Eugene Harris, was given the option of a new trial or reduction of the compensatory award to $50,000 and the punitive award to $200,000.

In analyzing the proper amount of punitive damages under State Farm Mut. Automobile Ins. Co. v. Campbell, the Court of Appeals found that Borer’s misconduct was sufficiently reprehensible to warrant punitive damages. There was abundant evidence that Borer acted with malice, that is, he engaged in despicable conduct with a willful and conscious disregard of the rights of others. The right violated here was the right of plaintiffs to engage in confidential communications without a third party unlawfully recording such communications.

Most of the reprehensibility factors, however, weigh against a high punitive damages award. Borer’s conduct did not endanger the health or safety of others and did not cause any physical harm, though plaintiffs were embarrassed and upset. The target of Borer’s conduct–Michael Jackson and his lawyers— were not financially vulnerable. Rather, Jackson was sufficiently wealthy to charter a private airplane and his lawyers were sophisticated and presumably well-compensated professionals. Further, there was no evidence of repeated misconduct by Borer; this appears to be an isolated incident.

Under the totality of the circumstances, the reprehensibility of Borer’s conduct was found not to be particularly egregious, compared to other conduct that justifies punitive damages.

Even though the case was not officially published, it nevertheless reflects the latest in an ongoing effort by California appellate courts to rein in the amount of punitive damages awards. See, Punitive Damages and Agency Limitations.