Bloomberg Law: Tesla Race Bias Damages Award Sets Up Another Post-Trial Fight
April 7, 2023
A new legal question over punitive damages has been raised following a California federal jury’s verdict that awarded US$3.2 million to former Tesla Inc. contractor Owen Diaz, who sued the company for race discrimination and originally sought US$137 million. Diaz brought the suit more than five years ago and pursued a retrial after a trial judge reduced the original compensatory damages payout to US$1.5 million and punitive damages award to US$13.5 million. In 2004, the US Supreme Court ruled in State Farm v. Campbell that a punitive damages award should have a single-digit ratio to the compensatory damages award. Eric Amdursky, co-chair of O’Melveny & Myers LLP’s Labor & Employment Practice Group, noted that ratio between both damages may need to fall within the scope established in State Farm v. Campbell, noting that “US$3.4 million is still a big victory for someone who worked at Tesla for nine months.” Amdursky also noted that the “headlines send a big message to employers that this can have serious ramifications.”
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