Turnbull & Turnbull v. Ara Transportation, Inc.

Defendant ARA Transportation, Inc. (ARA), appeals from a judgment entered after a jury found ARA had sold its bus transportation services at below its cost of providing the services with the purpose of injuring competitors or destroying competition in violation of Business and Professions Code section 17043 (hereafter all undesignated section references are to this code). The jury awarded plaintiff Turnbull & Turnbull, doing business as Sullivan & Co. (Sullivan), $259,568 in compensatory damages and $1 million in punitive damages.

On appeal, ARA contends the judgment should be reversed because California’s below cost sales statute is unconstitutional and preempted by federal law and because there is no substantial evidence that ARA sold its services below cost. ARA also contends there is no substantial evidence it had the requisite intent to injure competitors and that it was prejudiced by instructional error and by the erroneous admission of certain evidence. In addition, it alleges juror misconduct prevented ARA from having a fair trial. Finally, ARA raises various challenges to the compensatory and punitive damages awards. We shall reverse the judgment and remand the…