Professional Seminar Consultants, Inc., a Corporation v. Sino American Technology Exchange Council, Inc., and G.Y. Lin

Professional Seminar Consultants, Inc. (PSC) sought sanctions against Sino American Technology Exchange Council (SATEC) and G.Y. Lin because they had produced falsified documents in this suit for conversion and libel. We find that the magistrate did not abuse his discretion when he entered a default judgment and punitive damages for PSC.

PSC conducts professional seminars abroad. In 1980, PSC paid SATEC to make tour arrangements for a doctor’s group *1472 traveling to Hong Kong and China. G.Y. Lin, the owner of SATEC, agreed to handle all land arrangements, including visas, for PSC.

PSC sent checks to Lin, one for $11,450.70 payable to SATEC, the other for $102,-042.63 payable to the Peking Medical College for tour accommodations. PSC alleges that Lin deposited the funds in his own name and withdrew all the money.

SATEC failed to make arrangements for visas, which complicated the tourists’ plans for accommodations and meetings. As a result, angry patrons sued PSC, Lin, and SATEC in California state court.

Before this incident, PSC had conducted two to three study trips a year for each of the groups of medical specialists involved in this case. They were pathologists and…

dissenting:

Despite the majority’s effort to apply a gloss of reason, the magistrate’s award of punitive damages in this case is shockingly excessive and ought to be set aside. It is patently disproportionate to the wrongful conduct and to the appellants’ financial statements. The magistrate’s sense of balance seems to have been overcome by the zeal to inflict harsh punishment, even though some punishment was within his discretion.

The awards were as follows:

(1) $120,000 for special damages for conversion (of the $102,000 check) and for “implied indemnity.”

(2) $100,000 in general damages for libel— the basis for such damage is unknown.

(3) $200,000 in punitive damages for fraud and conversion.

(4) $200,000 in punitive damages for libel.

This case was essentially a claim for conversion because Lin misappropriated $102,-000. The court awarded $120,000 which was full compensation for that loss. It then awarded $100,000 as general damages for the libel because Lin “stone-walled” the plaintiffs while denying the conversion and contending that plaintiffs were responsible.

Not content with awarding $220,000 to an organization which was fully compensated by half that sum, the…

727 F.2d 1470 PROFESSIONAL SEMINAR CONSULTANTS, INC., a corporation, Plaintiff-Appellee, v. SINO AMERICAN TECHNOLOGY EXCHANGE COUNCIL, INC., and G.Y. Lin, Defendants-Appellants. No. 83-1725. United States Court of Appeals, Ninth Circuit. Argued and Submitted Dec. 15, 1983. Decided March 13, 1984. Harold B. Auerbach, Robert J. Dauphin, Auerbach & Dauphin, San Francisco, Cal., for plaintiff-appellee. Thomas M. Maddock, and Martin T. Snyder, Sellar, Engleking, Hazard, Snyder & Kelly, Walnut Creek, Cal., for defendants-appellants. Appeal from the United States District Court for the Northern District of California. Before WRIGHT, CHOY, and POOLE, Circuit Judge. EUGENE A. WRIGHT, Circuit Judge: 1 Professional Seminar Consultants, Inc. (PSC) sought sanctions against Sino American Technology Exchange Council (SATEC) and G.Y. Lin because they had produced falsified documents in this suit for conversion and libel. We find that the magistrate did not abuse his discretion when he entered a default judgment and punitive damages for PSC. 2 PSC conducts professional seminars abroad. In 1980, PSC paid SATEC to make tour arrangements for a doctor's group traveling to Hong Kong and China.…