Donald R. Boyle and Alpha One Productions, Inc., and v. Lorimar Productions, Inc., American Broadcasting Company, Inc. And Coleman Luck, And

Appellants Lorimar Productions, Inc., American Broadcasting Company, Inc. and Coleman Luck appeal a jury verdict awarding Donald R. Boyle $3.6 million in punitive damages on breach of contract and fraud claims arising out of the parties’ agreement to transfer Boyle’s rights to a treatment for a television series to Lorimar. The issue considered here is whether the California standard for the imposition and review of punitive damages is consistent with the requirements of due process identified by the Supreme Court in Pacific Mutual Life Ins. Co. v. Haslip, 499 U.S. 1 , 111 S.Ct. 1032 , 113 L.Ed.2d 1 (1991). We conclude the California standard satisfiés due process but remand because the district court failed to properly apply that standard in this case.

Due process requires that procedures for (1) imposing and (2) reviewing punitive damages provide a “sufficiently definite and meaningful constraint on the discretion of [ ] factfinders,” and assure that such awards “are not grossly out of proportion to the severity of the offense and have some understandable relationship to compensatory damages.” Haslip, 499 U.S. at 22 , 111 S.Ct. at 1045 . Applying the Haslip analysis, the…