FILED

NOT FOR PUBLICATION APR 27 2012

MOLLY C. DWYER, CLERK

UNITED STATES COURT OF APPEALS U.S . CO U RT OF AP PE A LS

FOR THE NINTH CIRCUIT

ASHLEY ANDREWS; ASHTONWOOD No. 11-16287

STUD ASSOCIATES, L.P.,

D.C. No. 2:06-cv-00209-RCJ- Plaintiffs - Appellants, GWF

v.

MEMORANDUM *

ROBERT B. RAPHAELSON; LUCILLE

R. RAPHAELSON; KENTUCKY BLUE

STABLES,

Defendants - Appellees.

Appeal from the United States District Court for the District of Nevada Robert Clive Jones, Chief District Judge, Presiding

Submitted December 14, 2011** San Francisco, California

Before: RAWLINSON and BYBEE, Circuit Judges, and BURNS, District

* This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). Judge.***

Ashley Andrews and Ashtonwood Stud Associates, L.P. (collectively,

'Andrews') appeal the district court's order reducing the jury's punitive damages

award against Robert Raphaelson. We previously reversed the district court's

reduction of punitive damages, Andrews v. Raphaelson, 346 F. App'x 198 (9th Cir.

2009), and on remand, the district court entered a second order reducing punitive

damages as excessive, in nearly the same amount. We reverse again.

'We review for abuse of discretion a district court's decision to grant or

deny a motion for a new trial or remittitur because of the size of a punitive

damages award.' Morgan v. Woessner, 997 F.2d 1244, 1266 (9th Cir. 1993).1 A

district court abuses its discretion when it applies an incorrect legal rule. See

Ahanchian v. Èenon Pictures, Inc., 624 F.3d 1253, 1258 (9th Cir. 2010). In this

case, the district relied on a excessiveness standard under Nevada state law which

the Nevada Supreme Court has expressly abrogated. See Bongiovi v. Sullivan, 138

*** The Honorable Larry A. Burns, District Judge for the U.S. District Court for Southern California, sitting by designation. 1 Although the basis for the district court's second reduction of damages is unclear, remittutur was liµely the only procedural tool available to it once we clarified that Nevada Revised Statute y 42.005 did not apply to limit the jury's punitive damages award. Since neither party raised the issue, we assume without deciding that a trial court may order remittutur sua sponte.

2 P.3d 433, 452 (Nev. 2006) (adopting the federal standard articulated in State Farm

Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003)), abrogating Ace Trucµ v.

Kahn, 746 P.2d 132 (Nev. 1987).2 The district court therefore abused its discretion

when reducing the damages award under Nevada state law using the now-

abrogated excessiveness standard.

Because both parties have briefed the issue under the correct standard and

the issue is purely one of law, we may address the merits of this issue on appeal.

Cf. Weissburg v. Lancaster Sch. Dist., 591 F.3d 1255, 1259 n.3 (9th Cir. 2010).

Under Bongiovi, courts are to consider '(1) the degree of reprehensibility of the

defendant's conduct, (2) the ratio of the punitive damage award to the actual harm

inflicted on the plaintiff, and (3) how the punitive damages award compares to

other civil or criminal penalties that could be imposed for comparable

misconduct.' 138 P.3d at 452 (footnotes omitted) (internal quotation marµs

omitted). If the district court had applied this test, its application of these factors

would be reviewed de novo. Id.

First, there is evidence that Raphaelson engaged in a pattern of deliberate

misconduct toward Andrews repeatedly over the course of five years. Additionally,

2 Because Bongiovi applied its new rule to the parties before it, the rule clearly has retroactive application. Cf. Harper v. Va. Dep't of Taxation, 509 U.S. 86, 97 (1993).

3 the district court indicated after trial that despite some evidence that Raphaelson

had produced fabricated documents in discovery and gave false deposition

testimony, it would not award sanctions for this misconduct because of the

substantial punitive damages award. We conclude this satisfies the first factor.

Second, because the ratio of compensatory damages to punitive damages is barely

over 2:1, the second factor is satisfied here. Cf. State Farm, 538 U.S. at 425

(referencing a 4:1 ratio as a possible upper limit). Lastly, the award compares

favorably to other civil or criminal penalties that could have been imposed because

it was only two-thirds of the statutory cap of Nevada Revised Statute y 42.005, and

although hypothetical criminal penalties would have been much smaller than the

punitive damages award here, no criminal charges were ever brought against

Raphaelson. Cf. Bongiovi, 138 P.3d at 452 n.86 ('[W]e conclude that being

criminally charged, convicted, and/or incarcerated far outweighs any monetary

penalty.').

'[T]he mere fact that a verdict is large is not conclusive that it is the result of

passion or prejudice. The trial court is precluded from substituting its view of the

evidence for that of a jury in a case where the losing party is not entitled to

judgment as a matter of law.' Beccard v. Nev. Nat'l Banµ, 657 P.2d 1154, 1156

(Nev. 1983) (internal quotation marµs omitted) (citation omitted).

4 REVERSED and REMANDED with instructions to reinstate the jury's

punitive damages award.

5

FILED

Andrews v. Raphaelson, Case No. 11-16287 APR 27 2012 Rawlinson, Circuit Judge, concurring: MOLLY C. DWYER, CLERK

U.S . CO U RT OF AP PE A LS

I concur in the result.