Penn. high court OKs punitive award in broker poaching case

The Pennsylvania Supreme Court unanimously affirmed a lower court’s $2.8 million punitive damages ruling in a broker poaching lawsuit, in a decision that focused on the method used in calculating them.

The state’s high court held that the lower court was correct in using a per-defendant approach in calculating punitive damages, rather than calculating them on a per-judgment basis, according to last week’s ruling by the court in The Bert Co. d/b/a/Northwest Insurance v. Matthew Turk, et al.

Mr. Turk was a senior vice president at Erie, Pennsylvania-based Northwest when he left in May 2017, according to the ruling.

The ruling said that in 2016, Pittsburgh-based First National Insurance Agency had developed a plan to take over Northwest, which involved Mr. Turk providing First National with sensitive Northwest data.

After several Northwest employees accepted officers from First National, Northwest fired Mr. Turk and sued several ex-employees, including him, alleging breach of nondisclosure agreements.

Following a 2018 trial, the jury found Mr. Turk liable for breach of contract, breach of fiduciary duty, and civil conspiracy, and First National liable for civil conspiracy and unfair competition. 

In calculating the punitive to compensatory damages ratio, the trial court used a per-defendant approach in reaching the $2.8 million punitive damages award, rather than a pre-judgment approach.

Defendants objected that the punitive damages amount was “unconstitutionally excessive,” arguing it created a punitive to compensatory damages ratio of 11.2 to 1.

On appeal, the state’s high court ruled it preferred the per-defendant approach, which it said is “consistent with federal constitutional principles that require consideration of a defendant’s due process rights.”