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U.S. Bank Owes $17 Million for Firing Executive to Avoid Bonus

July 28, 2020, 10:56 PM

A former regional president for U.S. Bank in Sacramento is entitled to more than $17 million in damages based on a jury’s finding that the company wrongfully fired—and later defamed—him so it wouldn’t have to pay out a bonus, a California appeals court held Tuesday.

A California jury awarded Timothy King $24.3 million, including $15.6 million in punitive damages, after it found the U.S. Bank National Association falsely accused King of discriminating against his subordinates based on gender, and making them doctor reports.

The jury also found the desire to deprive King of a substantial bonus was a motivating reason behind the decision to fire him.

But the trial court slashed King’s damages to just over $5 million, concluding that the award for defamation duplicated that for wrongful termination. The judge also found that a one-to-one ratio between compensatory and punitive damages was all that was constitutionally allowed.

The California Court of Appeals, Third District upheld the ratio but found the judge erred in its double-counting analysis. King lost nearly $5 million in past and future earnings and lost stock options from his termination, the appeals court said, and the statements impacting King’s reputation were made post-firing.

The appeals court also held that while the bank’s wrongful acts warranted the civil penalty, it’s conduct was at the low end of the range of wrongdoing that can support an award of punitives under California law.

The court, after reinstating the defamation award, held that King should receive $8.4 million in punitive damages, in line with the $8.6 million he was awarded as compensation for his actual losses.

Justice Ronald B. Robie wrote for the court.

Justice Harry E. Hull Jr. and retired Justice M. Kathleen Butz, sitting by designation, joined the opinion.

Christopher H. Whelan Inc. represents King. Faegre Drinker Biddle & Reath LLP represents U.S. Bank.

The case is King v. U.S. Bank Nat’l Ass’n, Cal. Ct. App., 3d Dist., No. C085276, 7/28/20.

To contact the reporter on this story: Maeve Allsup in San Francisco at mallsup@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Steven Patrick at spatrick@bloomberglaw.com

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