Target was hit with a sizable $3 million award to Rita Cantrell of Greenville, South Carolina. The award included punitive damages after Target sent out an email to businesses stating that Cantrell was a shoplifter trying to pass counterfeit cash.
Cantrell went to two Target stores in the Greenville area in Feb. 2006. On both occasions, she was refused the sale and accused of using a counterfeit bill. The bill turns out to be real, just dated. However, Target sent out the alert (with her picture) to businesses — including the one that Cantrell works at.
The U.S. Secret Service questioned Cantrell at her workplace, but found the bills to be authentic.
She sued the company for defamation and negligence and, after a three-day trial, the jury awarded her $100,000 for actual damages and $3 million in punitive damages.
Target will appeal, including challenging the fact that a $200 record of medical expenses supported a $100,000 compensatory damage award — which then supported the $3 million punitive award. The key to challenging punitive awards is to lower the compensatory figure as much as possible.
The size of the punitive award could cause some problems in light of recent Supreme Court rulings on the ratio between compensatory and punitive damages.
For the full story, click here.
rafflaw:
Me too.
Mespo,
that was a good refresher course on Libel per se. It has been too many years since law school for this old man.
“Target will appeal, including challenging the fact that a $200 record of medical expenses supported a $100,000 compensatory damage award — which then supported the $3 million punitive award.”
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Though we are in conservative SC, I think this one might make it through the appeals process unscathed. Since we likely have both the intentional tort of defamation (likely libel per se) and negligence in dissemination brought by a private plaintiff (as opposed to a public figure), the medical expenses seem only part of the basis since we know that damages, both compensatory and punitive, are presumed in a per se situation such as this when the defendant Target acted with reckless and utter disregard for the truth under the Gertz & NY Times cases standard.
This has got to be terrible for Target’s image…costing them more than the $3.1m in terms of imaging/what it would cost them to make this up in marketing efforts.
Luckily for Target, they have a new advertising campaign in place that has already received full approval from Dr. Tantillo (‘the marketing doctor’), a frequent guest on Box Business News.
Target’s new advertising campaign will absorb a full 3/4 of their marketing budget (at least according to the post on the the Marketing Doctor’s blog). The campaign will emphasize Target’s addition of more perishables and will fight against the perception that their products cost more than those of Wal-Mart and Kmart, including actual prices of products in their ads. ( I’m not sure I totally believe it that Target costs doesn’t cost a tad more than Walmart or Target..but maybe this just means that dirtier, more disorganized stores with frumpier staff spells VALUE to me).
“The marketing concept is about integrating business model fundamentals with aggressive marketing campaigns, and Target clearly has that concept in mind.”
“The instinct in tough times might be to cut marketing dollars. Bad idea. Smarter marketing is needed now, not less marketing.”
Tantillo’s full post
Even though the award may be reduced on appeal, I hope Target learned a valuable lesson. They better be sure who they are alleging to be shoplifters! What were they thinking??