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Can appealing a lower court decision reduce a company’s damages?

On Behalf of | Nov 16, 2020 | Appellate Practice |

Most companies have the right to appeal a commercial litigation decision when a judge appears to have ordered excessive or punitive damages. Requesting an appellate court to overturn a lower court’s decision, however, may require proof of an error made during the legal procedure.

Some examples of an error include misinterpreting how the law applies to the parties’ dispute or inaccurate analysis of the evidence presented. During an appeal, the appellate court judges review the case for legal errors made by the trial court.

Upon discovery of a mistake, the appellate judges may rule to overturn a lower court’s decision. The appellate court’s decision to overturn could reduce the number of damages awarded or demand a retrial.

A recent example from the next-door neighbor

The appellate process in Pennsylvania is almost identical to its next-door neighbor, New York.

Recently, the State of New York filed a lawsuit against one of the world’s largest commercial delivery companies alleging that it shipped untaxed cigarettes originating from smoke shops located on Indian reservations. Because the company deprived both New York City and NY State of receiving millions of dollars in tax revenues, a legal action sought damages for untaxed cigarettes on more than 600,000 cartons. The damages awarded by the lower court amounted to nearly one billion dollars.

The delivery company filed for an appeal claiming that the lower court’s decision resulted in “unwarranted damages.” As reported by Reuters, the appellate court found that the civil damages awarded to the Empire State were excessive and reduced them accordingly. The higher court, however, discovered an error in the amount that the lower court awarded in unpaid state and local taxes, and amended the company’s tax liability.

While an appeal may not provide a more reasonable financial outcome, it may provide a measure of closure. It could also serve as an opportunity to adjust your business practices to prevent problems in the future.