The court's reversal of the punitive damages award was based on its view (the only unanimous holding in the opinion) that the trial court erred in allowing the jury to determine the lump-sum amount of punitive damages for the class as a whole before it had determined the amount of total compensatory damages for the class. "As a matter of law," the court explained, "the punitive damages award violates due process because there is no way to evaluate the reasonableness of the punitive damages award without the amount of compensatory damages having been fixed." The court added that amount of the punitive damages award was "also clearly excessive because it would bankrupt some of the defendants."

While agreeing with the Third District "that problems with the three-phase trial plan negate the continued viability of this class action," the majority apparently was also reluctant to relinquish the results obtained from the Phase I and Phase II trials that had already taken place. Accordingly, it fashioned a "pragmatic solution," whereby the liability findings of Phase I were preserved, but further proceedings to determine compensatory liability and damages - and punitive damages - would have to be through individual actions filed by class members.[1] Lest the opinion be taken to be an approval of a phased approach to class actions, the court noted that "the procedural posture of this case is unique and unlikely to be repeated." July 6, 2006, slip op. at n.12.

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