Business Falsehoods Can Cost Plenty — Court

SAN FRANCISCO — Businesses — mainstream as well as adult — have a new incentive to be honest in the state of California.

The California Supreme Court ruled last week that they could be slapped with punitive damages for fraudulently breaching contracts.

The far-reaching decision could, in essence, threaten the predictability of risk in commercial contracts, whether it involves deals with adult webmaster affiliate programs or, in the case decided, faulty helicopter clutches.

The court affirmed $6 million in punitive damages against Dana Corp., a company that supplied helicopter equipment to Robinson Helicopter Co. The ruling was separate of $1.5 million in compensatory damages awarded to Robinson.

Robinson sued Dana for intentionally concealing that its sprag clutches — parts that keep helicopter blades rotating through a loss of power — weren't up to FAA specifications.

California justices ruled, 6-1, that Dana could be slapped with punitive damages because its fraudulent conduct was separate from breaching a contract.

Writing for the majority, Justice Janice Rogers Brown said Robinson had proven “dispositive fraudulent conduct” independent of the breach of contract — continuing to provide written certificates to Robinson with each delivery, falsely asserting that the clutches had been manufactured in conformance with Robinson’s written specifications.

Brown rejected the argument that limiting the buyer to a contract remedy under such circumstances would be consistent with public policy encouraging commercial transactions with predictable results.

“No rational party would enter into a contract anticipating that they are or will be lied to,” Brown wrote. “[D]ana’s argument therefore proposes to increase the certainty in contractual relationships by encouraging fraudulent conduct at the expense of an innocent party. No public policy supports such an outcome.”

But Justice Kathryn Mickle Werdegar, with the lone dissent, said the majority of the court was prescribing “a cure worse than the disease.”

“Today's decision greatly enhances the ease with which every breach of contract claim can don tort clothes,” Werdeger wrote. “I fear that in doing so, it opens a Pandora's box better left sealed.”

The ruling is Robinson Helicopter vs. Dana, No. S114054.

Copyright © 2026 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

Male Power Debuts 'Peacocking' Collection

Male Power has introduced its new Peacocking collection of men's underwear.

A Look at the Trends Shaping Male Pleasure and Wellness

The male pleasure category was once defined by familiar products: non-powered sleeves and strokers, manual penis pumps, rings and a relatively small selection of prostate toys. Today, manufacturers draw inspiration from consumer electronics, sexual wellness, gaming, streaming content and app-driven interaction, while still relying on one of the category's oldest staples: the basic stroker.

Judge Preliminarily Approves Pornhub Class Action Settlement

A U.S. District Court judge on Monday granted preliminary approval to a settlement between Aylo and the plaintiffs in two class-action lawsuits over allegations that former Pornhub parent company MindGeek knowingly allowed and profited from CSAM on its sites.

Anissa Kate, Koda Monroe Front Latest From Brazzers

Anissa Kate and Koda Monroe star with Jimmy Bud in the latest release from Brazzers, titled "Messy Massage, Amazing Anal."

Lucy Mochi Stars in 2nd Installment of 'Thoughtless Wishes/ From Digital Playground

Lucy Mochi stars with Peter Fox in the second installment of "Thoughtless Wishes," the latest release from Digital Playground.

Private Drops Latest Volume of 'Four-Hand Massage'

Private has released the fourth volume of "Four-Hand Massage," directed by Raul Lora.

Yasmina Khan Makes Her WIFEY Debut

Yasmina Khan has made her debut for Vixen Media Group studio imprint WIFEY alongside her husband Brady Bud and reigning XMA Europe Male Performer of the Year Dimitri Shadow in the latest installment of the series "WIFEY Vacay."

Orion Debuts 3 New Styles From Cottelli Lingerie

Orion Wholesale has introduced three new styles from its Cottelli Lingerie line.

Alexis Fawx Fronts Latest From Bellesa Plus

Multi-XMAs winner Alexis Fawx stars with Josh Rivers in the latest release from Bellesa Plus, titled "Show Me Yours, I’ll Show You Mine."

Amirah Adara Talks Roots, Ambition and the American Dream

Amirah Adara may be new to college football, but she's no stranger to scoring big. Fresh from attending her first Trojans game, the Budapest native shows off her newfound team spirit in a black USC tank top as she settles in at Sana’a Cafe in Los Angeles. It’s a taste of American life she’ll have more opportunities to enjoy with her work visa secured and a bevy of stateside projects ahead.

Show More