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

Orion Expands 'Cotelli Bondage' Line

Orion Wholesale has expanded its Cotelli Bondage collection with five new outfits.

Private Drops 'Pornstars Summer Getaway'

Private has released its latest title, "Pornstars Summer Getaway," directed by Xavi Rocka.

The End Is Coming: Pure Taboo Explores Post-apocalyptic Sex, Survival and Submission in 'The Doctrin

It's the end of the world as we know it, and Seth Gamble feels fine. On a scorching hot day in the remote mountains of Santa Clarita, Gamble is directing "The Doctrine," an ambitious post-apocalyptic drama for Adult Time's Pure Taboo label.

Aylo Wins Preliminary Injunction Against Utah AV Law's VPN Rule

A federal court on Thursday issued a preliminary injunction preventing the state of Utah from enforcing a legal provision that would make adult websites liable if minors in the state circumvent geolocation efforts in order to bypass age verification.

Avery Lust Leads Latest From TransAngels

Avery Lust stars with Jack Des Feux in the latest release from TransAngels, titled "Hung Waitress."

Kheper Releases New 'Adult A...Z' Couples Game

Kheper Games has released its new Adult A...Z party game.

LATAM in Focus: A Look at the Trends Shaping Latin America's Pleasure Products Market

Across Latin America, pleasure shoppers are looking for innovation, but winning their business requires brands to balance aspirational qualities. Consumers are watching every dollar — or peso, Brazilian real, Peruvian sol, etc. — as tariffs, exchange rates and import costs push retail prices upward.

Emma Rose Toplines 'TS Girls Do It Best 4' From TransSensual

Two-time XMAs Trans Performer of the Year Emma Rose headlines "TS Girls Do It Best 4," from Mile High Media studio imprint TransSensual.

Ofcom Investigates Pornhub's Device-Based UK Age Checks

U.K. media regulator Ofcom has opened an investigation to determine whether Pornhub parent company Aylo’s use of device-based age verification complies with the U.K.’s Online Safety Act.

Serenity Cox, Eva Angelina Star in Latest From MILFY

Serenity Cox and Eva Angelina star with Sheem in the latest release from Vixen Media Group studio imprint MILFY, titled "Yes Captain."

Show More