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 'Beastly Cocks' Line

Orion Wholesale has introduced two new fantasy dildos from its Beastly Cocks line.

Wicked Wraps Production on Crime Thriller 'Reputation'

Wicked Pictures has wrapped production on its new psychological crime thriller, "Reputation," co-directed by Michael Vegas and Siouxsie Q.

Leilani Li Fronts Latest From Grooby VR

Leilani Li stars in the latest release from Grooby VR, titled "Worshipping Leilani."

Blush Debuts 'Riana' Massager

Blush has introduced the new Riana massager.

Eldorado Opens Preorders for 'Blō' Flavored Lube From JO

Eldorado Trading is now accepting preorders for the new Blō collection of flavored lubricants from JO, with shipments beginning July 13.

Gigi Dior Performs Her 1st DP for Elegant Angel

Gigi Dior performs her first DP alongside multi-XMA winners Christian Clay and Vince Karter in the first scene from Elegant Angel's "MILF Performers of the Year 2026."

Violet Myers Leads Latest From Digital Playground

Violet Myers stars with Lucas Frost in the latest limited series from Digital Playground, titled “The Double Agents.”

KiwiSourcing Joins Pineapple Support as Sponsor

Outsourcing and consulting firm KiwiSourcing has joined the ranks of over 70 adult businesses and organizations committing funds and resources to Pineapple Support.

Holly Randall Agency, Stripchat to Collab on New Feature

Holly Randall Agency and Stripchat have announced their third collaboration.

Tiffani Time Makes Her Girlfriends Films Debut

Tiffani Time has made her Girlfriends Films debut opposite Penelope Snaps in “Bad Lesbians 22: Scene 1.”

Show More