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

Vixen Celebrates a Decade of Decadence With a View From the Top

The adult community took multiple shuttles through the winding roads and driveways of Benedict Canyon on Friday night to celebrate Vixen Media Group’s 10th anniversary.

Richard Mann Drops New Evil Angel Scene With Ravyn Alexa

Ravyn Alexa stars in an Evil Angel scene alongside director/performer Richard Mann.

Rocco Siffredi Drops New Evil Angel Scene With Amber Kawaii

Amber Kawaii stars with Little Maly in a new Rocco Siffredi-helmed Evil Angel scene.

Lilly Bell Leads Latest From Girlsway

2025 XMAs Girl/Girl Performer of the Year Lilly Bell stars in the latest Girlsway release, titled “You Won’t Last a Day!”

Centrobill Names Len Garcia as Chief Sales Officer

Centrobill has named Len Garcia as its new chief sales officer.

Octavia Red, Cherry Kiss & Seth Gamble Star in 'Devil in Her' From Elegant Angel

Reigning XMAs Girl/Girl Performer of the Year Octavia Red stars with Cherry Kiss and Seth Gamble in Elegant Angel’s crime thriller "Devil in Her."

Mistrezz.AI Joins ASACP as Corporate Sponsor

The UK-based adult AI companion platform Mistrezz.AI has signed on as the latest corporate sponsor for Association of Sites Advocating Child Protection (ASACP).

Woodhull Freedom Foundation Debunks Pornography Myths in Latest Edition of 'Fact Checked' Series

Woodhull Freedom Foundation is hosting the latest edition of its virtual series “Fact Checked by Woodhull,” addressing myths about pornography.

Scott Nails on Building a Lasting Career With Blue-Collar Grit

When you hear the name Scott Nails, certain images probably come to mind. On this sweltering summer afternoon, however, the only nailing in sight is happening beneath the swing of a hammer.

Utah VPN Enforcement Pause Extended in Aylo Lawsuit

Provisions of a Utah law making adult websites liable if minors in the state circumvent geolocation efforts to bypass age verification, which were set to come into force in May, have again been put on hold temporarily.

Show More