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

Hentaied Pro Debuts 'Ectoplasmed' Limited Series

Hentaied Pro has dropped the first installment of the new limited series “Ectoplasmed,” titled “Lingering Spirit.”

Xgen Debuts '4Play' Collection From Bodywand

Xgen Products has introduced the new 4Play collection of clitoral stimulators from its Bodywand line.

Charlotte Sins Fronts Latest From Kink.com

Charlotte Sins stars with Victor Ray in the latest release from Kink.com’s “Dungeon Sex” series, titled “Roped Up and Spread Out.”

Octavia Red Leads Latest From Kink.com

XMAs winner Octavia Red stars with director John Paul “The Pope” in the latest installment of Kink.com’s "Device Bondage" series, titled “Fiery Slut in Strict Bondage.”

Lilly Bell, Lana Smalls Star in Latest From Lust Cinema

Multi-XMAs winner Lilly Bell stars with Lana Smalls in the latest release from Lust Cinema, titled “Made to Taste.”

Carmela Clutch, Audrey Madison Front Latest Release From TeamSkeet

Carmela Clutch stars with Audrey Madison in the latest scene from TeamSkeet’s “Milfty” series.

StreamPayments Joins ASACP as Corporate Sponsor

Payment service provider and consultancy firm StreamPayments has signed on as the latest corporate sponsor for Association of Sites Advocating Child Protection (ASACP).

AdultHTML Introduces Custom AI Projects Development Service

AdultHTML has introduced its customizable AI projects development service.

Violet Myers Makes Her Directorial Debut for Blacked Raw

Violet Myers has made her directorial debut with the latest scene for Vixen Media Group studio imprint Blacked Raw.

Grazyeli Silva Toplines Latest Volume of Joey Silvera's 'Trans-Active'

Grazyeli Silva headlines the 36th volume of director Joey Silvera’s “Trans-Active,” from Evil Angel.

Show More