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Nature of Suit Code: 240
Nature of Suit: Torts to Land
Cause of Action: 

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PUBLISH 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

DONNIE D. MARSHALL and CHRISTIE ) 

A. MARSHALL, ) 

) 

Plaintiffs-Appellees, ) 

) 

v. ) 

) 

EL PASO NATURAL GAS COMPANY and ) 

MERIDIAN OIL PRODUCTION, INC., ) 

) 

Defendants-Third-Party ) 

Plaintiffs-Appellants, ) 

) 

WESTERN COMPANY OF NORTH AMERICA, ) 

) 

Third-Party Defendant. ) 

No. 87-1829 

FILED 

Unit.ed St.ates Court of Appeals Tenth Circuit 

MAY 171989 

ROBERT L. HOECKER 

Clerk 

ON APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE WESTERN DISTRICT OF OKLAHOMA 

(D.C. No. CIV-84-1783-A) 

Robert N. Barnes (Jane Good Rowe with him on the brief} of Stack & 

Barnes, P.C., Oklahoma City, Oklahoma, for Plaintiffs-Appellees. 

Neal Peck of Davis, Graham & Stubbs, Denver, Colorado (Grey w. 

Satterfield and Gregg R. Renegar of Kornfeld, Franklin & Phillips, 

Oklahoma City, Oklahoma; David M. Ebel and Charles L. Kaiser of 

Davis, Graham &-Stubbs, Denver,-Colorado, and Gregory E-. Simmons, 

Houston, Texas, were on the briefs) for Defendants-Appellants. 

Before MOORE, TACHA, and BRORBY, Circuit Judges. 

BRORBY, Circuit Judge. 

Appellate Case: 87-1829 Document: 01019963537 Date Filed: 05/17/1989 Page: 1 
This appeal arises out of a diversity suit initiated by 

plaintiffs Mr. and Mrs. Marshall (Marshalls) against defendants El 

Paso Natural Gas Company and Meridian Oil Production, Inc. to 

recover damages related to the drilling and plugging of an oil and 

gas well on Marshalls' real property. For purposes of this appeal 

we will refer to El Paso Natural Gas Company and Meridian Oil 

Production, Inc. jointly as Meridian. The jury returned a verdict 

for Marshalls, awarding $350,050 for diminution in value of the 

property, $50,000 for nuisance damages, and punitive damages of 

$5,000,000. Meridian appeals, asserting the district court erred: 

(1) in refusing to stay its proceedings and refer the factual 

issues of the case to the Oklahoma Corporation Commission under 

the doctrine of primary jurisdiction; (2) in excluding Meridian's 

proffered evidence of the Commission's authority to order remedial 

actions to correct Marshalls' property damage; and (3) in failing 

to instruct the jury that punitive damages in excess of actual 

damages may be awarded only upon a finding of clear and convincing 

evidence rather than a finding of a preponderance of the evidence. 

Finding no errors we affirm. 

I. Primary Jurisdiction 

Meridian asserts the district court erred in refusing to stay 

its judicial proceedings under the doctrine of primary 

jurisdiction in order to refer technical questions to the Oklahoma 

Corporation Commission (Commission). We disagree. 

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Primary jurisdiction is invoked in situations where the 

courts have jurisdiction over the claim from the very outset but 

it is likely that the case will require resolution of issues 

which, under a regulatory scheme, have been placed in the hands of 

an administrative body. Sunflower Elec. Coop. v. Kansas Power & 

Light Co., 603 F.2d 791, 796 (10th Cir. 1979) (citing United 

States v. Western Pacific R.R. Co., 352 U.S. 59, 64 (1956)). 

Meridian does not contend the district court is without subject 

matter jurisdiction; rather it asserts the district court should 

have referred this case to the Commission under primary 

jurisdiction. The doctrine of primary jurisdiction provides that 

where the law vests in an administrative agency the power to 

decide a controversy or treat an issue, the courts will refrain 

from entertaining the case until the agency has fulfilled its 

statutory obligation. Sunflower, 603 F.2d at 795 (citing 

California v. Federal Power Comm'n, 369 U.S. 482 (1962)). Under 

the doctrine of primary jurisdiction, the judicial process is 

suspended pending referral of the issues to the administrative 

body for its views. Western Pacific, 352 U.S. at 64. This 

circuit and Oklahoma courts have referred the issue of oil and 

gas well drilling costs to the Commission under the doctrine of 

primary jurisdic~ion. GHK Exploration Co. v. Tenneco Oil Co., 847 

F.2d 650 (10th Cir. 1988); Arkla Exploration Co. v. Shadid, 710 

P.2d 126, 128 (Okla. App. 1985); W.L. Kirkman, Inc. v. Oklahoma 

Corp. Comm'n, 676 P.2d 283, 287 (Okla. App. 1983). 

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In Far East Conference v. United States, 342 U.S. 570, 574-75 

(1952), the Supreme Court discusses the factors to be considered 

in applying the doctrine of primary jurisdiction: whether the 

issues of fact raised in the case are not within the conventional 

experience of judges; or whether the issues of fact require the 

exercise of administrative discretion, or require uniformity and 

consistency in the regulation of the business entrusted to a 

particular agency. The district court is not required to defer 

factual issues to an agency under the doctrine of primary 

jurisdiction if those factual issues are of the sort that the 

court routinely considers. United States v. Zweifel, 508 F.2d 

-1150, 1156 (10th Cir.), cert. denied, 423 U.S. 829 (1975) (court 

determination of good faith location of mining claims doe~ not 

require deference to agency); Denver Union Stockyard Co. v. Denver 

Live Stock Cornrn'n Co., 404 F.2d 1055, 1059 (10th Cir. 1968), cert. 

denied, 394 U.S. 1014 (1969) (court consideration of 

monopolization of business in private antitrust suit did not 

require stay of judicial proceedings although industry was 

regulated by an agency). 

We review under an abuse of discretion standard the district 

court's decision whether to apply primary jurisdiction and refer 

this case to the Commission. See, Burford v. Sun Oil Co., 319 

U.S. 315, 318 (1943) (discretionary standard applied to review 

abstention doctrine}; Grimes v. Crown Life Ins. Co., 857 F.2d 699, 

703 (10th Cir. 1988), cert. denied, 109 s.ct. 1568 (1989) (same). 

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Meridian asserts the district court should have referred this 

case to the Commission because the following factual issues were 

raised requiring the application of primary jurisdiction: whether 

defendants' operations have created a ''time bomb" that will 

"explode" in the immediate future; whether and to what extent 

defendants' operations have damaged the environment; and what 

remedial action, if any, is required to rectify any error 

defendants may have made in carrying out their operations. 

Meridian contends these factual issues are not within the 

conventional knowledge of judges or jurors, and will result in 

inconsistent orders of the district court and the Commission. 

The "time bomb" issue goes to the Marshalls' claim that 

Meridian deficiently plugged the well. The jury was instructed it 

could find liability based on either a theory of negligence or 

negligence per se for violation of Commission rules. Instruction 

No. 12. The jury was also specifically instructed on the 

Marshalls' contentions of how the well was improperly plugged. 1 

1 The jury was instructed in pertinent part as follows: 

The plaintiffs have contended that the well was 

improperly plugged and resulted from: the failure 

separately to plug the Atoka and Red Fork formations; 

the failure to use "plugging mud" at all intervals in 

the well bore; the failure to properly set a plug at the 

base of the surface casing. The plaintiffs contend that 

because of the improper plugging of the well, it is 

probable that the well will in the future blow out 

causing damage to the plaintiffs and their property. 

The plaintiffs contend that cleanup work needs to be 

done to correct or abate most of the improper plugging, 

to include reentering the well to properly plug it. 

Instruction No. 17. 

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The issue of negligent plugging of an oil and gas well has 

been determined by the Oklahoma courts without referring the case 

to the Commission. See, Sunray Mid-Continent Oil Co. v. Tisdale, 

366 P.2d 614 (Okla. 1961) (the question of negligence in plugging 

an exploratory well which allowed salt water to pollute a fresh 

water stratum was left to the jury); Harper-Turner Oil Co. v. 

Bridge, 311 P.2d 947 (Okla. 1957) (action for negligent plugging 

of an oil and gas well resulting in pollution of a water well 

submitted to a jury). The issue of negligence per se in plugging 

an oil and gas well has also been determined by the Oklahoma 

courts without referring the case to the Commission. See, Nichols 

v. Burk Royalty Co., 576 P.2d 317, 320 n.t (Okla. Ct. App. 1977) 

(jury instructed on negligence per se theory); Sheridan Oil Co. v. 

Wall, 187 Okla. 398, 103 P.2d 507 (1940) (claim of negligence per 

se where oil well was not plugged in accordance with Commission 

rules submitted to jury). Based on these cases we cannot say that 

the issue of negligence or negligence per se in the plugging of an 

oil and gas well is a factual issue which is not within the 

conventional knowledge of judges and jurors. The district court 

did not abuse its discretion in refusing to refer the plugging 

issue to the Commission under the doctrine of primary 

jurisdiction. 

Likewise, the determination of whether Meridian's acts caused 

water or soil pollution is not a determination outside of the 

-conventional knowledge of the judge and jur~ There are many 

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cases in which the Oklahoma courts have determined the existence 

of water and soil pollution from oil and gas activities without 

referring the issue to the Commission. See~, Ohio Oil Co. v. 

Elliott, 254 F.2d 832 (10th Cir. 1958) (action under Oklahoma law 

for damages to cattle from drinking water from a stream polluted 

by the release of salt water); Sunray (negligent plugging of oil 

well polluted fresh water well); Harper-Turner Oil (same); Tenneco 

Oil Co. v. Allen, 515 P.2d 1391 (Okla. 1973) (action to recover 

damages to land from escaping oil and salt water including cleanup 

costs); Sunray DX Oil Co. v. Brown, 477 P.2d 67 (Okla. 1970) 

(action to recover damages to land from leaking pipeline); Nichols 

(action to recover damages to land where defendant admitted 

injurious spillage). We do not find the district court abused its 

discretion in refusing to apply primary jurisdiction to the water 

and soil pollution issues. 

Meridian also contends the determination of what remedial 

action was necessary to rectify any errors the defendants made in 

carrying out their operations should have been referred to the 

Commission. Meridian has failed to refer us to the record where 

the Marshalls seek remedial action. We did find Marshalls 

asserted as part_ of their claim for damages that cleanup work 

needs to be done on their property. Instructions Nos. 11, 13, 14, 

15, 17. The issue of damages for cleanup of oil and gas 

operations in a nuisance action has been addressed by the Oklahoma 

courts without referral to the Commission. See, Allen, 515 P.2d 

at 1396--97 .(damages awarded for cleanup of pollution) and the 

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cases cited therein; see also Sheridan Oil (damages awarded to 

cover cost of plugging well}. Marshalls' claim for damages based 

on allegations that it would have to clean up the property is not 

a sufficient basis to require the district court to refer this 

case to the Commission. 

Meridian also asserts that the district court's exercise of 

jurisdiction in this case will result in inconsistent decisions. 

Meridian contends the Marshalls recovered damages in part to pay 

for cleanup of the pollution on their land, and the Commission 

may, at some future time, order Meridian to take remedial actions 

such as removing the reserve pits or replugging the well. 

Although the Commission has authority to order remedial action 

that authority has not prevented the courts from awarding damages 

for cleanup. See Allen, 515 P.2d at 1396-97 (damages awarded for 

cleanup of pollution}; Sheridan Oil Co., 103 P.2d at 510-11 

(damages awarded to replug well}; Schlegel v. Kinzie, 158 Okla. 

93, 12 P.2d 223 (Okla. 1932} (trial court's granting of a 

mandatory injunction ordering oil company to bury pipe lines and 

remove other trash left from drilling affirmed on appeal). 

Meridian-~oved to stay the district court proceedings on 

October 3, 1986 asserting it had filed an application with the 

Commission to review the Marshalls' claims of pollution. The 

motion fails to state when the application was filed or its status 

before the Commission. This motion was filed only two months 

before ,the jury ~trial~ While the timing of the motion is not 

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dispositive, the district court did not abuse its discretion in 

denying the motion to stay simply because the Commission might 

order Meridian to do additional remedial acts, when the jury trial 

was pending in two months and the court had no way of knowing when 

or how the Commission might act upon Meridian's application. 

Meridian has failed to cite us to any Oklahoma cases which have 

resulted in inconsistent orders by the district court and the 

Commission. We are not persuaded the potential for inconsistent 

orders was so likely that the district court abused its discretion 

in refusing to refer this case to the Commission under primary 

jurisdiction. 

Meridian also contends primary jurisdiction should be applied 

in the interest of ''orderly and sensible coordination of the work 

of agencies and of the courts," (quoting Zweifel, 508 F.2d at 

1156). In Zweifel the court refused to defer to the Interior 

Department the issue of the good faith placement of mining claims 

finding that issue was of the sort the court considered routinely. 

The decision discusses, but does not rely upon, the coordinated 

decision-making aspect of primary jurisdiction. Exercise of 

primary jurisdiction may be based on preventing the disruption of 

state. efforts to establish a coherent policy· with respect to a 

matter of substantial public concern, Burford v. Sun Oil Co., 319 

U.S. 315 (1943), or based on a policy of conservin~ judicial 

resources in situations involving the contemporaneous exercise of 

concurrent jurisdictions, Colorado River Water Conservation Dist. 

-v. United States, 424 ,U.S. 800 (1976). Grimes, 857 F.2d at 707. 

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Meridian's previous arguments for the exercise of primary 

jurisdiction come under the ''Burford policy," while this argument 

on coordinated decision making comes under the "Colorado River 

policy." We refuse to reverse the district court's exercise of 

jurisdiction based on coordinated decision making because "under 

Colorado River, once a federal court has tried the case on its 

merits, it would be rare that judicial resources would be 

conserved by abstaining on appeal." Grimes, 857 F.2d at 707. 

Meridian contends primary jurisdiction must be invoked 

because the parties have elected to submit the issues to the 

Commission. We find no merit in this contention. Our review of 

the record ihdicates the Marshalls initially pursued remedies with 

the Commission in September 1982, but their application was 

dismissed in October 1982 without meaningful action. We do not 

find that the Marshalls elected to participate in the application 

that Meridian submitted to the Commission in 1986 which was the 

basis of the motion to stay the court proceedings. 

Meridian contends exercise of primary jurisdiction is 

required because the Marshalls are challenging Commission Rule 3-

_101 by proving Meridian was negligent per se for violating this 

rule. Marshalls' use of Rule 3-101 to prove negligence per se is 

not a direct challenge to the rule requiring the matter to be 

referred to the Commission for an initial determination. See 

Greyhound Leasing & Finan. Corp. v. Joiner City Unit, 444 F.2d 

439, 445 (10th Cir. 1971). 

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The exercise of primary jurisdiction between the courts and 

the Commission has often hinged on whether the dispute involves 

public or private rights. In Tenneco Oil Co. v. El Paso Naturai 

Gas Co., 687 P.2d 1049 (Okla. 1984), the Oklahoma Supreme Court 

determined that parties to a forced-pooling order issued by the 

Commission could contract as to specific terms of the operating 

agreement. The court analyzed its jurisdiction to review the 

rights under the contract. It found the relief Tenneco sought was 

private in nature and not an attack upon the public rights 

function of the Commission, i.e., to regulate and administer the 

conservational laws and policies of the state. Id. at 1054. It 

concluded the district court had jurisdiction to review the rights 

under the contract. 

In this case Marshalls sought to recover damages to their 

property and water caused by Meridian's negligent operations in 

drilling the well. This is a private rights dispute derived from 

the liability of one individual to another under the laws as 

defined. See Tenneco, 687 P.2d at 1053 (quoting Northern Pipeline 

Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50, 69-70 

(1982) (defining private rights _dispute)). In Greyhound Leasing 

-

we held that a district court properly exercised jurisdiction over 

a claim of private nuisance for encroachment of saltwater. The 

court stated there was no administrative remedy available under 

the primary jurisdiction of the Commission ·for the tort action · 

asserted. Id. at 445. Und-er.the private versus public test for 

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Appellate Case: 87-1829 Document: 01019963537 Date Filed: 05/17/1989 Page: 11 
jurisdiction, we do not find the district court abused its 

discretion in refusing to defer this matter to the Commission 

under primary jurisdiction. 

We affirm the district court's exercise of jurisdiction in 

this case. 

II. Evidentiary Issues 

Meridian asserts the district court erred in refusing to 

admit material and relevant evidence critical to its defense. 

Meridian asserts the district court improperly excluded the 

""""·following evidence:·· ·that the Commission has -continuing authority 

to determine the existence of unsafe conditions from oil and gas 

operations and may order remedial action be taken by the well 

operator; that the defendants initiated proceedings before the 

Commission to determine whether their operations caused 

environmental damage and what remedial actions were required; and 

that if the Commission held a hearing regarding the Marshalls' 

well, a Commission field inspector would testify that the well was 

not dangerous and he would not recommend that it be replugged. In 

excluding the proffered testimony the district judge reasoned that 

it was not. relevant, and it was speculative and confusing 

requiring exclusion under Fed. R. Evid. 403. On appeal, Meridian 

argues the district court abused its discretion in excluding this 

evidence because it was relevant and its admission was not 

substantially outweighed by the danger of confusion. We disagree. 

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A trial court has broad discretion to determine whether 

evidence is relevant, and its decision will not be reversed on 

appeal absent a showing of clear abuse of that discretion. 

Beacham v. Lee-Norse, 714 F.2d 1010, 1014 (10th Cjr. 1983}. The 

same standard of review applies to a trial court's determination, 

under Fed. R. Evid. 403, that the probative value of the evidence 

is outweighed by its potential to prejudice or confuse the jury. 

Id.; see also Hill v. Bache Halsey Stuart Shields Inc., 790 F.2d 

817, 825 (10th Cir. 1986). Error may not be predicated upon a 

ruling which excludes evidence unless a substantial right of a 

party is affected. Fed. R. Evid. 103(a}; Smith v. Atlantic 

Richfield Co., 814 F.2d 1481, 148-6 (10th Cir~ 1987). 

First, Meridian asserts it offered the testimony on the. 

Commission's continuing remedial powers to show the plaintiffs' 

damages to clean up the property are substantially less than they 

claim because the Commission has the power to order Meridian to 

clean up the property at no cost to Marshalls. Meridian's 

proffered testimony that the Commission might take remedial action 

on the Marshalls' property is pure speculation. Testimony that 

the Commission has the power to act is not probative of the fact 

that it will act. Where Meridian failed to place into evidence 

any proof that the Commission would act to correct the problems on 

the Marshalls' land, the testimony on the Commission's authority 

to act fails to make the existence or extent of plaintiffs' 

damages any more or less probable. In Shoppin' Bag of Pueblo, 

Inc .. v. Dillon Cos., 783 F.2d 159, 165 (10th Cir. 1986), we 

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affirmed the exclusion of a Federal Trade Commission investigation 

because it was of little probative value and highly prejudicial. 

Likewise in this case, the fact that the Commission might act is 

of even less probative value. Additionally, implying that the 

Commission would take action if there were anything wrong places a 

"stamp of approval" on Meridian's actions which is highly 

prejudicial. The effect on a jury of the government "seal of 

approval" should not be underestimated; it can only be 

prejudicial. Smith, 814 F.2d at 1487. We do not find the 

district court abused its discretion in excluding this evidence of 

the Commission's authority to take remedial actions. 

Second, Meridian asserts the district court erred in 

excluding the evidence that it had submitted an application to the 

Commission to determine if its activities had caused any damage to 

the Marshalls and to determine what remedial measures should be 

taken. Meridian contends this evidence mitigates plaintiffs' 

claim for punitive damages by showing it acted in good faith in 

ignoring plaintiffs' claims. The district court excluded this 

evidence under Fed. R. Evid. 403 as confusing to the jury. we are 

not persuaded the district court abused its discretion in 

excluding this evidence. 

Meridian's application was filed with the Commission in 

November 1986, two and a half years after the Marshalls commenced 

this litigation. In ruling on the submissibility of the punitive 

.... damages .issue to the jury,.. the court , outlined, in part, the 

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evidence upon which it relied: drilling the well without water 

strings; failing to seal the west pit with a bentonite seal before 

flowing fluids into it; flowing saline fluids into the east pit 

that was not lined with the presc,ibed 30 mil liner; instituting a 

hearing to · obtain permission for annular injection without 

notifying the plaintiffs, thereby depriving them of an opportunity 

to object; filling the pits in such a way that it broke whatever 

seal had previously existed permitting percolation; and plugging 

the well in knowing violation of Commission rules requiring 

separation of formations. Each of these events occurred before 

Meridian's application to the Commission. 

"'Evidence of the parties' conduct subsequent to the event, 

which produces plaintiff's claim for punitive damages,. whether 

aggravating or mitigating, must be probative of the defendant's 

state of mind at the time of the transaction."' O'Gilvie v. 

International Playtex, Inc., 821 F.2d 1438, 1449 (10th Cir. 1987), 

cert. denied, 108 s.ct. 2014 (1988) (quoting Byers v. Santiam 

Ford, Inc., 281 Or. 411, 416, 574 P.2d 1122, 1125 (1978)). 

Meridian has made no showing that filing its application with the 

Commission in November 1986 is probative of its state of mind in 

·1981 and.1982 when it was drilling and plugging the Marshall well. 

Assuming the evidence established the good faith and good will of 

Meridian toward the Marshalls, such conduct came as a response to 

the complaint, which prayed for substantial actual and punitive 

damages. The evidence shows a desire to buy peace and minimize 

. the .risk .... of..an .. -award ,of. actual and .. punitive damages and not that 

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Meridian dealt with the Marshalls in good faith in drilling and 

plugging the well. We hold that evidence of Meridian's subsequent 

application to the Commission was properly excluded. 

Third, Meridian claims the district court erred in excluding 

the field inspector's testimony that if the Commission held a 

hearing regarding the Marshalls' property he would recommend the 

Commission not replug .the well. Meridian asserts it offered the 

testimony to show the plaintiffs failed to prove the ~ell was 

dangerous. What a Commission employee would recommend to the 

Commission at a future date falls far short of relevant evidence. 

--The district court excluded the evidence as irrelevant. Like the 

proffered evidence of the Commission's remedial powers, this 

evidence is speculative and prejudicial. The district court did 

not abuse its discretion in excluding it. Additionally, any error 

in excluding this evidence was harmless. The field inspector 

testified that he was at the site when the Marshalls' well was 

plugged in 1983 and he approved the plugging as proper. (However, 

the inspector also testified he was only present when the well was 

capped, not when the lower plugs were made.) This testimony alone 

is sufficient to establish Meridian's theory that the well was not 

dangerous. We will not.disturb the district court's ruling where 

Meridian has failed to show prejudice which would lead to a 

contrary result. Smith, 814 F.2d at 1486-87. 

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We affirm the district court's rulings excluding Meridian's 

proffered testimony regarding the Commission's potential remedial 

actions. 

III. Punitive Damages 

On the issue of punitive damages, Meridian asserts three 

errors: (1) the district court failed to instruct the jury that 

it could not award punitive damages in excess of actual damages 

absent clear and convincing evidence of conduct supporting an 

award of punitive damages; (2) the district court allowed 

excessive punitive damages that bore no relation to the cause and 

extent of plaintiffs' injuries; and (3) the evidence does not 

support the district court's finding of that clear and convincing 

evidence existed to support an award of punitive damages in excess 

of actual damages. We disagree. 

In 1986 the Oklahoma legislature amended its punitive damages 

statute, 23 Okla. Stat. Ann. § 9 (1971), limiting the amount of 

punitive damages to the amount of actual damages awarded unless 

the court first should find clear and convincing evidence of 

punitive acts prior to submitting the issue to the jury, in which 

case the limit of punitive damages to actual damages would not 

apply. 1986 Okla. Sess. Laws, ch. 315 § 1. The amended statute 

went into effect November 1, 1986. 

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The district court determined the amended statute applied to 

this case. 2 At the conclusion of the evidence and prior to 

submitting the case to the jury, the trial judge made findings, on 

the record and out of the presence of the jury, concerning the 

submission of the punitive damages issue to the jury. The judge 

stated: 

I find by clear and convincing evidence as a preliminary 

matter and, of course, this is for final Jury 

determination, that Defendant is ·guilty of conduct 

evincing a wanton or reckless disregard for rights of 

Plaintiff, oppression or malice, actual or presumed. I 

find no evidence of any fraud in the case. 

The judge supported his findings by discussing part of the 

evidence upon which he relied. 3 He concluded by stating, "in 

consequence of this finding, the Jury will be presented a punitive 

damages instruction that does not cap the punitives to the amount 

of any actual damages that they find." Meridian excepted to this 

finding. 

The jury was instructed the plaintiffs have the burden of 

proving every essential element of their claim by a preponderance 

of the evidence. Instruction No. 7. The jury was instructed they 

could award punitive damages upon finding the defendant has been 

guilty of conduct evincing a wanton or reckless disregard for the 

2 The applicability of the statute to this case filed in 1984 has 

not been raised by the Marshalls as a cross appeal. 

3 For a summary of the district judge's findings see slip op. at 

15-16. 

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rights of another, oppression, fraud4 or malice, actual or 

presumed. Instruction No. 26. The punitive damages instruction 

does not discuss the burden of proof. At trial, Meridian objected 

to instruction No. 26. On appeal, Meridian asserts the district 

court erred in failing to instruct the jury that any award of 

punitive damages must be based upon clear and convincing evidence. 

We disagree. 

This is a case of first impression. The Oklahoma punitive 

damages statute was amended and became effective on November 1, 

1986. The parties have not cited us to, nor have we been able to 

find, any cases discussing the plaintiff's burden of proof under 

the amended punitive damages statute. In the absence of an 

authoritative pronouncement from the state's highest court, our 

task is to predict how the Oklahoma Supreme Court would interpret 

the amended statute. Daitom, Inc. v. Pennwalt Corp., 741 F.2d 

1569, 1574 (10th Cir. 1984). We review the district court's 

interpretation of the amended statute de novo. See Glenpool 

Utility Servs. Auth. v. Creek Co. Rural Water Dist. No. 2, 861 

F.2d 1211, 1214 (10th Cir. 1988), petition for cert. filed March 

18, 1989. The amended statute provides: 

A. In any action for the breach of an obligation 

not arising from contract, where the defendant has been 

guilty of conduct evincing ~ wanton or reckless 

-. disregard for the rights of another, oppression, fraud 

or malice, actual or presumed, the jury, in addition to 

4 This instruction was given even though the district judge found 

there was no-evidence of any fraud. Meridian has not challenged 

the wording of this instruction on appeal. 

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the actual damages, may give damages for the sake of 

example, and by, way of punishing the defendant, in an 

amount not exceeding the amount of actual damages 

awarded. Provided, however, if at the conclusion of the 

evidence and prior to the submission of the case to the 

jury, the court shall find, 9.!l the record and out of the 

presence of the jury, that there is clear and convincing 

evidence that the defendant is guilty of conduct 

evincing~ wanton or reckless disregard for the rights 

of another, oppression, fraud or malice, actual or 

presumed, then the .i!:!!:Y may give damages for the sake of 

example, and_-~ w~y of punishing the defendant, and the 

percentage limitation on such damages set forth in this 

section shall not apply. 

B. The provisions 

strictly construed. · of this section shall be 

Okla. Stat. Ann. tit. 23, § 9 (1987) (emphasis indicates amended 

portions). 

The primary goal of statutory construction is to ascertain 

and follow the intent of the legislature. Ledbetter v. Alcoholic 

Beverages Laws Enforcement Comm'n, 764 P.2d 172, 179 (Okla. 1988). 

Statutory construction begins with consideration of the language 

used. Id. When amending a statute the legislature is presumed to 

be familiar with the then extant judicial construction that is in 

force. Huff v. State, 764 P.2d 183, 185 (Okla. 1988). With these 

rules of construction in mind we turn to a discussion of Okla. 

St at . Ann . ti t. 2 3 , § 9 ( 19 8 7 ) . 

Under the previous statute, Okla. Stat. Ann. tit. 23, § 9 

(1981), 5 punitive damages were submitted to the jury based upon a 

5 Before amendment, § 9 read: 

In any action for breach of an obligation not 

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preponderance of the evidence standard. See~, Young v. First 

State Bank, Watonga, 628 P.2d 707, 711 (Okla. 1981); Wootan v. 

Shaw, 205 Okl. 283, 237 P.2d 442, 443 (1951). The amended 

statute, Okla. Stat. Ann. tit. 23, § 9 (1987), incorporated the 

text of the previous statute and modified it by adding "wanton and 

reckless disregard for the rights of another" to the list of 

punitive conduct and by limiting the amount of punitive damages to 

the amount of actual damages awarded. Based on these changes, it 

does not appear that the Oklahoma legislature modified the burden 

of proof from a preponderance of the evidence to clear and 

convincing evidence, when the punitive damages are limited to the 

amount of actual damages awarded. Had the Oklahoma legislature 

wished the award of punitive damages by a jury to be conditioned 

upon the jury finding by clear and convincing evidence, it could 

easily have so provided in the statute. 

The amended statute also added a new second sentence 

requiring the court to make a finding, before the case is 

submitted to the jury, whether there is clear and convincing 

evidence to allow an award of punitive damages in excess of the 

actual damages awarded. Our reading of this change does not 

_support the conclusion .. that the issue of !'enhanced" punitive 

damages may only be submitted to the jury under the standard of 

clear and convincing evidence. The second sentence does not 

arising from contract, where the defendant has been 

guilty of oppression, fraud or malice, actual or 

presumed, the jury, in addition to the actual damages, 

may give damages.for sake of example, and by way of 

punishing the defendant. 

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discuss the burden of proof. A statute should be given a 

construction according to the fair import of the words taken in 

their usual sense, in connection with the· context, and with 

reference to the purpose of the provision. Jordan v. State, 763 

P.2d 130, 131 (Okla. Crim. App. 1988). 

A plain reading of the statute creates a threshold test for 

the plaintiff to meet in order for the issue of punitive damages 

to be submitted to the jury without limitation to the amount of 

actual damages. Once the threshold is met, the punitive damages 

issue is submitted to the jury under the standard of preponderance 

of the evidence to determine the amount of punitive damages 

regardless of whether it equals or exceeds the actual damages 

awarded. This construction is consistent with the legislature's 

intent to limit punitive damage verdicts in excess of actual 

damages to those cases in which the evidence meets a threshold of 

clear and convincing proof. We find no error in the district 

court's instructions to the jury that it could award punitive 

damages without limitation upon a preponderance of the evidence, 

where the district court made an initial finding that there was 

clear and convincing evidence the defendant's actions merited 

punitive damages. 

Meridian next asserts the district court erred in allowing 

excessive punitive damages that bore no relation to the cause and 

extent of the plaintiffs' injuries citing Garland Coal & Mining 

::'-..Co. v. Few, 267 F.2d 785 (10th Cir. -1959); Hobbs v. Watkins, 481 

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P.2d 746 (Okla. 1971). Meridian contends the punitive damages 

bear no relation to the Marshall's injuries because the Commission 

may intervene and order Meridian to correct the problems on the 

Marshall's property. This contention relies on speculation the 

Commission may act at some future time. The district court is 

without discretion to reduce or eliminate punitive damages on the 

basis of events occurring after the trial. Miller v. Cudahy Co., 

858 F.2d 1449, 1458 (10th Cir. 1988), petition for cert. filed 

Jan. 18, 1989. The district court did not abuse its discreiion in 

refusing to reduce the award of punitive damages based on actions 

the Commission may take at some future date. 

Meridian contends the district court erred in rejecting its 

evidence of good faith which led to an excessive award of punitive 

damages. We have discussed this contention in our discussion of 

evidentiary issues, and find no merit to it. 

Next Meridian contends the district court erred in finding 

clear and convincing evidence of conduct that would support an 

award of punitive damages in excess of actual damages. The issue 

of whether there is sufficient evidence to justify an award of 

punitive. damages is a question of law. Miller, 858 F.2d at 1457. 

On review we are confined to the assessment of whether the 

plaintiffs presented evidence sufficient that a reasonable person 

might conclude the defendants acted in a punitive manner. 

Silkwood v. Kerr-McGee Corp., 769 F.2d 1451, 1456 (10th Cir. 

__ .1985), cert. .denied, 416 u. S. 1104 ( 1986); .Garland Coal, 267 F~-2d 

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at 790 (applying Oklahoma punitive damages statute). We have 

reviewed the portions of the record cited by the parties and hold 

the district court's finding of clear and convincing evidence of 

the defendants' punitive acts is supported by the record. This 

evidence includes: Meridian's drilling of the Marshall well 

without a water string to protect the fresh water aquifer even 

though Meridian attended a Commission meeting discussing the 

general problem of fresh water pollution and the need to set and 

cement surface casing fifty to 200 feet below the base of the 

fresh water; Meridian's failure to jet bentonite into the west pit 

in a manner to create an impervious seal; Meridian's use of the 

east pit·with an inadequate plastic liner for five months after a 

Commission rule was issued specifying the liner as inadequate; and 

Meridian's failure to plug the Red Fork and Atoka formations 

separately in violation of Commission rules. The district court 

did not err in submitting this issue to the jury. 

Marshalls assert Meridian is precluded from raising the 

sufficiency of the evidence issue on appeal because it failed to 

move for directed verdict at the close of all the evidence and 

failed to move for a new trial or a judgment notwithstanding the 

.verdict or remittitur. -We are not persuaded by Marshalls' 

argument that the issue of sufficiency of the evidence has not 

been preserved for appeal. At the conclusion of Meridian's case 

it moved for a directed verdict generally, and specifically with 

respect to the issue of punitive damages. The district court 

denied the ... motion._ . After ... the ._.court's rul=-ing, the Marshal ls 

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presented two rebuttal witnesses who testified regarding the value 

of Marshalls' property. This testimony does not go to the issue 

of punitive damages. Meridian's previous motion for directed 

verdict is sufficient to preserve for appeal the issue of the 

sufficiency of the evidence to support the punitive damages award. 

United States v. 353 Cases*** Mountain Valley Mineral Water, 247 

F.2d 473, 476-77 (8th Cir. 1957). Meridian's failure to move for 

judgment notwithstanding the verdict does not bar an appeal. 

Hansen v. Vidal, 237 F.2d 453, 454 (10th Cii. 1956). Nor does its 

failure to move for a new trial bar an appeal where the issue of 

the sufficiency of the evidence was brought to the trial court's 

attention in the motion for directed verdict at the close of the 

evidence. Cf. Holmes v. Wack, 464 F.2d 86, 89-90 (10th Cir. 1972) 

("Failure to. move for a directed verdict bars appellate review of 

the sufficiency of the evidence." (Quoting Brown v. Poland, 325 

F.2d 984, 986 (10th Cir. 1963))). 

The district court's decision is AFFIRMED. 

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