Source: https://www.theenergylawblog.com/2017/10/articles/maritime/louisiana-supreme-court-holds-punitive-damages-are-available-under-general-maritime-law-against-products-liability-defendant/
Timestamp: 2019-04-21 08:32:37+00:00

Document:
Case: Warren v. Shelter Mutual Ins. Co., No. 2016-C-1647 (La. 10/18/17), ___ So. 3d ___.
A recreational boating accident occurred on navigable inland waters of Louisiana in May of 2005 resulting in the death of a 22-year old passenger. While the boat was on plane, the hydraulic steering system manufactured by defendant Teleflex suddenly failed due to fluid loss, causing the boat to turn violently with the motor going into a free spin (known in the industry as a “J-hook” or “kill spin”). Decedent and other passengers were ejected from the boat, and thereafter, the boat continued to spin around with its propeller striking decedent 19 times, resulting in death.
Decedent’s parents filed suit under general maritime law and products liability for the wrongful death of their son, and sought punitive damages under the general maritime law. Their claims against Teleflex, a sophisticated boating industry manufacturer, centered on its failure to warn unsuspecting users of the inherent danger in its product—that a very small loss of fluid would result in loss of steering and potentially cause ejection and death.
Following trial, the jury rendered a verdict in favor of the Plaintiff and against Teleflex for failure to warn, awarding compensatory damages of $125,000 and punitive damages of $23 million. Teleflex appealed the verdict, and the Louisiana Third Circuit Court of Appeal affirmed.
In its appeal to the Louisiana Supreme Court, Teleflex did not assign error to the court of appeal’s conclusion regarding negligence and compensatory damages. However, Teleflex argued that the Third Circuit erred in: a) affirming the trial court’ finding of liability for punitive damages despite a lack of evidence of reckless, wanton, or callous conduct; and b) affirming the amount of punitive damages awarded, which Teleflex argued was grossly excessive as a matter of federal maritime and constitutional law.
It is well-settled in Louisiana that punitive damages are available only where authorized by statute. The Louisiana Supreme Court noted that lower state appellate courts in Louisiana, as well as federal courts, have found punitive damages to be an available remedy under general maritime law where a defendant’s intentional or wanton and reckless conduct amounted to a conscious disregard for the rights of others.
The evidence showed that Teleflex was well aware that a small fluid loss could result in total loss of steering control, that there had been numerous complaints about fluid loss, that total loss of steering control when the boat was on plane could result in ejection and severe injury, that applicable standards at the time the product was sold provided for a warning sticker on the product itself, and that it had had the opportunity to warn. Yet, as the record shows, Teleflex failed to take any action to advise its end users of the risk of severe injury and possible death. This failure was more than simple negligence. Instead, it evinces a conscious disregard for, or indifference to, the safety of its customers, justifying the imposition of punitive damages.
This case is the first pronouncement from the Louisiana Supreme Court that punitive damages are available under general maritime law.
Despite affirming the finding of liability for punitive damages under general maritime law in this case, the Louisiana Supreme Court ultimately reduced the jury’s punitive damages award of $23 million to $4.25 million on grounds that it was unconstitutionally excessive. In analyzing whether the jury’s punitive damages award crossed the constitutional line, the Court thoroughly analyzed the three guideposts set out in BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996) and also recognized a non-BMW factor traditionally considered by Louisiana courts—the defendant’s wealth—as set forth in Mosing v. Domas, 02-0012 (La. 10/15/02), 830 So. 2d 967, 973.
The Louisiana Supreme Court rejected Teleflex’s argument that Exxon Shipping Co. v. Baker, 554 U.S. 471 (2008) limited the ratio of punitive damages to compensatory damages in maritime cases at 1:1. Instead the Court relied on BMW, which refused to set a mathematical bright line, and State Farm Mut. Auto. Ins. v. Campbell, 538 U.S. 408 (2003), which noted that the ratio must be reasonable and should generally not exceed 9 to 1 in order to satisfy due process. The Court reasoned that in this case, the harm caused was great (physical injury resulting in the violent death of a young man), while the defendant’s conduct was not the most egregious on the spectrum of punishable cases, and the $125,000 compensatory damages actually awarded were relatively small.
The Louisiana Supreme Court found no codal authority that would impose monetary civil or criminal penalties for the conduct of Teleflex in this case.
The Louisiana Supreme Court noted that the wealth of defendant may be considered in determining an amount that would deter future commission of the same actions and misconduct under Mosing, but that it “should not be a driving factor behind a punitive damage award in the absence of a showing that the defendant’s conduct was motivated by malice or greed.”  In this case, even though Teleflex is a wealthy corporation, the Louisiana Supreme Court found that the award of punitive damages in the amount of $23 million was higher than reasonably required to satisfy the objective of punitive damages awards: punishment, general deterrence, and specific deterrence.
 Decedent’s mother settled her claims prior to trial.
 A jury originally found for Teleflex and dismissed the claims against it. However, the trial court granted a new trial on discretionary grounds based on what it believed to be prejudicial error during trial. The verdict above resulted from the second trial.
 Warren v. Shelter Mutual Ins. Co., No. 2016-C-1647, p. 31 (La. 10/18/17), ___ So. 3d ___.
 Exxon Shipping Co. v. Baker, 554 U.S. 471, 510 (2008).
 Warren, No. 2016-C-1647 at p. 37-8, citing BMW, 517 U.S. at 575 and State Farm, 538 U.S. at 425.
 The Third Circuit noted that decedent’s death was violent but mercifully quick, and the jury awarded the father $100,000 for decedent’s survival damages. The Court further surmised that the award of $25,000 to Plaintiff father for his own wrongful death damages reflected the fact that decedent had not been raised by his father.
 Warren, No. 2016-C-1647 at p. 46 citing Exxon, 554 U.S. 471.
 Warren, No. 2016-C-1647 at p. 46; see also See Hutto v. McNeil-PPC, Inc., 2011-609 (La. App. 3 Cir. 12/7/11), 79 So. 2d 1199, writ denied, 86 So. 3d 628 (La. 4/27/12) (affirming general damages in the amount of $2 million to each parent for the death of their child in a products liability case).
 Id. at p. 46 citing Mosing, 830 So. 2d at 978.
 Warren, No. 2016-C-1647 at p. 48-09, emphasis added.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.