Opinion ID: 1783925
Heading Depth: 1
Heading Rank: 8

Heading: The Reasonable Relationship Factor

Text: Did the punitive damages award bear a reasonable relationship to the harm that was likely to occur from the defendant's conduct as well as to the harm that actually occurred? Was the actual or likely harm slight, or was it grievous? It seems apparent from the record that the jury's punitive damages award is based upon a multiplication of $4,000 (the diminution in value of the Gore vehicle) times 1,000 (approximately the number of refinished vehicles sold in the United States). Gore's counsel specifically argued the following during closing: They've taken advantage of nine hundred other people on those cars that were worth more.... If what Mr. Cox said is true, they have profited some four million dollars on those automobiles. Four million dollars in profits that they have made that were wrongfully taken from people. That's wrong, ladies and gentlemen. They ought not be permitted to keep that. You ought to do something about it. .... I urge each and every one of you and hope that each and every one of you has the courage to do something about it. Because, ladies and gentlemen, I ask you to return a verdict of four million dollars in this case to stop it. Based on these facts and the testimony taken at the post-trial hearing on the excessiveness issue, we must conclude that the award of punitive damages was based in large part on conduct that happened in other jurisdictions. This, BMW NA argues, is a violation of BMW's due process rights and encroaches upon the sovereignty of other states. See, Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 105 S.Ct. 2965, 86 L.Ed.2d 628 (1985). Although evidence of similar acts in other jurisdictions is admissible as to the issue of a pattern and practice of such acts, see part III, supra, this jury could not use the number of similar acts that a defendant has committed in other jurisdictions as a multiplier when determining the dollar amount of a punitive damages award. Such evidence may not be considered in setting the size of the civil penalty, because neither the jury nor the trial court had evidence before it showing in which states the conduct was wrongful. [6] This Court has recognized that evidence of adherence to industry practice bears importance on the question whether the defendant has acted in good faith and is therefore not subject to exemplary damages. Thomas v. Principal Financial Group, 566 So.2d 735 (Ala.1990); Richerzhagen v. National Home Life Assurance Co. of New York, 523 So.2d 344 (Ala.1988). This Court has also held that a manufacturer that in good faith repairs a vehicle to new specifications should not be found to have engaged in the type of conduct giving rise to punitive damages. Ford Motor Co. v. Burkett, 494 So.2d 416 (Ala.1986). This Court has further held that a vehicle with superficial cosmetic damage, including scratches in the paint and unmatched and uneven paint, was new as a matter of law, and on that holding affirmed a judgment based on a directed verdict against a plaintiff claiming fraud. Wilburn v. Larry Savage Chevrolet, Inc., 477 So.2d 384 (Ala.1985). While reviewing the verdict in this case, we have considered the principles of law contained in these other Alabama cases. In defending the jury's punitive damages award, Gore argues that the harm is likely to occur in the future if the substantial award is not upheld, because the policy of nondisclosure was not changed before the verdict in this case was returned, even though BMW NA had been faced with lawsuits and with requests by dealers that it change the policy. Gore contends that, because of the size of the award, [f]ive days after this punitive damages verdict, BMW NA adopted a full disclosure policy. In arguing for enforcement of the total jury award, Gore likens the conduct here to that in TXO Production Corp. v. Alliance Resources Corp., ___ U.S. ___, 113 S.Ct. 2711, 125 L.Ed.2d 366 (1993), where the United States Supreme Court considered whether a $10 million punitive damages award in a slander of title action was excessive when the actual damages verdict was only $19,000. The Supreme Court noted that [w]hile [TXO] stresses the shocking disparity between the punitive award and the compensatory award, that shock dissipates when one considers the potential loss to [Alliance], in terms of reduced or eliminated royalties payments, had [TXO] succeeded in its illicit scheme. ___ U.S. at ___, 113 S.Ct. at 2722. Likewise, we find a reasonable relationship between the jury's decision to award punitive damages and the number of times BMW NA had engaged in similar conduct, and we find no error in the admission of the evidence that showed how pervasive the nondisclosure policy was and the intent behind BMW NA's adoption of it. However, as we discuss below, when applying the reasonable relationship test to the amount of punitive damages to be awarded in this case, we do not consider those acts that occurred in other jurisdictions. As noted in Pacific Mut. Life Ins. Co. v. Haslip, supra , the constitutionality of Alabama's punitive damages law rests, in part, on this Court's use of comparative analysis during judicial review of a punitive damages award. Further, although in TXO Production Corp. v. Alliance Resources Corp., supra , the Supreme Court refused to embrace the comparative analysis method as the sole means for review of a punitive damages award, it noted that analysis was one of the relevant factors to be considered in a review of punitive damages awards. Accordingly, in reviewing the punitive damages award in this case, we have considered cases from this state, along with cases from other jurisdictions, involving the sale of an automobile where the seller misrepresented the condition of the vehicle and the jury awarded punitive damages to the purchaser. Although we find the use of comparison cases helpful in determining whether a jury's punitive damages award is excessive in relation to the defendant's conduct, we note that such an analysis is but one step in applying the Green Oil factors and is not a substitute for the use of all those factors. We emphasize that the use of an enhanced comparative analysis does not create, and is not intended to create, a mathematical formula incorporating other jury verdicts to produce a readily calculable figure for punitive damages. As the United States Supreme Court stated in Haslip, We need not, and indeed we cannot, draw a mathematical bright line between the constitutionally acceptable and the constitutionally unacceptable that would fit every case. 499 U.S. at 18, 111 S.Ct. at 1043. Mathematical formulas simply cannot fit the requirement of case-by-case justice that is the cornerstone of our jury system. The determination of a proper award of punitive damages ultimately turns on the jury's determination of the facts warranting their imposition. Our law governing this Court's deference to the jury's factfinding prerogative is long settled: When a jury is the trier of fact, it is not for the trial judge, nor an appellate court, to attempt to determine with mathematical certainty that all of the various elements of evidence offered by the parties regarding specific costs and credits precisely equal the amount of the jury's verdict. We do not have trial by computer, nor do we have post-trial, or appellate review by the computer. The reviewing court does not substitute its own judgment as to the amount of damages for that of the trier of fact. G.M. Mosley Contractors, Inc. v. Phillips, 487 So.2d 876, 879 (Ala.1986). See also Hollis v. Wyrosdick, 508 So.2d 704 (Ala.1987). Upon review of a jury verdict, we presume that the verdict was correct; we review the tendencies of the evidence most favorably to the prevailing party; and we indulge such reasonable inferences as the jury was free to draw from the evidence. We will not overturn a jury verdict unless the evidence against the verdict is so much more credible and convincing to the mind than the evidence supporting the verdict that it clearly indicates that the jury's verdict was wrong and unjust. Campbell v. Burns, 512 So.2d 1341, 1343 (Ala.1987) (citation omitted). See also Ashbee v. Brock, 510 So.2d 214 (Ala.1987); and Jawad v. Granade, 497 So.2d 471 (Ala.1986). Taken in this light, a comparative analysis referencing analogous cases provides additional data to be considered in determining whether a particular award is constitutionally reasonable under the requirements of TXO, Haslip, Green Oil, and Hammond, supra. After thoroughly and painstakingly reviewing this jury award in light of the factors discussed above, we hold that a constitutionally reasonable punitive damages award in this case is $2,000,000, and that a remittitur of the $4 million jury verdict is appropriate. Therefore, the trial court's order denying BMW NA's motion for a new trial is affirmed on the condition that the plaintiff file with this Court within 21 days a remittitur of damages in the sum of $2,000,000; otherwise, the judgment will be reversed and this cause remanded for a new trial as to the defendant BMW NA. 1920324ORIGINAL OPINION WITHDRAWN; OPINION SUBSTITUTED; AFFIRMED CONDITIONALLY; APPLICATION OVERRULED. 1920325ORIGINAL OPINION WITHDRAWN; OPINION SUBSTITUTED; REVERSED AND JUDGMENT RENDERED FOR DEFENDANT BMW AG; APPLICATION OVERRULED. HORNSBY, C.J., and MADDOX, SHORES, STEAGALL, KENNEDY and INGRAM, [7] JJ., concur. HOUSTON, J., concurs specially.