Opinion ID: 1791846
Heading Depth: 2
Heading Rank: 2

Heading: Excessive Punitive Damages Award

Text: In addition to arguing that there was insufficient evidence to support an award of punitive damages, Union Pacific argues the award given by the jury is excessive under either state or federal standards. We have recently explained the standard for reviewing a claim of excessive punitive damages: We consider the extent and enormity of the wrong, the intent of the party committing the wrong, all the circumstances, and the financial and social condition and standing of the erring party. Punitive damages are a penalty for conduct that is malicious or perpetrated with the deliberate intent to injure another. When punitive damages are alleged to be excessive, we review the proof and all reasonable inferences in the light most favorable to the appellees, and we determine whether the verdict is so great as to shock the conscience of this court or to demonstrate passion or prejudice on the part of the trier of fact. It is important that the punitive damages be sufficient to deter others from comparable conduct in the future. The conscious indifference of the alleged wrongdoer to the wrong committed is a pertinent factor in assessing punitive damages. Advocat Inc. v. Sauer, 353 Ark. 29, 50-51, 111 S.W.3d 346, 358 (2003) (citations omitted). We start by examining the enormity of the wrong in this case. There is evidence that Union Pacific was on notice of the dangerous and life threatening nature of this crossing through the complaints of its own personnel and the complaints of the public. There is also evidence that several near-misses occurred at this crossing. Furthermore, the record reflects that Union Pacific destroyed important evidence directly related to this accident, including voice tapes and track inspection records. Viewing the proof and all the evidence in the light most favorable to the Barbers, we conclude that Union Pacific knew, or should have known of the extreme danger presented to the public at Crossing 123. In recognizing that danger, Union Pacific still consciously refused to remedy the situation. As such, Union Pacific's conduct reflects that it intentionally put the traveling public in harm's way. Under these circumstances, the enormity of the wrong is substantial. There was also evidence to indicate a malicious intent perpetuated by Union Pacific. As noted by the Barbers in their brief, the record in this case reflects the development of a corporate policy at Union Pacific that put company profits before public safety. In addition to evincing that corporate policy through the handbooks given to claims representatives, the Barbers presented expert testimony from Dr. Harvey Levine who performed an economic study and opined that Union Pacific's practices reflected that policy. Lastly, we consider the financial and social condition and standing of Union Pacific. During the second phase of the bifurcated trial where the jury was called upon to determine the amount of punitive damages, Union Pacific stipulated that its net worth was $9.6 billion. Thus, there is no doubt that Union Pacific is in a strong financial and social condition. We note that the punitive damages award of $25 million amounts to 0.260% of Union Pacific's net worth. Taken together under all the circumstances, including the evidence that Union Pacific intentionally destroyed unfavorable evidence, we conclude that an award of punitive damages was appropriate in this case. Thus, we turn next to determine whether the amount of punitive damages shocks the conscience of the court. The United States Supreme Court has enunciated a three-factor test to determine whether an award of punitive damages is excessive. See BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996). A Gore analysis is to be undertaken by the appellate court de novo. Advocat v. Sauer, supra . Under Gore , to determine whether Union Pacific received adequate notice of both the conduct that would subject it to punishment and the magnitude of the sanction, we consider the following three factors: (1) the degree of reprehensibility of the defendant's conduct; (2) the disparity between the harm or potential harm suffered by the plaintiff and his punitive damages award; and (3) the difference between this remedy and the civil penalties authorized by statute or imposed in comparable cases. BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996). The three Gore criteria are to be given equal weight. Advocat v. Sauer, supra . We have employed the Gore test in three cases. See Advocat Inc. v. Sauer, 353 Ark. 29, 111 S.W.3d 346 (2003); Edwards v. Stills, 335 Ark. 470, 984 S.W.2d 366 (1998); Routh Wrecker Service v. Washington, 335 Ark. 232, 980 S.W.2d 240 (1998).