Opinion ID: 834924
Heading Depth: 2
Heading Rank: 3

Heading: Whether the Court of Appeals correctly resolved Farmers's challenge to the constitutionality of the punitive damages award

Text: The final issue before us is one that both parties raise on review: whether the Court of Appeals correctly determined that the amount of punitive damages awarded by the jury in this case was constitutionally excessive. Relying on its understanding of the applicable federal due process standards, the Court of Appeals concluded that the jury's award of $8 million in punitive damages was excessive, and that the highest amount that the jury could constitutionally award was four times the combined amount of plaintiff's compensatory damages and prejudgment interest. Strawn, 228 Or.App. at 485, 209 P.3d 357. The court therefore vacated the judgment with instructions to grant Farmers a new trial on the issue of punitive damages, unless plaintiffs on remand were to agree to a remitittur of the punitive damages award. Id. On review to this court, both parties assert that the Court of Appeals' 4:1 ratio is legally in error. Farmers contends that the ratio should be lower; plaintiffs contend that the ratio should be higher. Preliminarily, however, plaintiffs also contend that Farmers's challenge to the punitive damages award was not properly before the Court of Appeals and, therefore, the Court of Appeals should not have reached it at all. We turn to plaintiffs' argument in that regard because, as we will explain, it is dispositive. As context for our discussion, we begin by describing the parties' post-verdict positions on whether the trial court should have reduced the jury's punitive damages award, as advanced in the procedural motions and memoranda that the parties filed. After the jury returned its verdict, the parties filed a series of motions through which plaintiffs effectively asked the trial court to validate the amount of the jury's punitive damages award, while Farmers effectively asked the court to reduce that award. Plaintiffs filed the first of those motions, requesting that the trial court affirm the jury's punitive damages award under former ORS 18.537(2) (2001), renumbered as ORS 31.730 (2003) (requiring trial court to assess whether a punitive damages award is within the range of damages that a rational juror would be entitled to award). Farmers opposed that motion and also filed a motion for remittitur, urging in support of both motions that the punitive damages award exceeded federal due process standards as described in State Farm Mut. Automobile Ins. Co. v. Campbell, 538 U.S. 408, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003), and BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996). [19] Plaintiffs opposed Farmers's motion for remittitur, asserting, among other reasons, that the motion was procedurally defective because Farmers had not conjoined it with a motion for new trial. The parties' positions and objections were renewed and revised through a series of further motions. For our purposes here, it is not important to describe that entire series. It suffices to observe that they culminated in: (1) Farmers's alternative motions for remittitur and new trial, seeking to reduce the punitive damages award; and (2) plaintiffs' opposition to those motions. What is important for our purposes is that Farmers's motions and plaintiffs' opposition to them framed two broad issues on which the parties disagreed. The parties not only disagreed on the merits of Farmers's motion ( viz., whether the jury's punitive damages award comported with constitutional standards), they also disagreed about what procedures a defendant must follow to preserve a constitutional objection to the excessiveness of a jury's punitive damages award. In arguing that Farmers had failed to present its constitutional objections in a procedurally proper way, plaintiffs advanced several theories. One was waiver. In particular, plaintiffs asserted that Farmers should have taken any or all of a series of procedural steps during trial to ensure that the jury returned a punitive damages award consistent with due process standards. One such step, plaintiffs urged, was that Farmers should have sought to have the jury instructed that any punitive damages award it might make could not exceed whatever upper limit Farmers believed was constitutionally imposed. Plaintiffs also argued that, after the jury returned its verdict, Farmers should have objected to the discharge of the jury and requested that the jury be reinstructed to deliberate further to make sure that the punitive damages award did not exceed constitutional limits, citing Building Structures, Inc. v. Young, 328 Or. 100, 968 P.2d 1287 (1998) (party who fails to object to defective jury verdict before jury is discharged waives objection to the defect). In addition to those waiver arguments, plaintiffs urged that Farmers's motions suffered from other procedural defects as well. They included Farmers's failure, through a motion for directed verdict or some other procedural means, to move to strike plaintiffs' prayer for punitive damages on the ground that it exceeded whatever amount that Farmers believed was the constitutional maximum; Farmers's failure to move against plaintiffs' complaint or challenge the sufficiency of plaintiffs' evidence on that same theory; and Farmers's failure to condition its motions on a waiver of its right to appeal as to all other alleged errors during the trial (which plaintiffs urged was required at common law). Farmers responded to plaintiffs' waiver and other procedural objections by arguing that a defendant cannot challenge a verdict for punitive damages as excessive until after the jury renders its verdict. Farmers urged that alternative motions for remittitur or new trial were the appropriate procedural means for raising its federal due process objection to the punitive damages award, citing Parrott v. Carr Chevrolet, Inc., 331 Or. 537, 558-59 n. 14, 17 P.3d 473 (2001) (party cannot challenge verdict for punitive damages as constitutionally excessive until after jury renders verdict; motion for new trial is among appropriate procedures for raising such challenge). In oral argument on the motions, plaintiffs responded to Farmers's reliance on Parrott by asserting the statements in that case were dicta and by contending that there were many big questions raised by Farmers's procedural choices. Ultimately, the trial court agreed with plaintiffs, both with their procedural position and with their position on the merits. In its oral ruling, the trial court found at the outset that there's been waiver by Farmers and that, in the court's view, a finding of waiver is actually dispositive. The trial court also considered the merits of Farmers's challenge, stating expressly that it was doing so in the alternative, because of the possibility that an appellate court would not agree with the court's waiver determination. On the merits, the trial court concluded that the jury's punitive damages award was not constitutionally excessive. The written findings of fact and conclusions of law that the trial court later issued were consistent with its oral declaration, although more detailed. In them, the trial court concluded that Farmers had waived its constitutional objections, that its motions were procedurally defective in other regards, and that, on the merits, Farmers's challenge that the punitive damages award was excessive failed. On appeal to the Court of Appeals, Farmers's opening brief assigned error to the award of punitive damages, but did not specify the rulings being challenged. [20] The sole argument that Farmers made in support of its claim of error was that the trial court had erred in resolving the merits of the motion against Farmers. That is, Farmers argued at length that the jury's punitive damages award exceeded federal due process standards, and that the trial court had erred in concluding otherwise. Farmers made no mention of the trial court's procedural ruling that Farmers had waived its challenge or had otherwise not followed the proper procedural route to raise and preserve it. Instead, Farmers contended that the motion had been deemed denied on the expiration of the 55-day period prescribed by ORCP 64 F (which we will discuss shortly). In response to Farmers's argument, plaintiffs first urged that the Court of Appeals could not reach the issue of whether the award was excessive, because Farmers had not challenged the waiver and other procedural grounds on which the trial court ruling also rested. Plaintiffs then argued, in the alternative, that the trial court's resolution of Farmers's excessiveness challenge to the punitive damages award was correct. In its decision, the Court of Appeals resolved the Farmers's excessiveness challenge without acknowledging or addressing the waiver and procedural grounds on which the trial court had alternatively based its ruling. Strawn, 228 Or.App. at 476-85, 209 P.3d 357. On review, plaintiffs challenge the Court of Appeals' failure to affirm the trial court on the alternative procedural grounds that Farmers did not challenge. Farmers, for its part, does not question the proposition that, when a court's decision or ruling is premised on alternative grounds, a party challenging that ruling generally must take issue with all independent and alternative grounds on which it is based to obtain relief. Cf. State ex rel. Juv. Dept. v. Charles, 299 Or. 341, 343, 701 P.2d 1052 (1985) (dismissing petition as improvidently granted, because Court of Appeals decision rested on an independent ground and state petitioned for review on one ground only; thus, this court would be required to affirm the Court of Appeals on the issue for which review was not sought). Neither does Farmers disagree that the trial court in fact did conclude that Farmers had waived and procedurally defaulted in bringing its challenge to the punitive damages award, as alternative grounds for resolving that award. And finally, Farmers does not dispute that, to preserve an issue on appeal, a party must make the issue the object of a proper assignment of error and supporting argument in the party's opening brief. See ORAP 5.45(1) (No matter claimed as error will be considered on appeal unless the claim of error    is assigned as error in the opening brief   . (Emphasis added.)). Farmers's principal response is that the trial court had lost its jurisdiction to articulate any reasons for denying the motion. Farmers contends that its motion for new trial was denied by operation of law before the trial court ruled on it, so the court's order was void. Under ORCP 64 F, [21] if a trial court has not heard and determined a motion for new trial within 55 days after entry of judgment, that motion is deemed denied by operation of law, and the trial court lacks jurisdiction to enter any order on the motion. McCollum v. Kmart Corporation, 347 Or. 707, 711, 226 P.3d 703 (2010). In this case, the trial court held the hearing on Farmers's motions on the last day of the 55-day period, orally ruled on the motion at that time, and signed a simple order denying the motions in open court before the hearing ended. The trial court did not, however, sign and enter its lengthier written findings and conclusions in support of its order until after that period had expired. Based on that, Farmers argues that the trial court's oral waiver ruling was ineffective, since it was not memorialized in writing until after Farmers's motions were denied by operation of law, at which point the trial court had no further jurisdiction over the motions. That analysis, however, overlooks the legal effect of the trial court's ruling at the time of the hearing. During the hearing, the trial court stated that it was denying Farmers's motions and briefly explained its reasons on the record, including its waiver determination. The court then signedin open courtan order denying Farmers's motions, and expressly declared that it was doing so: At this time I'm signing the order denying Farmers's motions which I've already identified. So that order is signed. Under ORS 3.070, the order became immediately effective, and thus took effect before Farmers's motion for new trial would have been deemed denied by operation of law. [22] For that reason, Farmers's jurisdictional argument is unavailing. Farmers makes a second, alternative argument, as well. It contends that the trial court should be deemed to have denied the motion for new trial without any explanation of its reasoning. Farmers contends that the trial court's oral statements of its reasoning were ineffective, because they were not memorialized in writing. Farmers further reasons that the written findings of fact and conclusions of law were ineffective, because they were filed and entered after the trial court had denied the motion for new trial. Based on those alleged defects of form and timing, Farmers effectively urges that a reviewing court is required to ignore the trial court's stated reasons for its decision. We find no merit to that contention. By its terms, ORCP 64 F requires a motion for new trial to be heard and determined within 55 days from entry of judgment, but it requires no written statement of reasons or other explanation in support of the ruling. Neither does it preclude a trial court from memorializing its reasoning after ruling on the motion in open court within the time allowed. Such written explanations and findings are generally very helpful to the appellate courts in meaningfully reviewing a trial court's ruling, and we are not inclined to foreclose their consideration unnecessarily. In this instance, the only mandate contained in ORCP 64 F is that the motion for new trial be resolved within the prescribed period. Here, it was. The trial court ruled in open court; it briefly stated its reasoning orally; the written order denying the motion for new trial was signed in open court and specifically stated that future findings would be issued; and the findings themselves were signed, filed, and entered within two weeks, and before the filing of any notice of appeal. Farmers advances no persuasive reason why the trial court's written explanation of its timely determination of the motion should not be given full consideration by the appellate courts. [23] We therefore conclude that the Court of Appeals erred in reaching Farmers's challenge to the punitive damages award as excessive. The trial court articulated two alternative reasons for denying Farmers's motions (waiver and other procedural defects, as well as a conclusion on the merits that the award did not exceed constitutional limits). The trial court further expressly concluded that both bases on which it ruled were independently sufficient to support the trial court's ruling. Logically, that was true. On appeal, Farmers failed to preserve any challenge to the waiver and other procedural grounds on which the trial court's order was alternatively based. Any error by the trial court concerning the constitutionality of the punitive damages award therefore was necessarily harmless. The Court of Appeals should have affirmed the trial court's order denying the motion for new trial. See generally Jensen v. Medley, 336 Or. 222, 239-40, 82 P.3d 149 (2003) (affirming judgment, despite erroneous jury instruction on one of plaintiff's theories of liability, where defendant did not challenge another basis for liability). In so concluding, we emphasize that we do not decide whether the trial court's alternative grounds for its ruling were sound. The correctness of the trial court's waiver and other procedural analyses are not before us, just as those issues were not before the Court of Appeals. Indeed, it is precisely because the trial court's alternative grounds for ruling were not challenged by Farmers that the issue of the excessiveness of the punitive damages award was not before the Court of Appeals for its determination. Likewise, whether that award was constitutionally excessive is not before us. For that reason, the punitive damages award must be affirmed.