Opinion ID: 2460785
Heading Depth: 1
Heading Rank: 2

Heading: due process implications.

Text: In support of its motion for a directed verdict on the issue of punitive damages, OCF produced evidence that sixteen other juries had already awarded over $35,000,000.00 against it for injuries resulting from its manufacture, sale and distribution of Kaylo. [2] In essence, OCF argues that it has been punished enough, and that successive punishments for the same course of conduct violates its right to due process of law. For this proposition, OCF relies primarily on the opinion of United States District Court Judge H. Lee Sarokin in Juzwin v. Amtorg Trading Corp., 705 F.Supp. 1053 (D.N.J.1989) ( Juzwin I ), another asbestos-related tort action in which punitive damages were sought. Due process requires that a limit be placed upon a defendant's liability for punitive damages for a single course of conduct. If a defendant's conduct has been evaluated by a factfinder, and if that factfinder has made an assessment of the amount of punitive damages necessary to deter and punish that conduct, then this court concludes that any further punishment would be unnecessary, repetitive, and a violation of due process. Thus, with respect to those defendants who are able to present competent proof that liability for punitive damages has already been imposed upon them for the conduct alleged to be the basis of a punitive damage claim in this action, the court will dismiss plaintiff's claim for such punitive damages. Id. at 1065. However, upon reconsideration, Judge Sarokin vacated that order on grounds that he was unable to fashion a suitable remedy, because there was no guarantee that prior awards contemplated the full damage caused by the defendant's conduct, or that other courts in other jurisdictions would abide by his one and only award theory in subsequent litigation. He concluded that the problem could be solved only through uniformity established by the United States Supreme Court or national legislation. Juzwin v. Amtorg Trading Corp., 718 F.Supp. 1233, 1235 (D.N.J.1989) ( Juzwin II ). For similar reasons, the vast majority of courts which have considered the issue have held that successive awards of punitive damages for the same course of conduct do not violate the Due Process Clause. E.g., Dunn v. HOVIC, 1 F.3d 1371 (3d Cir.1993), cert. denied, 510 U.S. 1031, 114 S.Ct. 650, 126 L.Ed.2d 608 (1993); Simpson v. Pittsburgh Corning Corp., 901 F.2d 277 (2d Cir.1990), cert. denied, 497 U.S. 1057, 111 S.Ct. 27, 111 L.Ed.2d 840 (1990); Jackson v. Johns-Manville Sales Corp., 781 F.2d 394 (5th Cir.1986), cert. denied, 478 U.S. 1022, 106 S.Ct. 3339, 92 L.Ed.2d 743 (1986); Cathey v. Johns-Manville Sales Corp., 776 F.2d 1565 (6th Cir.1985), cert. denied, 478 U.S. 1021, 106 S.Ct. 3335, 92 L.Ed.2d 740 (1986); Hansen v. Johns-Manville Prods. Corp., 734 F.2d 1036 (5th Cir.1984), cert. denied, 470 U.S. 1051, 105 S.Ct. 1749, 1750, 84 L.Ed.2d 814 (1985); Man v. Raymark Industries, 728 F.Supp. 1461 (D.Haw.1989); Campbell v. ACandS, Inc., 704 F.Supp. 1020 (D.Mont.1989); Stevens v. Owens-Corning Fiberglas Corp., 49 Cal.App.4th 1645, 57 Cal.Rptr.2d 525 (1996); Spaur v. Owens-Corning Fiberglas Corp., 510 N.W.2d 854 (Iowa 1994); Owens-Corning Fiberglas Corp. v. Wasiak, 917 S.W.2d 883 (Tex.App.1996). We have no hesitancy in joining the majority on this issue. In Kentucky, the assessment of punitive damages requires consideration of not only the nature of the defendant's act, but also the extent of the harm resulting to the plaintiff. Fowler v. Mantooth, Ky., 683 S.W.2d 250, 253 (1984). In other words, the jury is to consider not only the defendant's conduct, but the relationship of that conduct to the injury suffered by this particular plaintiff. The punitive damages instruction given in this case authorized imposition of punitive damages only if OCF acted with a flagrant indifference to the rights of the Plaintiff, or engaged in misrepresentation, deceit or concealment of a known fact with the intention of causing injury to this Plaintiff. The jury was further instructed that the amount of punitive damages awarded shall bear a reasonable relationship to your compensatory damage award. In the context of a mass tort, a defendant's conduct may be viewed by a jury as more or less egregious depending on the status or situation of the particular plaintiff. For example, after acquiring knowledge of the health risks associated with exposure to asbestos, OCF distributed a brochure containing the following information concerning asbestos-containing Kaylo: Easy fabricationordinary tools of the trade, sufficient for all cutting, scoring or sawing. Lightweight, pleasant handling and non-irritating, non-toxic nature make it a well-liked workers' material. ... Easy fabricationKaylo-20 Block can be cut, scored or sawed with ordinary tools of the trade. Light weight, pleasant handling and non-irritating and non-toxic nature contribute to worker well-being on the job. A jury could reasonably believe that OCF's conduct was more egregious with respect to Carl Golightly, who was injured while employed in precisely the type of work advertised as non-irritating and non-toxic and contributing to his well-being, than with respect to someone who was otherwise exposed to the health hazards of the product. We agree with Judge Sarokin's observation in Juzwin II, supra, 718 F.Supp. at 1236, that it would be unfair to this plaintiff to bar his claim for punitive damages just because other plaintiffs have previously recovered damages arising out of the same conduct. We also subscribe to the view of the United States Sixth Circuit Court of Appeals that the availability of punitive damages should not be proscribed merely because a defendant's tortious behavior resulted in harm to a large number of people. We do not believe that defendants should be relieved of liability because, through outrageous misconduct, they have managed to seriously injure a large number of persons. Such a rule would encourage wrongdoers to continue their misconduct because, if they kept it up long enough to injure a large number of people, they could escape all liability for punitive damages. Cathey v. Johns-Manville Sales Corp., supra, at 1571, quoting Froud v. Celotex Corp., 107 Ill.App.3d 654, 63 Ill.Dec. 261, 437 N.E.2d 910, 913 (1982), rev'd on other grounds, 98 Ill.2d 324, 74 Ill.Dec. 629, 456 N.E.2d 131 (1983). We have examined the United States Supreme Court's recent decision in BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996) and are satisfied that it does not require reversal of the punitive damages verdict in this case. In BMW , the Supreme Court reversed a punitive damages award of $2,000,000.00 (reduced by a lower appellate court from an original jury verdict of $4,000,000.00) in a case involving actual property damage of $4,000.00 as so grossly excessive as to violate the Due Process Clause. That case involved one award to one plaintiff and did not address whether the Due Process Clause prohibits multiple awards to multiple plaintiffs injured as a result of a mass tort. In fact, as the cases cited supra indicate, the Supreme Court has been afforded numerous opportunities to address this issue and, to date, has declined to do so.
Recent decisions of the United States Supreme Court recognize that the Due Process Clause imposes a limit on awards of punitive damages. BMW of North America, Inc. v. Gore, supra ; TXO Production Corp. v. Alliance Resources Corp., 509 U.S. 443, 113 S.Ct. 2711, 125 L.Ed.2d 366 (1993); Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 111 S.Ct. 1032, 113 L.Ed.2d 1 (1991). OCF only briefly asserts that the punitive damages award in this case was excessive. Instead, it focuses primarily on what it claims is a constitutionally infirm standard of review used in this jurisdiction to assess whether a particular award of punitive damages is excessive. Specifically, OCF cites Davis v. Graviss, Ky., 672 S.W.2d 928 (1984) and Fowler v. Mantooth, supra , as holding that once a trial judge makes a first blush determination that a punitive damages award is not excessive, the only function of our appellate courts is to determine whether there is any evidence to support the verdict. In Honda Motor Co., Ltd. v. Oberg, 512 U.S. 415, 114 S.Ct. 2331, 129 L.Ed.2d 336 (1994), an amendment to the Oregon Constitution which prohibited any judicial review of the amount of a punitive damages award unless the court can affirmatively say there is no evidence to support the verdict was held to violate the Due Process Clause. Punitive damages pose an acute danger of arbitrary deprivation of property. Jury instructions typically leave the jury with wide discretion in choosing amounts, and the presentation of evidence of a defendant's net worth creates the potential that juries will use their verdicts to express biases against big businesses, particularly those without strong local presences. Judicial review of the amount awarded was one of the few procedural safeguards which the common law provided against that danger. Oregon has removed that safeguard without providing any substitute procedure and without any indication that the danger of arbitrary awards has in any way subsided over time. For these reasons, we hold that Oregon's denial of judicial review of the size of punitive damages awards violates the Due Process Clause of the Fourteenth Amendment. Id., 512 U.S. at 432, 114 S.Ct. at 2340-41. We, of course, are bound by the United States Supreme Court's interpretation of what constitutes due process under the United States Constitution. Wagers v. Sizemore, 222 Ky. 306, 300 S.W. 918 (1928); cf. Elmendorf v. Taylor, 23 U.S. (10 Wheat.) 152, 6 L.Ed. 289 (1825). However, we do not agree that our system of judicial review amounts to no review of the size of punitive damages awards. What we held in both Davis v. Graviss and Fowler v. Mantooth, supra , is that it is the primary function of the trial judge to determine whether, at first blush and in accordance with the criteria set forth in CR 59.01(d), (e) and (f), the verdict is excessive. On appeal, the trial judge's determination is considered presumptively correct and will be reversed only if it is clearly erroneous. Davis v. Graviss, supra at 932; Fowler v. Mantooth, supra at 253. The so-called first blush rule can be traced to Huckle v. Money, 2 Wils. 205, 95 Eng.Rep. 768 (C.P.1763), which held that an award of damages may be set aside by a reviewing court as excessive when the damages are outrageous and all mankind at first blush must think so. Id. at 207, 95 Eng.Rep. at 769. CR 59.01 authorizes a trial judge to grant a new trial for, inter alia, any of the following grounds: (d) Excessive or inadequate damages, appearing to have been given under the influence of passion or prejudice or in disregard of the evidence or the instructions of the court. (e) Error in the assessment of the amount of recovery whether too large or too small. (f) That the verdict is not sustained by sufficient evidence, or is contrary to law. Application of these criteria requires a judicial review of the evidence and a fact-finding function on the part of the trial judge. The Oregon constitutional amendment struck down in Honda Motor Co., Ltd. v. Oberg, supra , prohibited judicial review by either a trial court or an appellate court. Nor does the clearly erroneous standard of review constitute an abdication of our traditional role of appellate review. We have long held that for purposes of appellate review, a finding of fact of a trial judge ranks in equal dignity with the verdict of a properly instructed jury, i.e., if supported by substantial evidence, it will be upheld, otherwise, it will be set aside as clearly erroneous. Daniel v. Kerby, Ky., 420 S.W.2d 393 (1967); Massachusetts Bonding & Ins. Co. v. Huffman, Ky., 340 S.W.2d 447 (1960); Yates v. Wilson, Ky., 339 S.W.2d 458 (1960). In this jurisdiction, substantial evidence means evidence of substance and relevant consequence having the fitness to induce conviction in the minds of reasonable men. Kentucky State Racing Comm'n v. Fuller, Ky., 481 S.W.2d 298, 308 (1972); Smyzer v. B.F. Goodrich Chem. Co., Ky., 474 S.W.2d 367 (1971); O'Nan v. Ecklar Moore Express, Inc., Ky., 339 S.W.2d 466 (1960). Thus, even though the decision of the trial judge is accorded presumptive correctness on appeal, the appellate court still must review the evidence to determine whether that decision was clearly erroneous. Necessarily, the focus of this review is on the criteria set forth in CR 59.01, supra, and those factors set forth in Hanson v. American Nat'l Bank & Trust Co., supra at 310-11, as required by TXO Production Corp. v. Alliance Resources Corp., supra, 509 U.S. at 459-61, 113 S.Ct. at 2721-22, for determining whether punitive damages awarded in a particular case are excessive. We are satisfied that this duality of trial court and appellate court review affords a defendant the due process protections mandated in Honda Motor Co., Ltd. v. Oberg, supra . On the basis of the above criteria and our review of the evidence as set forth in Part I of this opinion, we are satisfied that the trial judge was not clearly erroneous in determining that the punitive damages verdict returned in this case was not excessive.