Opinion ID: 610843
Heading Depth: 3
Heading Rank: 3

Heading: Appellate Court Review of Procedure and the Amount of the Award

Text: 60 As the third stage of scrutiny, an appellate court should undertake two distinct inquiries. First, it must satisfy itself that the defendant was afforded the two prior stages of scrutiny, i.e., proper instructions and a recording of reasons for upholding or altering the award. If the district court failed to give proper instructions, a new trial is in order on that issue. If the district court failed to record its reasons for upholding or altering the award, as is the case here, the circuit court should remand the case so that the district court may make its analysis and record its conclusions. If either of the two prior stages is lacking, the circuit court should reverse and remand; it should not undertake the substantive review of the award. 61 The appellate court's second inquiry is a substantive review of the amount of the award. Appellate review, as the Supreme Court pointed out in Haslip, is necessary 62 to ensure that the award does not exceed an amount that will accomplish society's goals of punishment and deterrence. ... This appellate review makes certain that the punitive damages are reasonable in their amount and rational in light of their purpose to punish what has occurred and to deter its repetition. Id. at 17, 111 S.Ct. at 1045 (citations omitted). 63 The Ninth Circuit's standard states that [u]nless the amount of damages is grossly excessive, unsupported by the evidence, or based solely on speculation, the reviewing court must uphold the jury's determination of the amount. Davis, 927 F.2d at 1485 (citing Los Angeles Memorial Coliseum Comm'n v. Nat'l Football League, 791 F.2d 1356, 1360 (9th Cir.1986)). In Haslip, the Court suggested that a manifestly and grossly excessive standard, such as the one used by this circuit, does not comport with Due Process. Haslip, 499 U.S. at 17 n. 10, 111 S.Ct. at 1045 n. 10. 64 Following this lead, the Fourth Circuit found in Mattison v. Dallas Carrier Corp., 947 F.2d 95, 105 (4th Cir.1991), that Virginia's excessiveness standard for reviewing punitive damages was lacking. The substantive content of the Ninth Circuit's grossly excessive standard is now refashioned to give it a definite shape and texture and to avoid any conflict with the Due Process Clause. 16 A circuit court should determine whether a punitive damage award exceeds the amount necessary to accomplish the goals of punishment and deterrence in deciding whether it is grossly excessive. 65 c. The Seventh Amendment's Guarantee to Trial by Jury 66 The Seventh Amendment's guarantee to a trial by jury may require a court reviewing an award of punitive damages to give a plaintiff the option of a new trial on punitive damages if it finds an award grossly excessive and otherwise would order a remittitur. The Supreme Court, it appears, has never given its blessing to an appellate court reducing an award without affording the plaintiff an opportunity to retry that issue. See Browning-Ferris Industries, 492 U.S. at 279 n. 25, 109 S.Ct. at 2922 n. 25. 67 Several circuits, however, have reduced the amount of punitive damages awarded without giving the plaintiff a choice of a new trial on that issue. See, e.g., Rowlett v. Anheuser-Busch, Inc., 832 F.2d 194, 207 (1st Cir.1987); Shimman v. Frank, 625 F.2d 80, 102-04 (6th Cir.1980); Bell v. City of Milwaukee, 746 F.2d 1205, 1279 (7th Cir.1984); Douglas v. Metro Rental Services, Inc., 827 F.2d 252, 257 (7th Cir.1987); Guzman v. Western State Bank of Devils Lake, 540 F.2d 948, 954 (8th Cir.1976). However, none of these cases considered the Seventh Amendment, and we do not think it wise to follow this course of action. 68 Two cases already have held that a remittitur without the option of a new trial is a violation of the Seventh Amendment. In McKinnon v. City of Berwyn, 750 F.2d 1383 (7th Cir.1984), the court reversed the district court's remittitur of punitive damages, without option of a new trial, against police officers in a section 1983 case. The court said, the Seventh Amendment reserves the determination of damages, in jury trials within its scope, to the jury.... The proper corrective is to give McKinnon the choice he was improperly denied, between accepting the remittitur and having a new trial on damages. Id. 750 F.2d at 1392. The Fourth Circuit also held that the Seventh Amendment guarantees a right to a jury determination of the amount of punitive damages. Defender Indust., Inc. v. Northwestern Mut. Life Ins. Co., 938 F.2d 502, 507 (4th Cir.1991) (en banc). 69 To avoid any conflict with the Seventh Amendment, the preferable course is to afford the party awarded the grossly excessive punitive damages, whether that is determined by a trial or appellate court, the option of either accepting the remittitur of the punitive damage award or a new trial on that issue. See, e.g., Ramsey v. American Air Filter Co., 772 F.2d 1303, 1314 (7th Cir.1985); Hollins v. Powell, 773 F.2d 191, 198 (8th Cir.1985), cert. denied, 475 U.S. 1119, 106 S.Ct. 1635, 90 L.Ed.2d 181 (1986); Mason v. Texaco, 948 F.2d 1546, 1561 (10th Cir.1991), cert. denied, --- U.S. ----, 112 S.Ct. 1941, 118 L.Ed.2d 547 (1992). 2. Punitive Damages Based on State Claims 70 The award of $150,000 on the state law claims presents a different problem. As was said above, the Due Process analysis is the same whether the punitive damages are based on federal or state law. The state punitive damages are treated separately here only because of the additional issue of evidence of financial worth. In reviewing a punitive damage award based on state law, the district court has an additional duty; it must make sure that the award is within the confines set by state law. Browning-Ferris Industries, 492 U.S. at 279, 109 S.Ct. at 2922. Recently, in Adams v. Murakami, 54 Cal.3d 105, 284 Cal.Rptr. 318, 813 P.2d 1348 (1991), the California Supreme Court held that an award of punitive damages cannot be properly reviewed unless the record contains evidence of a defendant's financial worth. The Murakami court held that such evidence must be presented to the jury, and that the burden of presentation lies with the plaintiff. Thus, defendants' contention that Murakami requires the trier of fact to consider evidence of defendants' financial worth in considering the appropriateness of punitive awards under California state law claims is accurate. 71 Therefore, we remand the state law portion of the damages award to the district court for the dual purposes of reconsidering that award in light of Murakami and Haslip. On remand, the district court shall consider evidence as to Officer Searle's financial worth, determine whether or not a remittitur is appropriate, and record the reasons for its conclusions.