Opinion ID: 2635336
Heading Depth: 2
Heading Rank: 1

Heading: Constitutional validity of title 23, section 9.1

Text: ¶ 28 The Oklahoma defendants argue that title 23, section 9.1 of the Oklahoma Statutes is unconstitutional. Section 9.1 provides factors a jury is to consider in awarding punitive damages and limits the amount, among other things. Only subsections A, C, and E of title 23, section 9.1, are implicated here. [39] ¶ 29 The Oklahoma defendants rely on Gore [40] and Campbell, [41] in which the United States Supreme Court reviewed punitive damages awards for compliance with due process. Review of a jury's award under a due process analysis and review of legislation are significantly different. [42] The United States Supreme Court has not reviewed for constitutional validity a punitive damages statute like Oklahoma's which significantly bridles jury discretion. [43] For the first time, we address title 23, section 9.1's validity under the Fourteenth Amendment Due Process Clause. [44] ¶ 30 The Due Process Clause of the Fourteenth Amendment imposes substantive and procedural limitations on punitive damages awards. [45] The Due Process Clause prohibits punitive damages awards which are grossly excessive in relation to a state's legitimate interests in punishment and deterrence. [46] Governed by this constitutional limitation, the states have considerable flexibility in determining the level of punitive damages that they will allow in different classes of cases and in any particular case. [47] ¶ 31 Legislation such as title 23, section 9.1 is tested under the rational-basis standard unless it draws upon an inherently suspect classification or infringes upon a fundamental right. [48] Legislation challenged as violating a fundamental right must be strictly scrutinized. [49] We read the Oklahoma defendants' briefs as contending that they have a fundamental right to have a jury instructed on factors just as they are enumerated in Gore [50] and Campbell [51] and to have title 23, section 9.1 incorporate judicial review of the jury award. ¶ 32 The Oklahoma defendants posit that title 23, subsection 9.1(A) is unconstitutional because the factors a jury is to consider do not track those articulated in Gore and Campbell. Gore and Campbell teach that a court is to consider certain factors when reviewing a jury award, but they do not require that a jury be instructed on each individual factor. [52] Both Gore [53] and Campbell [54] looked at the overall processnot only the jury's discretion, but also the judicial review of the award. ¶ 33 In Pacific Mutual Life Ins. Co. v. Haslip, [55] the United States Supreme Court upheld a punitive damages award against a due process attack. The Court reviewed the states' traditional common-law approach of assessing punitive damages. Under this approach, the jury determines the amount of punitive damages based on the gravity of the wrong and on a state's need to deter similar wrongful conduct and then the court reviews the award for reasonableness. [56] The Court found that this approach was not so inherently unfair so as to deny due process and be per se unconstitutional. [57] Under Haslip for purposes of due process, the jury need only be instructed to consider the gravity of the wrong and the need to deter similar wrongful conduct. [58] The Court stated: As long as the [jury's] discretion is exercised within reasonable constraints, due process is satisfied. [59] That said, the factors to be considered under section 9.1 cannot conflict with those articulated by the United States Supreme Court. ¶ 34 Subsection 9.1(E) [60] requires a jury to consider the following factors, which are set out in subsection 9.1(A), when assessing punitive damages: 1. The seriousness of the hazard to the public arising from the defendant's misconduct; 2. The profitability of the misconduct to the defendant; 3. The duration of the misconduct and any concealment of it; 4. The degree of the defendant's awareness of the hazard and of its excessiveness; 5. The attitude and conduct of the defendant upon discovery of the misconduct or hazard; 6. In the case of a defendant which is a corporation or other entity, the number and level of employees involved in causing or concealing the misconduct; and 7. The financial condition of the defendant. [61] All of these factors relate to Oklahoma's legitimate interests in punishment and deterrence. [62] ¶ 35 Judicial review of the size of the punitive damages awards safeguards against excessive verdicts. [63] Gore instructed that courts reviewing a punitive damages award must consider three guideposts: (1) the level of reprehensibility of the defendant's misconduct; (2) the ratio of punitive damages awarded to the actual damages awarded; and (3) the comparison of the punitive damages awarded and the civil penalties authorized. [64] ¶ 36 Campbell, citing Gore, sets out seven factors relating to reprehensibility: the harm caused was physical as opposed to economic; the tortious conduct evinced an indifference to or a reckless disregard of the health or safety of others; the target of the conduct was financially vulnerable; the conduct involved repeated actions or was an isolated incident; and the harm was the result of intentional malice, trickery, or deceit, or mere accident. [65] The section 9.1 factors do not run afoul of Gore and Campbell as the Oklahoma defendants argue: rather they are related to the Campbell factors, to the Gore guideposts, and to the state's interests in punishment and deterrence. ¶ 37 The Oklahoma defendants argue that section 9.1(C) prohibits consideration of factors other than those listed in subsection A and places a cap on the award. Subsection (C) provides: Any award of punitive damages under this subsection awarded in any manner other than as required in this subsection shall be void and reversible error. If a statute is unambiguous and does not conflict with another enactment, we apply its plain language. [66] By its own unambiguous terms, this provision applies only to subsection (C). ¶ 38 The procedure for an award under subsection (C) must be followed: there must be a jury finding by clear and convincing evidence that the defendant acted intentionally and with malice towards others, there must be a separate jury proceeding on the punitive damages amount, the punitive damages amount must fall within the statutory limits, and the trial court must reduce the jury award by any amount previously paid as a result of all punitive damages verdicts in Oklahoma for the same conduct. [67] Otherwise, the award is void. [68] This provision of subsection 9.1(C) does not affect subsection 9.1(A) factors nor does it prevent a reviewing court from considering additional factors. We cannot agree with Oklahoma defendants' proposed construction of title 23, section 9.1(C). ¶ 39 The Oklahoma defendants argue that subsection 9.1(C)(1)(c)'s provision allowing a punitive damages award to disgorge defendant's financial gain directly resulting from the conduct causing the injury to the plaintiff or other persons or entities also runs afoul of Campbell. Under section 9.1(C)(1)(c)'s plain language, the conduct that caused harm to others must be the same as the conduct that harmed the plaintiff. With the proper limiting instruction, Campbell allows the jury to consider evidence of out-of-state conduct in determining a defendant's deliberateness and culpability and of in-state conduct in punishing a defendant if the conduct has a nexus to the specific harm suffered by the plaintiff. [69] ¶ 40 The Court in TXO Production Corp. v. Alliance Resources Corp. [70] stated: It is appropriate to consider the magnitude of the potential harm that the defendant's conduct would have caused to its intended victim if the wrongful plan had succeeded, as well as the possible harm to other victims that might have resulted if similar future behavior were not deterred. If potential harm to other victims is a consideration, then actual harm to others is also an appropriate consideration. This is especially true here where Oklahoma mitigates the risk of multiple punitive damages awards by allowing a reduction by the amount paid for other punitive damages awards in Oklahoma for the same conduct. [71] ¶ 41 The Oklahoma defendants also argue that the $500,000.00 limit is unconstitutional because it is not expressed as a multiplier of actual damages and, thus, allows punitive damages awards which are excessive in relation to the actual damages award. The jury can award no more than $500,000.00 under subsection 9.1(C)(1)(a). However, they may award less or nothing at all. It is the reviewing court's duty to assure that a punitive damages award is not unconstitutionally excessive. [72] ¶ 42 The United States Supreme Court has tacitly approved of a legislatively imposed dollar cap on punitive damages. [73] In Cooper, the Court recognized that several states have passed statutes which place limits on punitive damages. [74] Many of these limits are expressed in dollar amounts. [75] In addressing these limits, the Court recognized that legislatures enjoy broad discretion in authorizing and limiting permissible punitive damages awards. [76] Additionally, the Court has refused to impose a bright-line ratio test for punitive damages awards. [77] Any bright-line ratio imposed on a punitive damages award is thus a matter of public policy for the state legislatures and is not imposed by Campbell. ¶ 43 Lastly, the Oklahoma defendants attack section 9.1 as unconstitutional because it fails to provide for judicial review. First, we note that section 9.1 is directed at the jury, not the reviewing court. Trial court review of a jury verdict is provided by title 12, section 651(6) of the Oklahoma Statutes. Section 651(6) allows the trial court to grant a new trial if the verdict is contrary to law. A party aggrieved by a trial court judgment or final order has a right to appeal the decision under title 12, section 990A, and if the petition in error is properly filed, a right to appellate review. [78] ¶ 44 We do not agree that the onus is on the jury to apply the Due Process Clause to the punitive damages award to determine if the award was unconstitutionally excessive. That burden lies with the trial court and the appellate courts. [79] The jury has only the burden of determining an amount of punitive damages based on Oklahoma's statutory requirements and interests. [80] ¶ 45 The Oklahoma defendants have failed to articulate a right which would require heightened scrutiny of title 23, subsections 9.1(A), (C), and (E). Therefore, we review these provisions under the rational-basis standard. It is uncontested that section 9.1 is rationally related to Oklahoma's goal of authorizing punitive damages for the sake of example and by way of punishing a defendant's conduct subject to the provisions and limitations set out in the statute. [81] ¶ 46 Title 23, section 9.1 provides far more restraints on jury discretion than required by the Due Process Clause of the Fourteenth Amendment. Oklahoma appellate courts review punitive damages awards to determine whether an award is reasonably related to the defendant's conduct and related to the cause and extent of the injuries. [82] This Court has not hesitated to reverse a punitive award when it is excessive as a result of the `passion, prejudice, or improper sympathy' of the jury. [83] Our review of a punitive damages award for excessiveness certainly meets the review required under the Due Process Clause. [84] ¶ 47 In summary, the Due Process Clause does not require jury instructions state specifically the United States Supreme Court's reprehensibility factors for assessing punitive damages. [85] The Court has on more than one occasion approved the method of assessing punitive damages wherein the jury is instructed to consider the gravity of the wrong and the need to deter similar wrongful conduct. [86] Pursuant to Oklahoma's statutory mandate, [87] juries in Oklahoma, including the jury in this case, are given much more guidance in awarding punitive damages than required by due process. After the jury makes its punitive damages award, it falls to the court to determine if the award is grossly excessive as it relates to Oklahoma's interest in punishing misconduct and deterring similar misconduct. [88] Accordingly, we hold that the provisions of title 23, section 9.1(A), (C), and (E) are facially valid under the Due Process Clause of the Fourteenth Amendment to the United States Constitution. [89]