Opinion ID: 1791846
Heading Depth: 1
Heading Rank: 7

Heading: Civil Sanctions

Text: The final factor adopted by the United States Supreme Court in Gore for adequate notice is that of comparing the punitive damages award to the civil or criminal penalties that could be imposed for similar misconduct. See Advocat v. Sauer, supra . The Barbers point this court to 49 C.F.R § 213.5 (2003) and states that Union Pacific could have been fined up to $22,000 per day for each day of noncompliance. Union Pacific, on the other hand, directs this court to Cooper Industries, Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 121 S.Ct. 1678, 149 L.Ed.2d 674 (2001), for the proposition that a fine cannot be multiplied on the theory that each day was a separate violation because the accident only happened once. Although the Supreme Court indicated in Cooper v. Leatherman that it would view passing out promotional material as a single incident under the Oregon Unlawful Trade Practices Act, it made no ruling on the issue because the lower court did not apply the proper standard of review. Id. A specific federal regulation governs vegetation on railroad property. 49 C.F.R. § 213.37 (2003) provides: Vegetation on railroad property which is on or immediately adjacent to roadbed shall be controlled so that it does not  (a) Become a fire hazard to track-carrying structures; (b) Obstruct visibility of railroad signs and signs and signals: (1) Along the right-of-way, and (2) At highway-rail crossings; (This paragraph (b)(2) is applicable September 21, 1999.) (c) Interfere with railroad employees performing normal trackside duties; (d) Prevent proper functioning of signal and communication lines; or (e) Prevent railroad employees from visually inspecting moving equipment from their normal duty stations. As noted earlier, Willie Savage testified that the vegetation at Crossing 123 caused his crew problems while they performed a cluster-buster repair on the railroad ties. Thus, there is evidence that the vegetation at Crossing 123 interfered with railroad employees performing normal trackside duties. The penalty provision of the federal code at issue states in pertinent part: a) Any person who violates any requirement of this part or causes the violation of any such requirement is subject to a civil penalty of at least $500 and not more than $11,000 per violation, except that: Penalties may be assessed against individuals only for willful violations, and, where a grossly negligent violation or a pattern of repeated violations has created an imminent hazard of death or injury to persons, or has caused death or injury, a penalty not to exceed $22,000 per violation may be assessed. 49 CFR § 213.15 (2003). The regulatory provision at issue specifically contemplates recurring violations and increases the maximum penalty in those situations where a violation persists. In fact, the penalties provision of the code specifically states, [e]ach day a violation continues shall constitute a separate offense. 49 C.F.R. § 213.15(a). Here, the evidence clearly reflects that the vegetation at Crossing 123 was potentially out of compliance from the time Union Pacific took over the tracks in September 11, 1996. Under the federal code, Union Pacific could be fined for each day of non-compliance after September 11, 1996. As such, the maximum civil penalty in this case may be calculated by multiplying $22,000 by each day of noncompliance. There were over 450 days between September 11, 1996, and the date of the accident at Crossing 123 on January 19, 1998. Accordingly, Union Pacific's noncompliance made them potentially liable for about $9.9 million. In addition, Union Pacific could have been potentially liable under Arkansas law. The pertinent statutory provision provides: (a)(1) All railroad corporations operating in this state shall maintain their right-of-way at or around any railroad crossing of a public road or highway free from grass, trees, bushes, shrubs, or other growing vegetation which may obstruct the view of pedestrians and vehicle operators using the public highways.     (b) Any railroad corporation failing or refusing to comply with the provisions of this section shall be subject to a fine of not less than one hundred dollars ($100) nor more than five hundred dollars ($500) for each violation. Ark Code Ann. § 23-12-201(a)(1), (b) (Repl.2002). The plain language of the statute contemplates that a railroad will continue in noncompliance and will be assessed proportionally to the amount of time it fails or refuses to comply. At $500 per day, the railroad's liability could approach up to $182,500 per year. We conclude that the total civil penalties authorized by law are comparable to the punitive damages award set by the jury in this case. In Advocat v. Sauer, supra , we enforced a $21 million punitive damages award, based upon a wrongful-death claim stemming from the neglect of a nursing and rehabilitation center's neglect of an elderly patient. Here, the punitive damages award of $25 million stems from a negligence action that resulted in one person's death and caused severe and permanent injuries to another person. We will not substitute our judgment for that of the jury when there is basis in the evidence for the punitive award. Harold McLaughlin Reliable Truck Brokers, Inc. v. Cox, 324 Ark. 361, 922 S.W.2d 327 (1996). In addition, the penalty needs to be sufficient to deter others of such conduct. Id. We have also recognized that punitive damages may validly amount to a windfall for the plaintiff. Missouri Pacific R.R. Co. v. Arkansas Sheriff's Boys' Ranch, 280 Ark. 53, 655 S.W.2d 389 (1983). Under these circumstances, where the award of punitive damages is appropriate and the net worth of the company is $9.6 billion, we cannot say that a $25 million punishment shocks the conscience.