Court Opinion

ID: 9707247
Source: CourtListenerOpinion
Date Created: 2023-08-26 02:06:30.508633+00
Date Added: 2024-06-11T18:22:29.614096
License: Public Domain

LARSEN, Justice,
dissenting.
The majority holds that it is improper to assess punitive damages against appellee, SEPTA (the Southeastern Pennsylvania Transportation Authority), “given its status as a Commonwealth agency.” Majority op. at 581. As I perceive no basis in logic, justice or sound public policy for insulating SEPTA from the full measure of liability for its wrongdoing simply because of its “status as a Commonwealth agency,” I dissent, and would reverse the order of the Superior Court and reinstate the jury’s award of punitive damages.
As the majority states, “the purpose of imposing punitive damages is to punish the wrongdoers and to deter future conduct.” Id. at 579. Of course, ordinary negligence will not justify an award of punitive damages. Only where the record supports a finding of outrageous (e.g., malicious, wanton, reckless, willful) conduct indicating reckless indifference to the person or property of the plaintiff will a *582jury’s award of punitive damages be sustained. Feld v. Merriam, 506 Pa. 383, 395-396, 485 A.2d 742, 747-48 (1984). As the trial court stated, in the case at bar there was testimony and evidence presented to support a finding that agents/employees of SEPTA, acting within the course of their employment, intentionally, knowingly or with reckless indifference to the interest and safety of others, permitted one of its vehicles to be operated despite known substantial defects, which defects caused the accident and injuries to plaintiff. Feingold v. SEPTA, 8 Phil.Co.Rep. 321, 333-34, (C.C.P.Phil.1982). Nevertheless, the majority does not believe that the policy supporting awards of punitive damages generally — punishment of wrongdoers and deterrence of future wrongdoing — would be served by permitting such awards against government agencies, for two reasons.
First, the majority observes that “[traditionally, government agencies have been exempt from the imposition of punitive damages. See Hermits of St. Augustine v. County of Philadelphia, 4 Clark 120, 7 Pa.LJ. 124 (1847).” Majority op. at 579. Second, the majority believes that punitive damages against SEPTA will punish only the “blameless and unknowing taxpayers” and will likely increase taxes or result in reduced services to the public. Id. at 581, quoting Newport v. Fact Concerts, Inc., 453 U.S. 247, 263, 101 S.Ct. 2748, 2757-58, 69 L.Ed.2d 616 (1981).
The “tradition” prohibiting punitive damages against government agencies was, however, largely a by-product of the antiquated doctrine of sovereign immunity which has lost its efficacy in modern times and has been thoroughly discarded by this Court. Much of what was said by this Court in Ayala v. Philadelphia Board of Public Education, 453 Pa. 584, 305 A.2d 877 (1973) and Mayle v. Pennsylvania Department of Highways, 479 Pa. 384, 388 A.2d 709 (1978), in the context of abolishing the common law1 doctrines of local governmental and sovereign immuni*583ty, applies with equal force to the “tradition” that punitive awards will not be allowed against a government agency, as well as to the notion that punitive damages against the agency will not serve to deter future wrongdoing and will not punish the “right” wrongdoer.
In Ayala, this Court stated:
[W]e must agree with Chief Justice Traynor of the California Supreme Court that “the rule of governmental immunity for tort is an anachronism, without rational basis, and has existed only by the force of inertia.” Muskopf v. Corning Hospital District, supra [55 Cal.2d 211] at 216, 359 P.2d [457] at 460, 11 Cal.Rptr. [89] at 92 [1961]....
“[T]he torts of public employees are properly to be regarded, as in other cases of vicarious liability, as a cost of the administration of government, which should be distributed by taxes to the public.” ...
Imposition of tort liability will, thus, be more responsive to current concepts of justice. Claims will be treated as a cost of administration and losses will be spread among all those benefited by governmental action____
Moreover, “where governmental immunity has had the effect of encouraging laxness and a disregard of potential harm, exposure of the government to liability for its torts will have the effect of increasing governmental care and concern for the welfare of those who might be injured by its actions.” Note, The Discretionary Exception and Municipal Tort Liability: A Reappraisal, 52 Minn. L.Rev. 1047, 1057 (1968). As Dean Prosser has written: “The ‘prophylactic ’ factor of preventing future harm has been quite important in the field of torts. The courts are concerned not only with compensation of the victim, but with admonition of the wrongdoer. When the decisions of the courts become known, and defendants realize that they may be held liable, there is of course a strong incentive to prevent the occurrence of the harm. Not infrequently one reason for imposing *584liability is the deliberate purpose of providing that incentive.” Prosser, Handbook on the Law of Torts 23 (3d ed. 1964).
453 Pa. at 597, 599, 305 A.2d 877 (emphasis added; some citations omitted).
As the quoted passage from Ayala indicates, the prevention of future harm and admonition of the wrongdoer is a major factor in. imposing liability upon a governmental agency and, as the majority notes, this too is the purpose of imposing punitive damages where the wrongdoer’s conduct reaches the “outrageous” level and the punishment must be commensurately increased. When the tortious conduct of the agency’s agents and employees exhibits a reckless disregard for the safety and property of others, an award of punitive damages serves as valid a purpose in connection with a government defendant as it does, with a private, corporate defendant. In both cases, those responsible for ensuring the safety of their operations through proper employment hiring practices, training and policy formulation are punished for their employees’ and agents’ reckless, outrageous or wanton and willful misconduct that has injured another. The deterrent effect remains the same, whether the stockholders elect and pressure board members to hire supervisors who will prevent reoccurence of the tortious conduct, or whether the taxpayers elect and pressure the officials who appoint the Board of Directors to hire the supervisors who will prevent reoccurence of the tortious conduct. As Judge Murray C. Goldman stated in Steffens v. SEPTA, 83 Legal Intelligencier 717, (C.C.P.Phil.1980):
The real issue is whether allowing punitive damages against municipal corporations will provide a public benefit. Notwithstanding past beliefs about lack of deterrent effect, there is no indication that the desired deterrent would not be achieved here. ... The court sees no reason why an award of punitive damages, especially in times of budget difficulties, would not work a desired effect upon the management of SEPTA. In fact, it is quite possible that there would be as great a deterrent *585effect in this case as in any other, such as one involving a large private corporation with diverse ownership.
That the funds for punitive damages will come from the public is not determinative. The deterrent effect of the punitive damages may well result in the payment of less compensatory damages in the future, with the net effect for the public being positive.
There is the further consideration that punitive damages are not mandatory. Assuming the proper foundation of evidence is submitted, we are leaving to the jury, members of the public, the opportunity to decide in a given case whether an award of punitive damages would have a salutary influence. If the jury feels that punitive damages are not appropriate, they need not award them. But if the jury, obviously aware of the ultimate source of the funds, decides they should be awarded, there is no reason why it should be prevented from doing so.
The refusal to allow punitive damages against SEPTA is, therefore, little more than an artificial distinction based solely on “its status as a Commonwealth agency.” As we stated in Mayle, supra:
Whatever justification ever existed for the doctrine that the Commonwealth is immune from liability for tortious conduct ... the doctrine’s day has long since passed. Under the doctrine, plaintiff’s opportunity for justice depends, irrationally, not upon the nature of his injury or of the act which caused it, but upon the identity or status of the wrongdoer. Three times in recent years we have repudiated as unfair similar [status-based immunities.]
479 Pa. at 386, 388 A.2d 709 (emphasis added; citations omitted). Distinctions based solely on the status of the defendant are arbitrary and violate equal protection principles embodied in the Constitutions of this Commonwealth and of the United States. James v. SEPTA, 505 Pa. 137, 149-152, 477 A.2d 1302, 1308-09 (1984) (Larsen, J., dissenting). Article I, section 26 of the Pennsylvania Constitution, adopted May 16, 1967, provides: “Neither the Common*586wealth nor any political subdivision thereof shall deny to any person the enjoyment of any civil right, nor discriminate against any person in the exercise of any civil right.” And the equal protection clause of the Fourteenth Amendment directs that no state shall make or enforce any law which shall “deny to any person within its jurisdiction the equal protection of the laws.”
As I stated in Carroll v. County of York, 496 Pa. 363, 437 A.2d 394 (1981):
serious equal protection problems are raised by legislative classification based solely on the identity and/or status of one of the parties. [As] this Court’s recent decisions have uniformly and unequivocally stressed, there are “no reasons whatsoever•” for immunities that are strictly status-based. Ayala v. Philadelphia Board of Public Education, supra, 453 Pa. at 592, 305 A.2d 877 (1973) (emphasis added). We further stated in Ayala, per Justice Roberts, “we must agree with Chief Justice Tray-nor of the California Supreme Court that ‘the rule of governmental immunity is an anachronism, without rational basis....”’ Id., 453 Pa. at 592, 305 A.2d 877.9
Id., 496 Pa. at 381-382, 437 A.2d at 403-404. See also Smith v. City of Philadelphia, 512 Pa. 129, 516 A.2d 306 (1986) (Larsen, J. dissenting).
It is particularly inappropriate to deny punitive damages because of the “status as a Commonwealth agency” of the appellee SEPTA in this case. SEPTA grew out of a government “take-over” (or the Commonwealth equivalent of “nationalization”) of private transportation companies that were performing proprietary functions for profit in Southeastern Pennsylvania. The government take-over transformed the status of these private operating authorities into the “status as a Commonwealth agency.” Had this “nation*587alization” not taken place, the wrongdoer/public carrier in the instant case would have been subject to punitive damages for the reckless conduct of its employees and agents. If the Commonwealth chose to “nationalize” all private businesses and operations located in Pennsylvania, then, according to the majority, there would be no recovery of certain damages by injured citizens of Pennsylvania. One of the hallmarks of our society is the respect and concern we demonstrate for the unfortunate individuals who have been injured by others as expressed in judicial redress and compensation for their injuries. The majority now erodes this hallmark. I would not allow the expedient of “nationalizing” a private operation to insulate that operation from the full measure of liability that would otherwise be imposed.
For the foregoing reasons, I dissent.

. We are concerned here only with the common law, as the statutory immunity for Commonwealth agencies was not in effect at times relevant to this cause of action. 42 Pa.C.S.A. §§ 8521-8528.

- Thus, even under the traditional "rational basis" test (i.e., whether a classification is reasonable, not arbitrary, and rests upon a difference having a fair and substantial relation to a legitimate legislative purpose. See Moyer v. Phillips, 462 Pa. 395, 341 A.2d 441 (1975) and Tosto v. Pennsylvania Nursing Home Loan Agency, 460 Pa. 1, 331 A.2d 198 (1975)) a classification based solely on status is in a grave constitutional predicament. . . .