Court Opinion

ID: 9714264
Source: CourtListenerOpinion
Date Created: 2023-08-26 05:33:56.517992+00
Date Added: 2024-06-11T18:23:24.745018
License: Public Domain

COFFEY, J.
(dissenting). I dissent because the majority has extended application of the concept of punitive damages, established by this court’s prior case law, beyond the boundaries set forth in Entzminger v. Ford Motor Co., 47 Wis.2d 751, 177 N.W.2d 899 (1970) :
“Punitive damages are not allowed for a mere breach of contract, ... or for all torts or for crimes but generally for those personal torts, which are malicious, outrageous or a wanton disregard of personal rights which require the added sanction of a punitive damage to deter others from committing acts against human dignity.
. . . The type of cases allowing punitive damages has been cases of assault and battery, slander and libel, seduction, malicious prosecution, breach of promise, and the like. Despite repeated criticism of the punitive-damage rule, this court has adhered to it but has refused to extend the doctrine. However, in a most recent case, the court did lay down, as an additional requirement, that where no actual malice is shown the character of the offense must have the outrageousness associated with serious crime.” Id. at 757-58.
The majority relies on a portion of this quotation. I have included the entire passage.
In this case the majority, contrary to the holding in Entzminger v. Ford Motor Co., supra, has allowed recovery of punitive damages for a nonpersonal tort. The purpose of a strict liability action is to allow recovery of compensatory damages where injuries are caused by an unreasonably dangerous product without requiring proof of specific acts of negligence. Ghiardi and Koehn, Punitive Damages in Strict Liability Cases, 61 Marq. L. Rev. 245, (1977). Dippel v. Sciano, 37 Wis.2d 443, 155 N.W.2d 55 (1967). The doctrine of strict liability in tort is in essence a no fault concept and it is the con*322dition of the product (whether it is defective and unreasonably dangerous) rather than the conduct of the actor or manufacturer that determines liability. Recovery of punitive damages is based on a finding of aggravated fault and thus the conduct of the manufacturer is the sole determinant of liability. Therefore, in a case of strict liability in tort, the conduct of the manufacturer is not at issue, and thus it is singularly inappropriate to allow punitive damages in an action where the standards for recovery of compensatory damages have been so relaxed.
The majority has created a separate tort of outrageous conduct, not associated with a serious crime, and without any standard at all to determine whether the conduct is in fact outrageous. It is clear that the tort is something separate from a claim for strict liability because this case arises on a motion to dismiss. If punitive damages were no more than an incident of a claim for compensatory damages, there would be no separate claim for the court to consider, and a motion to dismiss would not lie. Draeger v. John Lubotsky Motor Sales, 56 Wis.2d 419, 202 N.W.2d 20 (1972). In Draeger there was no need to consider punitive damages as a separate claim because the claim for compensatory damages was grounded on fraud. Therefore, the allegations supporting the prayer for compensatory damages also supported the prayer for punitive damages.
There is no need for the majority to go that far. If the acts of the Ford Motor Company constituted out-rageousness associated with serious crime, they could have been pleaded as part of the claim for compensatory damages. In that case, the prayer for relief could have included punitive damages. However, the court should not permit the claim for punitive damages based on outrageous conduct to be joined for trial with a claim for compensatory damages grounded on the lesser, relaxed standards of strict liability. If the majority insists on *323legislating punitive damages, I believe the strict liability claim should be severed from the claim for punitive damages and tried separately before a different jury. The majority has extended an invitation to the unscrupulous plaintiff to buttress a weak strict liability case with a claim for punitive damages and thus prejudice the jury.
I agree that the question of whether to abolish punitive damages is not for this court to decide, as it has been a part of our law for so long.1 However, I also believe that this court should not extend the recovery of punitive damages to any class of cases other than those in which they have been historically permitted, beyond the outer limits of punitive damages defined in Entzminger v. Ford Motor Co., supra. Any further extension of the applicability or recoverability of punitive damages is judicial legislation just as surely as a decision to abolish the doctrine of punitive damages would be. I will not be a party to the intrusion by the majority into the areas of public policy which must be reserved for the legislature.
As Chesterfield Smith, the former president of the American Bar Association, said in his Law Day address:
“. . . courts are being asked today to solve problems for which they are not institutionally equipped, or at least not as well equipped as other areas of government [such as the legislature].
“. . . As far as possible, judicial forums should be reserved for doing only that which cannot be done elsewhere.
“The American public perceives the courts as a jack-of-all trades available to furnish the answer to whatever may trouble them. Shall a war be prosecuted or peace made? What is life, or when does death begin? Shall racial integration be achieved by . . . busing of children to far away schools? How shall prisons and mental institutions be operated? Shall nuclear power plants be built, and if so, where ? Shall the Concorde fly *324to these shores? Is affirmative action really inverse discrimination? Shall the snail darter survive? [Should punitive damages be recovered in a products liability case?] . . .
“The courts properly should be only the conflict resolvers and not the problem solvers of American society.”
This court has recently expounded Smith’s philosophy in State v. Princess Cinema of Milwaukee, 96 Wis.2d 646, 292 N.W.2d 807 (1980), and refused to infringe on the legislative prerogative of enacting statutes to implement public policy in the following language: “The problems Of public policy . . . are for the legislature.” and further, “recognizing that our job is one of interpreting statutes not redrafting them.” Id. at 661, 662. To the same effect, in State v. I, A Woman — Part II, 53 Wis.2d 102, 191 N.W.2d 897 (1971) this court held:
“There is no doubt that carefully drafted legislation will accomplish this purpose, but this requires fact finding and public policy determinations that only the legislature can furnish.” Id. at 120.
We are without the benefit of citizen input or a trained .staff to search out, weigh, balance and comprehend the economic problems created by the majority. With only the opinions and prejudices of those commentators with whom the majority agrees as a foundation, the majority heedlessly delivers a potential knockout punch to many men and women in the work force by mandating punitive damages in a products liability case. The short memories of the author of the majority opinion and three of the justices joining her are most surprising. Little more than a year ago they extolled the virtues of the legislative process for the making of policy determinations in matters relating to products liability cases, expressing a strong preference for legislative fact-finding over suggestions for legislation from this court as follows:
*325“It is presumptuous for this court, which does not and cannot have the benefit of public hearings and constituent expression of opinion, to ‘commend’ sw sponte any specific change in the applicable period of limitations. It is enough for us to note that the determination of a period of limitations in respect to products liability presents a substantial problem, worthy of the legislature’s consideration.” Kozlowski v. John E. Smith’s Sons, Co., 87 Wis.2d 882, 904, 905, 275 N.W.2d 915, 927 (1979).
There are strong arguments for denying punitive damages in a strict liability case, presenting a substantial problem worthy of the legislature’s consideration:
1. Permitting the recovery of punitive damages in product liability cases will have an adverse economic impact and be financially destructive to employees and employers alike. How many times are punitive damages to be awarded for the same act? In this case, the majority would apparently allow punitive damages to be awarded twice, once to the injured minor and once to the parents. The design defect alleged in this case has been the subject of other litigation in many other states. Are the Wisconsin courts to monitor the courts of the other 49 states so as to insure that a Wisconsin court’s award of punitive damages does not place an undue burden on the manufacturer and his employees? As Judge FRIENDLY stated in Roginsky v. Richardson-Merrell, Inc., 378 F.2d 832 (1967) :
“The legal difficulties engendered by claims for punitive damages on the part of hundreds of plaintiffs are staggering. If all recovered punitive damages in the amount here awarded these would run into tens of millions, as contrasted with the maximum criminal penalty of ‘imprisonment for not more than three years, or a fine of not more than $10,000, or both such imprisonment and fine’, 21 U.S.C. §333 (b), for each violation of the Food, Drug and Cosmetic Act with intent to defraud or mislead. We have the gravest difficulty in perceiving how claims for punitive damages in such multiplicity of actions *326throughout the nation can be so administered as to avoid overkill.”
“. . . the apparent impracticability of imposing an effective ceiling on punitive awards in hundreds of suits in different courts may result in an aggregate which, when piled on large compensatory damages, could reach catastrophic amounts. If liability policies can protect against this risk as several courts have held, the cost of providing this probably needless deterrence, not only to the few manufacturers from whom punitive damages for highly negligent conduct are sought but to the thousands from whom it never will be, is passed on to the consuming public; if they cannot, as is held by other courts and recommended by most commentators a sufficiently egregious error as to one product can end the business life of a concern that has wrought much good in the past and might otherwise have continued to do so in the future, with many innocent stockholders suffering extinction of their investments for a single management sin.” Id. at 839, 841.
Roginsky was the first of 75 similar cases pending in the Federal District Court for the Southern District of New York against Richardson-Merrell Co. for injuries resulting from use of a drug manufactured by them. The majority suggests that the danger of excessive multiple punitive damages may be effectively mitigated by apprising the jury of “compensatory and punitive damages and fines and forfeitures already imposed on the defendant or likely [!] to be imposed on the defendant.” The prejudicial and inflammatory effect of such evidence is apparent. I doubt that any award could be sustained on such a record.
The cumulative effect of the imposition of punitive damage awards (which are open-ended because the amount of damages awarded is left to the jury’s absolute discretion) in multiple lawsuits would be to threaten the very existence and economic life of the manufacturer. Is this the form of “corporate capital punishment” that the majority intended? The majority wants to re*327view corporate economic decisions to insure that these decisions coincide with the majority’s view of social responsibility.
There are two categories of persons who will automatically bear the costs of the majority decision, depending on the strength and market position of the manufacturer: (1) the employees and stockholders; or (2) the consumer-taxpayer. If the manufacturer is not in a strong financial position so as to be able to bear these added costs, he will be faced with the threat of being forced out of business or into bankruptcy, thus resulting in a loss of jobs (unemployment) and the curtailment of competition, to the detriment of the consumer. If bankruptcy or the loss of business and jobs is to be avoided; it is the consumer who will ultimately bear the burden of punitive damage awards through the payment of higher prices for the goods in the market place. As the cost of such damages is passed on through higher product prices, the consumer will foot the bill for a penalty imposed for its very own protection. If the consumer does not pay higher prices, as a taxpayer, he will pay for the hidden costs of government with higher taxes for increased welfare, retraining and unemployment programs occasioned by business failures. Moreover, imposition of multiple punitive damage awards could have an adverse impact not only on the manufacturer, Ford, but also those commercial businesses that supply materials for use in construction of cars, such as the producers of automobile locks, tires, catalytic converters, etc. Are we going to further intimidate Wisconsin manufacturers with the threat of high punitive damage awards? The recovery of punitive damages against American businesses resulting in higher product costs obviously magnifies their disadvantage in competition with foreign manufacturers.
2. Punishment and deterrence, the avowed goals of punitive damages, may also be accomplished through the state criminal laws, the federal Consumer Products *328Safety Act and the state counterpart. Punishment and deterrence are proper goals of the criminal justice system, not the civil tort law. In Bielski v. Schulze, 16 Wis.2d 1, 114 N.W.2d 105 (1962) this court held that:
“The protection of the public from such conduct [gross negligence] or from reckless, wanton or wilful conduct is best served by the criminal laws of the state. . . .” Id. at 18.
Thus, criminal penalties were envisioned by this court in Bielski v. Schulze, supra, as a remedy available to parties who are aggrieved and feel the need for punishment. Moreover, the federal Consumer Products Safety Act provides protection against unreasonably dangerous products:
A. through the establishment of specific safety standards ; and
B. by imposing civil penalties of up to $500,000 per defective product.
Since the means of punishing reckless and unscrupulous manufacturers and of deterring others from engaging in similar conduct already exists, there is no need for this court to make punitive damages available in products liability actions. The extension of punitive damages into products liability cases only serves to increase the number of times a manufacturer can be punished for marketing the exact same product. Now with this decision a manufacturer can possibly be punished four separate times: criminally, civilly (punitive damages), pursuant to the federal regulations (Consumer Products Safety Act) and pursuant to sec. 100.42 of Ch. 100 of the Wisconsin Statutes, entitled Marketing, Warehouses, Trade Practices, for the exact same conduct. This is contrary to the requirements of justice:
“Justice requires that limits be placed on punishment; that one jury’s mulct should be enough; that the windfall of punitive damages designed originally to punish one *329be limited to its original purpose. Justice requires that when society has punished once by criminal sanctions, society should be content. It should not demand or permit successive punishment by the device of punitive damages.” Tozer, Punitive Damages and Products Liability, Insurance Counsel Journal, (1972) at 304.
The fact that a manufacturer may be subject to multiple forms of punishment will only serve to inhibit experimentation and the introduction of new products on the market and thus stifle potential future commercial development for which this nation is well-known.
Another adverse by-product of the majority’s holding is that an already overburdened court system is further encumbered with needless lawsuits. If the court is determined to extend punitive damage liability to strict liability cases, it should reexamine the policy of allowing once compensated litigants to retain, for their own benefit, the entire punitive damage award. The punitive damage award is a windfall recovery over and above any compensatory damages received. In Hartford Accident and Indemnity Co. v. Village of Hempstead, 48 N.Y.2d 218, 422 N.Y.S.2d 47 (1979), the New York Court of Appeals .stated that the purpose of punitive damages is to punish and deter others from acting similarly and that such damages are a “windfall” to the plaintiff who has been made whole by the award of compensatory damages. Public policy would be better served by allowing plaintiffs reimbursement for their attorneys’ fees and ordering the payment of the balance of the award into a fund to be administered by the court, the proceeds of which should be used to defray the added administrative costs (court personnel, courtroom costs, jury expenses, etc.) of the litigation invited by today’s decision. This does no violence to the policy underlying the awards of punitive damages because it will not be necessary to hold out the prospect of a windfall recovery in order to encourage plaintiffs to bring punitive damage suits. Some lawyers will *330be more than happy to include punitive damage claims as a means of insuring full payment of their fees. The “alleged victims” of the “outrageous” corporate conduct will still have the satisfaction of seeing their rights vindicated. Our legislature has provided a limited right of compensation to the victims of certain crimes. How much greater is the bonus which the majority offers those “alleged victims” of the strict liability crime the court legislates in this case.
3. The doctrine of punitive damages does not provide the defendant with the benefits of the constitutional safeguards afforded in criminal proceedings:
“. . . the same operative facts which would result in indictment in a criminal case may be the basis for a civil case and that the award of punitive damages in such a situation raises questions under the Fourth, the Fifth, the Sixth, the Eighth and the Fourteenth Amendments, particularly with respect to multiple punishment and double jeopardy without any of the safeguards afforded by the criminal law [such as proof beyond a reasonable doubt, the defendant’s privilege against self-incrimination].” Fulton, Punitive Damages in Product Liability Cases, the Forum, Vol. 15, pp. 129-31 (Fall, 1977).
As one legal commentator has recently stated:
“Punitive damages for tortious conduct is the only area of law where an American citizen can be severely punished by other citizens without clear guidelines or evi-dentiary safeguards of due process well known to all other legal punishment.” Haskell, Punitive Damages: Expanded Application Creates Problems, The National Law Journal, p. 25 (1978).
I believe that if this court is going to impose such a severe punishment on manufacturers and their employees, then they must be provided with safeguards similar to those provided in criminal law under the constitution and statutes.
4. Punitive damages serve as a bonus, added reward or windfall to the injured party. As a result, the exten*331sion of punitive damages to the product liability cases “will undoubtedly encourage counsel in some cases to pursue unmeritorious claims and manufacturers will sometimes have to settle such claims in excess of their fair value because of the risk, however remote, of large jury awards.” Owen, Punitive Damages in Products Liability Litigation, 74 Mich. L. Rev. 1257,1290 (1976).
In light of the above public policy considerations and ramifications, I believe the legislative branch, with its superior factfinding capabilities, is best able to deal with the question of whether punitive damages should be recovered in a products liability case. As stated in Kozlowski v. John E. Smith’s Sons Co., supra at 904:
“The myriad of problems and solutions in this complex area of products liability law should be the subject of hearings and debates in the legislature in order to balance the scales of justice between the manufacturer and the consumer.”
The majority has unwisely usurped the legislative function in this case, and, for the above reasons, I must dissent. Let us allow our democracy to function in the manner the framers of our constitution intended. Let each of the three branches of government operate independent of one another. Let no branch usurp or invade the province or responsibility of another. Let not the majority further roil the already turbulent waters of products liability by riding a “new wave” of social, economic and political improvement. If social welfare experimentation is to be conducted, it should be done by the legislature. The implications for the free enterprise system, and therefore the structure of our economy, are too disturbing to leave a decision of this magnitude to five jurists.
I am authorized to state that Mr. Justice CONNOR T. HANSEN joins in this dissent.

 Bass v. The Chicago & Northwestern R’y. Co., 42 Wis. 654 (1877).