Court Opinion

ID: 9735714
Source: CourtListenerOpinion
Date Created: 2023-08-26 18:28:33.686396+00
Date Added: 2024-06-11T18:27:00.709822
License: Public Domain

LEVINE, Justice,
concurring and dissenting.
I concur in all but the resolution of the constitutionality of the award of exemplary damages under the due process clause of the federal constitution. I do not believe the parties have adequately briefed the state constitutional excessive fines clause *758and therefore I agree with the majority that the punitive damage award does not violate Art. I § 11 of the State Constitution.
Trying to predict what the United States Supreme Court will do with a particular issue reminds me of a game of darts — you aim for a bull’s-eye but are satisfied with anything that approaches the mark. However, try we must, and my review of recent United States Supreme Court cases dealing with the impact of due process on punitive damages leads me to believe that at least a majority of the present Court would strike, as a violation *of federal due process, the $200,000 award of exemplary damages in this case.
The trial court instructed the jury in accord with North Dakota law that in addition to compensatory damages, it may award the injured party “any further reasonable sum as an example to others and to punish the wrongdoer as you consider just.” That is the sum and substance of the guidance to the jury for setting the amount of punitive damages in this case.
While it is a given that compensatory damages may be awarded in an amount the jury deems appropriate, compensatory damages, by and large, are based upon proof of actual injury including specific monetary losses as well as more indeterminate injuries such as pain and suffering, humiliation and wounded feelings. Punitive damages, however, are awarded, not to compensate for injury but rather “to punish the wrongdoer in order to deter him (sic), and others, from repetition of the wrongful conduct.” Dahlen v. Landis, 314 N.W.2d 63, 68 (N.D.1981). As Justice O’Connor stated in a separate concurring opinion in Bankers Life & Casualty Co. v. Crenshaw, 486 U.S. 71, 108 S.Ct. 1645, 1655, 100 L.Ed.2d 62 (1988), in which Justice Scalia also joined:
“Punitive damages are not measured against actual injury, so there is no objective standard that limits their amount. Hence, ‘the impact of these windfall recoveries is unpredictable and potentially substantial.’ Electrical Workers v. Foust, 442 U.S. 42, 50, 99 S.Ct. 2121, 2127, 60 L.Ed.2d 698 (1979). For these reasons, the Court has forbidden the award of punitive damages in defamation suits brought by private plaintiffs, Gertz [v. Robert Welch, Inc.], supra, 418 U.S. [323] at 349-359, 94 S.Ct. [2997] at 3011-3012 [41 L.Ed.2d 789 (1974) ], and in unfair representation suits brought against unions under the Railway Labor Act, Electrical Workers, supra, 442 U.S., at 52, 99 S.Ct., at 2128. For similar reasons, the Court should scrutinize carefully the procedures under which punitive damages are awarded in civil lawsuits.”
Justice O’Connor’s analysis of Mississippi law on punitive damages noted that “the amount of the penalty that may ensue is left completely indeterminate.” Id. 108 S.Ct. at 1656. Under Mississippi law, juries may award any amount of punitive damages against a defendant who acted with a wrongful animus, leading Justice O’Connor to conclude that “because of the punitive character of such awards, there is reason to think that this may violate the Due Process Clause.” Id. at 1655.
I see no difference between the unbridled discretion of North Dakota juries and that of Mississippi juries. While evidence of a defendant’s wealth may properly be considered in fixing punitive damages, Dahlen v. Landis, supra, 314 N.W.2d at 68, the amount of punitive damages rests in the sound discretion of the jury. Neidhardt v. Siverts, 103 N.W.2d 97, 102-03 (N.D.1960). In this case, no instruction was given on tying the amount of punitive damages to the wealth of the defendant. Nor was the jury instructed to consider the evil of the act or the harm visited upon the plaintiff. But I do not believe a different result would ensue even had those instructions been given. I believe Justice O’Connor would hold in this case that the unguided discretion of the jury to assess $200,000 as exemplary damages violates the defendant’s right to due process under the United States Constitution. See Browning-Ferris Industries v. Kelco Disposal, Inc., — U.S. -, 109 S.Ct. 2909, 2924, 106 L.Ed.2d 219 (1989).
*759Furthermore, since Justice Scalia joined Justice O’Connor in Bankers Life, and Justice Stevens joined her in Browning-Ferris, I believe they, too, would conclude that North Dakota law on assessing the amount of punitive damages is so vague and unelu-cidating as to provide a jury no guidance, no standards and no constraints, thereby violating a defendant’s right to due process.
Justice Brennan, writing specially in Browning-Ferris, and joined by Justice Marshall, pointed out that the due process clause forbids damage awards that are “grossly excessive” or “so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable. [Citations omitted.]” Id. 109 S.Ct. at 2923. However, I am less concerned that the award in this case is “obviously unreasonable” because of its excessiveness, than I am over the absence of standards and guidelines for the jury to act upon in setting the amount of exemplary damages. Therefore, I believe Justice Brennan’s comments on the subject of standards are instructive:
“Without statutory (or at least common-law) standards for the determination of how large an award of punitive damages is appropriate in a given case, juries are left largely to themselves in making this important, and potentially devastating, decision. Indeed, the jury in this case was sent to the jury room with nothing more than the following terse instruction: ‘In determining the amount of punitive damages, you may take account of the character of the defendants, their financial standing, and the nature of their acts.’ ” Id.
Justice Brennan characterized the “guidance” of the quoted jury instruction as “scarcely better than no guidance at all.” The only guidance for juries on the issue of punitive damages is “little more than an admonition to do what they [i.e., the jury] think is best.” Id. Since the “touchstone of due process is protection of the individual against arbitrary action of government,” id., Justice Brennan would “look longer and harder at an award of punitive damages based on such skeletal guidance” than he would scrutinize an award of punitive damages “situated within a range of penalties as to which responsible officials had deliberated and then agreed.” Id. The jury instruction in this case didn’t even make reference to the financial standing of the defendant or the nature of its acts. Applying Justice Brennan’s views to this case, I believe he and Justice Marshall would conclude that the jury was merely admonished to do what it thought “best” and such guidance being no guidance at all, is a violation of due process.
In Smith v. Wade, 461 U.S. 30, 56, 103 S.Ct. 1625, 1640, 75 L.Ed.2d 632 (1983), Chief Justice Rehnquist launched his dissent on the issue of the requisite degree of a defendant’s culpability in a § 1983 action to justify punitive damages with a polemic against punitive damages in general. He noted that punitive damages awarded by a jury are unaccompanied by the safeguards present in criminal proceedings though punitive damages are themselves criminal in nature; that punitive damages are frequently based upon the caprice and prejudice of jurors; that punitive damages may be employed to punish unpopular defendants; that punitive damages are assessed in wholly unpredictable amounts bearing no necessary relation to the actual harm caused; that the deterrence allegedly achieved by punitive damages is likely outweighed by the costs, “at least when the standards on which the awards are based are ill-defined.” 461 U.S. at 59, 103 S.Ct. at 1641. One need not be a soothsayer to discern from this dissent the unfriendly attitude of the Chief Justice to the doctrine of punitive damages.
North Dakota has an additional problem because we have no requirement that an award of punitive damages be reasonably proportionate to an award of compensatory damages. Olmstead v. Miller, 383 N.W.2d 817, 822 (N.D.1986); Smith v. American Family Mutual Insurance Co., 294 N.W.2d 751, 766 (N.D.1980). Thus, North Dakota juries are left completely to their own notions of what is sufficient punishment and what is sufficient deterrence in setting the amount of punitive damages. *760So too, our trial courts, in reviewing those damages on motions for a new trial, are left to their own devices in deciding whether or not an award is “excessive” to a degree that demonstrates passion and prejudice. Similarly, this court is faced with the same problems. There are simply no objective standards which guide a jury in its assessment of punitive damages, or a trial court in its review of that assessment, or this court in its appellate review.
Whether or not the $200,000 award of punitive damages in this case is excessive, therefore, is truly in the eye of the beholder. There is a direct causal relationship between such rank subjectivity and the complete lack of standards and guidance against which an award of punitive damages may be tested. I believe a majority of the United States Supreme Court would hold that the absence of any standards is fundamentally unfair and contrary to the due process clause of the United States constitution. I would, therefore, reverse the award of punitive damages and suggest that the Legislature act to provide standards to govern the amount of punitive damages, or absent legislative action, that this court adopt, as has California, e.g., Radell v. Comora, 211 Cal.App.3d 1244, 259 Cal.Rptr. 891, 899 (1989), at the very least, some rule of proportionality.