Aken v. PLAINS ELEC. GENERATION & TRANS.

• Decision Date: 04 June 2002
• Docket Number: No. 26,730.,26,730.
• Citation: 132 N.M. 401,2002 NMSC 21,49 P.3d 662
• Court: New Mexico Supreme Court
• Parties: Jim AKEN, Plaintiff-Respondent, v. PLAINS ELECTRIC GENERATION & TRANSMISSION COOPERATIVE, INC. and Craig Chapman, Defendants-Petitioners.

49 P.3d 662

132 N.M. 401

2002 NMSC 21

Jim AKEN, Plaintiff-Respondent, v. PLAINS ELECTRIC GENERATION & TRANSMISSION COOPERATIVE, INC. and Craig Chapman, Defendants-Petitioners.

No. 26,730.

Supreme Court of New Mexico.

June 4, 2002.

Rodey, Dickason, Sloan, Akin & Robb, P.A., Edward Ricco, Albuquerque, NM, for Petitioners.

Foster, Johnson, McDonald, Lucero & Koinis, L.L.P., Thomas L. Johnson, Kerri L. Peck, Kathryn D. Lucero, Albuquerque, NM, for Respondent.

OPINION

MAES, Justice.

{1} In this punitive damages case, we are asked to assess jury awards in favor of Jim Aken and against Plains Electric on Aken's claims for retaliatory discharge and defamation. We conduct an analysis on procedural and substantive levels and affirm the jury awards.

FACTS

{2} On July 28, 1993, Aken had worked for Plains for nine years. He had been selected employee of the month and employee of the year. The evidence was consistent that he was respected and trusted and had a reputation for honesty and integrity. Aken was somewhat unique at Plains in that he tended to stand up to management, particularly on issues of plant safety and sexual harassment in the workplace. When he complained about plant safety, he was told by management that this was "not conducive to long-term employment." When he went to Joanna Simpson, the plant human relations manager, about a female plant employee who had been the victim of sexual harassment, Simpson stated she did not want to hear from him about it.

{3} Aken paid for his stalwartness. He was given an unsatisfactory attendance mark when he took time off to recover from pneumonia and because of the deaths of his mother and uncle. Despite his competence and leadership qualities, he was consistently denied promotions. In 1992, he had volunteered for service on the plant Policy Review Team, and fellow members of the team stated to management in writing that Aken had been "harassed, humiliated, intimidated and retaliated against" in an effort by management to "coerc[e] ... employees into silence."

{4} During the day of July 28, some unknown person or persons at the plant hid a welding machine from Aken three different times, apparently engaging in "horseplay" typical at the plant. Aken eventually hid the welding machine in a cardboard box in a place where he could have a plant electrician do some work on it the next morning. On July 29, Aken went with the electrician to the place he had put the welder only to discover it was not there. It had been taken by management and hidden in a tool room. Craig Chapman, Aken's immediate supervisor, escorted Aken to a meeting with plant manager Oren Key, supervisor James McCollam, and Simpson, where Aken was to be accused of (and later terminated for) stealing the welder. Chapman knew then that the welder had been placed in the tool room. There was no basis for concluding that Aken had stolen or had attempted to steal a welder; a rational reading of the record strongly suggests that management, who, according to testimony, operated more like a "gang" enforcing closed-mouthedness and mindless toeing of the line on the part of employees, was waiting for an opportunity to terminate Aken, however unfairly.

{5} At the meeting, upon being accused of theft, Aken suffered a stroke. Later, when his wife called Plains asking for an explanation of what had happened, she overheard Key tell Chapman, to whom Aken's wife was talking, that Key would not talk to her and that if Chapman knew "what was good for him, he would keep his mouth shut, too." Simpson and Superintendent of Operations Don Russell also refused to provide Aken's wife with any explanation.

{6} There is nothing in the record which suggests that the source of information that Aken had been fired for stealing a welder, which was disseminated to plant workers in general, was anyone other than members of management. The jury was instructed that Plains itself was susceptible to a punitive damages award if it "authorized, participated in, or ratified" the illegal acts of its managers or other employees. There was credible evidence that at the hospital Chapman told Aken's fellow worker, Twig Hollar, that Aken had stolen a machine. Chapman specifically told another worker, Robert Gonzales, that Aken had stolen a welder. Mike McInnes, then plant manager, announced at a staff meeting that Aken had been fired for theft. Foreman Alan Bratzell also told Hollar that Aken was fired for stealing a welder. Jim Behnken, a coordinator in management at Plains headquarters in Albuquerque, told an employee that Aken was fired for stealing.

{7} Aken had never been accused of anything such as stealing equipment from the job and was "ashamed." It was difficult for him to deal with people who now thought he was a thief. He had sleepless nights and was depressed.

{8} On August 4, 1993, while still hospitalized, Aken was fired. He sued for wrongful termination (retaliatory discharge) and defamation. After an eight-day trial, the jury entered an award in favor of Aken on his wrongful termination claim ($500,000 compensatory and $1,750,000 punitive damages) and on his defamation claim ($100,000 compensatory and $1,000,000 punitive damages). Plains appealed on numerous grounds to the Court of Appeals, which affirmed the judgment in favor of Aken in a memorandum opinion. On certiorari, Plains now seeks review on the sole ground that the punitive damages awards are "grossly excessive" under the three-guidepost test of BMW of North America, Inc. v. Gore, 517 U.S. 559, 574, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996).

PRELIMINARY ISSUE

{9} There is an issue in this appeal whether the primary issue—the alleged constitutional excessiveness of the punitive damages awards—was adequately preserved below. The Court of Appeals refused to decide any issues of the constitutionality of the awards on the ground that the arguments "were not raised below" and were "never voiced at trial." See Aken v. Plains Elec. Generation & Transmission Corp., NMCA No. 20,271, slip op., at 15-16, 25 (Dec. 13, 2000). Both parties agree that the issue was in fact raised at trial, in Plains' motion for reconsideration. What the parties argue in their briefs is whether under Rule 12-213(A)(4) NMRA 2002, Plains' brief in chief in the Court of Appeals complied with the requirement that the brief contain "a statement explaining how the issue was preserved in the court below." The constitutional claim was not specifically referenced to the Court of Appeals, although a complete reading of Plains' brief in that court would have revealed that it was voiced in the trial court. We also note that Aken responded to the argument in his answer brief below.

{10} We have held that we will "construe the rules of appellate procedure liberally so that causes on appeal may be determined on their merits." Danzer v. Prof'l Insurors, Inc., 101 N.M. 178, 180, 679 P.2d 1276, 1278 (1984); see also Garcia ex rel. Garcia v. La Farge, 119 N.M. 532, 540, 893 P.2d 428, 436 (1995)

(finding due process issue adequately preserved although arguments raising issue "were not a model of clarity"). We conclude that Defendant properly preserved the constitutional issue in the trial court and substantially complied with the requirement that the manner of preservation be set out in its brief-in-chief. The Court of Appeals erred in not considering the argument, and so we will proceed to do so.

PROCEDURAL VERSUS SUBSTANTIVE DUE PROCESS

{11} The United States Supreme Court indicated in a series of cases preceding BMW that excessive punitive damages awards may constitute a violation of a defendant's substantive due process rights. See Aetna Life Ins. Co. v. Lavoie, 475 U.S. 813, 828-29, 106 S.Ct. 1580, 89 L.Ed.2d 823 (1986)

(case disposed of on other grounds); Bankers Life & Cas. Co. v. Crenshaw, 486 U.S. 71, 76, 108 S.Ct. 1645, 100 L.Ed.2d 62 (1988) (declining to reach issue); Browning-Ferris Indus. of Vermont v. Kelco Disposal, Inc., 492 U.S. 257, 276-77, 109 S.Ct. 2909, 106 L.Ed.2d 219 (1989) (reflecting explicit recognition by Court that Due Process Clause places "some limits" on the size of punitive damages awards); Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 23, 111 S.Ct. 1032, 113 L.Ed.2d 1 (1991) (calling a four to one ratio of punitive to compensatory damages substantively "close to the line"); TXO Prod. Corp. v. Alliance Res. Corp., 509 U.S. 443, 453-54, 113 S.Ct. 2711, 125 L.Ed.2d 366 (1993) (plurality opinion) (stating Due Process Clause imposes "substantive limits `beyond which penalties may not go'") (quoting Seaboard Air Line Ry. Co. v. Seegers, 207 U.S. 73, 78, 28 S.Ct. 28, 52 L.Ed. 108 (1907)).

{12} The review in Haslip and TXO strongly emphasized the procedural component of the Due Process Clause. The Court in TXO stressed the importance of procedural regularity as underpinning any substantive analysis: "Assuming that fair procedures were followed, a judgment that is a product of that process is entitled to a strong presumption of validity. Indeed, there are persuasive reasons for suggesting that the presumption should be irrebuttable or virtually so." TXO, 509 U.S. at 457 (plurality opinion) (citation omitted). After these cases, "the door remained open for defendants to argue that their particular punitive damages award was `grossly excessive' and therefore an arbitrary deprivation of property in violation of substantive due process." Neil B. Stekloff, Note, Raising Five Eyebrows: Substantive Due Process Review of Punitive Damages Awards After BMW v. Gore, 29 Conn. L.Rev. 1797, 1806 (1997) [hereinafter Raising Five Eyebrows]. The Court granted certiorari in BMW to "help ... illuminate `the character of the standard that will identify unconstitutionally excessive awards' of punitive damages." BMW, 517 U.S. at 568 (quoting Honda Motor Co. v. Oberg, 512 U.S. 415, 420, 114 S.Ct. 2331, 129 L.Ed.2d 336 (1994)). Thus, after concentrating on the procedural aspects of punitive damages awards, the...