Galjour v. General American Tank Car Corp., Civ. A. No. 87-5003.

• Decision Date: 19 April 1991
• Docket Number: Civ. A. No. 87-5003.
• Citation: 764 F. Supp. 1093
• Parties: Cynthia GALJOUR, et al. v. GENERAL AMERICAN TANK CAR CORPORATION, et al.
• Court: U.S. District Court — Eastern District of Louisiana

764 F. Supp. 1093

Cynthia GALJOUR, et al. v. GENERAL AMERICAN TANK CAR CORPORATION, et al.

Civ. A. No. 87-5003.

United States District Court, E.D. Louisiana.

April 19, 1991.

COPYRIGHT MATERIAL OMITTED

Charles J. Imbornone, New Orleans, La., Joseph M. Bruno, Bruno & Bruno, New Orleans, La., for plaintiffs.

Benjamin R. Slater, Jr., Benjamin R. Slater, III, Charles N. Nunmaker, Mark E. Van Horn, Monroe & Lemann, New Orleans, La., for defendant, Norfolk Southern Corp.

Raymond J. Salassi, Jr., Harry S. Hardin, III, Pierre V. Miller, II, Jones, Walker, Waechter, Poitevent, Carrere & Denegre, New Orleans, La., for defendant, CSX Transp., Inc. David S. Kelly, Walter F. Marcus, III, Bryan C. Misshore, John J. Hainkel, III, Lemle, Kelleher Law Firm, New Orleans, La., for defendant, Illinois Central R. Co.

Frederick W. Bradley, Liskow & Lewis, New Orleans, La., for defendant, GATX Terminals Corp.

James G. Burke, Jr., Kimbley A. Kearney, Burke & Mayer, New Orleans, La., for defendant, Phillips Petroleum Co. and Phillips 66 Co.

John P. Manard, Jr., Sallye G. Webb, Phelps, Dunbar, Marks, Claverie & Sims, New Orleans, La., for defendant, General American Transp. Corp.

George J. Richaud, Young, Richaud, Theard & Myers, New Orleans, La., for defendant, Mitsui and Co. (U.S.A.), Inc.

William A. Percy, III, Asst. Atty. Gen., New Orleans, La., for intervenor, Louisiana Atty. Gen.

ORDER AND REASONS

MENTZ, District Judge.

This matter is a diversity action for personal injury and property damages arising out of the explosion and fire of a railroad tank car carrying the chemical butadiene. In addition to compensatory damages, the plaintiffs assert claims for punitive or exemplary damages pursuant to Louisiana Civil Code article 2315.3, which provides:

In addition to general and special damages, exemplary damages may be awarded, if it is proved that plaintiff's injuries were caused by the defendant's wanton or reckless disregard for public safety in the storage, handling, or transportation of hazardous or toxic substances. As used in this Article, the term hazardous or toxic substances shall not include electricity.

La.Civ.Code Ann. article 2315.3 (West Supp.1991).

The defendants, Norfolk Southern Corporation, CSX Transportation, Inc., Illinois Central Railroad Company, GATX Terminals, Inc., Phillips Petroleum Company, and Phillips 66 Company, General American Transportation Corporation, and Mitsui & Company (U.S.A.), Inc., filed motions to dismiss the plaintiffs' exemplary damages claims on the ground that article 2315.3 is unconstitutional. The defendants contend that article 2315.3 violates the Due Process and Equal Protection Clauses of the United States and Louisiana Constitutions.¹

In accordance with 28 U.S.C. § 2403(b)², the Court certified to the Louisiana Attorney General that the defendants were attacking the constitutionality of a state statute, and permitted time for the State to submit briefs. In addition to the substantive grounds raised in opposition to the defendants' motions to dismiss, the Attorney General takes the position that it is premature for the Court to address the constitutionality of article 2315.3 until the defendants are determined liable under that section, and exemplary damages are assessed against them. The defendants in this case are not challenging the amount of a jury award, but the statute creating a cause of action for exemplary damages. Because the plaintiffs' cause of action is based on article 2315.3, it is not premature to address the constitutionality of that statute.

In December, 1990, the Court denied the motions to dismiss, but withheld its reasons until the United States Supreme Court rendered a decision in Pacific Mutual Life Ins. Co. v. Haslip, 553 So.2d 537 (Ala.1989), cert. granted, ___ U.S. ___, 110 S.Ct. 710, 107 L.Ed.2d 731 (1990). As Pacific Mutual was decided on March 4, 1991, see ___ U.S. ___, 111 S.Ct. 1032, 113 L.Ed.2d 1 (1991), the Court now renders the following reasons upholding article 2315.3 under both the federal and state constitutions.

I. DUE PROCESS

The defendants' claim that article 2315.3 violates due process of law due to a lack of notice to potential offenders and standardless enforcement.³ This is essentially a void-for-vagueness argument. Specifically, the defendants argue that article 2315.3 violates due process because it provides no substantive standards or procedural guidelines to aid the jury in fairly assessing exemplary damages, it imposes no limit on the amount of exemplary damages that a jury can award, and the proscribed conduct is so vague that it fails to provide notice to potential offenders. In addition, the defendants argue that because of the quasi-criminal nature of exemplary damages, the statute violates due process by not incorporating a clear and convincing burden of proof. The defendants further argue that article 2315.3 violates fundamental fairness because it exposes a carrier of hazardous materials to punitive liability notwithstanding the carrier's compliance with all rules, regulations, orders, and standards promulgated by the Secretary of Transportation of the United States for the transportation of hazardous materials in interstate commerce.

A. Void-for-vagueness

The void-for-vagueness doctrine requires that a statute be sufficiently definite so that it gives ordinary people adequate warning of the proscribed conduct and provides sufficient guidance to judges and juries so that they can fairly administer the law. See Grayned v. City of Rockford, 408 U.S. 104, 108-09, 92 S.Ct. 2294, 2298-99, 33 L.Ed.2d 222 (1972). The strictness of the vagueness test depends upon whether the enactment: (1) is an economic regulation; (2) imposes civil or criminal penalties; (3) contains a scienter requirement; and (4) threatens to inhibit the exercise of constitutionally protected rights. See Village of Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 498-99, 499, 102 S.Ct. 1186, 1193-94, 71 L.Ed.2d 362 (1982).

Economic regulation is subject to a less strict vagueness test because its subject matter is often more narrow, and because businesses, which face economic demands to plan behavior carefully, can be expected to consult relevant legislation in advance of action. Indeed, the regulated enterprise may have the ability to clarify the meaning of the regulation by its own inquiry, or by resort to an administrative process. The Court has also expressed greater tolerance of enactments with civil rather than criminal penalties because the consequences of imprecision are qualitatively less severe. And the Court has recognized that a scienter requirement may mitigate a law's vagueness, especially with respect to the adequacy of notice to the complainant that his conduct is proscribed.

Finally, perhaps the most important factor affecting the clarity that the Constitution demands of a law is whether it threatens to inhibit the exercise of constitutionally protected rights. If, for example, the law interferes with the right of free speech or of association, a more stringent vagueness test should apply.

Id. (footnotes omitted).

Article 2315.3 is a social and economic regulation of constitutionally unprotected conduct. The statute imposes civil exemplary damages, which are penal in nature, but do not approach the severity of criminal penalties. See Browning-Ferris Indus. of Vermont, Inc. v. Kelco Disposal, Inc., 492 U.S. 257, 109 S.Ct. 2909, 106 L.Ed.2d 219 (1989). However, exemplary damages "have been described as quasi-criminal." See Pacific Mutual Life Ins. Co. v. Haslip, ___ U.S. ___, 111 S.Ct. 1032, 1044, 113 L.Ed.2d 1 (1991) (citing Smith v. Wade, 461 U.S. 30, 59, 103 S.Ct. 1625, 1641, 75 L.Ed.2d 632 (1983) (Rehnquist, J., dissenting)). A law which imposes only civil penalties may warrant a strict test if the law is quasi-criminal, and has a prohibitory and stigmatizing effect. See Hoffman Estates, 455 U.S. at 499-500, 102 S.Ct. at 1194. Erring on the side of caution, the Court will apply a strict test: article 2315.3 will sustain the due process challenge only "if the enactment is impermissibly vague in all of its applications." See United States v. Clinical Leasing Service, Inc., 925 F.2d 120, 122 (5th Cir.1991) (quoting Hoffman Estates, 455 U.S. at 494-95, 102 S.Ct. at 1191) (applying this strict test to a federal statute authorizing civil penalties against persons who distribute controlled substances without registration.)

There are limits to the degree of exactitude required of a statute.

It is not a test for the constitutionality of a statute that it be so unambiguous that all judges will read the statute in only one way.... Indeed, if every statute were so clear as to permit only one reading, judicial interpretation would never be necessary.

. . . . .

A statute so vague as to have no predictable meaning is void for vagueness. But this doctrine does not ordain the unconstitutionality of a statute that two lawyers may read differently, nor does it mean that persons subject to the law may bank against startling or inconsistent decisions.

. . . . .

Neither absolute uniformity of interpretation, nor total absence of ambiguity is semantically or practically achievable — or, it necessarily follows — constitutionally required.

Franklin v. First Money, Inc., 427 F.Supp. 66, 69-70 (E.D.La.1976), aff'd, 599 F.2d 615 (5th Cir.1979) (citations omitted).

By these standards, article 2315.3 withstands the defendants' attack. The statute carefully defines the conduct that warrants exemplary damages. It provides for exemplary damages where the defendant's "wanton or reckless disregard for public safety in the storage, handling, or transportation of hazardous or toxic substances" caused the plaintiff's injuries. See La.Civ.Code Ann. art. 2315.3 (West Supp.1991). Thus, the statute puts these persons on notice of the conduct that may expose them to liability for exemplary damages.

Obviously, it is not possible for the...