Germanio v. Goodyear Tire & Rubber Co.

• Decision Date: 26 March 1990
• Docket Number: Civ. A. No. 87-3857(JFG).
• Citation: 732 F. Supp. 1297
• Parties: Sublizio GERMANIO and Hilda Germanio, Plaintiffs, v. The GOODYEAR TIRE & RUBBER COMPANY, Defendant.
• Court: U.S. District Court — District of New Jersey

732 F. Supp. 1297

Sublizio GERMANIO and Hilda Germanio, Plaintiffs, v. The GOODYEAR TIRE & RUBBER COMPANY, Defendant.

Civ. A. No. 87-3857(JFG).

United States District Court, D. New Jersey.

March 26, 1990.

Stephen A. Browndorf, Northfield, N.J., and John C. Risjord and Randy W. James, John C. Risjord & Associates, P.C., Overland Park, Kan., for plaintiffs.

Thomas T. Chappell, DeGonge & Chappell, Belleville, N.J., and Christopher S. Shank and William D. Beil, Stinson, Mag & Fizzell, Kansas City, Mo., for defendant.

GERRY, Chief Judge.

I. Introduction

Presently before the court is defendant Goodyear Tire and Rubber Company's pretrial motion for summary judgment on the claim for punitive damages advanced by plaintiffs, Sublizio and Hilda Germanio, in this products liability action concerning the explosive separation of a truck tire rim manufactured by defendant. Defendant argues that New Jersey's scheme for the determination of the propriety of an award of punitive damages by the jury violates the U.S. Constitution. The specific provisions which defendant argues are being violated are the Fourteenth Amendment's guarantee of due process and equal protection of the law. Defendant also raises the New Jersey Constitution's proscription of excessive fines. N.J. Const. Art. I, Sec. 12. Defendant has adduced a number of arguments in favor of its position, and we will treat each in turn.

At the outset, it is useful to examine the standards by which the question of punitive damages is decided in New Jersey. The New Jersey Products Liability Act of 1987 provides, in pertinent part:

a. Punitive damages may be awarded to the claimant only if the claimant proves, by a preponderance of the evidence, that the harm suffered was the result of the product manufacturer's or seller's acts or omissions, and such acts or omissions were actuated by actual malice or accompanied by a wanton and willful disregard of the safety of product users, consumers, or others who foreseeably might be harmed by the product. For the purposes of this section "actual malice" means an intentional wrongdoing in the sense of an evil-minded act, and "wanton and willful disregard" means a deliberate act or omission with knowledge of a high degree of probability of harm to another and reckless indifference to the consequences of such act or omission. Punitive damages shall not be awarded in the absence of an award of compensatory damages.

b. The trier of fact shall first determine whether compensatory damages are to be awarded. Evidence relevant only to punitive damages shall not be admissible in that proceeding. After such determination has been made, the trier of fact shall, in a separate proceeding, determine whether punitive damages are to be awarded. In determining whether punitive damages are to be awarded, the trier of fact shall consider all relevant evidence, including but not limited to, the following:

(1) The likelihood at the relevant time that serious harm would arise from the tortfeasor's conduct;

(2) The tortfeasor's awareness of reckless disregard of the likelihood that the serious harm at issue would arise from the tortfeasor's conduct;

(3) The conduct of the tortfeasor upon learning that its initial conduct would likely cause harm; and

(4) The duration of the conduct or any concealment of it by the tortfeasor.

....

d. If the trier of fact determines that punitive damages should be awarded, the trier of fact shall then determine the amount of these damages. In making that determination, the trier of fact shall consider all relevant evidence, including, but not limited to, the following:

(1) All relevant evidence relating to the factors set forth in subsection b. of this section;

(2) The profitability of the misconduct of the tortfeasor;

(3) When the misconduct was terminated; and

(4) The financial condition of the tortfeasor.

N.J.S.A. 2A:58C-5(a), (b), (d).

We also note at the outset that defendant has attacked the constitutionality of the entire "New Jersey punitive damages regime." (Defendant's brief, p. 3, n. 2.) However, defendant lacks standing to challenge N.J.S.A. 2A:58C-5(c), which concerns the applicability of punitive damages to products subject to premarket approval by the federal Food and Drug Administration. We therefore will consider that provision to be severed from the challenge to the remainder of the statute, and we do not pass on its constitutionality.

Defendant states that "punitive damages in New Jersey are rooted in the common law. Although a statute now exists to regulate punitive damages in certain instances, the New Jersey punitive damages regime remains the product of the common law." (Defendant's brief, p. 3, n. 2.) (Citations omitted.) However, the punitive damages provision of the Product Liability Act directly applies to the present case. The Act specifically excludes environmental torts from its purview. Beyond that, its provisions, including those concerning punitive damages apply to any "product liability action," which is defined as "any claim or action brought by a claimant for harm caused by a product, irrespective of the theory underlying the claim, except actions for harm caused by breach of express warranty." N.J.S.A. 2A:58C-1(b)(3). The statute took effect on July 22, 1987. The complaint in this matter was filed on September 22, 1987. Defendant's assertion that this court's analysis of a constitutional challenge to New Jersey's punitive damages law in a products liability case must rely solely on New Jersey case law may have been true before July 22, 1987, but is true no longer. "The court must decide according to existing laws." United States v. Peggy Schooner, 1 Cranch 103, 110, 2 L.Ed. 49 (1801). We therefore must concentrate our attention on the punitive damages statute, although we will consider pre-1987 case law as supplementary guidance to the intent of the New Jersey legislature, see N.J.S.A. 2A:58C-1, Senate Judiciary Committee Statement, Senate, No. 2805-L.1987, c. 197 (citing Fischer v. Johns-Manville Corp., 103 N.J. 643, 512 A.2d 466 (1986); Nappe v. Anschelewitz, Barr, Ansell & Bonello, 97 N.J. 37, 477 A.2d 1224 (1984); Berg v. Reaction Motors Div., 37 N.J. 396, 181 A.2d 487 (1962); Enright v. LuBow, 202 N.J.Super. 58, 493 A.2d 1288 (App.Div.1985), cert. denied, 104 N.J. 376, 517 A.2d 386 (1986), as sources of the statutory punitive damages standards and for guidance on questions where the legislature is mute.

We do not write on a wholly blank slate. Two other judges in our District have had occasion to examine the constitutionality of punitive damages in New Jersey and have upheld the state law. Juzwin v. Amtorg Trading Corp., 718 F.Supp. 1233 (D.N.J. 1989); Leonen v. Johns-Manville Corp., 717 F.Supp. 272 (D.N.J.1989). In both of these cases, the question of the constitutionality of punitive damages hinged on the much debated issue of whether the availability of such damages in mass tort litigation violated the due process clause. The Leonen court also considered equal protection and vagueness challenges to New Jersey punitive damages law and found them wanting. 717 F.Supp. at 278-81. These issues are before us today, but defendant also propounds a number of other theories of constitutional attack, and on those issues we plow new ground.

II. Punitive Damages and the "Standardless Discretion of Juries"

Defendant's first challenge to punitive damages alleges a facial violation of due process caused by the standardless discretion of civil juries under New Jersey law. This argument is prompted by concurring language in two recent Supreme Court decisions. In Browning-Ferris Industries v. Kelco Disposal, Inc., ___ U.S. ___, 109 S.Ct. 2909, 106 L.Ed.2d 219 (1989), the court rejected a challenge to an award of punitive damages brought under the excessive fines clause of the Eighth Amendment. Id., 109 S.Ct. at 2910. In a concurring opinion, Justice Brennan, joined by Justice Marshall, indicated that the due process clause may limit awards of punitive damages that are imposed by juries that are given only "skeletal guidance" by the trial court. Id., 109 S.Ct. at 2923 (Brennan, J., concurring). Justice O'Connor, joined by Justice Stevens, dissented from the Eighth Amendment holding but agreed with the majority that no issue of due process had been raised. Justice O'Connor agreed with Justice Brennan concerning "the vagueness and procedural due process problems presented by juries given unbridled discretion to impose punitive damages." Id., 109 S.Ct. at 2924 (O'Connor, J., concurring in part and dissenting in part). Justice O'Connor's opinion in Browning-Ferris echoed her earlier opinion in Banker's Life & Casualty Co. v. Crenshaw, 486 U.S. 71, 108 S.Ct. 1645, 100 L.Ed.2d 62 (1988). In that case, the Court refused to pass on the question of the constitutionality of punitive damages because the question was not properly raised below. Id. at 80, 108 S.Ct. at 1651. In a separate opinion, Justice O'Connor, joined by Justice Scalia, opined that "Mississippi law gives juries discretion to award any amount of punitive damages in any tort case in which a defendant acts with a certain mental state. In my view, because of the punitive character of such awards, there is reason to think that this may violate the Due Process Clause." Id. at 87, 108 S.Ct. at 1655 (O'Connor, J., concurring in part and concurring in the judgment).

Defendant takes these opinions to show that "five of the nine Justices expressed grave doubt about the constitutionality under the Due Process Clause of current punitive damages law." (Defendant's brief, p. 2.) But we think that they can only be taken as evidence that an unreasonably generous award of punitive damages may be attacked under the Due Process Clause, which is hardly news. St. Louis, I.Mt. & So. Ry. Co. v. Williams, 251 U.S. 63, 66-67, 40 S.Ct. 71, 73, 64 L.Ed. 139 (1919) (due process forbids damages which are "so severe and oppressive as to be wholly...