Hudgins v. Southwest Airlines, Co.

• Decision Date: 13 January 2009
• Docket Number: No. 1 CA-CV 07-0366.,1 CA-CV 07-0366.
• Citation: 221 Ariz. 472,212 P.3d 810
• Parties: Thomas HUDGINS, individually; Leroy Devore, individually, Plaintiffs/Appellees, v. SOUTHWEST AIRLINES, CO., a Texas corporation, Defendant/Appellant.
• Court: Arizona Court of Appeals

212 P.3d 810

221 Ariz. 472

Thomas HUDGINS, individually; Leroy Devore, individually, Plaintiffs/Appellees, v. SOUTHWEST AIRLINES, CO., a Texas corporation, Defendant/Appellant.

No. 1 CA-CV 07-0366.

Court of Appeals of Arizona, Division 1, Department C.

January 13, 2009.

Hebert Schenk, PC By Richard M. Gerry, The Gillespie Law Firm PC By Craig C. Gillespie, Phoenix, Attorneys for Plaintiffs/Appellees.

Munger Chadwick, PLC By Michael J. Meehan, Tucson, Attorneys for Plaintiff/Appellee Devore.

Fennemore Craig, PC By Timothy Berg, Alexander Arpad, Phoenix, Wheeler Trigg Kennedy, LLP By Malcolm Wheeler, Denver, CO, Attorneys for Defendant/Appellant.

OPINION

TIMMER, Presiding Judge.

¶ 1 Southwest Airlines Co. ("SWA") appeals the judgment entered after a jury found SWA liable for compensatory and punitive damages stemming from its conduct surrounding the arrest and criminal prosecution of its passengers, appellees Thomas Hudgins and Leroy Devore. SWA argues the trial court erred by making evidentiary and instructional errors and by failing to either negate or reduce the punitive damages award. For the following reasons, we reject most of SWA's challenges but reverse the judgment insofar as it awards unconstitutionally excessive punitive damages and remand for entry of a reduced award.

BACKGROUND

¶ 2 We review the facts and inferences in the light most favorable to upholding the jury's verdict. Powers v. Taser Int'l, Inc., 217 Ariz. 398, 399, ¶ 4 n. 1, 174 P.3d 777, 778 n. 1 (App.2007).

¶ 3 Hudgins and Devore (collectively, "Plaintiffs") are Virginia-based bail enforcement agents, sometimes referred to as "bounty hunters," who operate through their business, H & D Enterprises. On Saturday, September 11, 1999, Plaintiffs flew from Baltimore to Phoenix on a SWA flight in order to apprehend a fugitive in Arizona. Before making the trip, Plaintiffs called SWA to obtain instructions on how to lawfully transport handguns on the airplane. SWA told both men to arrive two hours early, bring photo identification, and have departmental letters setting forth their itinerary and explaining their purpose for transporting weapons.

¶ 4 After arriving at the airport on the day of their flight, Plaintiffs presented cards at the SWA ticket counter identifying themselves as bail enforcement agents with H & D Enterprises and provided the requested information, including a letter from H & D Enterprises, which Devore had signed. Plaintiffs never represented themselves as law enforcement officers. A SWA agent provided forms entitled, "Notice to Armed Individuals" (the "NAI forms" or "forms"), which informed Plaintiffs that the Federal Aviation Administration ("FAA") prohibited any person from carrying a deadly or dangerous weapon on flights "unless they have a legal authority to do so," and described SWA flight procedures and restrictions. Plaintiffs signed the forms representing their agreement to abide by SWA's procedures and affirming they met "all F.A.A. regulations relating to armed passenger travel." In a space provided to list the individual's "[l]aw enforcement or authorizing [a]gency," Hudgins wrote "H & D Enforcement Agent," and Devore wrote "H & D Enterprises." Both provided identification numbers in spaces reserved for that information.

¶ 5 SWA personnel did not ask any questions of Plaintiffs and failed to realize they were not law enforcement agents. Plaintiffs asked to check their weapons because they did not have a fugitive in custody, but a SWA employee told them to take the weapons on board, and another employee, Susan Williams, signed the NAI forms as written authorization to do so. As a result, Plaintiffs were allowed to board the SWA flight with their guns.

¶ 6 Before the airplane departed, the lead flight attendant took Plaintiffs' NAI forms and provided them to the captain, David Wilder. After the attendant pointed out the arguably unclear agency names written on the forms, the captain spoke with a Baltimore terminal agent and was told Plaintiffs worked for HUD—Housing and Urban Development. Near the end of the flight, DeVore informed another flight attendant that he was a bounty hunter. She informed the lead flight attendant who, in turn, informed Captain Wilder that Plaintiffs did not work for HUD. The captain then reviewed the NAI forms again and concluded Plaintiffs were not authorized under the FAA regulations to fly with firearms. At that point, he was unsure of their intentions and had safety concerns. Because Plaintiffs were not deemed an immediate threat, however, Captain Wilder continued the flight to Phoenix rather than divert to another city's airport. He did not call SWA personnel in Baltimore to determine why they had authorized Plaintiffs to fly with guns. When he called the Phoenix ground operations for a gate assignment, he followed what he believed to be applicable SWA flight operation manual procedures by requesting that law enforcement meet the airplane at the gate for assistance. Neither Captain Wilder nor any other SWA employee asked law enforcement agents to arrest Plaintiffs.

¶ 7 After the SWA flight landed, Phoenix Police officers met the airplane. Captain Wilder provided the police officers with the NAI forms and told them that SWA had permitted Plaintiffs to board the airplane. When Plaintiffs exited the aircraft, a police officer questioned them, and after he learned they were not law enforcement officers, he handcuffed them and escorted them to the airport's police holding area. The officer interviewed Plaintiffs and ultimately held them for approximately two hours. Phoenix Police called the Federal Bureau of Investigation ("FBI"), which sent an agent to the airport to question Plaintiffs. After the agent questioned Plaintiffs and received the NAI forms, he arrested Plaintiffs and had them transported to the Maricopa County Jail, where they remained until released from custody on Monday morning. Understandably, Plaintiffs suffered emotional distress from these events. Aside from the humiliation of their arrest, at the jail they were subjected to strip searches, crowded and unpleasant living conditions, and threats of violence from other inmates.

¶ 8 On September 13, the United States charged Plaintiffs with carrying concealed dangerous weapons on an aircraft in violation of 49 United States Code ("U.S.C.") section 46505(b)(1) (2001).¹ Additionally, the FAA sent letters to Plaintiffs on September 16 and September 28, respectively, informing them of the FAA's investigation of the matter and its possible imposition of civil penalties. After conducting a further investigation of the incident, on February 28, 2000, the United States dismissed the charges against Plaintiffs without prejudice to reinstating them. Similarly, the FAA informed Plaintiffs by letters dated March 28, 2000 that although they had violated Federal Aviation Regulations by flying with guns, because "it appear[ed] every attempt was made to comply with instructions given to [them] by the airline," the FAA would take no further action in the matter.

¶ 9 Plaintiffs subsequently initiated this lawsuit by filing a complaint alleging multiple claims against SWA for its acts and omissions on September 11, 1999 and during the subsequent federal investigations. The trial court later entered summary judgment for SWA on all claims. After Plaintiffs appealed, this court affirmed the trial court's disposition on most of Plaintiffs' claims but reversed the entry of summary judgment on Plaintiffs' cause of action based on negligence. Hudgins v. Southwest Airlines, Co., 1 CA-CV 04-0487, mem. dec. at ¶ 1 (Ariz. App.Aug. 30, 2005) ("Hudgins I"). Additionally, the court reversed the trial court's ruling that as a matter of law Plaintiffs were not entitled to punitive damages. Id. On remand, the matter was tried to a jury, which found SWA liable to Plaintiffs for $500,000 each in compensatory damages and $4 million each in punitive damages. After addressing post-trial motions, the trial court entered final judgment and SWA's timely appeal followed.

DISCUSSION

I. Motion for new trial

¶ 10 SWA argues the trial court erred in denying its motion for new trial because the court made erroneous evidentiary rulings and improperly instructed the jury. We will not disturb the court's evidentiary rulings and grant a new trial absent an abuse of discretion and resulting prejudice. Gemstar Ltd. v. Ernst & Young, 185 Ariz. 493, 506, 917 P.2d 222, 235 (1996). Additionally, we review the entirety of the jury instructions to determine whether the court properly guided the jury in its deliberations. State Farm Fire & Cas. Ins. Co. v. Grabowski, 214 Ariz. 188, 192, ¶ 13, 150 P.3d 275, 279 (App.2007). We will reverse and grant a new trial on the basis of an erroneous instruction "only if it was both harmful to the complaining party and directly contrary to the rule of law," and we have substantial doubt that the jury was properly guided in its deliberations. Id. With these principles in mind, we address Plaintiffs' challenges in turn.

A. The FAA letter

¶ 11 Before trial, SWA moved the court in limine to preclude Plaintiffs from introducing in evidence a May 10, 1999 letter from the FAA to SWA's in-house attorney, Donald Hood, concerning a 1998 incident in which other bounty hunters were permitted to board a SWA flight with weapons. The letter stated that although the bounty hunters had presented false information, SWA personnel had failed to ask basic questions of them that would have prevented the deception. Significantly, the letter further provided as follows:

Unfortunately this appears to be a prevelant [sic] problem in Arizona where, at least some individuals calling themselves Bail Recovery Agents or Bounty Hunters have been able to present themselves as being authorized to travel armed when indeed, they are not.

The letter closed by warning SWA to review its procedures to prevent future violations, which could result in the...