Neill v. Gulf Stream Coach, Inc.

• Decision Date: 29 May 1997
• Docket Number: No. 96-658-CIV-J-10.,96-658-CIV-J-10.
• Citation: 966 F.Supp. 1149
• Parties: Gerald NEILL and Barbara Neill, Plaintiffs, v. GULF STREAM COACH, INC., et al., Defendants.
• Court: U.S. District Court — Middle District of Florida

966 F.Supp. 1149

Gerald NEILL and Barbara Neill, Plaintiffs, v. GULF STREAM COACH, INC., et al., Defendants.

No. 96-658-CIV-J-10.

United States District Court, M.D. Florida, Jacksonville Division.

May 29, 1997.

Gail A. Stafford, Jacksonville, FL, for Plaintiffs.

Bruce W. Bennett, Tampa, FL, Thomas Francis McMorrow, Jacksonville, FL, for Defendants.

ORDER AND OPINION

HODGES, District Judge.

This is an action in which the Plaintiffs assert a federal claim together with other claims based on state law.¹ The law of Florida supplies the rule of decision with regard to the merits of the state law claims. See 28 U.S.C. § 1652.

The Plaintiffs allege entitlement to punitive damages as part of their state law causes of action. The Defendants have moved (Docs. 7 and 13) to dismiss or strike those allegations based upon Fla.Stat. § 768.72, et seq. which establish special requirements regarding pleading, discovery procedures and the measure or amount of punitive damages recoverable under Florida law.²

Of immediate concern is that part of § 768.72 which prohibits any allegation of punitive damages until permitted by the court after a "reasonable showing by evidence in the record or proffered by the claimant which would provide a reasonable basis for recovery of such damages." The issue to be decided, therefore, is whether the state statute or the Federal Rules of Civil Procedure govern the time and manner in which allegations of punitive damages must be made in the circumstances of this case.

For the reasons that follow, I have decided that the state statute applies and that the motions to dismiss or strike should be granted.

DISCUSSION

The question is whether the Florida statute constitutes a matter of procedure thus rendering it inapplicable in actions brought in a federal court, or whether the statute creates substantive rights under the law of the state such that it should apply regardless of whether the case is litigated in a state or federal forum. The issue remains unresolved by the Eleventh Circuit Court of Appeals, and the approaches pursued and results obtained by the district courts in Florida have been quite diverse.³ The weight of this authority, however, favors application of the statute.

Analysis begins with the Erie doctrine. Concerns about forum shopping, a desire that the law treat similarly situated litigants similarly, and constitutional limitations on the power of the Article III courts all compel the conclusion that "[t]here is no federal general common law." Erie R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 822, 82 L.Ed. 1188 (1938). Phrased differently, where neither the federal Constitution nor a federal statute provides the rule of decision, and the matter is not one pertaining to the practice and procedure of the federal courts, state law must control. Guaranty Trust Co. of New York v. York, 326 U.S. 99, 105-10, 65 S.Ct. 1464, 1469-71, 89 L.Ed. 2079 (1945); Erie, 304 U.S. at 78, 58 S.Ct. at 822. The general rule of thumb is that, when state law supplies the rule of decision, state law governs matters of substance while federal law governs matters of procedure.⁴ Gasperini v. Center for Humanities, Inc., ___ U.S. ___, ___, 116 S.Ct. 2211, 2219, 135 L.Ed.2d 659 (1996).

Ascertaining Erie's command in any given case through the classification of a law or rule as substantive or procedural has proved decidedly more difficult than was originally anticipated. As a result, the Supreme Court has, over the years, increasingly refined the federal choice of law inquiry.⁵ The two track analysis prescribed by Hanna v. Plumer currently governs the issue. 380 U.S. 460, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965). Under the Hanna rubric, when faced with a potential conflict between federal and state law, the court should first determine whether the state law directly conflicts with some federal statute or rule. Walker v. Armco Steel Corp., 446 U.S. 740, 750, 100 S.Ct. 1978, 1985, 64 L.Ed.2d 659 (1980); Reinke v. O'Connell, 790 F.2d 850, 851 (11th Cir.1986). If a direct conflict exists, the federal statute or rule will always govern. A federal statute, if it applies, will always trump state law under the Supremacy Clause; there is no occasion to engage in an Erie analysis, which involves a comparison of state law with federal decisional law. The same is true with respect to a federal rule of procedure promulgated under the Rules Enabling Act. Subject to the limitations of that Act,⁶ if a federal rule of procedure clearly controls a particular issue, then that federal rule also trumps any inconsistent state law or rule. Gasperini, ___ U.S. at ___ n. 7, 116 S.Ct. at 2219 n. 7; Hanna, 380 U.S. at 470-72, 85 S.Ct. at 1143-44.

Thus, when comparing a federal rule or statute with a corresponding state rule or statute, it is only when the court first decides that there is no direct conflict between them — that each could be given its own field of operation in parallel or, perhaps, tandem fashion — that the court may then determine whether to apply state law in order to achieve the "twin aims" of Erie. Those "twin aims" are the discouragement of forum shopping and the avoidance of inequitable administration of the laws, i.e., the likelihood that the applicability of particular substantive rights and duties would turn on the forum in which the action is brought. Hanna, 380 U.S. at 468, 85 S.Ct. at 1142.

Before undertaking a comparison between the Florida statute and the Federal Rules of Civil Procedure in order to determine whether there is, or is not, a direct collision between them, it is appropriate and instructive to be aware of both the history of Fla.Stat. § 768.72 and the statutory context and framework within which it exists (discussed in more detail, infra). It is important to know that the statute is not simply an isolated provision related to judicial procedure, but is instead a part of a cohesive and comprehensive statutory scheme establishing the substantive law of the state regulating the right to recover, as well as the measure and disbursement, of punitive damage awards. See Smith v. Dep't of Insurance, 507 So.2d 1080, 1092 n. 10 (Fla.1987). Indeed, as a part of the Florida Tort Reform and Insurance Act of 1986, the provisions regarding punitive damages (codified as §§ 768.72 and 768.73) were only one feature of an even broader statutory scheme addressing damages in general. Id. Looking forward to the twin aims of Erie, therefore, it is clearly in the interest of those objectives to give full effect to the Florida statutory scheme in adjudicating state law claims if it is possible to do so within the constraints of existing law.

A. Fla.Stat. § 768.72 and the Federal Rules

Turning, then, to the first prong of the Hanna analysis, the Court must inquire whether Fla.Stat. § 768.72 directly conflicts with a federal rule or statute. A federal statute or rule will directly conflict with a purportedly applicable state law when the federal law controls the issue before the court and in a way that leaves no room in which the state law can operate. Burlington Northern R. Co. v. Woods, 480 U.S. 1, 4-5, 107 S.Ct. 967, 969, 94 L.Ed.2d 1 (1987); Walker, 446 U.S. at 750-51, 100 S.Ct. at 1985. All that is required is a "straightforward exercise" in interpretation, giving the federal statute or rule its plain meaning, directed at ascertaining whether the point in dispute is within the federal law's field of operation. Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 26, 108 S.Ct. 2239, 2242, 101 L.Ed.2d 22 (1988); Walker, 446 U.S. at 750 n. 9, 100 S.Ct. at 1985 n. 9.

The Plaintiffs suggest that the statutory requirement of an evidentiary showing before a claim for punitive damages may be asserted runs afoul of Federal Rules of Civil Procedure 8(a) and 9(g).⁷

1. Rule 8(a)

Rule 8(a) requires that a complaint plead only a "short and plain statement of the claim showing that the pleader is entitled to relief" accompanied by a "demand for judgment for the relief the pleader seeks." F.R.Civ.P. 8(a)(2), (3). On the other hand, the statute requires that no punitive damages claim be "permitted" until: (1) the claimant has made an evidentiary showing or proffer; and (2) the court makes a determination that there is a reasonable basis for the claim. Accordingly, the argument goes, a direct and irreconcilable conflict between the state statute and the federal rule exists because the statute requires far more than the short and plain statement and demand for judgment contemplated by the rule. To permit the application of the Florida statute, given the value of notice pleading embodied in the Federal Rules, "would subvert not only the intent of Rule 8, but the entire system of the Federal Rules." State of Wisconsin Inv. Bd. v. Plantation Square Assoc., Ltd., 761 F.Supp. 1569, 1575 (S.D.Fla.1991). See also Blount v. Sterling Healthcare Group, 934 F.Supp. 1365, 1373-74 (S.D.Fla. 1996).

This position certainly has superficial appeal, but upon deeper reflection, the Court is not persuaded that any direct conflict exists because it is possible to give each of the provisions its full field of operation. To be sure, Rule 8(a)(2) and (3) contemplate a broad right to plead generally any claim entitling the pleader to relief. There is, however, no requirement that all claims be pleaded in the first complaint or that an entitlement to relief will be lost forever if not so pleaded. See Fed.R.Civ.P. 15. Rather, the rule requires only that when a claim for relief is pleaded, the pleading need only contain a short and plain statement showing the entitlement and a demand for judgment.⁸

Thus, the state statute and the federal rule are capable of harmonious coexistence. Fla. Stat. § 768.72 bars the prosecution, and therefore the pleading, of a claim for punitive damages until the relevant threshold showing has been made. If the Plaintiff ultimately makes the required showing,⁹ the complaint may be amended to add claims for...