Romo v. Ford Motor Co., F034241

• Decision Date: 25 November 2003
• Docket Number: No. F034241,F034241
• Citation: 113 Cal.App.4th 738,6 Cal.Rptr.3d 793
• Court: California Court of Appeals Court of Appeals
• Parties: Juan Ramon ROMO, individually and as Administrator, etc., et al., Plaintiffs and Appellants, v. FORD MOTOR COMPANY, Defendant and Appellant.

6 Cal.Rptr.3d 793

113 Cal.App.4th 738

Juan Ramon ROMO, individually and as Administrator, etc., et al., Plaintiffs and Appellants, v. FORD MOTOR COMPANY, Defendant and Appellant.

No. F034241

Court of Appeal, Fifth District

November 25, 2003

Rehearing Denied December 15, 2003.

Law Offices of Joseph W. Carcione, Jr., Joseph W. Carcione, Jr., Gerald K.

Okimoto, Redwood City, Gary W. Dolinski, San Diego; and Erwin Chemerinsky for Plaintiff and Appellant Juan Romo.

Law Offices of Drivon & Tabak, Laurence E. Drivon; and Erwin Chemerinsky for Plaintiffs and Appellants Maria Irene Romo and Evangelina Romo.

Esner & Chang and Stuart B. Esner, Los Angeles, for Consumer Attorneys of California as Amicus Curiae on behalf of Plaintiffs and Appellants.

Gibson, Dunn & Crutcher, Theodore J. Boutrous, Jr., Los Angeles, William E. Thomson, Thomas H. Dupree, Jr., and Miguel A. Estrada, Salinas, for Defendant and Appellant.

Mayer, Brown, Rowe & Maw, Donald M. Falk, Palo Alto, Evan M. Tager; National Chamber Litigation Center, Inc., and Robin S. Conrad for Chamber of Commerce of the United States as Amicus Curiae on behalf of Defendant and Appellant.

Horvitz & Levy, Ellis J. Horvitz, Mary-Christine Sungaila, and Curt Cutting, Encino, for The California Chamber of Commerce, The American Chemistry Council and Exxon Mobil Corporation as Amici Curiae on behalf of Defendant and Appellant.

OPINION

VARTABEDIAN, Acting P.J.

In the wake of its decision in State Farm Mutual Automobile Ins. Co. v. Campbell (2003) 538 U.S. 408, 123 S.Ct. 1513, 155 L.Ed.2d 585 (hereafter State Farm), the United States Supreme Court granted certiorari in the present case. The court summarily vacated the judgment and remanded the case to us for reconsideration in light of State Farm. We have received and considered further briefing from the parties and from amici curiae and we now conditionally affirm the punitive damages portion of the judgment before us, conditioned upon plaintiffs' acceptance of reduction of the punitive damages portion of the judgment to $23,723,287. If plaintiffs timely consent to the reduction, then the judgment shall be modified accordingly and, as modified, affirmed. (Cal. Rules of Court, rule 24(d).)

I. BACKGROUND

A. The Roll-Over

In Romo v. Ford Motor Co. (2002) 99 Cal.App.4th 1115, 122 Cal.Rptr.2d 139, we were presented with an appeal from the judgment in a personal injury and wrongful death case arising from a rollover accident. That opinion contains a more detailed statement of the facts and procedural history of the case.¹ For present purposes, we summarize the facts only briefly.

The Romo family was riding in their 1978 Ford Bronco when it rolled over as plaintiff Juan Romo was trying to avoid a car that had swerved in front of him. Ramon, Salustia, and Ramiro Romo were killed in the accident when the steel portion of the Bronco's roof collapsed and the fiberglass portion shattered. Juan, Evangelina, and Maria Romo were injured.

B. The Trial

In a products liability action brought by the surviving Romos individually and on behalf of the estates of the deceased family members, the jury awarded compensatory damages from Ford Motor Co. (Ford) (after adjustments by the trial court) of nearly $5 million. In addition, the jury awarded the Romos punitive damages from Ford in the amount of $290 million. (Ford did not move for bifurcation of the punitive damages portion; as a result, there was a unified trial and the jury returned a single verdict on all issues.) After the trial court granted Ford's motion for new trial of the punitive damages issues based on jury misconduct, both sides appealed.

C. The First Appeal

Ford raised numerous issues concerning both the compensatory damages aspect and the punitive damages aspect of the case. We concluded all of Ford's contentions were without merit. The Romos appealed from the order granting a new trial on punitive damages. We determined that the record rebutted any presumption of prejudicial juror misconduct and that the new trial motion was granted in error. The net result of the appeal was that the judgment was reinstated and affirmed.

After the California Supreme Court denied Ford's petition for review on all issues, Ford filed a petition for certiorari in the United States Supreme Court. On May 19, 2003, the court granted the petition, vacated the judgment, and remanded the case to us "for further consideration in light of" State Farm. (Ford Motor Co. v. Romo (2003) 538 U.S. 1028, 123 S.Ct. 2072.)

II. DISCUSSION

Our effort to comply with the instructions from the United States Supreme Court has required us to reexamine the purpose and nature of punitive damages and to revisit certain pivotal California appellate cases, chief among them Grimshaw v. Ford Motor Co. (1981) 119 Cal.App.3d 757, 174 Cal.Rptr. 348 (Grimshaw). We attempt to report the results of this reexamination in as summary a fashion as the subject permits and not to write a treatise on the subject of punitive damages.

A. The Statute: "[F]or the Sake of Example and by Way of Punish[ment]"

Civil Code section 3294, subdivision (a), provides: "In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant." Civil Code section 3295, subdivision (a), with certain restrictions, permits introduction of evidence in a punitive damages case of "[t]he profits the defendant has gained by virtue of the wrongful course of conduct of the nature and type shown by the evidence" and of "the financial condition of the defendant."

B. Punishment and Deterrence

"The purpose of punitive damages is to punish wrongdoers and thereby deter the commission of wrongful acts." (Neal v. Farmers Ins. Exchange (1978) 21 Cal.3d 910, 928, fn. 13, 148 Cal.Rptr. 389, 582 P.2d 980.) Of course, there are degrees of punishment and deterrence. One way to deter parking meter violations would be forfeiture of the cars of parking offenders. The law does not do that, but the law does seek to deter drug traffickers through forfeiture of cars used to transport drugs. (See Health & Saf.Code, § 11470 et seq.) Even in the case of parking meter violations, however, it cannot be disputed that the purpose of the relatively small monetary fine is to "punish wrongdoers and thereby deter the commission of wrongful acts," to borrow the phrase from Neal v. Farmers Ins. Exchange, supra, 21 Cal.3d at page 928, footnote 13, 148 Cal.Rptr. 389, 582 P.2d 980.

In the case of punitive damages, the degree of punishment and deterrence that can be exacted under state law is subject to limits arising from the due process clause of the Fourteenth Amendment. (State Farm, supra, 538 U.S. at p. 412, 123 S.Ct. at p. 1517.) In reconsidering the present case in light of State Farm, we believe the inquiry profitably and initially may focus on two questions: first, what is sought to be "punished and deterred"? and, second, how is that action to be "punished and deterred"? While at first glance the answer to these questions seems straightforward (i.e., malicious conduct, money), consideration of California punitive damages precedent in light of the restrictions articulated in State Farm seems to us to require a more nuanced consideration of those answers.

1. What Is to be Deterred: Punishment of Private Wrongs

There is a fundamental difference between parking fines and drug forfeitures, on the one hand, and punitive damages, on the other. In the former case, the exactions arise from "public" wrongs — that is, wrongs against society. In the case of punitive damages, the exaction arises from a "private" wrong: if there is no wrong resulting in compensable injury to this plaintiff, there can be no exaction of punitive damages. (See, e.g., Jackson v. Johnson (1992) 5 Cal.App.4th 1350, 1355, 7 Cal.Rptr.2d 482.) By contrast, in the case of "public" wrongs, the law seeks to enforce compliance with norms of conduct through the infliction of punishment regardless of the existence of an identifiable victim in a particular case; no one needs to be waiting for the parking space in order to justify the issuance of a parking ticket.

Moreover, in the case of "private" wrongs, our common law tradition does not seek to "punish and deter" ordinary private wrongs: normally, the sole purpose of a damages award in tort is to compensate a wrongfully injured party for injury to person or property. (See Prosser & Keeton on Torts (5th ed.1984) § 1, p. 6 (hereafter Prosser & Keeton); see also Civ.Code, §§ 3281-3282.) If, for example, a driver negligently causes a collision in which one person in the other car is severely injured and another in the same car is uninjured, the negligent driver is required to pay damages only to the party who has suffered loss. The driver is not punished for his or her lack of due care through an award to the uninjured person. In other words, the system of compensatory damages "is concerned [merely] with the allocation of losses arising out of human activities" (Prosser & Keeton, p. 6) by requiring "the person in fault" to pay compensation for detriment suffered by another (Civ.Code, § 3281).

For more than two centuries, common law courts have recognized that certain wrongful acts constitute an affront to honor and dignity, and that this affront is not a loss that the common law normally compensates with a damages award. (Prosser & Keeton, pp. 10-11) Perhaps in recognition that offenses to honor were particularly likely to result in extrajudicial retribution if not sufficiently compensated within the judicial system, common law courts permitted an award of exemplary or punitive damages in certain cases of outrageous behavior without any pretext that the award was compensating the victim for some otherwise compensable...