Silivanch v. Celebrity Cruises, Inc.
| Decision Date | 28 September 2001 |
| Docket Number | No. 95 Civ. 0374BSJJCF.,No. 94 Civ. 5270BSJJCF.,95 Civ. 0374BSJJCF.,94 Civ. 5270BSJJCF. |
| Citation | 171 F.Supp.2d 241 |
| Parties | John and Joyce SILIVANCH, Plaintiffs, v. CELEBRITY CRUISES, INC., Fantasia Cruising Inc., Essef Corp., PAC-FAB, Inc., and Structural Europe, N.V. (f/n/a SFC), Defendants. Celebrity Cruises, Inc. and Fantasia Cruising Inc., Third-Party Plaintiffs, v. Structural Europe, Essef Corp., and PAC-FAB, Inc., Third-Party Defendants. |
| Court | U.S. District Court — Southern District of New York |
v.
CELEBRITY CRUISES, INC., Fantasia Cruising Inc., Essef Corp., PAC-FAB, Inc., and Structural Europe, N.V. (f/n/a SFC), Defendants.
Celebrity Cruises, Inc. and Fantasia Cruising Inc., Third-Party Plaintiffs,
v.
Structural Europe, Essef Corp., and PAC-FAB, Inc., Third-Party Defendants.
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Steven M. Hayes, Robert A. Jacobs, Parcher, Hayes & Snyder, PC, New York City, for plaintiffs.
Gregory O'Neill, James Hazen, Hill, Betts & Nash LLP, Newark, NJ, for defendants.
Robin G. Weaver, Squire, Sanders & Dempsey, Cleveland, OH, for third-party defendants.
FRANCIS, United States Magistrate Judge.
In July 1994, there was an outbreak of Legionnaires' Disease, a form of pneumonia, among passengers who had disembarked from the cruise ship Horizon after a voyage to Bermuda. An investigation by the United States Centers for Disease Control and Prevention revealed the presence of Legionella bacteria in the filters of the ship's whirlpool spa. Many of the victims (collectively, the "Passenger Plaintiffs") brought suit against Celebrity Cruises Inc. and Fantasia Cruising Inc. (collectively, "Celebrity"), the owners and operators of the Horizon. They also sued Essef Corporation, Pac-Fab, Inc., and Structural Europe, N.V. (collectively, the "Essef Defendants"), affiliated companies that had designed, manufactured, and distributed the filters. In addition, Celebrity filed a complaint and cross-claims against the Essef Defendants seeking indemnification and contribution and also seeking damages for products liability, breach of warranty, fraud, and negligent misrepresentation.
The cases were consolidated for discovery, and the parties consented to refer each action to me for all purposes including trial pursuant to 28 U.S.C. § 636(c). The parties also stipulated that the Silivanch action would be tried as a bellwether case and would result in a determination of the liability of Celebrity and the Essef Defendants to the Passenger Plaintiffs, an allocation of responsibility among the defendants, a determination of the Essef Defendants' liability on Celebrity's claims, and an assessment of any punitive damages. The parties also agreed that the jury in the bellwether case would award compensatory damages to the Silivanch plaintiffs, but that separate compensatory damage trials would be held with respect to the remaining plaintiffs and with respect to Celebrity's claims against the Essef Defendants.
After receiving evidence over a period of six weeks in the Silivanch case, the jury rendered its verdict. It found Celebrity liable to the Passenger Plaintiffs for negligence and the Essef Defendants liable to these plaintiffs for negligence and strict products liability, as well as breach of express and implied warranties. Further, the jury held the Essef Defendants liable to Celebrity for fraud, negligence, strict products liability, breach of express and implied warranties, and negligent misrepresentation. The jury allocated thirty percent of the responsibility for the Passenger Plaintiffs' injuries to Celebrity and seventy percent to the Essef Defendants. It also held the Essef Defendants liable both to the Passenger Plaintiffs and to Celebrity for punitive damages.
Thereafter, the jury calculated the amount of damages to be awarded. It
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found the Essef Defendants liable for $7 million in punitive damages, of which it awarded sixty percent to the Passenger Plaintiffs and forty percent to Celebrity. The jury then awarded John Silivanch $110,000 for medical expenses, $1,350,000 for lost earnings, and $900,000 for pain and suffering, and it awarded $300,000 to his wife Joyce for loss of society. Following the jury determination, I granted the plaintiffs' application for an award of pre-judgment interest.
The defendants now move pursuant to Rules 50(b) and 59(a) of the Federal Rules of Civil Procedure for judgment as a matter of law or for a new trial. The Essef Defendants seek judgment or a new trial with respect to all claims of strict liability and negligence, and in particular with respect to proof of causation.1 They also move for judgment as a matter of law striking the awards for punitive damages and loss of society, and they seek a new trial on compensatory damages as well as judgment as to certain elements of that award. In addition, these defendants request a new trial based on purported errors in the admission of evidence, the jury instructions, and the conduct of the proceedings. They also renew their motion for judgment as a matter of law or seek a new trial with respect to Celebrity's claims of fraud. Finally, Essef Corporation and Pac-Fab, Inc. seek judgment or a new trial, arguing that there is no evidence of direct liability as to them and no basis for finding them vicariously liable for the acts of Structural Europe, N.V.2
Celebrity, in turn, has filed posttrial motions on two narrower points. It seeks judgment as a matter of law striking the award for loss of society and it challenges the award of prejudgment interest.
With respect to all of the defendants' applications, the relevant facts will be discussed in the context of each legal argument.
Discussion
A. Legal Standards
Judgment as a matter of law may be granted under Rule 50 only if "(1) there is such a complete absence of evidence supporting the verdict that the jury's findings could only have been the result of sheer surmise and conjecture, or (2) there is such an overwhelming amount of evidence in favor of the movant that reasonable and fair minded [persons] could not arrive at a verdict against [it]." Galdieri-Ambrosini v. National Realty & Development Corp., 136 F.3d 276, 289 (2d Cir.1998) (citations omitted) (alterations in original). The court must view the evidence in the light most favorable to the party opposing the motion and must defer to all of the jury's credibility determinations and reasonable inferences. Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000); Raniola v. Bratton, 243 F.3d 610, 616 (2d Cir.2001); Caruolo v. John Crane, Inc., 226 F.3d 46, 51 (2d Cir.2000); Galdieri-Ambrosini, 136 F.3d at 289. On a Rule 50 motion, the court "may not weigh the credibility of witnesses or otherwise consider the weight of the evidence." Caruolo, 226 F.3d at 51 (citing Galdieri-Ambrosini, 136 F.3d at 289). Indeed, "although the court should review the record
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as a whole, it must disregard all evidence favorable to the moving party that the jury is not required to believe." Reeves, 530 U.S. at 151, 120 S.Ct. 2097 (citation omitted).
The standard for granting a new trial under Rule 59 is less stringent. "[U]nlike a motion for judgment as a matter of law, a trial judge considering a motion for a new trial is free to weigh the evidence himself and need not view it in the light most favorable to the verdict winner." United States v. Landau, 155 F.3d 93, 104 (2d Cir.1998) (internal quotations and citation omitted). Accordingly, "`a motion for a new trial may be granted even if there is substantial evidence to support the jury's verdict.'" Caruolo, 226 F.3d at 54 (quoting Landau, 155 F.3d at 104). A new trial is warranted if the court "is convinced that the jury has reached a seriously erroneous result or that the verdict is a miscarriage of justice." Caruolo, 226 F.3d at 54 (internal quotations and citation omitted).
Each of the defendants' motions may now be judged against these standards.
B. Negligence
I previously determined that this litigation falls within the admiralty jurisdiction of the court. In re Horizon Cruises Litigation, 101 F.Supp.2d 204, 207-09 (S.D.N.Y.2000). "With admiralty jurisdiction comes the application of substantive admiralty law." East River Steamship Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, 864, 106 S.Ct. 2295, 90 L.Ed.2d 865 (1986). And, in admiralty law, common law principles of negligence apply. See Smith v. Mitlof, 130 F.Supp.2d 578, 582 (S.D.N.Y.2001); Jurgens v. Poling Transportation Corp., 113 F.Supp.2d 388, 396-97 (E.D.N.Y.2000); Diesel Tanker Ira S. Bushey, Inc. v. Tug Bruce A. McAllister, No. 92 Civ. 5559, 1994 WL 320328, at *6 (S.D.N.Y. June 29, 1994); see also East River Steamship, 476 U.S. at 863-66, 106 S.Ct. 2295 (incorporating principles of product liability into maritime law).
The elements of negligence are: (1) a duty owed by the defendant to the plaintiff; (2) breach of that duty; (3) proximate causation of the plaintiff's injuries; and (4) damages. See Stagl v. Delta Air Lines, Inc., 117 F.3d 76, 79 (2d Cir.1997); see also Alfaro v. Wal-Mart Stores, Inc. 210 F.3d 111, 114 (2d Cir.2000) (conflating the elements of causation and damages). This formula is routinely applied in maritime cases. See Petitt v. Celebrity Cruises, Inc., 153 F.Supp.2d 240, 252-53 (S.D.N.Y.2001); Jurgens, 113 F.Supp.2d at 397; In re Queen of Hearts Cruises, Inc., Nos. 96 Civ. 6712, 98 Civ. 0111, 1999 WL 195298, at *6 (S.D.N.Y. April 7, 1999). The evidence at trial amply supported the jury's finding of negligence against the Essef Defendants.
1. Facts Relevant to Negligence
The Essef Defendants designed and manufactured the model TR-140 high rate sand filter used aboard the Horizon. The main body of the filter is a hollow cylinder. Water from the whirlpool spa is introduced into the filter by a diffuser that operates like a shower head and disperses the water when the filter is operating in filtration mode. The water then seeps through the filter medium,...
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