155 So. 3d 930
Ala.2013Background
- In 2007 Shahin Esfahani (U.S. citizen, born in Iran) opened Eastern Shore Toyota (EST) in Daphne; EST competed with Pensacola Motor Sales, Inc. d/b/a Bob Tyler Toyota (BTT).
- BTT employees repeatedly told customers that Esfahani/EST were terrorists or funded terrorism (e.g., “Taliban Toyota,” “Middle Eastern Shore Toyota”); some remarks were attributed to sales manager Fred Keener.
- EST and Esfahani sued BTT and Keener (Jan. 2010) for slander per se, slander per quod, and interference; trial focused on slander claims after some counts were withdrawn or dismissed.
- A jury found for EST and Esfahani on slander claims and awarded compensatory and punitive damages (Esfahani: $1,250,000 compensatory, $2,000,000 punitive; EST: $1,250,000 compensatory, $3,000,000 punitive).
- Defendants moved for new trial/remittitur arguing evidentiary errors, expert testimony error, excessive compensatory and punitive awards; trial court denied relief and Alabama Supreme Court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Admissibility of prior federal cybersquatting litigation evidence | EST sought to exclude; plaintiffs argued relevance limited | Keener argued prior case showed improper advertising/reputation and motive | Issue not preserved—defendant did not attempt admission at trial; exclusion affirmed |
| Admissibility of multiple-level hearsay testimony about statements to customers | Plaintiffs offered witness testimony recounting customers’ reports of BTT statements to prove statements were made | Defendants argued multilayer hearsay was inadmissible to prove truth of slanderous statements | Court held testimony cumulative of many admissible witnesses and owner admissions; no prejudicial error |
| Exclusion of Esfahani’s and related financial evidence | Plaintiffs relied on corporate separateness and limited relevance of personal/other-entity finances | Defendants argued excluded returns and market losses would rebut damages/loss causation | Personal returns were ultimately in evidence via expert’s materials; other financial evidence irrelevant to EST claims; exclusion upheld |
| Admissibility and sanctionability of damages expert (Dr. Manuel) | Plaintiffs relied on expert’s lost-profits model and allowed supplemental materials; trial court permitted testimony and re-deposition | Defendants argued expert relied on inadmissible/unproduced data and late supplementation warranted exclusion or sanction | Trial court allowed testimony (and extra deposition); disk of materials admitted; defendants failed to show prejudice or that exclusion was warranted |
| Sufficiency/excessiveness of compensatory damages (slander per se) | Plaintiffs argued defamation per se presumes damage; offered emotional testimony and expert lost-profits analysis | Defendants argued awards speculative and unsupported, especially EST’s lost-profits evidence | Court: defamation per se presumes reputational and non-economic harm; expert provided reasonable lost-profits basis; compensatory awards sustained |
| Excessiveness of punitive damages / remittitur under Gore/Hammond/Green Oil | Plaintiffs argued conduct was highly reprehensible, repeated, targeted, and warranting deterrence; little corrective action by BTT | Defendants argued punitive awards excessive, disproportionate to harm, and lacked comparable penalties or repeated prior sanctions | Applying Gore and Hammond/Green Oil factors, court found reprehensibility, pattern/duration, economic impact, and lack of corrective measures justified punitive awards; 2:1 punitive-to-compensatory ratio acceptable; remittitur denied |
Key Cases Cited
- BMW of N. Am., Inc. v. Gore, 517 U.S. 559 (U.S. 1996) (three guideposts for reviewing punitive-damages excessiveness)
- State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (U.S. 2003) (further guidance on punitive damages proportionality)
- Hammond v. City of Gadsden, 493 So.2d 1374 (Ala. 1986) (factors for evaluating punitive damages)
- Green Oil Co. v. Hornsby, 539 So.2d 218 (Ala. 1989) (punitive-damages considerations and remittitur factors)
- Liberty Nat’l Life Ins. Co. v. Daugherty, 840 So.2d 152 (Ala. 2002) (slander per se presumes reputational harm; damages review)
- Super Valu Stores, Inc. v. Peterson, 506 So.2d 817 (Ala. 1987) (proof of lost profits; reasonable certainty rule)
- Tanner v. Ebbole, 88 So.3d 856 (Ala. Civ. App. 2011) (application of Gore and Hammond/Green Oil factors in defamation context)