Ron Warren, Individually and on Behalf of the Estate of Derek Hebert v. Shelter Mutual Insurance Company
2016-C -1647
| La. | Oct 18, 2017Background
- 22-year-old Derek Hebert died after a 1998 Champion boat’s Teleflex SeaStar hydraulic steering failed while the boat was on plane; loss of steering caused a "J-hook" and the propeller struck him.
- Plaintiff (Ron Warren, on behalf of the estate) sued under general maritime law and the Louisiana Products Liability Act alleging Teleflex failed to warn of an inherent, non-obvious danger; jury ultimately found Teleflex liable.
- First trial produced a defense verdict; trial court granted plaintiff a new trial after the jury had been given (and asked about) a SeaStar manual whose revision date was mischaracterized during deliberations.
- Second (retrial) jury found Teleflex liable and awarded $125,000 in compensatory damages and $23,000,000 in punitive damages; Teleflex appealed claiming multiple trial errors and excessiveness of punitive award.
- Louisiana Supreme Court affirmed liability-related rulings but found the $23,000,000 punitive award violated due process and reduced punitive damages to $4,250,000 (2:1 ratio to $2,125,000 relevant compensatory figure).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of grant of new trial after jury received manual and judge’s remark | New trial justified because jury was given wrong information (manual dated 2006 but told it was the 1997 manual), creating miscarriage of justice | Trial court abused discretion; manual irrelevant to plaintiff’s theory and plaintiff failed to object contemporaneously | Majority: trial court did not abuse discretion in granting new trial under La. C.C.P. art.1973; appellate affirmed |
| Duty – component-part instruction | Warren argued SeaStar was a defective system requiring direct warnings to end users | Teleflex argued it was a component sold to manufacturers and duty to warn runs to manufacturer, not necessarily end users; requested component-part jury instruction | Court rejected Teleflex’s proposed instruction; SeaStar was a system marketed for boats and duty to warn to end users applied |
| Bifurcation of liability and punitive damages | Warren: single trial was acceptable; only Teleflex remained at retrial so no unfair prejudice | Teleflex: failure to bifurcate allowed prejudicial punitive-evidence to influence liability finding | Court held trial court did not abuse discretion by trying liability and punitive damages together (Art.1562 requires consent to bifurcate) |
| Excessiveness of punitive damages / due process | Punitive award justified by reprehensibility: physical harm, knowledge of risk, inexpensive warning could have prevented death | Teleflex: award grossly excessive; Exxon and Supreme Court precedent support much lower ratio (1:1 maritime guidance); no evidence of malice or profit motive | Court found punitive award excessive under BMW/State Farm/Cooper/Exxon framework; reduced punitive damages to $4,250,000 and affirmed as amended |
Key Cases Cited
- BMW of N. Am., Inc. v. Gore, 517 U.S. 559 (1996) (three guideposts for reviewing punitive damages: reprehensibility, ratio to harm, comparable penalties)
- State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003) (refined reprehensibility factors; cautioned that ratios above single digits raise serious due-process concerns)
- Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424 (2001) (de novo appellate review required when punitive award challenged on due-process grounds)
- Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1 (1991) (upheld punitive award and declined to set a strict mathematical limit)
- TXO Prod. Corp. v. Alliance Res. Corp., 509 U.S. 443 (1993) (addressed limits on punitive damages; plurality declined bright-line rule)
- Exxon Shipping Co. v. Baker, 554 U.S. 471 (2008) (in maritime context, set a 1:1 ratio as a fair upper limit in certain maritime punitive-damage cases)
- Atlantic Sounding Co., Inc. v. Townsend, 557 U.S. 404 (2009) (recognized availability of punitive damages in some maritime claims)
- Mosing v. Domas, 830 So.2d 967 (La. 2002) (state-level guidance applying BMW factors and permitting consideration of defendant’s wealth)
- Jack v. Alberto-Culver USA, Inc., 949 So.2d 1256 (La. 2007) (elements and burden for LPLA failure-to-warn claims)