Ginny v. White Jimmie D. White v. Ford Motor Company, a Delaware Corporation, and Orscheln Company, a Missouri Corporation

KLEINFELD, and Before WOOD GRABER, Judges. Circuit Kleinfeld; Partial Opinion by Judge by Judge Dissent and Partial Concurrence Graber.

OPINION KLEINFELD, Judge: Circuit issues, several This addresses decision puni- relate to of which important the most damages.2 tive Inc., Wood, Group, 532 U.S. Tool Harlington Leatherman Senior 1. The Honorable Circuit, (2001) sitting by desig- Judge and for the Seventh 149 L.Ed.2d 674 (In Corp nation. re v. Exxon our decision Baker Cir.2001). (9th Valdez), 270 F.3d 1215 Exxon Supreme had to await the 2. This decision Industries, Cooper Inc. v. decision in Court's $2,305,435 Facts compensatory dam- $150,884,400 ages in punitive damages. trial, ease but on the This went The district court remitted the points, there is much critical factual $69,163,037.10. damages to is, there Where facts are of dispute. favorably taken verdict.3 course theory The plaintiffs’ of the case was parking go despite brake let being 9, 1994, Jimmie White October On set, and roll. let truck Ford knew the company’s 1993 Ford F-350 parked his failure, parking prone brake was driveway. in Ms truck The drive- pickup kept selling recalling it without it and level, way sloped, not and the truck was warning without consumers of the danger. parked slope pointing on the downhill. Mr. if White testified that he been put he Mr. testified that the truck White informed that Ford had a problem with gear, set the parking into first brake parking letting brake sometimes go, he brake went stepping pedal, parked wouldn’t have his slope, truck on a He did not lock the truck. inside. recall, been he’d advised of a he three-year-old Whites’ son Walter brought would have the truck in immedi- outside, White playing Mrs. ately to be fixed. checking through on him the from window Ford offered alternative theories of how time. wasn’t watching, time to While she the accident could occurred. have One got his pickup Walter into father’s truck. was that put Mr. White had the car in first theory The of the case that Whites’ was gear pressed parking the brake pulled out gear Walter or kicked it of first down, boy and the pulled gear little the gearshift long into neutral. lever ais shift into neutral. If this is the how acci- sticking stalk from the floor. A up piggy occurred, theory dent then the on which up bank turned under the seat the after the Whites accident, damages, recovered that the so have clam- Walter been parking brake sometimes allowed trucks to bering piggy after his lost bank. The despite roll being engaged and that Ford parking brake didn’t hold the truck after it customers, should have its warned neutral, would was from first shifted and it be irrelevant to this accident. But taking rolling. got pas- started Walter out the favorably the most door, plain- evidence senger possibly falling out when the tiff, we assume that the believed Mr. truck rolled a bump. Tragically, over the White’s recollection he engaged had rear wheels of the truck dual rolled over the parking brake. Mr. White’s account the boy’s little chest and killed him. by testimony was bolstered boy that the brought products The Whites this defect pulled couldn’t have the truck out first against case Ford and against Orscheln neutral, gear into parking had the brake Company, which made the parking brake engaged, not been it because when was on alleged prod- Ford. The Whites strict slope a the force pull needed out of (defective uct liability design), negligence, first was considerable. warn, misrepresenta- failure intentional tion, negligent and infliction of Parking emotional brakes work with a pulled cable distress. during wheel, Orscheln settled the trial. by pedal, a pawl. ratchet and came back with against pawl a verdict A hinged pivoted finger is a or See, Hicks, (2000). e.g., 217 F.3d United States v. 148 L.Ed.2d 536 (9th Cir.), denied, 531 U.S. cert. problem. Following out try figure wheel. the ratchet a tooth of into sticks tests, Ford by over November get tend to loose Orscheln’s Parking brakes because, prob- In time, had narrowed on the cable stretches. and Orscheln nineties, designed park- tip pawl of the would Orscheln lem. Sometimes early self-adjusting, tops the teeth instead of slip Ford that over the ing brake for aged, parking gaps the truck engaging that even as in one of the between so started stay tight. April Ford would still teeth of the ratchet wheel. brake F- year model in 1991 of production report saying Mr. wrote a draft Rakowicz with the Orscheln pickup series trucks condition could cause “tip-on-tip” self-tightening parking brake. parking brake and disengagement rendered the brakes “de- problem this re-

By pre-production Ford had wrote that this fective.” Mr. Rakowicz problems park- with the ports potential parked cause vehicles phenomenon could F- being designed for the ing brake hill, to roll and that it incline down By time the F-series trucks. series owner campaign a field no- warranted production, reports trucks were engineers tification. But more senior increased, sources. many from different the draft re- disagreed Sometimes, reported, park- customers down, say- Rakowicz to tone it quired Mr. freely right down ing pressed brake test was not ing instead that the Orscheln Ford called this engaging. floor without Meanwhile, prob- valid. the evidence “skip out” “skip-through-on-apply” piled up, lems with F-series brakes Also, reported customers some problem. 1993, the Traffic Highway March National despite parking their trucks rolled Safety had become in- Administration engaged. Ford called being brake having received investigation, volved in the “rollaway” problem. reports rollaways. figure to out what Ford told Orscheln threatened going wrong and and was fixjt, 1993, By May developed Orscheln had fix change couldn’t suppliers to Orscheln wedge plastic a fix. All it took was a over difficulty had a deal of great it. Orscheln pawl, pressed it down the to make sure in to fail labo- getting any parking brakes skipping teeth over between the instead conditions, subjected they ratory unless 1993, enough of the August By them. fact, extraordinary In abuse. the brake to so that wedges were manufactured plastic Ford at first believed that and Orscheln trucks on install them all the Ford could subjected unless to the brake could fail course, trucks if all the on the road. Of allowed for The evidence severe abuse. wedge, it with the the road were modified why they reason the that the conclusion notifying expense of all would also take the the failure was easily replicate couldn’t shop for the paying the and customers or, a rare event alternative- because it was enough the to truck labor to disassemble only severe happened with ly, because wedge. In plastic fifteen cent put the 785,000 1992 and roughly abuse. theOf were other the there expense, addition to brake, there with 1993 F-series trucks and put to all the trucks reasons not recall skip-throughs or reports only were the fix eliminated self- wedge. in the rollaways affecting and between 1992 parking brakes. adjusting feature of thousand. about one truck ten installed, Thus, skipovers fix would rollaways this cause be engi- from its own Ford established eliminated, aged, the jun- but as the trucks by a somewhat neering headed group Also, Rakowicz, get would loose. Timothy parking to brakes design engineer, ior thought “skip out” engineers Orscheln death. White’s also found that safety inconvenience was more an than brakes were defective on account of problem, user would feel because the Ford’s failure to warn that this defect floor with no resistance going brake proximate awas cause of Walter White’s only to engaging, instead of had re- death. get it down press again

lease it and to it to engage. Analysis reasons, recalling For these instead of 1.Inconsistent verdicts trucks, Ford pickup issued a Technical Ford’s argument first is that ver- dealers, in November Service Bulletin and, dicts are inconsistent re- accordingly, told 1993. The bulletin dealers install quire judgment for Ford aas matter of wedges complained. if customers verdicts, law. are the relevant pre- Here Meanwhile, though, reports rollaways ceding awards: accumulate, continuing were and the Transportation National Highway Office of SPECIAL VERDICT Investigation pressuring Defect problems recall the trucks. These were We, in the above-enti reported tiny percentage of action, tled find follows particular sold, one in trucks about ten thousand. questions of fact: still, big pickup But trucks downhill rolling product 1. Was the in question defec- dangerous, without are if only drivers even tive in design? one so far actually of these had involved an Answer: XYes No injury. you Question If answered “no” to do rolled The White truck down the drive- Question you not answer 2. If answered way and killed Walter White in October “yes” question[sic] answer the next purchased Septem- It had been question. ber By then Ford already fig- potential ured out that there was a rolla- proximate 2. Was this defect cause of way problem. At end of August death White? Walter accident, which the was before White Ford Answer: Yes No X the pickup decided to recall to trucks in- 3. Was the product question defec- stall plastic wedges. But the by time tive for defendant Ford’s failure to the recall notice was formulated and warn? dealers, November, mailed out to it was Answer: XYes No after the White accident. Thus accident happened after the brake problem was you If Question answered “no” to do out, figured discovered and after tech- Question answer you not 4. If answered out, nical bulletin to dealers gone and Question 2[sic], “yes”,to answer the next after Ford had decided to recall the trucks question. fix, to install but before recall 4. Was the for defect failure a to warn any warnings notices or to ultimate con- proximate cause of the death of Walter sumers out. were sent White? In response a form “Special to entitled Answer: XYes No Verdict,” jury found that the brakes had a design defective but found this 5. Was defendant Ford with negligent defect was not proximate respect a Walter cause of to product question? No Yes X Answer: is potentially complicated waiver raises under Rule of Procedure sue Federal Civil Question do “no” to If answered you 49(b) Angeles Nut decisions Los our answered Question you 6. If not answer Corp.5 and Holiday v. Hardware House the next Question answer “yes” v. Moss Indemnity Co. Lane Powell Home question. But we need not resolve & Miller.6 proximate negligence Ford’s Was 6. because, assuming pur for waiver issue White? the death of Walter cause of not waive Ford did poses discussion Yes X No Answer: inconsistency, there was none. explained Floyd we As .... Laws,7 duty “a the sev court has under plaintiffs’'' [sic] Ford liable to Is jury’s enth amendment to harmonize” for Ginny negli- White Jimmy [sic] if a fair inconsistent answers” “seemingly of emotional distress?' infliction gent In Nut reading Angeles for it.8 Los allows Yes X No Answer: House, must held that “the verdict we Ford liable to Is plaintiffsjp[sic] har upheld impossible it is be unless for Ginny White Jimmy [sic] ||fen- reading,” under a fair monize the answers misrepresentation? tional verdict general not save the though we will No Yes X Answer: fair us torture a “require if that would case, reading.”9 an verdict In inconsistent theory is found that once Ford’s asks, nec not whether verdict a court proximately product defect did that the any reading, essarily sense under makes death, had to be for the verdict cause the light it can be read in but whether verdict, reads this liability. no As Ford evidence to make sense. accepted contention plaintiffs’ “the dangerous case, had a parking reading plau brake Ford’s defective, tendency disengage spontaneously, they but were sible: brakes spontaneously here, did not punishing concluded fail and the was didn’t If that is on this occasion.”4 and sell disengage making Ford for defective brakes means, necessarily then though the verdict general public what them the even ing A cannot recover But plaintiff is correct. defect cause this accident. didn’t injuries occasioned the use After reading. plausible that isn’t the product product, record, where the dis agree of a defective we reading the injury in his his that, fine use and presented worked as the case was trict court else. by something plau caused jury, there was alternative understanding that makes sense sible argue that Ford waived its The Whites the verdicts. verdicts, inconsistency of the objection to thought reasonably have jury could object jury before the it did because de- brake was object particular parking that this Whether failure discharged. was truck to go, allowing let fective and did discharge of the constituted before (9th Cir.1991). Appellant White Ford 7. 929 F.2d 1390 4. Brief for Co., (emphasis in 2002 WL 31687641 Motor original). Floyd, F.2d at 1396. 8. (9th Cir.1987).

5. F.2d 1351 House, at 1354. Angeles Los Nut 825 F.2d 9. (9th Cir.1995). 43 F.3d discretion,10 But run over Walter White. and we reverse where nevertheless have concluded that the “such likely could nonconstitutional error more design “proximate” brake defect wasn’t the than not affected the verdict.”11 the death. The brake had cause of been Testimony Campbell a. of Dr. Laird accident, designed years before the many intervening events. The in- judge Laird, The Whites called Campbell Ph. proximate structed D., “[f]or expert as an witness. Dr. Laird’s established, to be you causation must find training experience, mostly academic injury that the or damage plaintiffs was including years five working for Ford probable consequence the natural and Company, Motor metallurgist. was as a negligence act, wrongful defendant’s or He a professor of material science and injury and that the or damage was foresee- engineering. He testified that that meant light able in attending circum- taught he about how steel is made and could stances.” have reasoned shapes, molded into useful big how a rail that the accident wasn’t the “natural and carry had to be to weight of railroad probable consequence” of the brake design last, long and how crystal would defect, because the natural consequence of materials, structure of and how materials discovering dangerous manufacturer’s break when stressed. The great majority design defect would be to warn the cus- many publications of his dealt with how fix, product tomers and recall the for a materials break. dangerous rather than to leave the trucks Dr. Laird was not an accident recon- on the street and leave the igno- drivers expert. struction any Nor did he have rant of the hazard. Mr. White testified training experience to which he testified

that, he known that the brake could in designing or manufacturing products. set, go being let despite he wouldn’t have He had never assembly looked at a brake parked slope. the truck on a before examining the Ford parking brake That approximately how the district in this case and another related case. He court, evidence, having heard all the recon- any experiments did not do with the brake ciled the On our parts verdicts. review of the in this case. Although he examined arguments, them, evidence and it makes sense of he largely relied on the Orscheln the verdicts to us. There is no irreconcil- tests and the Orscheln engineer- and Ford able conflict. ing departments’ memoranda rather than

on results of his own tests. Evidentiary issues Dr. Laird examined pawl and ratch- argues that reversal is neces et wheel of the Whites’ truck’s brake using sary because the district erroneously court scanning electron microscope. He ob- expert admitted certain testimony and evi served wear patterns indicating repeated prior dence of incidents. We review a tip-on-tip engagement. That meant that district evidentiary court’s rulings during particular brake had repeatedly been trial, including its rulings on subject the admissi to the problem that Ford and Or- bility expert testimony, for abuse discovered, scheln had pawl sticking Joiner, 10. International, See General Electric Wornick, Co. v. 522 U.S. Inc. v. 264 Metabolife 136, 512, (9th (1997); Cir.2001). 118 S.Ct. 139 L.Ed.2d 508 F.3d 832 States, 172, Old v. United 519 U.S. 174 Chief Ramirez, 1179, 11. United States v. 176 F.3d 1, 644, (1997); n. 117 S.Ct. 136 L.Ed.2d 574 (9th 1999). 1182 Cir.

1007 knowledge and settling tween ‘scientific’ ‘technical’ of a tooth instead of tip on knowledge.”16 specialized’ of the or ‘other We gap into the between teeth fully not that v. dispute Hankey17 does United States recognized wheel. Ford ratchet admissible. McKendall was overruled to the ex- this evidence was that apply that it held Daubert did tent that not objection over appeals admission testimony.18 to “non-scientifie” Thus Dau- was opinions to which Dr. Laird two other require bert and Kumho Tire did indeed that testify. to He testified allowed judge gatekeeping his role apply produce spon- could engagement tip-on-tip expert Daubert all forms of testi- under to parking of the disengagement taneous just mony, testimony.19 not scientific “subject pertur- if the to brake truck Daubert, however, inquiry Rule 702 under bation,” fancy way saying one,”20 “is a flexible “factors iden- let if slammed the go brake could someone may may perti- in Daubert not be tified Second, truck. he testi- door or shook the reliability, depending on assessing nent disengagement spontaneous fied that such issue, expert’s partic- nature of the case, occurred in this parking of the brake subject expertise, ular and the of his testi- that killed the causing rollaway to an mony.”21 required apply We are child. Whites’ to of a abuse of discretion standard review considering Daubert v. Mer decision, “as district court’s much to the Inc.,12 Pharmaceuticals, the dis rell Dow trial court’s decisions about how to deter- our deci trict court concluded under reliability mine as to its ultimate conclu- in McKendall Crown Control sion 22 sion.” for “gatekeep factors Corp.13 Daubert judge thought The trial the two applied not to mechanical ing” could be exception is taken on opinions held McKendall which engineers. We had under Rule 702. “are were admissible appeal that the Daubert factors relevant tip-on-tip the first testimony bearing opinion, on ‘scientific’ knowl As to spontaneous di expert engagement produce did testi could edge” apply not parking brake ought sengagement how a to have been fying product “subject perturbation,” attempt so to limit Dau truck was designed.14 Our Co., Although rejected judge Ltd. was within his discretion. bert was Kumho Tire any of Supreme experi done Court Dr. Laird v. Carmichael.15 himself, training make Rule Evidence ments his would there held Federal read the Orscheln and competent “makes distinction be- him 702 no relevant Tire, 147, 2786, 579, S.Ct. Kumho 526 U.S. 119 U.S. 113 S.Ct. 125 L.Ed.2d 19. 12. 509 (1993). 1167; 469 Inc. v. Secure Invest- Jinro America cf. Inc., (9th ments, Cir.2001). 266 F.3d 993 1997). (9th 122 F.3d Cir. 13. 803 Tire, 150, U.S. at 119 S.Ct. 20. Kumho 526 McKendall, F.3d at 806. 14. 122 Daubert, (quoting 509 U.S. at 113 L.Ed.2d 15. 526 U.S. 119 S.Ct. 2786). S.Ct. (1999). (citation quotation marks Id. and internal 21. Tire, U.S. at 119 S.Ct. 16. Kumho omitted). 1167. Cir.2000). (9th 203 F.3d 1167; 17. see also Han Id. at key, F.3d at 1166-67. Hankey, 203 at 1169 n. 7. F.3d reports testified, sumptions. and those Dr. reports, supported Laird based on hard gave.23 deposition testimony the he It’s to see how Mr. White’s and an opinion any in opinion engineer’s reports, he more this Orscheln saying was experimental engaged, and Ford brake have than the must been because Orscheln said, any which boy would make otherwise the little could not results had have admitting opinion gear in his harmless.24 moved shifter from first error to neu- was judge go also within his discre- tral. The must have let The trial brake after neutral, determining that car tion in such scientific bol- was shifted into because other- in articles wise track have stering published reference would not rolled. And journals required, boy not because is probably was there was too small to have suppose disengaged parking no reason this detail of brake. parking general manufacture was brake advantage This took opinion of Dr. the scientific community interest expertise metallurgy only Laird’s his for peer-reviewed generate would litera- knowledge particular brake ture.25 repeatedly engaged the tip-on-tip posi- opinion exception The second to which is tion from which spontaneous disengage- question. that, Dr. Beyond taken is a close Laird testi- ment occur. could Dr. Laird spontaneous disengagement fied that such established no more foundation any- than case, occurred in parking any brake this one engineering, trained kind of or causing rollaway lay person killed the even a not trained in engineer- The foundation ing, Whites’ child. for this have would to venture the opinion. Laird, skimpy. opinion was Dr. well with- correct, If testimony Mr. White’s metallurgical expertise, his identified we must assume that so wear on the ratchet wheel of the brake found, roll, truck despite being did repeated tip-on-tip engage- showed parked in gear first with the parking brake ment than the proper engagement. rather on. apply Dr. Laird did his metallurgical justified That the inference that even (elec- expertise and scientific procedures though tip-on-tip engagement might be microscopy) tron objection to which no a one in thousand phenomenon ten as ap- appeal, made on to determine that trucks, plied to all the Ford pickup it had repeatedly subject brake had been particular indeed on this happened track. that, tip-on-tip phenomenon Ford and Or- from way got determined, Dr. Laird the metal scheln had spon- could lead to wear, showing repeated tip-on-tip engage- disengagement taneous and a rollaway ment, opinion on his how accident the truck was disturbed. For the part of occurred, rely his did Dr. metallurgy opinion Laird’s not requiring special expertise just all. He relied on simple training experience, arguably the dis- assumed, logic. purposes He for trict of his court had discretion admit opinion, Mr. parked that White had opinion on the Federal under Rule of Evidence driveway, brake, sloping engaged the question 701. The A layman, is close. put gear. the truck first Mr. which an expert White’s is what witness is when testimony provided a basis those as- testifying expertise, outside his area See, International, e.g., Corp., Cabrera v. Cordis 134 F.3d Inc. v. Wor 25. Cf. Metabolife (9th 1998). nick, Cir. (9th Cir.2001). 264 F.3d Cordoba, 24. E.g. United States 194 F.3d (9th 1999). Cir.

1009 ambiguous. that was somewhat ny au- about anointed with ersatz to be ought not spring the that witness Laird testified that court-approved expert Dr. thority aas properly We between essentially lay opinion. pawl engage a the helps for what is court not up specifications the district was on whether the teeth need not decide brake, opin- that allowing but he also said discretion the Bobb abused its case, we in this because and that he design ion defect was the same into evidence design grounds.26 rollaway other to the de- reverse on attributed within The district court was its fect. rollaways prior of b. Evidence that there concluding was discretion similarity allow the evidence court sufficient the district argues Ford to the rollaway go jury. admitting evidence of the Bobb discretion abused its an- allowed rollaways. court of other reports, As for customer owner, Tammy truck other pickup Ford clearly under the they were admissible' Bobb, deposition that her testify by exception hearsay business records despite parking rolled truck had had notice of rollaw to show Ford rule set, Dr. Laird to and allowed being brake’s the district court redacted re ays,30 and testify rollaway. Bobb about rollaways post- of dissimilar ports put the Whites to court allowed also rollaways. argues Ford accident White that Ford showing exhibit into evidence reports for that it was error admit number of com- customer received asserted, because the truth of matter is rollaways. contention plaints of Ford’s purposes for they hearsay were not even to show sub- insufficient foundation them, that Ford had received proving of and that similarity stantial was established hearsay of purposes proving for they were hearsay. were reports the customer reported the customers about rolla what “showing of simi A substantial whether this ways. We need not resolve attempts larity required plaintiff when error, Oth because it was harmless.31 accidents as to introduce evidence other govern rollaways such as er evidence defect, design negligence, direct proof experiments reports and Orscheln’s ment imma defect.”27 Minor or or notice of the in, unlikely that it is highly came dissimilarity prevent does not admiss terial whether reports affected customer de ibility.28 review a court’s We district tip-on-tip problem jury believed evidence for abuse cision to allow such rollaways. and did cause could discretion.29 Sufficiency of for evidence 3. theory dissimilarity Ford’s caused rollaway is that it was Bobb it was enti defect, argues design de manufacturing not the law matter of judgment as a case. But the testimo- tled to fect in this at issue Vehicles, Inc. v. considering this decision 28. Western Recreational were 26. While we Swift (9th Inc., Adhesives, 1555 Cir. dissent, F.3d v. State Uni Mukhtar California - 1994). - (9th 1992), came Cir. F.3d versity grounds, we reverse on other down. Because 29. Id. question whether Mukh- we not reach do expert analysis our would affect tar Fuchs, See, 218 F.3d e.g., v. United States testimony issues. (9th Cir.2000). Miller, Co., 771 F.2d Tire Rubber 31. United States Cooper v. Firestone & 1985). (9th (9th Cir.1991). Cir. F.2d ute, punitive damages, because the but them, evidence we need not consider be- support to was insufficient award. The cause the evidence was sufficient under the that “[t]here district court ruled was suffi standard Ford concedes applicable. was jury cient evidence for a reasonable to find certainly Although it could have conclud- problem that the for the brake cure was otherwise, ed the could permissibly in Ford’s hands known and before the conclude that Ford knew a parking brake sold, and White vehicle was that Ford did tip-on-tip engagement could result in a argues Ford that apply it.” this was rollaway, and to warn people driving failed “utterly at with the evidence.” odds We pickup trucks about the brake in conscious review de novo the district court’s denial of (that disregard is, safety of their knowing 50(b) motion judgment Rule renewed for that injured someone could be or killed as a matter of law.32 The test is whether warn). failing and evidence, deliberately “the light construed the most case, could accepted have nonmoving party, favorable to the Ford’s that the permits conclusion, only engineers one reasonable and that were hard at work trying contrary conclusion replicate is that of the problem, and the cure but they jury”33 could accepted also have plaintiffs’ the case, essentially that when engineers the argues

Ford that the evidence showed figured problem out the fix the for that it the investigated rollaway reports it, up Ford euphemistic covered it carefully promptly turned the matter dealers, consumers, notice to rather than over to the brake manufacturer for investi- instead plain warning of a gation remedy, and immediate engineers disagreed there recall. The could on whether was have anything accepted design. 884,000 wrong with the Out of Ford’s claims that “skip-through,” where brake, using inju- vehicles person three pressed parking brake with his ries occurred. was There evidence to sup- resistance, foot and felt no and rollaway, view, port and the could have so where parking brake seemed to en- apparently concluded. But it didn’t. gage but didn’t prevent the truck from There was also evidence from which the rolling away, were two different things. It jury could conclude that Ford knew the accepted could also have the evidence that parking engage brake tip-on- could they were both same thing, failure of tip position a pickup and let truck roll pawl drop properly between the it, away, it, fix didn’t didn’t recall and teeth of the wheel. ratchet As for the trucks, didn’t warn drivers prior all small injuries, number of the jury could to the White accident. have concluded that it was unlikely so an accident would occur that Ford should

Ford concedes that applicable punished not be it. for Or it legal could accept standard is that the Whites had to plaintiffs’ case, prove by that once clear and convincing evidence knew that pickup Ford acted with could be rolling conscious trucks disregard down for rights safety hills wheel, others. without drivers behind There are alternative and additional grounds obvious that someone was likely to be punitive damages under the Nevada stat- killed if do something Ford didn’t about it. Richardson, 32. See Valley Johnson v. Paradise 33. See Forrett v. 112 F.3d Unified Dist., (9th Cir.), (9th 1997) School 251 F.3d (citing Cir. Bank the West v. denied, cert. Ariz., Valley 535 U.S. National Bank 41 F.3d (2001). (9th L.Ed.2d 1994)). Cir. safety of others.”39 The Nevada statute argument gives Ford’s part of disregard” defines “conscious “knowl- hesitancy citation us most its consequences harmful edge probable Supreme The Nevada Nevada authorities. wrongful act and a willful and deliber- Agency of a in Maduike v. decision Court to act those failure to avoid conse- ate affirmed the dismissal Rent-A-Car34 Maduike, quences.” a claim. In punitive damages a car on vaca young family driving rental Court, Supreme The Nevada before Ma- problem to the rent tion a brake reported duike, upheld punitive damages in it, fix agency al refused to agency, but Co. v. Granite Construction and Rhyne,41 they family unless leaving the stranded purport does not cite or to over- Maduike to do so They drove the car home. tried rule Granite Construction. Granite In af and had an accident. The decision Construction, woman hit a bull ground firmed that no could on the highway sued a construc- interstate and agency have the car rental found company supposed that was to have tion “subjected un the Maduikes to ‘cruel and keep high- a fence to off the built livestock just disregard hardship with conscious way. The could have concluded that ”35 correctly rights person.’ decided not to company the construction evidence says that the uncontradicted fence, contractual despite build its ob- showed that it exercised more care for so, state in order to the to do ligation safety the car of its customers than did and could money. save time also Maduike. in agency rental that the state had waived have concluded requirement no the fence because live- Maduike, Supreme Since Nevada thought in the area and stock were to be v. Dean Evans in recognized Court has delay, to avoid and when the it wanted Inc.,36 Reynolds, Witter “Nevada law discovered, bull was the construc- single requires convincing clear and evidence to find company reasonably tried tion malice be damages before and have him remove the bull. owner spe The term is a “malice” recovered.”37 favorably to the Taking evidence most law, of art Nevada cially term defined however, verdict, Supreme Nevada something less than the ordi means punitive damages on the upheld Court definition, nary others or “a desire to harm company the construction ground to see A Nevada statute others suffer.”38 deliberately disregarded “consciously mal broadens malice to include “implied” safety procedures” “guilty and was known ice, which covers not “conduct which malice, express or injure person” but also implied.”42 is intended to Coughlin v. TailhookAssocia “despicable engaged conduct which is We held Construction, that, Granite or under disregard rights with a tion43 conscious 42.001(1) (1996). (1998) (per cu Nev.Rev.Stat. 34. 114 Nev. 953 P.2d 24 40. riam). (1991). Nev. P.2d 711 41. 107 (citation omitted).

35. Id. at 26-27 Construction, (ci- 817 P.2d at (2000). 42. Granite Nev. 5 P.3d 1043 omitted). quotation and internal mark tation Evans, 5 P.3d at 1052. (9th Cir.1997). F.3d 1052 43. 112 (2d College Heritage Dictionary 38. Am. 1985). Ed. 42.001(3) (1996). § 39. Nev.Rev.Stat. permissibly were ing evidence that oppres award- Ford acted with failing a hotel for to do against anything

ed sion or malice in the upon conduct which rowdy party you which a woman was your finding liability about base for the “attacked, groped, grabbed, and handled death of Walter White?” and an by throng Cough- of men.”44 We held swered jury’s “Yes.” addition statutory lin that the 1995 amendment to determination that Ford was liable on the the Nevada “in- statute basis of design, negligence, defective fail ‘malice, warn, dicates that Granite’s definition of negligent ure to infliction of correct,”45 express implied,’ distress, and emotional punitive damages are punitive damages could be awarded on the jury’s special bolstered verdict find theory disregard that “a ‘conscious for the ing misrepresentation,” of “intentional safety implied of others’ mal- amountfs] which is an intentional tort and would both 46 ice.” fall within Evans50 and survive the Nevada Supreme rejection punitive Court’s of Supreme The Nevada Court has not damages in Dow Chemical.51 principle of law that stated the reconciles Maduike, the Nevada authorities. After punitive damage 4. Excessiveness of Supreme the Nevada Court in Dow Chem extraterritoriality award and ical Co. v. Mahlum47 vacated an award of punitive damages following its reversal of argues that errors in in against intentional tort claims the defend require structions a new trial. We review opinions ant.48 The Court’s Maduike a district court’s formulation of in and Dow Chemical do not cite or discuss structions in a civil case for abuse of disc Granite Construction. Jury retion.52 fairly instructions must and adequately cover the presented, issues by We are bound our interpreta law, correctly must state the and must not in Coughlin. tion of Nevada law in be misleading.53 Prejudicial error results there, terpretation adopted we that “a that, from instructions when viewed disregard ‘conscious for the safety of oth whole, as a fail fairly and correctly implied malice,”49 ers’ amount[s] allows cover the substance of the applicable law.54 case, for the in this tak ing the evidence most favorably to the judge gave pattern jury Nevada prevailing party. The White guide instruction to jury’s judgment you by asked find clear “[d]o and convinc amount of damages, telling Coughlin, 44. 112 F.3d at 1054. disagree 51. Thus we do not with our dissent- ing colleague’s position judgment that the 45. Id. at instructions conformed to Nevada law. 1055-56. World, 1123, 52. See Neibel v. Trans 108 F.3d 46. Id. at 1056. (9th Cir.1997) (citing Cleghorn, 1129 Fikes v. 1011, (9th Cir.1995)). 47 F.3d 1013 (1998) (hold- 47. 114 Nev. 970 P.2d 98 GES, ing grounds disfavored on other Inc. Wright, 53. See Chuman v. 76 F.3d 294 Corbitt, (2001)). 117 Nev. P.3d (9th 1996). Cir. Mahlum, 48. P.2d at 113. 54. Corp., Swinton v. Potomac 270 F.3d (9th Cir.2001) (quoting Chang v. Johns- Coughlin, 112 F.3d at 1056. (In Cases), Corp. Manville Sales re Asbestos (9th Cir.1988), denied, 847 F.2d cert. (2002)). 5 P.3d at 1052. 122 S.Ct. 1609 outside the State of fendant’s conduct passion or to act “without jury only Nevada. reprehensibility consider and to prejudice” said: The instruction

and deterrence. give in- court refused to this The district instruction, struction, or any part of now heard jury, you’ve Members anything equivalent. financial condition of the the evidence “only for its Defen- argument Ford’s Company. Ford Motor the defendant conduct that -has had wrongful dant’s yes spe- you have answered Because instruc- the citizens of impact on Nevada” fifteen, you number question cial verdict discus- based on the federalism tion was discretion, award your inmay, pffljHtive America, Inc. v. in BMW North sion against exemplary jfpfen- in BMW that “the The Court held Gore.55 example dant Ford for sake appropriately inquiry excessiveness federal Your way punishment. discretion the states’ with an identification of begins pasáitó5 or exercised without should be designed award is interests that a awápjl any arriving at prejudice. deceptive involved to serve.”56 BMW you are to damages, cóésider pre- failure to disclose practices trade [o]ne, reprehensibility following: the value of a repairs that affected sale defendant; two, of the conduct noted that “the new car. The Court damages which amount of not, not, provide and in fact do States need the defen- effect on will have deterrent in a uniform manner.”57 protection such financial con- in defendant’s light dant ways the diverse noting In addition to complete instruc- dition. That’s consumers actually protected states had you’ll and damages, tion on noted such deception, from such the Court in you have this instruction choices that a state hypothetical policy room. make, “plausibly con- might such an instruction on extra- requested costs as- cluding] that the administrative It would have barred territoriality. have full disclosure would sociated with other impact Ford for punishing raising prices from car the effect of on Nevadans: than residents.”58 State’s determining pgjjSitive imposed amount of in BMW The Court damages any, limitation on damages, territorial necessa^jfor deterrence, This federal and the interest of federalism. punishment in yojllfnay flexibility for a state to wrongfffl con- only consider Defendant’s ism includes chooses, subject to policy it impact had an on have whatever duct that has limits. congressional may Nevada. You not constitutional citizens of exist, no state can be flexibility to of For that damages purpose for the any punitive on policies its other impose permitted the sale Defendant relative to punishing “im could States, single no state states. Because in or for of vehicles other neighboring choice on pose policy its own deterring De- punishing purpose 1589, 559, that the Court excessiveness three criteria for S.Ct. 134 L.Ed.2d U.S. 55. (1996). opinion. its subsequently in sets out BMW, at 116 S.Ct. 1589. 517 U.S. 56. S.Ct. 1589. Id. 57. inquiry “begins” the Court said Because inquiry, we this is with this federalism where 1589. 116 S.Ct. Id. at 570 n. 58. begin. reject assumption the dissent’s We elsewhere, ought begin with^the that we States,” may question impose held that “a can the Court State whether state punish sufficient to un- sanctions on violators impose economic (as lawful) opposed lawful conduct changing with the intent of of its laws open by other states was left BMW. The conduct in other lawful tortfeasors’ noted in “the Court BMW because Alabama, held, the Court “does States.”59 verdict based in part was on out-of-state ... punish defen- power [a not have occurred, it conduct was lawful where lawful it that was where for conduct dant] we need not consider whether one State impact that had no on [the occurred may properly attempt change a tortfea- residents,” or its nor state] punishing sor’s conduct another state.”63 unlawful “impose [a defendant] sanctions ques- We avoided the need to consider this conduct that is lawful in to deter order tion Neibel v. Trans World Assurance Evidence of extra- jurisdictions.”60 other Co.,64 involving a RICO case fraudulent conduct, such as sales in other territorial sale of insurance and sham tax shelters. states, relevant to the determina- “may be $259,366, Compensatory damages were degree reprehensibility tion of the $500,000 in punitive and we held that the conduct,”61 admissibility defendant’s “supported by [California’s] not, un- reprehensibility does evidence in protecting interest its own consumers BMW, extra go the and substantial der that, economy” and its own consider- step entitling enough state to award ing amount, the evidence and the “it [was] (or money to deter conduct at least lawful clear that California interests [were] conduct) in other states.62 involved.”65 571-72, (1989) S.Ct. Id. at 106 L.Ed.2d 219 (interference with contractual relations 572-73, Id. at 116 S.Ct. 1589. 60. market), upon limited Vermont the cases relies, purely which the dissent dealt with in- 21, 1589; 61. at 574 n. 116 S.Ct. see Id. also engaged by state conduct in a limited number Co., 1235, Ingersoll-Rand 214 F.3d Smith v. actors, exactly of in-state BMW addresses (10th Cir.2000). situation in the case we have before us: tor- part tious conduct on the of nationwide single 62. BMW holds that "no State could manufacturer, pol- that reflected a nationwide Nation], policy a tort law for the [enact entire icy, and that caused the same harm in all impose policy or even its own choice on not, states. BMW tells us that we as a neighboring power States .... [0]ne State's law, permit matter of federal one state to impose burdens on interstate market punish such nationwide manufacturers for automobiles is not subordinate to the hypothetical their conduct—actual or oth- commerce, —in power federal over interstate er states. by respect is also constrained the need to 571, interests of other States.” 517 U.S. at BMW, 63. 517 U.S. at 573 n. 116 S.Ct. (internal omitted). 116 S.Ct. 1589 citations 1589. squarely The Court held "[t]he analyzed light must be in the [conduct (9th Cir.1997). Alabama], 108 F.3d 1123 occurred within with consideration given only to the interests of Alabama con sumers, Neibel, (internal rather than quota- those of the entire Na at F.3d omitted) (first tion.” Id. 116 S.Ct. 1589. We are not tion marks and citation altera- ignore holding, original); free to this nor decline to tion in v. Johansen Combustion cf. Inc., (11th reasoning by Engineering, follow the which the Court 170 F.3d Cir.1999) reached this While (embarking result. Mutual on BMW excessiveness Pacific Life Haslip, analysis only holding Ins. Co. v. 499 U.S. after that the conduct (1991) (intentional being punished, seepage 113 L.Ed.2d 1 fraud in acidic into water- company) Browning-Ferrisways, Alabama insurance and single in a state "occurred] and Inc., Disposal, expressed strong In dus. Kelco U.S. [the statutes] state’s inter- in Nothing much all.” changed so after avoiding ques That means many The evi how trucks argument in this case. addressed unavailable tion is Nevada, of vehicles the number in and our attention has were sold dence focused the number of nationally, and any Ford sold evidence about directed to not been reported nationally. failures parking brake many trucks were sold Nevada. how was not limited national evidence The argument entire thrust of the was or admonitions any jury instructions Nevada now should vindicate the reprehensibility. limit relevance to its every- of all Ford truck owners interests despite request Ford’s permitted, that would make the where with verdict error, to award to cure this for instructions every newspaper the coun- page front the interests of all to vindicate damages chief executive officer and try, so that the buyers everywhere. pickup truck top Company officers of Ford Motor other essence, to measure jury was asked out of their chairs like “pour[ ] would harm to the whole by Ford’s damages crumple[ on the floor.” With ] water country. and the denial argument, this evidence and sought instruction, conclude, dam- closing argument Plaintiffs’ we cannot con- Ford for its ages punish Neibel, that would did in that even without we states, in all consumers duct toward instruction, jury plainly was vindicat- attorney empha- just Nevada. Plaintiffs’ protecting ing only the state’s interest 884,000people in this “there are sized that addressing citizens or that it was its got vehicles that country who have these only in the case at reprehensibility Ford’s tell them the truth as letter that didn’t bar.67 being vehicles were recalled”

why these BMW, verdict, light and in After the “your verdict for remittitur based on ex- Ford moved for a that it is on the enough loud so must be extraterritoriality and on the cessiveness tomorrow every newspaper page front The district court denied rule BMW. country in this morning, every person so extraterritoriality, saying that motion on vehicle, knows, they can they have that that its conduct would Ford had not shown shop get fixed.”66 take it into the jurisdictions. But the legal other be attorneys Plaintiffs’ told had sub- court conceded that Ford district actions would cause deaths Ford knew its “many arguing that mitted materials country.” Plain- of children “across the duty to recognize post-sale not states do the “across the attorney repeated tiffs’ five would warn and that at least states times, using a re- country” phrase several in of punitive damages type permit not in emphasis, for his “send petitive mantra dis- attempted to case.” The district court The emotion- message” argument. them 884,- the theory that tinguish BMW on plaintiffs’ at- up with argument al wound in “marketed trucks Ford pickup prosecuted he had torney’s statement universal market con- America attorney’s North was office criminals in the district centrally; pecu- it was not performed work hasn’t duct twenty years, “[his] for Emphasis added. pollution”); 66. deterring in environmental est Servs., Equifax Credit Deters Info. (D.Kan.1997) (noting F.Supp. 1389-90 Ingersoll-Rand, 214 F.3d at 1253. 67. Cf. statute, federal- that in action under federal concerns, ad- must otherwise be ism dressed, which assessing implicated con- are not award). damages stitutionality necessarily performed in a given We cannot conclude that the ratio liar to or analysis by state.” which the district court ex plained limited the damages its remittitur adopt But we cannot distinction. rights to vindicating the of Nevadans. BMW, marketed its cars In BMW nation- jury encouraged by The argument was to too, ally, damages wrongs award Ford’s for to the because “had imposed case were BMW country, rejected entire and the court policy in adopted a national 1988 concern- jury instruction that would have told the damaged in the ing cars that were course only wrongs vindicate done in Nevada. transportation.”68 of manufacture or Possibly jury would have as chosen case, policy a national affected a sale large an it award had been told to vindi Alabama, in this case a pickup of a car only Nevadans, cate rights pos but truck in No material Nevada. difference. sibly substantially chosen a would have case, the jury Thus in this Nevada was know, lower all award. For we damages impose punitive pro- asked to would have a much applied lower ratio tect states with people pick- other Ford thirty chose, than one trucks, the court court up and the district refused to sixty-six jury initially to one that damages reduce on account of chose, had it been told that it limit aspect. the extraterritorial should district scope its A rejected argument court the interests Nevadans. expressly punishment damages encompasses the award should limited to award that be place may for the conduct that had taken a defendant’s extraterritorial conduct Nevada. The court refused to limit the be even if unconstitutional the size of the itself, compared rights to vindication Nevadans’ to the compensa “performed tory because damages, Ford’s conduct is not outside the bounds centrally.” process.69 due BMW, U.S. at "clear that California interests are in- volved.” 108 at 1131. proposed F.3d Ford's one 69. The error was not of formulation of stood, complete instruction was less than as it instructions, plain- substance. The because, explained, may as we have produced extensive evidence tiff has of extra- extraterritoriality consider insofar as it bears conduct, argument urged and in territorial reprehensibility of the conduct. "[S]uch punish the extraterritorial evidence be relevant determina- conduct, just not the Nevada conduct. The degree tion of reprehensibility of the law, substantive error was not one of Nevada BMW, defendant’s 574, conduct.” 517 U.S. pre- but of federal law. constitutional n. 116 S.Ct. 1589. Where we differ Gore cases discussed the dissent do getting with the that there dissent is is no upon extraterritoriality, touch because the is- that, proposition way around the one or an- sue was not before court in those cases. other, by the whether nature of the evidence does, opinion, Gore in II of the Court’s section in, arguments that comes of counsel made separate prior to and which is from section instructions, otherwise, jury, to the III, lays three which out the criteria for exces- BMW, under section II of state im- cannot siveness, ratio, reprehensibility, and sanctions pose punitive for sanctions conduct that af- comparable for misconduct. An award is un- impact fected other but had no states on the principles constitutional if it violates laid plaintiff’s its state or residents. "Alabama out in either section. dissent concludes however, power, punish does not have the to that the award violates the section III stan- BMW for conduct that was lawful it where III, dards. We do not reach section because impact occurred and no that had on Alabama we conclude that it violates the section II 572-73, or its Id. at residents.” standards. 1589. In some cases distinction between cases, Neibel, using In some as reprehensi- such no extraterri- as it bears on evidence needed, toriality bility damages might instruction is because it was but not as a measure of in Perhaps important, most the variation suggest language of BMW logic policies punishment, even where wheth- if were to “consider the Court states, unlawful in all amounts conduct is attempt to may properly one er State policy. distinction in For important to in conduct change a tortfeasor’s unlawful example, ceiling Nevada has no on state,”70 to would have the answer another In this damages in a case such as this.74 Circuit, only other The Tenth be “No.” case, because the vindicated question so to have considered the Circuit pickup all Ford truck drivers rights of far, “Despite that conclusion.71 reaches im- everywhere, effectively Nevada has opinion [BMW] comment we read this in in posed million $70 inhibiting unlaw- prohibit upon to reliance Alaskans, others, among part protect That makes ful conduct in other states.”72 pickup failure to warn of defects in from First, the core for two reasons. sense quite trucks. But Alaska has a different BMW, fraud, in consumer would conduct policy punishment means of in wrongful degree to some all likely be legislature ceiling, damages: imposed its diversity approaches of state states. The case,75 fifty million in this probably $7 point- consumer fraud the BMW Court payable cents on the dollar to the Alaska in conduct is part to was in how the ed treasury.76 state per- rather than whether it is sanctioned By imposing ten times what Alaska discussion was mitted. The Court’s allow, money going would with all potential part hypothetical, conceiving attorneys, their rather the Whites and diversity in treatment. rather than actual government, it to the than half of state legislature “might a state The Court said very created different incen- Nevada has plausibly conclude that the administrative manufacturers, dis- tives from Alaska for full would costs associated with disclosure tributors, attorneys. A plaintiffs’ raising prices car have the effect of an but untried manufacturer innovative pro- That comment State’s residents.”73 product, self-tightening park- such as the legislature that hypothetical tected a state case, faces much more ing brake from Ala- might approach take a different A selling risk it Nevada than Alaska. bama’s, legislature company even no actual sometimes limits its national risk, according to variations position. sales taken different lard, (Fla.App. 4th Dist. gossamer as to be difficult for a 739 So.2d be so 1998) (disagreeing with Trend’s significance of the Continental apply, but in others the grounds that example, interpretation of BMW on quite will be clear. For distinction conduct is considered punish a “where the defendant's wants to national where due something nationally, in all 50 states ... the same it did tortious manufacturer implicated tempted multiply ap- process in BMW do not might well be concerns arise”). propriate amount of for one hypothetical plain- plaintiff by the number of Trend, 101 F.3d at 637. likely 72. Continental jury thinks to be harmed. That tiffs the done, BMW, be under where the can't BMW, S.Ct. 517 U.S. at 570 n. thereby on out- would include amounts based of-state victims. 20, 42.005(2) (1996). n. 116 S.Ct. 1589. 70. Id. 573 § 74. Nev.Rev.Stat. 2000). Res., (Lexis 09.17.020(g) § 75. Alaska Stat. Continental Trend Inc. v. OXY USA 71. Inc., 634, Cir.1996); (10th 101 F.3d 636-37 (Lexis 2000). 09.17.020(j) § Owens-Corning Fiberglas Corp. Stat. v. Bal- 76. Alaska but see 1018 liability pull insurers of high- safety Or,

when out in favor of innovation. Alaska or mail-order companies verdict states re- may think gets more rather than less fuse from some states. orders The Neva- safety by limiting penalties for innova- has legislature arguably da chosen economies, tions and though even some safety-oriented approach, more the Alaska turn out unanticipated have risks.78 legislature a less approach risk-averse entitled, Neither state is in our federal though friendlier to innovation. Even republic, impose policy its on the other. defectively both states treat distribution of If imposes Nevada an award based on designed products and failure to warn of vindicating a national safety, interest in tortious, dangerous defects as the differ- was encouraged to do in this case they ence in penalize how the tortious and as the district court expressly permit- expresses conduct significantly different ted, may then it only deter not conduct policy choices. states, tortious in other but also innova- BMW, Supreme Court in speaking tions and economies of production that oth- being large corporation, BMW’s said er states purposely have tailored then- “its status as an active participant in the laws not to discourage strongly. so Mea- economy implicates national the federal in- sured the Alaska legislative policy, Ne- preventing terest in individual States from policy vada’s would be overdeterrence79 imposing undue burdens on interstate BMW, All suggests of this that under “a commerce. While each ample State has may State not impose economic sanctions power consumers, protect its own none on violators of its laws with the intent of may use the damages deterrent as changing the tortfeasors’ ... conduct in imposing means of its regulatory policies States,”80 other whether the on the entire Nation.”77 extraterritori- This federalism al conduct is lawful applies strongly concern or not. Though to the case no at bar. free, other circuit court yet Nevada the absence has held way of federal one other, legislation to the contrary, the dictum previously choose a quoted policy may sacrifice some from the Tenth innovation Circuit takes this posi- in favor safety, tion,81 and Alaska is free to and several district and state courts policy choose a sacrifice some have so held.82 An Eastern District of BMW, 585, Stores, 77. Inc., 517 U.S. at 116 1256, S.Ct. 1589. Dep’t Dillard F.Supp.2d 18 (D.Kan.1998) ("the punitive damage See, (In e.g., 78. Corp. Baker v. Exxon re Exxon award must relate to occurring conduct with- Valdez), (9th Cir.2001). 270 F.3d state”); Geressy Digital Equip. Corp., F.Supp. (E.D.N.Y.1997) (not- 521-22 See, BMW, e.g., 79. 517 U.S. at ing punitive damage awards are limited (Breyer, concurring); J. In re Exxon Valdez, by "principle of system our 270 F.3d at federal that state 1244. legislation, policy, judicial state develop- BMW, 517 U.S. at 116 S.Ct. 1589 ment of state law can be directed at (elision "lawful”). is of word state.”); activity within the Ford Motor Co. v. Ammerman, (1999) (as- 705 N.E.2d Trend, 81. See Continental 101 F.3d at 637. suming jurisdiction no condones sale of defec- See, Co., e.g., Ace v. Aetna products, Ins. tive up “[n]onetheless it is to each Life 1125, 1133(D.Alaska 1999) F.Supp.2d (read- jurisdiction to make that determination for ing broadly "BMW enough case suggest any itself.... Thus that Alaska must leave some room within protecting should be limited to this State's which the other states can exercise their own consumers.”). defining precise interests in extent of and conduct”); deterring wrongful Hampton v.

1019 Pennsylvania recognizes post-sale duty a products liability approves case New York if plaintiff to warn can demon- telling jury it could a instruction product that the was defective from reasonably required to strate consider “what is in- legitimate the date of manufacture and that the man- York State’s vindicate New Thus, deterrence, had notice of the defect.89 punishment in ufacturer terests while we assume that the instruc- that it was “not authorized to court’s any,”83 but in tion this case was correct as a matter of protect people to impose (which Nevada has chal- of New York.”84 We law not been outside State lenged), everywhere. that that it is not the law with the Eastern District agree consistent with BMW. instruction was a among impose Even states warn, post-sale duty limitation there are differ- Even if the BMW territorial supposed in ences in who is be warned. only to conduct lawful other applied Whites, states, example, conduct dif- The for were neither opposed as unlawful truck, states, purchasers pickup we nor owners of the ferently sanctioned other a they warning so needed rule that a must compelled be to reverse because would go beyond purchasers be calculated to case. the extraterritorial Kansas, though owners to actual users. to warn found unlawful here is The failure requires post-sale warning, a limits the probably not unlawful all states. post-sale duty to warn to “ultimate con- although this case found that purchased product,”90 sumers who design, design brake was defective which would leave out the Thus Whites. proximately defect did not cause Walter this case was invited to award imposed liability death. It White’s damages to vindicate the interests warn, design Ford’s failure to not for the pickup of Ford truck drivers all over the defect, having after been instructed country, but the conduct for which the responsibility manufacturer has a “[a] actually in a punished was product after it has warn of a defective lawful states. number of other sold, if been manufactured and the manu- facturer becomes aware of the defect.” us, in prohibiting BMW reminds agree in- just punishment

But not all states such extraterritorial case, impose post-sale duty punish struction. in this imposed “[t]o Some Illinois,86 warn, Arkansas,85 don’t. he has done what the law person some because Texas,88 few, Nebraska,87 him plainly process to name a do allows to do is due the most basic sort.”91 impose post-sale duty to warn. violation of 624, Co., Geressy, 745 A.2d 627- F.Supp. at 521. 89. DeSantis v. Frick 950 (2000) (defect 32 must have existed when 84. Id. at 524. hands); product Sullivan left manufacturer's 524, Ltd., Group 46 Pa. D. & C.4th v. Modern 85. Boatmen's Trust Co. v. St. Paul Fire & (2000). 530-31 956, Co., F.Supp. 962 Marine Ins. 995 (E.D.Ark.1998). Co., F.Supp.2d & 161 90. Hiner v. Deere Co., (7th 86. Birchler v. Gehl 88 F.3d (D.Kan.2001). 1996). Cir. 91. 517 U.S. at 573 n. Co., 87. Anderson v. Nissan Motor 139 F.3d (citation quotation marks omit- and internal 1998). (8th Cir. ted). Eurocopter Corp., 88. McLennan Am. (5th Cir.2001). F.3d 1020 issue, jury speak limit the to BMW. We do not on this refusal to

district court’s interests, it. because we need not reach com- consideration Nevada’s lawyers exhorta- plaintiffs’ bined with by possibility are troubled While we decision resonate “across let the tions to may also jury that the award this case compels us to conclude that country,” by inflam- unduly have been influenced permitted engage jury here plaintiffs’ matory closing argument of violation of the most basic process “a due attorneys, we need not reach the issue of punitive dam- it arrived its sort” when reversal, argument requires whether' the therefore reverse the ages award. We and trust that on remand the district court district court as to Ford’s decision proceed- will take care to ensure that the 50(b) puni- motion for a new trial on Rule ings by inflammatory argu- are not tainted damages. tive appealing passion prejudice.93 ment or liability AFFIRMED as to determina- ground.that we reverse on the Because compensatory damages. and RE- tion damages award unconstitu puni- AND REMANDED as to VERSED jury punish a Nevada tionally allowed damages. party tive Each to bear its own conduct, out-of-state we do not Ford for appeal. costs on de novo whether these need to address punitive damages unconstitutionally were GRABER, Judge, concurring in Circuit guideposts, excessive under the BMW part dissenting part: by the normally required Supreme of us Industries, majority’s opinion-except I concur ruling Cooper Court’s Inc. v. view, my majority as to Part 4. In fails Inc.92 Nor do we Group, Leatherman Tool Supreme guidance to adhere to the Court’s consider whether the award is excessive in analyzing punitive damages.1 There- remand, under Nevada law. On fore, I Part 4 respectfully dissent from must decide on proceedings. from the remand for further within the territorial restraint established by Extraterritorial conduct is ad BMW. A. Standard Review degree repre bearing missible for its hensibility, must limited to be cases, In civil generally we review de reasonably required question novo the whether a instruc legitimate interests in vindicate Nevada’s applicable tion misstates the law. Navelli deterrence, punishment any, (9th Sletten, 923, and er v. 262 F.3d 944 Cir. — prohibited 2001), denied, U.S. -, imposing from dam cert 122 S.Ct. (2002). ages punish 2623, 153 protect people harm general L.Ed.2d 806 We jury’s outside of award on ly Nevada. The particular review the formulation of civil may yet constitutionally remand be exces instructions abuse of discretion. sive, or, Co., may within the be limits of Neibel v. Trans World Assurance 108 424, 1678, Supreme give 92. 532 U.S. S.Ct. 149 L.Ed.2d 1. The 121 Court additional (2001). guidance presented 674 on the issues here when it Campbell decides v. State Farm Mutual Auto Co., 981564, Co., mobile Insurance No. 2001 WL Cooper v. Firestone Tire & Rubber 945 (Utah 19, 2001), granted, (9th Cir.1991); 1246676 Oct. cert. F.2d Bird see also U.S. -, Inc., 153 L.Ed.2d Coop., v. Glacier Elec. F.3d - Meanwhile, however, (2002). (9th Cir.2001) I believe (citing 1145 & n. 16 Standard Perkins, (9th majority strayed Oil Co. v. that the has from the mes 347 F.2d Cir.1965)). sages Supreme sent Court to date. (9th Cir.1997); jury, you’ve Fikes v. Members now F.3d (9th heard the evidence of the financial con- 47 F.3d 1013 Cir. Cleghorn, Pearce, 1995); 954 dition of the defendant Ford Motor Waugh ex rel. Oviatt (9th Cir.1992). Company. “In evalu F.2d 1481 instructions, error prejudicial

ating jury you yes Because have answered when, looking to the instructions results fifteen,2 question special verdict number whole, applicable the substance of discretion, may, your you puni- correctly covered.” fairly and [not] law was exemplary damages against tive or de- 270 F.3d Corp., v. Potomac Swinton example fendant Ford for sake of [the] Cir.2001) (alteration (9th original) 802 by way punishment. of (citations quotation and internal marks Your discretion should be exercised omitted), denied, 122 cert. U.S. passion prejudice. without or (2002). 1609, 152L.Ed.2d 623 S.Ct. arriving any punitive In award of to be inconsistent appear

Our civil eases you are to consider the follow- damages, ap- what of review describing standard One, ing: reprehensibility a requested to the denial of plies defendant; two, conduct of the Neibel, F.3d at Compare instruction. amount of which will for of (reviewing abuse discretion have a deterrent effect on the defendant not to deliver the district court’s decision light of defendant’s financial condi- instruction), with requested defendant’s tion. & v. Bank Am. Nat’l Trust Sav. Ortiz of in- pattern That instruction is Nevada (9th Cir.1988) Ass’n, F.2d struction, 10.20, appro- Nev. J.I. with the entitled to an (stating that a is “defendant priate identify modifications to the defen- law, by if it supported instruction is dant. instruc- proper the failure to submit give following The court refused to law which we review question tion is a instruction, requested by Defendant: (citations omitted)). However, de novo” determining In the amount of by reviewing cases can be reconciled those any, necessary for damages, is any questions of law are de novo deterrence, you may punishment requested give involved in the failure to wrongful Defendant’s con- consider instruction, the re- example, for whether impact that has had an on the duct law incor- quested instruction states the of Nevada. You not award citizens in a rectly and whether its absence results any purpose for the misleading statement of the law. Other to the sale Defendant relative punishing give in the failure to questions involved States, for the vehicles other or are for requested instruction reviewed deterring De- purpose punishing discretion, example, whether abuse of fendant’s conduct outside State theory adequately is covered party’s Nevada. by other instructions. give partic- It is the court’s refusal to Damages Instructions B. The Punitive “non-extraterritoriality” instruction on ular majority to reverse and which the relies gave following The court instruction trial. remand for a new punitive damages: Question upon you base provided: the conduct which Special Fifteen malice in Verdict finding liability death of Wal- convincing your evi- for the you clear and "Do find oppression or ter White?” that Ford acted with dence damages. The court used the standard Law C. Nevada Although Nevada. pattern instruction for case, the first diversity is a Because this analyzing no cases there are Nevada is to examine the fit analysis in the step pattern whether the instruction consis- given and the the instructions between law, a of Nevada tent with Nevada review diversity “In a law of Nevada. substantive cases demonstrates that is. action, other lawsuit where -state any or in decision, pro the basis of provides law Nevada, end of proper “[t]he punitive damages for of an award of priety damages punish culpable is to and deter question, conduct in and the factors Rentals, Equip. conduct.” Ace Truck & jury may determining consider in their Kahn, v. 103 Nev. 746 P.2d Inc. amount, law.” questions are of state (1987). Specifically, Revised Nevada of Vt.,Inc. v. Kel Browning-Ferris Indus. § plaintiff 42.005 allows a to recov- Statute Inc., 257, 278, 109 Disposal, co 492 U.S. punitive damages er “in an action for the (1989). 2909, 106 L.Ed.2d 219 S.Ct. obligation arising of an not from breach majority by analyzing the The errs suffi contract, proven by it is clear and where ciency of the instructions as a matter of convincing evidence that the defendant has in law in the first federal substantive malice, guilty oppression, been of fraud or 1012-13, (Majority Opinion at stance. implied, ... for the sake of express or 1016.) that, argue Defendant does even de- example by way punishing non-extraterritoriality a instruction is not 42.005(1). § fendant.” Nev.Rev.Stat. constitutionally by it required, required is punitive damages appro- “The amount of general principles pertaining federal-law to priate purpose punishment to the stated However, the jury Supreme instructions. in the discretion and deterrence lies rejected argument a Court similar Truck, Ace 746 P.2d at 134. fact-finder.” Browning-Ferris, when declined to hold Nevertheless, the fact-finder’s discretion is common a provides federal law Instead, subject “unbridled.” Id. it is not finding punitive damages basis for post-verdict scrutiny by the trial and in diversity to be excessive case. 492 U.S. appellate “legal courts for excessiveness”: 278-80, 109 2909.3 S.Ct. damages legally in- sufficiently The district court here Punitive are excessive jury punitive damages formed the of Nevada law on when the amount of awarded is constitutionally cognizable way, by also Defendant contends that it suffered failure words, give harm from the court's failure to its re- to instruct. In a defendant other because, quested constitutionally instruction even if the entitled to a "lower” range by range award falls within the allowed due award within the of awards that com- process, might plies process. the award have due been lower Cf. Leatherman Tool Inc., Indus., argu- Cooper Group, had the been so instructed. The Inc. F.3d (9th Cir.2002) (stating usually ment that a failure to instruct the on the imposed by process required limitations due violates a new trial is not when an award of process, resulting punitive damages due even if the award in lim- exceeds constitutional comports process, persua- usually fact with due is not its. "That conclusion follows from below, plaintiff sive. As will be discussed a defen- the fact that a would not be entitled procedural process pro- any greater dant’s due interest is award on remand and therefore damages implicit corollary aggrieved.” tected if awarded in a cannot be are complies process. against manner that A with due conclusion is that defendant process permissible defendant’s substantive due interest is whom a verdict was entered protected any if the be size award is not exces- would not entitled lesser award on long process, sive. So as neither of harms oc- remand as a matter due and like- those curs, harmed, aggrieved.). a defendant has not been in a wise could not be justice public’s propriety by sense of degree dearly disproportionate in- focusing “reprehensibility.” and harmfulness inher- blameworthiness struction also informed mali- fraudulent or oppressive, ent amount to deter Defendant should needed of the tortfeasor under cious misconduct by be set reference to its financial condi- If given circumstances of a case. tion. awarding jury judge assesses than is rea- more contrast, By requested the instruction necessary fairly deserved sonably required Defendant was neither nor and deter punish order to the offender First, supported by Nevada law. Defen- conduct, then others from similar dant’s statement award must be set aside as excessive. relationship must bear a reasonable

compensatory damages does not state Ne- accurately. vada law As summarized arriving judgment at the ultimate above, law requires Nevada begins, courts can where excessiveness damages “reasonably award to be neces- cir- legitimately any take into account sary” punish the defendant for the chal- cumstances which relate to the limits of lenged and to from conduct deter others punishment and deterrence can be is, engaging in like conduct. That the imposed given in a case. Rele- properly relationship reasonable is between the mat- vant circumstances included such amount of and the chal- financial of the de- position ters as the conduct, lenged not between the amount of fendant, culpability and blameworthiness punitive damages and the award of com- tortfeasor, inju- vulnerability of the and pensatory damages. ry by party, suffered the offended the punished the conduct extent to which Second, requested Defendant’s extrater- justice the and public’s offends sense ritoriality required by instruction is not and the means which are propriety, prohib- Nevada law. Nevada law does not to deter future judged necessary mis- jury considering it the from a defendant’s conduct of this kind. conduct; indeed, it explicitly out-of-state jury’s authorizes the consideration of (footnote omitted). Id. at 136-37 condition, a piece defendant’s financial law, In view of the statute and case an com- information that has out-of-state pattern adequately instruction informed ponent many cases. Nev.Rev.Stat. jury law on of the Nevada 42.005(4). § damages. explained statutory It that the accurately and purpose damages of such is to set an ex- Because the instructions law, I sufficiently It Nevada ample punish and to the defendant. summarized damages clarified that the were not man- turn next to the more difficult issues datory, by by could be awarded raised Defendant: whether the Nevada but instead discretion, pro with due jury comply its a discretion that instructions federal prejudice. or cess standards. These are constitutional passion should include questions rather than of instruc pattern questions, The instruction then identified postverdict questions tional error. And as to such germane some of the factors —(cid:127) review, thereby including involving prop “those issues limiting excessiveness jury’s by instruction drew er review of the award federal discretion. The appeals” jury’s attention to the blameworthiness district court and court —feder Browning-Ferris, conduct and the manner al law controls. Defendant’s 278-79, 109 at which Defendant’s conduct offended the U.S. S.Ct. trial court. Id. at Due Process S.Ct. Procedural

D. Alabama, In trial courts are v. Has Mutual Ins. Co. Life Pacific required “to reflect in the record the rea- 113 L.Ed.2d S.Ct. lip, U.S. verdict, interfering sons for (1991), Court articulated a Supreme so, refusing grounds to do on of excessive- determining pro whether the standard for (citation damages.” Id. and ness an governing cedures omitted). Fac- quotation internal marks damages comply process. with due tors relevant to that determination includ- system jury held Alabama’s Court (1) (2) culpability; the defendant’s ed review, instructions, appel trial-court and discourage need to others from similar together protected late review—taken — (3) conduct; parties; on effect process civil defendant’s due Id. interests. (4) factors, including other the effect on 20-24, 111 S.Ct. 1032. parties. third Id. The concluded Court first the Alabama Court reviewed system provided that Alabama’s for review trial court’s instructions a “meaningful adequate” check on the in- damages.4 It concluded that “[t]he jury’s discretion. Id. ... enlightened structions as punitive damages’ purpose, nature and Third, the Court found that the Alabama damages punishment identified the for Supreme review of awards of puni- Court’s involved, wrongdoing civil of the kind “provide[d] tive additional explained imposition their was not jury’s check on the or trial court’s discre- 19, 111 compulsory.” Id. at S.Ct. 1032. 20-21, tion.” Id. at 111 1032. S.Ct. Consequently, imposed the instructions Supreme two-step Alabama Court uses jury’s “reasonable on the dis- constraints” process punitive to review an award of cretion, satisfying requirements pro- of First, damages. engages compara- in a 20, at 111 process. cedural due Id. S.Ct. analysis of applies tive the award. It then 1032. the “detailed substantive standards it has Second, Ala- developed evaluating punitive the Court examined the for procedures post-verdict bama review awards.”5 Id. at 1032. The S.Ct. Now, Specifically, provided: purpose awarding punitive 4. the instructions of or exemplary damages money is to allow recov- Now, you perpetrated if find that fraud was ery plaintiffs, plaintiff, by it does to the compensatory damages then in addition to way punishment of to the defendant and for discretion, you may your when I use purpose protecting public by the added of discretion, say you word I don't even have to detering the defendant and others from [sic] fraud, to, you you may, but find wouldn't have doing wrong Imposition such in the future. says you may the law award an amount of punitive damages entirely discretionary is money damages. known as jury, you with the that means don’t have to money This amount of is awarded to the jury you award it unless this feels.that should plaintiff compensate plain- it is not to do so. any injury. punish tiff for It is to the defen- you punitive damages, Should award in fix- punish dant. Punitive means to or it is also amount, ing you into must take consider- exemplary damages, called which means to degree ation the character and the So, feel, you example. malte if feel or not wrong as shown the evidence and necessi- you reasonably but if are satisfied from ty preventing wrong. similar plaintiff, plaintiff evidence that the whatever Haslip, 499 U.S. at 6 n. 111 S.Ct. 1032. about, you talking perpe- are has had a fraud upon they trated them and as a direct result 5. Those standards are: injured compensatory were and in addition to (a) damages you may your award whether there is a reasonable relation- discretion punitive damages. ship punitive damages between the award jury’s Id. at Supreme strained the discretion. that the Alabama held Court 2331; 440-43, id. at S.Ct. see also supplied review a “suffi- method of Court’s (dis- J., (Ginsburg, dissenting) S.Ct. meaningful constraint ciently definite cussing jury required by instructions factfinders the discretion of Alabama law). Oregon damages.” Id. at awarding punitive Respondent’s safeguard, proper final S.Ct. instruction, a well-established is short, Haslip proposi- stands for the and, course, important against check process due is satis- procedural

tion that problem excessive awards. The award of respect to an fied us, however, possibility concerns a “def- procedures provide that a will follow those instruc- meaningful constraint” on inite and lawless, biased, tions and return a place are in to en- factfinder’s discretion arbitrary verdict. any award is sure that the amount 433, 114 Id. S.Ct. legitimate reasonably related to state’s Haslip and Honda together, Read Has- goals punishment deterrence. that, process imposes teach while due clear that instructions lip also makes requirements some on how a must be discretion, jury’s beyond limit need not re- punitive damages, instructed on those punitive damages are dis- clarifying In- general. are minimal and quirements purpose, their cretionary explaining stead, availability post-verdict it is the proce- provided postverdict review damages awards that review of available to ensure that an dures are procedural provides the most substantial is not excessive. punitive damages. check on Oberg, 512 U.S. In Honda Motor Co. approved Although Supreme Court 2331, 129 L.Ed.2d 336 general jury Haslip instructions (1994), post-ver- the Court confirmed reviewing a state court’s the context of awards, dict review of no punitive damages, award of there is instructions, jury provides than the

rather in why jury instructions principled reason constitutionally significant constraint most be diversity case in federal court have to There, jury’s on a discretion. the Court That the Su- more detailed. is because awarding Oregon’s system held that for punitive preme Court has established punitive damages procedural violated due are damages awards federal court sub- process permit meaning- it did not because ject post-verdict scrutiny compliance for post-verdict punitive damages ful review of and the federal consti- with both state law 434-35, 114 In awards. Id. at S.Ct. 2331. tution. rejected argu- holding, so the court Industries, Leather Cooper instructions Inc. v. ment the detailed Inc., 424, 121 Group, man Tool 532 U.S. by Oregon adequately law con- required loss; (d) the "fi- likely de- defendant also sustain and the harm to result from the defendant; (e) position” as well as the harm that all fendant's conduct of the nancial occurred; (b) actually degree of (f) has imposition litigation; the costs of conduct, reprehensibility of the defendant’s for its criminal on the defendant sanctions conduct, the duration of that the defen- conduct, mitigation; these to be taken awareness, concealment, any and the dant’s (g) of other civil awards the existence frequency past existence and of similar con- conduct, against for the same the defendant duct; (c) profitability defendant mitigation. these also to be taken in desirability wrongful and the of the conduct 21-22, Haslip, 499 U.S. at 111 S.Ct. having removing profit and of 1026 (2001), damages A 1678, Haslip. punitive 149 L.Ed.2d 674 Court

S.Ct. subject by is to review both the proper procedures Court outlined jury- appellate court for review. When district court and post-verdict federal law, damages on state compliance based with state and the amount awards law, subject to de review of the award is novo to ensure that it falls within the bounds judge trial is “to deter-

the role of process. due Because those substantive jury’s verdict is within mine whether pro- law, post-verdict procedures are at least as set state and to confínes approved of defendants as those determine, stan- tective by reference to federal 59, it follows that the instructions Haslip, under Rule whether developed dards damages diversity in a case in or remittitur be or- on a new trial should only court need to meet the stan- If no constitutional issue is federal dered.” raised, court, appellate Haslip comply at articulated in the role dard system, merely in the federal to procedural process. least due review the trial court’s “determination Thus, in re- general, the instructional standard.” under abuse-of-discretion Indeed, quirements are modest. this fact 433, (quoting Browni Id. at 121 S.Ct. frustrated Justice O’Connor. See TXO has Indus., ng-Ferris 492 U.S. at Corp. Corp., Prod. v. Alliance Res. 2909). S.Ct. 443, 474-75, U.S. 113 S.Ct. (1993) (O’Connor, J., However, appellate a federal court must L.Ed.2d 366 dissent- that, necessarily trial ing) (noting de novo the court’s determina while is not review constitutionality tion of the of a unconstitutional for a to “receive 436, 121 award. Id. at S.Ct. damages vague amorphous guidance” puni- jury’s puni “the award of 1678. Because “it cannot damages, tive be denied finding does not constitute a tive guidance heightens lack of clear the risk ‘fact,’” higher arbitrariness, standard of review passion, or bias will re- the Seventh Amend implicate does not place dispassionate deliberation as the ba- 437, 121 ment. Id. at S.Ct. 1678. The verdict”); jury’s Haslip, sis for the appel has directed federal Supreme Court (O’Connor, J., 111 S.Ct. 1032 U.S. constitutionality late courts to review dissenting) (arguing that the instruc- awards under the cri approved by majority tions were un- North Amer teria established BMW constitutionally vague). Gore, ica v. U.S. meet the The Nevada instructions stan- (1996): 134 L.Ed.2d 809 in- by Haslip: they dards articulated (1) degree reprehensibility the of the jury that punitive damages formed the (2) misconduct, disparity the defendant’s discretionary, that purpose were their is to (or harm) potential the harm between example, to set an punish and the by plaintiff punitive the and the suffered amount bear some relation to must the (3) award, and the difference damages of blameworthiness the defendant’s con- damages awarded between the Consequently, jury the duct. instructions by jury penalties and the civil autho- the procedural of due requirements met the in imposed comparable rized or cases. process. 440, 121 Cooper, 532 at U.S. S.Ct. E. The Role Conduct of Ouh-of-State post-verdict

Those review procedures Gore, provide In the protec- again at least the same level of the Court considered puni- tion of approved by process as the the due limitations on awards procedures Court, in- Additionally, pattern the Nevada According to the damages. tive jury structions did not invite the to consid- requires that process due substantive in award be er Defendant’s out-of-state conduct punitive damages a amount of Rather, legitimate manner. the in- reasonably inappropriate related to state’s in and deterrence. directed the to consider punishment interests structions 568, 116 reprehensibili- at S.Ct. 1589. as Defendant’s 517 U.S. factors such may ty position and financial —factors whether a step analyzing The first by informed Defendant’s out-of-state be reasonably related given award conduct, proper that are nonetheless determining legitimate interests is state’s setting to consider a for the when In interests. Id. scope of those award. legitimate defining Alabama’s context of interests, a the role of the Court discussed Finally, during comment clos- Plaintiffs’ pu out-of-state conduct defendant’s ing arguments Defendant faded 568-74, at damages calculus. Id. nitive 884,000 in North people to warn America concluded 116 S.Ct. 1589. The Court roll-away by risk posed about the its vehi- sovereignty principles ... of state “from require cles did not the court to instruct impose not comity that a State ignore Defendant’s out-of-state violators of its law economic sanctions on conduct. Defendant’s counsel did not ob- changing the tortfeasors’ with the intent ject aspect closing to that of Plaintiffs’ Id. at lawful conduct other States.” and, arguments6 as the Court held in Instead, an award S.Ct. Gore, that information was relevant to the supported by “must be jury’s reprehensibility assessment of the protecting its own interest State’s failing conduct in to warn of Defendant’s economy.” Id. That consumers its own product defect. mean, however, jury may not does however, remains, whether question all conduct consider at the out-of-state not give the court to some form required Gore setting of a defendant when instruction, even non-extraterritoriality contrary, To the damages award. formulated properly in the absence of explicitly that a defendant’s Court stated I believe that the answer is “no.” request. jury’s out-of-state conduct can inform degree reprehensibility of the evaluation Gore, accepted the Court Ala- at 574 n. of a defendant’s conduct. Id. Supreme interpretation bama Court’s 576-77, 116 S.Ct. 1589. jury’s reflecting computa- verdict as in other largely tion based on activities In view of the discussion Gore Court’s conduct, 517 U.S. at 116 S.Ct. 1589. role of out-of-state states. proper states, Yet, in the defen- re- some of those “non-extraterritoriality” instruction 569-71, mat- conduct was lawful. Id. wrong Defendant is as a dant’s quested punish Alabama could simply require law. does not S.Ct. 1589. ter of Gore policy in accordance with its only Defendant’s the defendant “consider its was not the same as other impact policy that on when wrongful conduct added), majority opinion As the policies. states’ (emphasis the citizens of Nevada” observes, the same situa- correctly proposed. the Defendant’s instruction as arguments preju- object tinues to contend that those 6. Defendant did to a reference to Plain- grief argument prejudice dicially appealed passion and to an that Defendant and tiffs’ of its knew that children would be the victims jury. of the appeal, Defendant con- failure to warn. On a®,d it” (Majority Opinion appropriate remedy” face here. that “the tion we 36-37.) Consequently, majority’s the independent “an determination mig^he discus- speculation about whether Gore’s by *We Alabama Supreme Court of the in scope of a state’s interest sion of the necessary awafcí to vindicate the economic deterring extraterritorial punishing interests In of Alabama consumers.” Id. apply would when the conduct is conduct words, other the entire discussion was dictum, purely everywhere is merely part analysis unlawful of the of exeessive- no role the outcome of this playing ness, pains and the Court took not to Gore, 517 U.S. at 574 n. case.7 See require giving either new trial or the (“Given that the verdict S.Ct. 1589 particular 602-04, instructions. See id. at part based in on out-of-state conduct that (Scalia, J., dissenting) S.Ct. 1589 occurred, was lawful where it we need not (recognizing logic majority that the may properly whether one consider State opinion suggest process could “that due change a attempt to tortfeasor’s unlawful require would assessing jury to be State.”). ” conduct another scope legiti- instructed on the of a state’s examining legality After of the de- mate interests in imposing punitive dam- states, fendant’s conduct some the Su- conduct, ages relative to extraterritorial preme Court considered what “guideposts” concluding suggestion of a required are so ensure a defen- new instructional burden was a “false dant receives fair of both notice the con- alarm”). resulting punishment duct po- and the Cooper pro- further confirms that due severity tential penalty. The three require cess does not that a court order “guideposts” are degree reprehensi- new trial punitive damages simply be- nondisclosure, bility of the disparity jury may cause the have awarded harm potential between the harm suf- inappropriate for an reason due award, fered and the difference misleading In Cooper, instructions.

between the penalties award and the civil punitive damages have been imposed authorized or in comparable unconstitutionally excessive it because was 574-85, cases. Id. at Sig- S.Ct. 1589. part based in on an improper predicate (1) however, nificantly, the Court discussed due to erroneous instructions. bearing those factors as on the excessive- U.S. at 121 S.Ct. 1678. The Court award, ness of the actual amount remanded the case to apply us to a de novo bearing not as on the procedures that had standard of review in an excessiveness (2) trial, been followed in the Alabama analysis under Gore. Id. at did not require new trial even though Notably, despite recognition its appears that was either encour- an improper purpose may have informed aged or simply multiply allowed Dr. decision, jury’s Gore’s actual Court did not hold damages by the number of 585-86, that the cars sold defendant was entitled to a nationwide. Id. at new Instead, S.Ct. 1589. trial on the issue of punitive damages. the Court held “that grossly that, That imposed suggests excessive award result even when a this case transcends the constitutional lim- awards for an im- question I principles whether the articulat- prevent siveness review would the unfairness ed in Gore extend to a situation in which multiple recovery wrong. for the same As conduct at everywhere. issue is unlawful text, however, noted in we have no occasion circumstance, there would be no conflict to decide this issue. state, policy goals any with the and exces- remedy is not a proper purpose, worthy new than those that involve violence or trial, Gore, instead is a reduction in the the threat of violence. 517 U.S. at 576, award so that reflects the state’s 116 S.Ct. 1589. “Similarly,’trickery legitimate interests. and deceit’ reprehensible are more than (citation omitted). negligence.” Id. Con- was no Because there instructional er- duct that causes economic harm alone is ror, and because Defendant received pro- reprehensible less than conduct that in- I turn process, cedural due next to an (or jures risks injuring) the health and excessiveness review. safety of “[Rjepeated others. Id. miscon- F. Whether the Award is Excessive duct reprehensible is more than an individ- 577, ual instance of malfeasance.” Id. at

The did award some dam- 116 S.Ct. 1589. ages explicitly for out-of-state conduct. jury’s original award was million $150 The conduct for which Defendant is lia- $884,000.

plus $884,000 apparently ble here is a (Majority failure to warn. represented “one dollar for each Ford ve- 10-13.) Opinion at Defendant knew of a hicle of type sold North America.” potentially very dangerous defect. The However, the district court reduced the injuring defect risked people, as well as $69,163,037.10. computed It causing Yet, economic harm. in part for reduced amount by multiplying the com- economy, reasons of Defendant neither re- pensatory damages by theory on the called its for a trucks 15 cent fix nor the largest punitive damages award warned consumers. Defendant’s conduct approved by the Nevada courts had been in failing to warn consumers of a known compensatory damages. times the The danger was intentional. It must be re- district court’s computation thereby cured membered that the found against De- jury’s erroneous “bonus” for extrater- fendant on Plaintiffs’ claim for intentional ritorial conduct. misrepresentation, so we must take it as a (as given that

Although the district court recog- the reduced award contains no nized) suppression Defendant’s extraterritoriality component, our of informa- work is tion implied misrepresen- amounted to an Cooper requires over. us to review de (cid:127) tation of fact safety. novo whether the as to the truck’s grossly reduced award is Moreover, excessive, applying the Gore Defendant’s misconduct was not factors: malfeasance, single act of degree part but was reprehensibility of the defen conduct, an ongoing pattern failing dant’s to warn. The disparity between the weighs heavily harm first factor thus by plaintiff suffered favor of and the award, significant award of punitive damages punitive damages. and the differ ence between pen the award and the civil “The second and perhaps most common- imposed alties authorized or in comparable ly cited indicium of an unreasonable Cooper, cases. at U.S. S.Ct. excessive award is its 1678. The factor signifi first is the most ratio to the actual harm inflicted on the Gore, cant. U.S. 116 S.Ct. Gore, plaintiff.” 517 U.S. at “presents 1589. It also the most difficult If plaintiff fully the harm to the question for an appellate court.” Leather realized, analyzes court this factor man, 285 F.3d at 1150. looking at ratio of punitive damages Gore, the Court identified the hall- compensatory damages. Id. at marks of particularly reprehensible Alternatively, con- if greater S.Ct. 1589. harm duct. likely plaintiff Nonviolent offenses are less blame- was to befall the aas result conduct, justified ratio is because higher which a the court exam- the defendant’s ‘“ in conduct resulted egregious a rela- there is reasonable Defendant’s “whether

ines damages compensatory damages. punitive a low award of tionship between from is difficult to conceive of a loss likely Although to result it harm and the award of a child— conduct as well as more terrible than the death the defendant’s ’” actually has occurred.” Id. a child’s life—the and it is hard value harm that TXO, 460, at 509 U.S. Plaintiffs a substantial (quoting awarded 21, at Haslip, damages: 499 U.S. quoting compensatory in amount 1032). ap- Haslip, Thus, In the Court in $2,305,434.57. this is not a case S.Ct. that was four times the an award proved compensatory damages fail mean- which In damages. Id. compensatory amount of egregious to address a defendant’s ingfully TXO, compared the award of the Court it conduct; is it a case in which was nor harm with “the damages punitive for the to com- exceptionally difficult have ensued the tor- that would victim be- damages. Finally, non-economie pute That difference had succeeded. plan fully tious the harm to Plaintiffs has been cause relevant ratio was not that the suggested realized, we need not take into account 1.” Id. than 10 to more but unrealized harm when exam- potential com- ining punitive the ratio between Nevertheless, the has Court damages. pensatory consistently rejected the notion that the by simple is line marked two factors counsel that constitutional The first formula, even one requires puni- mathematical a lower ratio of Constitution potential damages damages actual and compares damages compensatory tive Indeed, award. low ap- to the ratio that the district court than the compensatory damages may justifying higher awards of factors ratio plied. The support higher ratio than properly present. Under the circum- are awards, if, stances, for exam- high compensatory approved I believe that the ratio act has re- egregious ple, particularly in to 1-—would be Court TXO—10 in a small amount of econom- sulted here. appropriate higher A ratio also be damages. ic compara for The third factor —sanctions injury in cases which the is justified weighs ble misconduct—also somewhat monetary or the value of hard to detect out, points amicus favor of Defendant. As might harm the noneconomic have been Safety the National Motor Vehicle under determine. difficult to penalty Act of the maximum civil (citation 116 S.Ct. 1589 omit- Id. $800,000. selling defective motor vehicles is ted). said, being That the Court Gore 30165(a). course, § Of Defen 49 U.S.C. the ratio at issue—500 to characterized in this case not for the statu dant is hable “breathtaking,” and 1—as sufficient tory wrong selling a defective motor judicial suspicion. Id. at arouse but, instead, failing for the tort of vehicle S.Ct. 1589. potentially devastating to warn of the con

Here, particular defect. Never sequences the ratio of remitted award bearing statute has some damages compensatory theless this import more are other Although comparability. 30 to 1. ratio is Of damages is “breathtaking” as 500 to 1 ratio similar tort cases. Ford Motor Co. not as (Ind.Ct. Ammerman, Gore, substantially larger than the 705 N.E.2d is jury’s court held that a approved by Haslip App.1999), ratios the Court $58 Moreover, against not a case in million TXO. in products liability suggesting defendant that a smaller award appro- this same is excessive, $23,054,350.00 An priate. award of is in constitutionally action was line with the awards in similar cases and punitive damages that the remitted award provides constitutionally acceptable rela- was constitutional. The million $13.8 tionship punitive between and compensato- in that case compensatory damages ry damages. million, making amounted about $4.4 punitive compensatory damages

ratio of 1; unremitted, excessive about 3 G. Conclusion ratio was about 13 to 1. But see Romo v. instructions on dam- Corp., 99 Cal.App.4th Ford Motor ages were sufficient under Nevada law. 122 Cal.Rptr.2d (Ct.App.2002) 165-67 The instructions also were sufficient to as constitutional a (upholding requirements meet the procedural due damages award of million where the $290 process, the context of the available compensatory damages were about $6.2 procedures for review. Substantive due 1). million, A a ratio of about 45 to search process necessarily does not an require mil- of recent awards reveals a $120 instruction on nonextraterritoriality; rath- punitive damages against lion award er, that ais factor to consider in excessive- holding Motor based on a Company, ness review. The Ranger pick-up its 1988 Ford truck was in this case was excessive as a matter of unreasonably defective and dangerous; the view, process. In my substantive due compensatory damages just amounted to $23,054,350. constitutional maximum is million, under for a ratio of about 5 to $25 reasons, For foregoing majori- Jury Analysis 1. 13 Nat’l Verdict Rev. & ty’s analysis of punitive damages is want- (West 2002) Robinson v. Ford Motor Co. ing, and it reaches incorrect result. (1998 2020336). WL Accordingly, I dissent from Part all Applying concededly these factors-—-a remanding from the order the case for unscientific exercise—I conclude that a pu- proceedings. further $23,054,350 (10 nitive award of compensatory damages) times the is the

constitutional maximum degree here. The reprehensibility of Defendant’s conduct high intentionally failed to —Defendant

warn consumers of a defect that foresee-

ably person. could result the death of a did, according

That failure to warn

jury’s finding, result in the death of Walter However,

White. the ratio of dam-

ages compensatory high damages is compared approved by

when to the ratios Court; Supreme. suggest its cases appropriate

a 10 to 1 ratio is here. Tony Eugene SAFFOLD, Petitioner- Finally, magnitude of the award Appellant, compared when to awards in cases similar analogous statutory large, sanctions is

Case Details

Case Name: Ginny v. White Jimmie D. White v. Ford Motor Company, a Delaware Corporation, and Orscheln Company, a Missouri Corporation

Court Name: Court of Appeals for the Ninth Circuit

Date Published: Dec 3, 2002

Citation: 312 F.3d 998

Docket Number: 99-15185

Court Abbreviation: 9th Cir.