*1 HODDER, Respondent L. Dale
(C3-87-419), Appellant
(C2-87-511),
v. TIRE & RUBBER
The GOODYEAR al., Defendants,
COMPANY, Peti et (C3-87-419),
tioners, Appellants Re (C2-87-511),
spondents Rim &
Pioneer Wheel Respondent.
Company, TIRE & RUBBER
The GOODYEAR COMPANY, Party Third Defendant and (C3-87 Petitioner,
Plaintiff, Appellant (C2-87-511),
419), Respondent
v. COMPANY, INC., Third
REMER OIL Defendant,
Party Respondent. COMPANY, RIM &
PIONEER WHEEL Party Third
Defendant and
Plaintiff, Respondent,
v. COMPANY, TIRE Arrowhead
ACHESON
Equipment Company, Itasca Tire Com Defendants, Respon
pany, Party Third
dents. C3-87-419,
Nos. C2-87-511.
Supreme Minnesota. Court of
6,May 1988.
Rehearing July Denied *2 Hendircks, May, J.
F. Kirk T. Dennis Dob- bels, Mo., appellants, City, Kansas Goodyear Tire Co. and Motor & Rubber Corp. Wheel Merrill, Godlewski, Bama, Guzy, E. Paul Ltd., Giancola, Minneapolis, Hynes & *3 Risjord, Risjord & Associ- John C. John C. ates, P.C., Mo., Dale City, Kansas for Hod- der. Paul,
Geoffrey Jarpe, P. for Pioneer St. Wheel Rim & Co. McGuire, Minneapolis, for Ar-
Robert J. Equipment rowhead Co.
Phillip Pfaffly, Minneapolis, A. for Itasca Tire Co. Ditzler, Minneapolis, for
Austin Acheson Tire Co. Adamson, II, Flaskamp, W.D.
O.C. Spevacek, Minneapolis, E. for Rem- Charles er Oil Co. Studer, Connelly, P. Michael St.
William Anderson, Paul, and Mark Shirley S. A. Paul, Brantingham, amicus curiae for St. Minnesota Chamber of Commerce & Indus- try. Sieben, Jr.,
Harry Minneapolis, amicus Lawyers Trial curiae for Minnesota Assn. Struble, Minneapolis, Wayne D. amicus Advisory Liability curiae for Council and Assn. Motor Vehicle Mfrs. Schwartz, Liberty Mahshigian, E. Victor D.C., Washington, curiae for Prod- amicus Liability and Advisory uct Council Motor Mfrs. Vehicle Assn.
SIMONETT, Justice. products liability case raises a varie- issues, ty including interpretation of the defense,” the statutory duty “useful life warn, punitive damages. and entitlement to recovery a tort be- Issues on allocation of subrogated injured employee tween prejudgment employer, as well as on inter- affirm, est, presented. also for the except puni- part, for a reduction most for damages and a remand reallocation tive Lorix, Vessey, readjustment of Kelley B. R. tort James Timo- of the Branson, thy Minneapolis, E. and Randall interest. 1955, Goodyear producing 19, 1981, Dale plaintiff
On December L-rims. rim selling K-rims and The KWX seriously injured when Hodder, age was accident) (the kind involved Hodder’s explosively rim a truck tire metal base, lighter put K-rim with a rim on was a mounting the tire he was separated while use, apparently the market logging truck. on a customer’s L-rim, lighter trucks; was the load Company, Oil by Remer employed then however, years in later both KWX community of in the small service station generally L-rim came to be used Hodder re- Minnesota. Remer in northern A single-piece load trucks. rim heavier flat tire fix a he was to members in 1953 was invented until some little else. truck but remembers years gain acceptance did it later exploded was mounted on a The tire that industry and on the market. assembly made multi-piece rim KWX Dale Hodder sued and its sub- Compa- Tire & Rubber defendant sidiary, Corporation, Motor Wheel and the heavy of a assembly consists ny.1 This defendants, turn, brought in Remer Oil *4 base, which the tire with rim about metal plaintiff’s employer, Company, as a third placed, plus separate a is an inner tube party Remer Oil counter- defendant. rim. ring that attaches to the metal side required pay claimed for benefits it was to getting split to facilitate rim is The base employee Com- for its under the Workers’ off; assembly, split on the the tire on and pensation Act. realigned carefully and the ends must be trial, During plaintiff dropped its claim helps to lock the ring then fastens and side manufacturing jury, defect. The an- of a tires on the There were other rim base. interrogatories, no swering special found in “L-type” L-type, rim. The with an truck K-rim; negligence in design defect K-rim, a solid rim has contrast with Hodder; negligence percent 42.5 causal ring split. side base but the Wheel, 15 Goodyear and Motor and each on injured Hodder was The K-rim which negligence on Remer Oil. Good- percent years in before the manufactured negligence was year and Motor Wheel’s rim corroded and worn accident. The was jury The for failure warn. found component there was also evidence $3,368,- damages of compensatory awarded at the parts in serviceable condition were million. punitive damages of $12.5 916 and explosion. Goodyear had been time of the life” found that the “useful jury The also 1920’s, possi- making and K-rims since expired rim had at KWX of the involved quarter still in circulation. bly a million are accident and time of Hodder’s discontinued Manufacture of the KWX was failing negligent in to de- not Hodder was 1955, Goodyear became 1962. After expired. life had that the useful termine separa- danger pressurized of the appeal aware from a Motor Wheel Goodyear and By rim asemblies. multi-piece tion of its and the post-trial motions denial of their 1970’s, using safety appeals the alloca- was and Hodder judgment, films, manuals, advertising, interest posters, and an tion of his tort review granted to make accelerated promotion of standards item. We OSHA maintenance and re- this court. known information on dangers
pair of K-rims and to warn about I. misassembly or use associated with (1986), pro- subd. any of parts. Hodder saw this Minn.Stat. worn never action, “it liability products vides that a material. remounting wheel to apparently ploded as Hodder was The flat tire Hodder was to fix was version position. The second its inner dual wheel. What is uncertain tin inner dual outer the nonflat KWX rim was on assumes the KWX rim was on the inner or outer whether the get at this wheel Hodder had removed jury accident dual. dual. The could have found the rim), (which L-type had an ways. flat inner dual happened The first version one of two exploded Hodder wheel the outer dual rim was on the flat inner assumes the KMX removed, having remounting remounted it after repaired, and reas- dual. Hodder had repaired repaired inner dual. flat tire and the tire ex- sembled the hand, designer, ing Goodyear, on the other fault. a to a claim is a defense that, says just life defense is manufacturer, of the useful or seller distributor defense, any injury thereof, injury complete bar to oc- part that the product or a curring product the useful life of the expiration after following the sustained parties expired. has Both select remarks product.” ordinary life useful states, hearings legislative added.) made (Emphasis Subdivision support po- their is not neces- useful life defense which product life of a “The useful legislative history is product, but sition. We think the sarily the life inherent inconclusive, much is certain: The reasonable but this during which with period expanding legislature to the was concerned about be useful safety product should say liability intended to limit products on to goes The subdivision user.” open-ended liability aging products. by reference to period “shall be determined prod- question is to extent that of similar for us what experience of users purpose accomplished. has of the factors been ucts,” then lists some into account.2 be taken typical Section 604.03 is not a statute of repose. repose A statute of starts the limi- read to the the statute was In this case bringing and, special questions, period tation an action from jurors, in answer or sale of the K-rim’s useful life the date of manufacture that the found negligent product, limitations unlike a statute of expired and Hodder was had injury. A the useful life which starts from the date of failing determined to have post- typical repose specify pre- denying Goodyear’s statute will expired. In had sumptive years an motions, ruled that the number after which the trial court trial *5 Here, however, brought.3 inapplicable action cannot be life defense was be- useful by period K-rim limitation is determined the cause, having found the the jury the jury warnings, injury of fact after occurs. The accompanied by adequate trier by “reference to period during with makes this determination there never was a which products,” and takes into the users of similar safety the rim was useful to reasonable account, among things, dete- words, other natural by user. In other the statute’s own art, rioration, definition, progress of the climatic and the K-rim never had a useful conditions, peculiar repair prac- other local life. tices, specified by life as the the useful Hodder, course, agrees the trial with manufacturer, any user modification. and Alternatively, ar- ruling. court’s concept am- gues simply one The statute’s useful life the useful life defense is biguous. if life refers factor for in It is not clear useful the to consider determin- anticipated provi- 2. its Six states have useful or life Subdivision 2 of section 604.03 reads in entirety: liability products sions in their states, statutes. five presump- coupled product useful life is with a The useful life is not necessar- the of a ily Connecticut, product, (or, exception the life but is the period inherent in the is an tive period during safety reasonable which with repose) expiration of the to a statute of and product the period should be useful to the user. unambiguously recovery. Conn. useful life bars by to the shall be determined reference Code, (1987); 52-577a Idaho § Gen.Stat. experience products, taking similar users of 6-1403(2) (Supp.1987); Kan.Stat.Ann. § present, past into account de- conditions (1983); Tenn.Code Ann. § 60-3303 § 29-28-103 (1) velopments, including not limited to but (1980); (Supp.1987). 7.72.060 § Wash.Rev.Code wear and from natural tear or deterioration prod- explicitly provides that use of a Arkansas causes, art, (2) progress of the economic the beyond "anticipated life" is an element of uct its changes, developments within inventions and comparative 16-116-105 § fault. Ark.Stat.Ann. (3) industry, the the climatic and other local (1987). appears state to be the Minnesota user, (4) peculiar policy conditions the the a expiration life as of useful simply labels that repairs, of the user and similar users “defense.” (5) replacements, renewals and as stated the useful life repose is that it has One effect of a statute of manufacturer, by designer, the dis- potential barring tributor, even before product or seller of the in brochures consti- of action accrues. This raises pamphlets the cause product or with the or in furnished by parties, (6) questions, product, briefed a notice tutional attached to the product by modification of the the user. which we do not reach. product “nothing in- tion of the particular product has to do the life of person’s Further, if the injury, or a caused conduct.” be- volved which mea- is to be particular product action,” applies “any life of that cause the defense products of all like by the useful life sured injury even a user’s to a attributable manu- manufacturer, or by particular made that facturer’s failure to after warn barred product or generic life of some product’s expired. useful life has seemingly The statute industry norm. claim, Notwithstanding Goodyear’s approaches, encompass all three tries to seems to us that section 604.03 does have particular The presents problems. but this something particular person to do with the may con- accident product involved using particular product. who is Use- spans life different ceivably have several period product life is ful is “useful measurement is used. depending on which Id,., user.” 2. A factor to subd. problems. statute There are other * * * policy considered is “the of the user product original- a surely to cover is meant repairs, replacements.” as to renewals and which becomes “defec- ly nondefective but “any Another factor is modification of Id. long age. prod- how must a But tive” with product the user.” Id. A review of being originally labelled uct last to avoid legislative hearings suggests also the statute also cover an Does defective? legislature thought the obviousness of product? product A originally defective product’s particular deterioration to the initio, but not cause may be defective ab might user be a consideration determin- span of normal life a nonde- injury until the too, ing Significant, fact useful life.4 expires. prod- If these product like fective legislature first considered and covered, as the trial court ucts are not 15-year a true statute of re- abandoned ruled, life statute is irrelevant the useful 338, 3, (sec- Legis., pose, H.F. 70th liability products most claims. 18, 1977), reading, April ond House turn, problems, questions raise These adopted concept life de- instead a useful product role of the user of the about the study federal task force rived from a 1977 user, owner, (who may temporary be the products liability. Dept, of See U.S. hypothetical average person) in deter- Commerce, Report, Interagency Final mining product’s useful life. Hodder Liability Task Force on Product *6 relies points out the useful life definition report, cursory analysis, en- The final with prove many of the same factors used to concept, the the useful life but task dorsed design defect, manufacturing defect and specifically recom- legal study force’s warn, result the failure to with the odd that only that manufacturers utilize a mended support of same evidence is a cause used disclaiming liability product for a notice Nevertheless, this action and to defeat it. legal specific period of time. The after a may legislature intend- exactly be what the study contrasted the “useful-life-disclaimer say the ed. But Hodder also seems that of approach” with more “drastic” statutes a “reason- incorporates useful life defense reasoning repose, that a claim is to be “[i]f care, i.e., person” the de- able standard of occurs, injury it seems barred before plaintiff operative fense is not unless the equitable employee that the more to ensure product is user knows or should know using he is or consumer knows that longer reasonably no to use. Good- safe risk, product his and that if he is at own year 604.03 by saying counters section against no ie., injured, there will be repose, must be viewed as a statute of Inter- the condi- the manufacturer.” Id. at 28-29. entirely the defense focuses inquired example, Spear who allows the muffler to rust off but continues using 4. For Senator in com- becomes deaf. The when use- the mower until he mittee how consumer determines * * * ends, damage prudent no claim for' ear ful life and a con- user would have "what provision the lawnmower or muffler manufactur- sumer under this kind of a [does] prod- implication precautions er. The clear is that the deteriora- take reasonable not to use a user, (Committee tion was obvious to the who failed to uct when useful life has worn out.” 1, 1978). continuing Hearing, exercise reasonable care in to use Feb. Senator Davies re- product. sponded hypothetical with a lawnmower user along weighed expiration life useful subd. includes section estingly, aspects liability all the of the determining useful life with other among factors finding negligent, in not product’s case Good- notice the manufacturer’s negligent, comparing in year and Good- life. useful fault. This year’s fault with Remer Oil’s clear. There will be cases much is proper. was reasonably prudent user should where a expired liability ag- has to limit open-ended useful life How product’s a know life ing products perplexing. no reason is The useful the user has instances where and seems, attractive, Goodyear way knowing. approach glance, at first know nor noted, case, user one on clos- in is as commentator has argues that either but recovery. adopt study, decline to these statutes “seem incoherent from We er barred theoretically operationally.” of useful life Expiration both this construction. Schwartz, Products, Products, legislature New we think the Old a defense but Law, Law, 58 saying Evolving it is an abso- N.Y.U. stopped short Retroactive has Indeed, defense, it for us to take author is not L.Rev. lute especially possible in of the mixed if it is to devise worka- step, view wonders that given by repose that measures the time signals statute. ble statute concept. may It period a useful life be hold, therefore, expi that feasible, until that such statute product’s life under sec of a useful ration arrives, apparently, time the courts that weighed by the 604.03 is a factor to be tion simply suggests, Professor will Schwartz determining fault of the manu jury in to monitor for directed ver- have motions the user. fault of facturer aging products. closely dicts cases words, emphasizes to the the statute other importance, determining fact the trier of II. liability, considering wheth
comparative useful product er has outlived its life. jury The was asked whether jury to the Section 604.03should be read negligent it knew or reason- was because instructions, pre part perhaps of its with ably danger have in- could discovered statutory de fatory statement rim, the KWX truck volved use of fense, is to applicable, if found to be accompa- rim and the KWX truck factors, considered, along with other adequate warnings. The nied an- evaluating the the manufacturer conduct of question “yes” then found swered sepa and the user. There no need for negligence a cause Hodder’s questions given special rate verdict as were that it injuries.5 contends had jury’s eval in this case on useful life. warn; continuing duty to but if it post-sale, will uation of the useful life defense be did, duty; complied any but in special ver reflected its answers to the was not a cause event failure to warn questions dict on fault. injuries. of Hodder’s *7 case, found, safety in If in the use of K-rims did jury In this an hazards Goodyear until after superfluous to a that not become known to question, swer injured life This an after K-rim which Hodder expired. K-rim’s useful had sold, Goodyear jury’s made and did have a swer is not inconsistent with the was and findings duty other jury post-sale of fault. The have to warn would marketing questions and handled the of 5. Similar were submitted for defend- in 1964 thereafter Corporation amply ant Motor Wheel firmatively, and answered af- K-rim. The established that evidence jury assigning percent then 42.5 duty to warn about Motor Wheel assumed a K-rims, Goodyear percent to causal fault Motor Wheel. The defendants and 42.5 to Goodyear. We which it shared with argue that be- submitting in did not err hold the trial court Wheel or cause Motor did not manufacture sell opin- duty ion, In this to warn to Motor Wheel. rim, duty it had of the KWX product’s no to warn Goodyear, brevity, we refer whenever danger. Motor Wheel manufactures a Wheel, unless context this includes Motor K-rims, products variety of wheel but not but it otherwise indicates. text wholly-owned subsidiary Goodyear became a of warn, occasion and to that have not had instruct so users of used We similar users? Jury- question apprised safety before. K-rims would this be hazards to deal with says which, manufacturer time, a fully at an earlier were not Instruction Guide keep informed scientific obligated appreciated. continuing duty A is to warn field, in its and knowledge special and discoveries in arises cases. We think this states that “the comment a committee a case. is such judged at the time the knowledge should be The trial court instructed the question is manufactured.” in product using instruction, jury, the JIG that if Ass’n, Judges Minnesota Prac- Minn.Dist. warn, duty a “and if there was the KWX 1986). (3d Goodyear ar- tice, ed. JIG 119 accompanied by rim truck was not ade post-sale knowledge of means gues this warnings instructions, quate then duty for a to warn. danger not a basis Goodyear/Motor negligent.” Wheel drafted with time-of- 119 seems be JIG added.) instruction, (Emphasis con mind, primarily in but it does warnings sale Goodyear, finding tends in effect directed preclude post-sale duty purport to because, negligence admittedly, there might what the be nor to declare law warn warning on Hodder’s K-rim. was subject. that words, Goodyear the word other construes case, hold the facts of this we On warning “accompany” to mean the must be continuing post-sale duty to warn that a go along affixed to or somehow with adequately and was submitted. existed Cf. Goodyear argues persuasively rim. tire Corp., 358 v. Motors Comstock General itself, affixing warnings to rim that Hun Mich. 99 N.W.2d having rough in mind the wear to which of K-rims have been dreds of thousands and, impractical; any put, rims are was changes of tire over the used millions way, injuring the rim Hodder was that incident; years of the 134 or so without Moreover, argues already circulation. occur, explosions many K-rim which did Goodyear, the trial court’s instruction made explained by improper servicing or misuse. evidence it introduced of irrelevant all the Goodyear steadfastly maintains its K-rim is warning made subsequent its efforts product properly. a safe if used Neverthe films, manuals, through posters, safety less, late 1950’s became evident concede, advertising. in the context of temperamental; that K-rims could case, “accompany” that the word this margin servicing error in K-rim as the inapposite, we are satisfied that assembly dangerously small and it arguments and the was adduced evidence might explosively separate seemingly trial, during long made were provocation; explosions little that when did narrow, interpreta give a technical did not occur, injury usually serious or death re instruction but under tion to the court’s sulted; and, therefore, great care was states, warnings, JIG 119 were stood required handling servicing way” as to “catch “set out such to be Further, Goodyear K-rims. has continued ordinary user. attention” of business, and, rim years over the in the tire duty says it had no although production Goodyear all K-rim also was discon have Hodder knew or should tinued continued to ad because warn danger. While Hodder its of the K-rim vertise K-rims as late as has known training servicing continued to sell tires and tubes for use had received rims, appreciation of the his Finally, multi-piece with used K-rims. un per- not so duty dangers. dangers dertook a to warn of K-rim inherent involved *8 circumstances, Goodyear a matter of Under these it seems to us fect as to absolve continuing duty Goodyear duty that had a to law of its to warn.6 fore, useful life. company report it has an unlimited 6. The 1973 Smith internal thinks part: states in regard knowledge expert with eyes community, We have In the of the user published, information is part secondary component. maintenance. Such is a It is [K-rim] He, may in- sturdy, heavy part, not reach the a but the information made steel. there- jury not did, fact, recognize jury a con- to consider and the was Goodyear contends, forced, and, Goodyear to absolve by the late tinuing duty to warn accident, liability it unaware Remer of because was 1970’s, it distrib- Hodder’s before regulations. by of the OSHA means warnings instructions uted manuals, films, and ad- posters, safety find either in various We no error however, could have vertising. jury, The evidentiary rulings challenged by Good warnings were inad- Goodyear’s that found post-1955 K-rim year. Evidence of We hold the K-rim users. equate to reach by Hodder. explosion accident was offered Goodyear negligent finding jury’s This evidence was relevant on notice duty to warn is sustained its performing dangerous propen Goodyear of the K-rim’s question, a closer While the evidence. warnings needed. The fact sities and could find that breach jury hold the we also may have been caused other accidents inju- of Hodder’s duty a cause of this diminish their relevance on misuse does not Co., 407 v. Ford Motor ries. Kallio Cf. Wagner failure to warn. v. Interna Cf. (Minn.1987). N.W.2d Co., Harvester 611 F.2d 230-31 tional Cir.1979). think, too, (8th a sufficient III. testimony foundation for admission of percent at jury (7 found Remer Oil 15 days the other accidents was laid about argues percent- Goodyear foundation), that the fault. pretrial were devoted to greater but age would have been and, expert gave only of fault while Hodder’s sum Remer, jury instructions. accidents, for erroneous exten maries review, hand, by notice of con- using the other sively expert cross-examined a matter of law it was not at fault. admitting reports tends as files. In of other full accidents, its the trial court did not exceed may may or not have Hodder allowable discretion. K-rim, changed mounted on a a flat tire Bradford, acting Lynn In 1979 di depending on which version of the accident Investiga supra. of the Office of Defects jury accepted. footnote rector See outer, dual, Department of United States If K-rim was on the nonflat tion (fresh Transportation, a letter to hammer marks wrote there was evidence rim) strongly recommending Goodyear vol indicating improp had on the remaining from untarily recall the K-rims erly hammered the rim to return the wheel initiating Goodyear considered to the axle. If K-rim was on the flat service. declined, dual, apparently dis inner Hodder had recall but then there was evidence had, K-rim as Brad improperly agreeing In either whether the serviced the rim. it, event, put safety defect.” negligence training Remer ford “an inherent Oil’s the Bradford letter trial court The trial court admitted Hodder was fact issue. The objections that it was Goodyear’s Goodyear’s jury, also instructed the over over conclusory opinion, untrust objection, Bradford’s possible that Remer Oil’s OSHA finding by worthy, justi violations if had not a factual were excused Remer and, therefore, hearsay inad being regula government, fication for unaware of 803(8)(C) under the Minn.R.Evid. tions. was not error. Restate missible See (Second) (1979) exception hearsay rule. The ment to the Torts 288A understood, however, that Bradford’s justification being ignorant Remer Oil’s governmental find- regulations was not a formal of the OSHA was a fact for the letter does, (pro- part apparently won’t function volved user. If it he doesn’t believe the doesn’t tire). up support see reason for it. We do not follow for the He doesn’t believe vide published personal information with contact endanger if he feels it is will him. Even it why. to show how and the reason unserviceable, replace may not be able to he knowledge expert regard We have instructions; or his bossesf] due to ownerfs] serviceability negative (possibly type of may replacement available. He not be or a knowledge). is not Such information detailed may willing because he to take a chance publications. in our The involved user can- rim, hurry. he’s in a afford a new can’t "good” part tell from a "bad”. He *9 binding Goodyear, cannot This is ing and we not a case where the manufactur- gave warnings. in er Goodyear warn, court discretion say the trial abused its did warning message, and its insofar admitting In re as con- the letter. Multi-Piece Cf. tent, generally adequate. was For exam- Litig. No. Rims Prods. Liab. M.D.L. ple, Goodyear’s safety film showed a K-rim (Bradford (W.D.Mo.1982) P.Supp. 149 exploding tire dummy figure into a with admissible, under Fed.R.Evid. letter ruled every devastating bit as much vividness as instructions). 803(8), proper cautionary Hodder’s own video trial demonstration. Goodyear’s claims We have also reviewed Goodyear’s posters, manuals, and mass respect admission of OSHA of error with mailings dangers told of safety regulations, expert testimony, and the Hod- measures to be problem taken. The was tape of a K-rim der video demonstration these materials inadequate received rulings explosion, find these and we were 10-year period, distribution. Over a for proper exercise of the trial within the example, appears Goodyear’s it repre- sales court’s discretion. only sentative visited 26 towns in all of
northern Minnesota with literature on K- IV. dangers. too, rim large part, In Goodyear left shops the initiative to tire to write in Goodyear challenges the mil $12.5 safety for in response material to its inad damages punitive lion award. For there to journals. trade damages punitive the defendant must be have acted with “willful indifference to the So the issue becomes whether Good- * * * safety of others” and this conduct year’s inadequate distribution of K-rim must be established clear and convinc warnings willfully By indifferent. ing (1986); 1962, Goodyear evidence. Minn.Stat. 549.20 produc- had discontinued tion of Gryc Dayton-Hudson Corp., v. the KWX and 1969 it had discon- N.W. (Minn.1980). production tinued all K-rims. open- 2d 727 Because of the reports withheld some accident and told the punitive ended and volatile nature of dam Department Transportation produc- ages, this court exercises “close control tion had been discontinued for commercial imposition puni over the and assessment of reasons, whereas could have found damages.” Equitable tive Lewis v. Life growing concern was because over Co., (Minn. Assurance 389 N.W.2d In explosions. Goodyear’s chairman 1986) (quoting source). another We con protecting expressed concern about the tire punitive damages clude proper but dependent market which was tube lesser amount. rims, multi-piece and K-rims in con- stock Gryc upheld In punitive we a million $1 study In tinued to sold. the Smith damages award the manufacturer reported danger- inherently K-rims were highly flannelette, of a flammable cotton ous. 1974-75 did un- Not until manufacturer, though where the even warning program, dertake a but then bud- available, per- flame-retardant cotton was geted $100,000 year for this about marketing sisted in product its flammable purpose, company objections after “to profitable. because it was Gryc, more In us[ing] advertising projects dollars for then, the willful indifference consisted of advertising product pro- which are not marketing continued defectively of a manu- 1976-77, Goodyear motion.” In offered a product. factured In this case we do not Program, offering Safety Exchange Rim defectively have a product manufactured purchase take used K-rims on of a new defectively designed nor do we have a prod- discount, L-rim at a the discount was uct; rather, the manufacturer’s fault here small; unrealistically only four K-rims negligent consisted of failure to warn. The program were turned nationwide and the question, then, Goodyear’s is whether con- 1979, Goodyear abandoned. balked failing duct in to warn rose to the level of government’s request at the a volun- willful indifference. tary pushed recall and instead OSHA *10 words, jury Goodyear design. reason of In other did Not until 1988
regulations.7 catalog. found, regular in its regulations that neither the the OSHA as of have the K-rims described Goodyear K-rim, L-rim, itself single-piece While nor nor the it ex-' properly, used dangerous if not rim, jury safer than the KWX.9 The was of distribution plained its less-than-efficient though the L-rim in so found even was reach you cannot warnings by saying single- regular use in 1955. As for the that Goodyear warned everybody. While rim, piece acceptance heavy its for load disastrous ef- explode with tire assemblies gradually years came in later trucks and common to not unknown fect—a fact development larger on the tires tubeless warnings usually ne- Goodyear’s all rims— Yet, arguing punitive progressed. in dam- special hazards of glected single out the to argued design ages, Hodder the K-rim was there was evi- K-rim. conclude We L-rim because both the and the defective jury could find that from dence which safer, single-piece rim were and that Good- downplayed deliberately and ob- Goodyear therefore, put K-rim year, should have out protect the K-rim to dangers of scured the said, warnings “Do Not which Use thereby exhibit- tire sales its tube and Product.” safety of oth- indifference to ed willful finding a nondefeetive ers. view of the of design, KWX-rim we do not think the evi- damages argues punitive that Goodyear convincing is clear and that Good- dence however, awarded, to not for failure were year willfully telling indifferent in not was recall, says which it warn but for failure Only use the K-rim at all. users not to impermissible.8 question,” “The legally the extent that failed to warn Hodder, “is there is a responds not whether to use the K-rim was the evi- users how common law for failure cause of action at recall, convincing of willful indif- simply whether the failure to dence clear but (who give as a remedial dis- consumer notification ference.10 Yet Hodder’s counsel action) failure to warn measure is evidence of a a recall cause of asked the claims giving punitive dam- and of conduct rise to time, course, (at when defec- jury of ages.” point taken. Hod- Hodder’s is well unresolved) design yet for tive issue was of action der never claimed a recall cause $12,500,000punitive damages on based any jury given on re- nor was instruction 250,000 recalling K-rims at $50 cost call. $12,500,000. jury The each. The awarded jury inescapable that conclusion Nevertheless, remembered it must be appreciable-punitive .damages on a awarded rim that the found the KWX not J the, by theory jury-itself--had rejected. present an risk of harm unreasonable Goodyear’s argues of harm and the seriousness of that harm 7. Hodder that willful indif- "pressure” feasibility any precau- ference its is demonstrated and burden adopt safety regulations, OSHA to so that the be effective to avoid the tions which would "liability onus" would be transferred to service and, balance, harm," to consider in the final personnel. campaigning We would think availability things, among of other “[t]he other regulations opposite OSHA of indif- shows the products to meet the same need." and safer lies, rather, Goodyear’s ference. assuming ing indifference program pursu- OSHA’s absolved it of issue here is not which kind rim 10.The vigorous warning program of its own. better, better, whether, if one rim was Good- indifferent, failing willfully year there is no common law contends rim, recall, duty but in not citing to warn about the less safe Firestone Tire & Smith v. Co., (8th Cir.1985), withdrawing Rubber more safe rim. Between 755 F.2d for the awarding and hence gradual recall affords no basis there was a evolution 1955 and 1981 further, event, punitive damages; involving relative merits of the various rims punitive damages award based on recall preempted by the National Traffic and Motor Against many complex considerations. jury’s finding background that the K- and the Act, Safety seq. Vehicle 1381 et U.S.C. defectively designed, Goodyear's rim was not (1982). We need not this issue. reach cannot be said not to recall used K-rims election high- indifference which meets the to be willful 9. court’s de- trial instruction defective convincing proof. standard er clear sign required jury, followed JIG among things, to balance "the likelihood other therefore, punish and deter the conduct found to be persuaded, areWe damages willfully punitive safety cannot indifferent to the of others. the award jury’s conclude, case, of obvious error appropri- stand because in this that an justice conclude that We also punitive damages calculations. ate award should be $4 *11 reducing punitive the award, is best served therefore, million. The is reduced new by granting a damages rather than from to $12.5 million million. $4 Gordon, 309 Minn. Stanger v. trial. See 628, (Minn.1976) 222, 244 632 N.W.2d V. given). trial (reduction new rather than 176.061, Minn.Stat. subd. 6 § When, here, liability and issues of as the (1981), plaintiff employee’s divides a tort fairly damages been compensatory have recovery employee between the and his em again, would we tried and need not be tried ployer roughly as follows: After deduction issues; all grant a new trial on not want to collection, expenses paid of of one-third is grant a new trial on hesitate to and we employee outright; to the the remainder is alone, the evi punitive damages where employer compensa to the established, reimburse for fault, yet now dence of paid; remaining any tion balance there again exhaustively presented to decide goes employee after to the a cred but with egregiousness of that fault. Further the employer against compen more, “belong” it to the future punitive damages do not to compen payable. challenges sation the tri plaintiff in the same sense as the damages application al court’s of the 6 satory damages. Punitive subdivision defendant, compensate recovery compensatory not the to his of punish the formula compensat damages. plaintiff already parties agree punitive has been dam who argue public ages go employee ed. the outside the formu Indee d some the more.,oiLa_claim to collect a should have la. plaintiff. the In than punitive award. statute, Under subdivision 7 of the the event, public unique, it is because of the employer separate “a additional cause has aspect punitive damages of that the court party of action” the third tort- supervision over exercises a much closer past future medical ex- feasor for compen these awards than is the case with penses. Here Remer Oil was awarded satory awards. $1,238,916 ex- past and future medical reduction, determining In the we look for judge trial excluded this penses and the egregious proportionality between the mis- formula. Hod- sum from the subdivision 6 damages, keep- conduct and the amount of in- der claims this sum should have been ing justly in mind “those factors which agree. cluded. We upon purpose punitive bear the dam- recognized spe- previously the haveWe (1986) ages.” Minn.Stat. subd. 3 § cial, employer’s the independent nature of added). Here, all, (emphasis first of ex- statutory of action for medical cause substantially award must be discounted penses 7. Travelers under subdivision See per-rim the erroneous calculation. recall 131, 133 Springer, 289 N.W.2d Ins. Co. v. Secondly, danger- while focus is on the (Minn.1979); Metropolitan Tran- see also propensity explode, ous of the K-rim Bachman’s, 311 N.W.2d sit Comm’n v. egregious must, misconduct under (Minn.1981). we Springer, Under jury’s findings, be restricted to the inade- third-party claim for employer’s held the itself, warnings; quacies product employee expenses exists when the medical remembered, must not be was found party the third because is unable to sue defective, in design neither nor manufac- re- meet the threshold employee cannot ture, complete nor was there a failure to a tort no-fault act for quirements of the appears It jury, punish- warn. that the action. defendant, ing may have included limit- action could be If the “justly bearing” punitive factors not subdivision expenses, direct damages. medical Finally, purpose punitive ed to mind, might appropriate as damages kept namely, urges needs to be Remer Oil nevertheless, employer’s employer, application his general exception to the narrow expenses subject recovery medical 6 formula.11 the subdivision result re- 6 formula. This the subdivision however, legislature expanded subdivi- em- employer spects the allocation expenses just medical 7 to cover sion statutory rights inherent ployee compensation payable.” “other in- 176.061. In those of section scheme By amend- Minn. Laws ch. employee does not or stances where ment, to extend legislature meant action, subdi- third-party cannot maintain right employer’s Springer to insure the give employer, 7 continues to vision compensatory benefits nonmedical recover its bene- Springer, right to recover in instances expenses as medical well case, So, in this paid payable. fits right recover tort employee’s where the $3,368,916 compensatory award entire no-fault act. All- damages is barred *12 section subject to allocation under Industries, Eagle-Picker state Ins. Co. v. subd. 6. 324, (Minn.1987). Inc., 326-27 410 N.W.2d course, recognize, the 1983 of We attorney calculating Hodder’s fees After case, govern Hodder’s does not amendment award,12 the trial compensatory for the is construed to pre-1983 if the statute costs taxed to judge excluded expenses from the subdivi- exclude medical ($52,372.41) prorated remaining col- the formula, that the amended sion 6 it follows attributable costs to exclude costs lection cases, statute, must exclude other in other punitive damages. Exclu- recovery as medical compensation payable as well proper sion of costs taxed expenses. Employers could the future pay Pro- did not have to them. as Hodder entirely bypass 6 allocation however, the subdivision was, legal rating the other costs suing “separate additional” by out their incorrect, costs ex- as we do believe action; if the 6 formu- cause of subdivision damages establishing punitive pended for employer’s of the apply la does not damages can compensatory and those for interest, subrogation employee would the separated in case. realistically this be recovering longer of at least no be assured formula, 6 Under the subdivision recovery one-third of the tort for himself employee his one-third the receives after employers expenses. Nor would after recovery outright, tort the share of the employee’s equitably share have to for employer is entitled reimbursement recovery. think this result cost of We paid from compensation already benefits neither desirable nor was intended. Ordinarily, re remaining balance. hold, therefore, when, rep by an amount imbursement is reduced proportionate here, resenting employer’s includes employee’s tort action recovery.13 tort separately by share of the costs of the expenses medical asserted 6, attorney expense fees should be calcu- 7 medical action sion Hodder’s 11. The subdivision 755, purposes from that amount ch. lated for formula was enacted in 1953 Minn.Laws compensatory legislature Apparently from the nonmedical 6. was then react- rather than § ing Lakie, as in the trial court’s calculation. v. 240 Minn. 61 award to Dockendorf (1953), which had allowed the com- N.W.2d 752 pensation subrogation 6(c) to recover its insurer Subdivision calculates the amount expenses claim for benefits and medical out of employer’s for reduction reimbursement employee’s general, unsegregated plaintiff ver- recovery as follows: costs third-party tortfeasor. See also dict Lakie, follow-up opinion, v. Dockendorf Minn. N.W.2d 728 Since then third-party has been further modified action subdivision 6 allocation formu- and the current years, except Springer, la added. Over the the nature of the subdivision 7 action has not and, practice, has been treat- been examined ambivalently. ed compensation hold the entire 12. Because we subject to under subdivi- award is distribution facts, hired these equities Remer Oil its we think the
Apparently because
lie with
subrogation
attorneys
represent
employee
its
and there is
justification
own
trial,
the trial
throughout
straying
statutory
interests
from the
formula
Oil’s reim-
Remer
court did not reduce
which is intended “to ensure that
those
share of
by
proportionate
its
equitably
bursement
benefited
share
incorrect.
employee’s
This was
costs.
obtaining
the cost of
that recovery.”
Cronen,
remanded OF In the Matter WELFARE and K.K.
C.K.
COYNE, J., part in took No. C9-87-1672. of this case. or decision consideration Supreme Court of Minnesota. July 1988. ORDER court, having en considered banc rehearing in petitions the above entitled
case,
IT IS HEREBY ORDERED: rehearing, petition In its Good-
1. (as Company one of its
year Tire & Rubber our attention to an amend-
arguments) calls pre-verdict
toment Minn.Stat. § statute, legis- enacted the 1988
interest 13,1988
lature, April “to cases effective all ch. See pending.” 1988 Minn.Laws
then pending” provi- 6. The “cases then amendment to
sion means that the 1988 relates to the rate
subdivision which 13; interest, April to be effective contention,
contrary Goodyear’s
“pending” language has no effect on the allowing pre-
remainder of subdivision already in force interest which was
verdict by the 1988
and was left undisturbed
amendment. respects, petitions for re- all
hearing Goodyear Tire & Com- Rubber
pany, Corporation, and Remer Motor Wheel Company stay denied
Oil vacated. attorney pursuant
3. No award of fees Minn.R.Civ.App.P. 140.03 is allowed.
4. The taxation of costs and disburse- by Goodyear Compa-
ments Tire & Rubber
ny hereby Hodder are Dale L. de-
nied.
COYNE, J., part in took no
consideration or decision of this case.