This is the second appearance of this case before this Court. On July 13, 2000, we affirmed the jury’s award of compensatory and punitive damages to appellees Six Flags Over Georgia, LLC (“Flags”) and Six Flags Fund, Ltd., L.P. (“Fund”).
Time Warner Entertainment Co. v. Six Flags Over Ga.,
1.
Leatherman
pertains only to our analysis of whether the award of punitive damages in this case was excessive. We addressed whether the award of punitive damages was excessive in Division 6 (c) of our original opinion.
Time Warner,
2. Review of Allegedly Excessive Punitive Damages Awards.
(a) The Standard of Review.
(i)
Federal Constitutional Excessiveness Claims. Leatherman
requires state and federal appellate courts to review de novo claims that punitive damages awards are grossly excessive in violation of the Due Process Clause of the Fourteenth Amendment to the United States Constitution.
Leatherman,
Because
Leatherman
applies only to excessive punitive damages claims raised under the federal constitution’s due process clause, it does not reach excessiveness claims raised under state and federal common law. Thus, state and federal appellate courts remain free to review common law excessiveness claims under an abuse of discretion standard. See id.;
Foster,
As one scholar quipped, judicial review of excessive punitive damages awards “now comes in both common-law and constitutional flavors.” Murphy, Punitive Damages, Explanatory Verdicts, and the Hard Look, 76 Wash. L. Rev. 995, 1014 (Oct. 2001). Since
Leatherman,
many state and federal courts have recognized this federal due process/common law analytical split. For example, in July 2001, the Eleventh Circuit reviewed an award of both compensatory and punitive damages in a diversity action under an abuse of discretion standard.
Middlebrooks v. Hillcrest Foods,
In
Kent v. A. O. White, Jr., Consulting Engineer, P.C.,
(ii)
State Common Law Excessiveness Claims.
Because
Leatherman
applies only to excessiveness claims raised under the due process clause of the federal constitution, precedent dictates that we must continue to review state common law claims under an abuse of discretion standard.
Hosp. Auth. of Gwinnett County v. Jones,
Applying this principle to appellate courts, the Supreme Court of Georgia explained that reviewing courts lack
the broad discretionary powers invested in trial courts to set aside verdicts, and where the trial court before whom the witnesses appeared had the opportunity of personally observing the witnesses has approved the verdict, this court is without power to interfere unless it is clear from the record that the verdict of the jury was prejudiced or biased or was procured by corrupt means.
(Citation and punctuation omitted.)
Smith v. Miliken,
Because the Supreme Court of Georgia has not embraced the idea that an award of punitive damages is a question of law, we believe we are bound by precedent to defer to the jury’s factual decision-making process and to apply an abuse of discretion standard when evaluating whether an award is excessive under the common law. See, e.g.,
Hosp. Auth. of Gwinnett County v. Jones,
(b) Criteria for Evaluating “Excessiveness” of Punitive Damages Awards.
When an appellant has properly raised a federal due process claim, the reviewing court must apply the three “guideposts”
4
set out in
BMW of North America v. Gore,
The Supreme Court of Georgia has held that an award of punitive damages under OCGA § 51-12-5.1 is to deter the repetition of reprehensible conduct by the defendant or others.
Hosp. Auth. of Gwinnett County v. Jones,
Before the verdict will be set aside on the ground that it is excessive, where there is no direct proof of prejudice or bias, the amount thereof, when considered in connection with all the facts, must shock the moral sense, appear exorbitant, flagrantly outrageous, and extravagant. It must carry its death warrant upon its face. Although a verdict may be large and generous, where the evidence abundantly authorized a finding for the plaintiff, this court does not feel authorized under the law to set the verdict aside on the sole ground that it is excessive, there being nothing in the record to indicate prejudice or bias on the part of the jury, and the verdict having been approved by the trial judge.
(Citations and punctuation omitted.)
Western & Atlantic R. v. Burnett,
3. The Award of Punitive Damages Against Appellants.
(a) Appellants Abandoned Their Federal Due Process Excessiveness Claim.
In their enumerations of error, appellants failed to assert that the award of punitive damages violated the Due Process Clause of the Fourteenth Amendment to the United States Constitution.
7
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Instead, they simply asserted the award was “excessive.” In two sentences at the very end of their appellate brief, however, appellants noted that “punitive damages also violate [ ] the Due Process Clauses of the Georgia
8
and United States Constitutions,” citing
Gore.
Appellants did not argue that the award was “grossly excessive”; rather, it alleged the appellees’ injury was “purely economic in nature” and “evinced no indifference to or reckless disregard for the health and safety of others.” Pretermitting whether this adequately enumerated an “excessiveness” claim under the federal due process clause, we considered the claim of error abandoned because appellants failed to cite to any relevant facts, give record citations, or present any legal analysis supporting that assertion. Court of Appeals Rule 27 (c) (2), (3). An assertion of error followed by a case citation is
not
legal argument. As we have explained, legal analysis “is, at a minimum, a discussion of the appropriate law as applied to the relevant facts.”
Dixon v. MARTA,
(b) We recognize, however, that the Supreme Court of Georgia may choose to apply Leatherman and Gore to all excessive punitive damages claims or to the claim presented in this case. Therefore, as a matter of judicial economy, we also review the punitive damages award de novo and apply the Gore guideposts.
(i)
Reprehensibility.
We begin our analysis by examining the degree of reprehensibility of appellants’ conduct in this case. In examining the degree of reprehensibility of a defendant’s conduct, the Supreme Court in
Gore
outlined a number of “aggravating factors,” including whether the harm was more than “purely economic in nature,” and whether the defendant’s behavior “evinced indifference to or reckless disregard for the health and safety of others.”
Gore,
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After closely scrutinizing over 80 volumes of record and transcript during the first appeal, we found that the evidence adduced supported the jury’s conclusion that appellants acted in concert to breach SFOG’s fiduciary duty to its business partners. Six and a half pages of our published opinion are dedicated to describing appellants’ scheme to devalue their partners’ investment for their own benefit.
Time Warner,
Appellants’ conduct toward its partners and those who invested in the limited partnership was part of a premeditated plan surreptitiously executed over a period of years. Appellants’ conduct was deceitful, self-serving, and financially damaging. More importantly, however, appellants’ conduct was a breach of fiduciary duty, a violation of a confidential relationship of trust requiring the utmost in good faith. Even though Flags and Fund were, as appellants asserted at oral argument, controlled by “sophisticated business people,” they were nevertheless entitled to rely on their general partner. Appellants? conduct was, in short, the kind of behavior we find “deserving of reproof, rebuke, or censure; blameworthy” — the very definition of “reprehensible.” Random House Webster’s Unabridged Dictionary (2nd ed.), p. 1634. A California court, which recently considered a comparable issue upon remand under
Leatherman,
held: “Trickery and deceit are reprehensible wrongs, especially when done intentionally through affirmative acts of misconduct.” (Citation and punctuation omitted.)
Simon v. San Paolo U.S. Holding Co.,
(ii)
Ratio.
In
Gore,
although the U. S. Supreme Court held that the ratio of compensatory to punitive damages
9
is a factor to consider in determining whether the punitive damages award is excessive, it refused to draw a bright line. The court explained that “[w]e need not, and indeed we cannot, draw a mathematical bright line between
*607
the constitutionally acceptable and the constitutionally unacceptable that would fit every case. We can say, however, that a general concern of reasonableness properly enters into the constitutional calculus.” (Citations and punctuation omitted.)
Gore,
In this case, the ratio of compensatory to punitive damages is 1 to 1.3. We see no “shocking disparity” inherent in this figure. Cf.
Gore,
(iii)
Sanctions for Comparable Misconduct.
Georgia law authorizes double and treble damages for a variety of unfair and deceptive business practices, certain securities violations, and generally corrupt corporate behavior.
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Statutory multiple damages awards are intended to deter those who might engage in deceptive practices when the risk of getting caught would otherwise be an acceptable cost of doing business. See, e.g.,
Zeeman v. Black,
Applying a de novo standard of review and weighing the Gore guideposts, we find that the award of punitive damages under these circumstances does not violate appellants’ federal due process rights.
Judgment affirmed and reinstated on remand.
Notes
This appeal is from a jury verdict in favor of a limited partnership and its sole limited partner against the general partner which from 1991 through 1998 operated the partnership’s business investment, the Six Flags Over Georgia theme park. Appellee [Flags] is the limited partnership which owns the park. Appellee [Fund] is the partnership’s sole limited partner and is comprised of individual investors. Although appellant Six Flags Over Georgia, Inc. (“SFOG”) was the named general partner corporate entity responsible for operating the park, appellees alleged that Time Warner Entertainment Company, L.P. (“TWE”), acting through and in concert with its subsidiaries SFOG, Six Flags Entertainment Corporation (“SFEC”), and Six Flags Theme Parks, Inc. (“SFTP”), assumed the role of general partner and directed the activities of the partnership. The complaint alleged, in essence, that the general partner damaged the appellees by preferring its own financial interest over that of the partnership and of the limited partner. The jury returned a verdict in favor of the appellees, awarding a total of $197,296,000 in compensatory damages and $257,000,000 in punitive damages.
(Footnotes omitted.)
Time Warner,
“In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise reexamined in any Court of the United States, than according to the rules of the common law.” (Emphasis supplied.) U. S. Const., Amend. VII.
Whether the jury’s award of punitive damages is really the result of a factual inquiry is a subject of some dispute. Certainly, as Justice Ginsburg points out in her dissent, puni
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tive damages “derive their meaning from a set of underlying facts as determined by a jury.”
Leatherman,
These guideposts are: (1) the degree or reprehensibility of the defendant’s misconduct, (2) the disparity between the harm (or potential harm) suffered by the plaintiff and the punitive damages award, and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases.
Leatherman,
“The concept of proportionality as a
legal
limitation on the amount of punitive damages applies, in Georgia, only when damages are given to compensate for wounded feelings.” (Emphasis in original.)
Hosp. Auth. of Gwinnett County v. Jones,
However, we note that many scholars have found Gore as imperfect an attempt to evaluate punitive damages awards as those fashioned by state courts. See Developments in the Law, 113 Harv. L. Rev. 1783, 1792-1795 (2000). For example, the Gore guideposts combine a number of variables that are not specifically weighted. Consequently, these “variables make it difficult for a court to find precedential value in a prior decision, because it is nearly impossible to determine how an earlier court valued any one of them.” (Footnote omitted.) Leading Case, 115 Harv. L. Rev. 356, 362 (2001).
The issue was raised in the trial court in appellants’ amended motion for judgment notwithstanding the verdict or, in the alternative, new trial.
We also find that appellants abandoned any claim of error under the due process clause of the Georgia Constitution. Had that claim been preserved, however, our analysis would be quite similar to that applied to common law excessiveness claims. See
Hosp. Auth. of Gwinnett County v. Jones,
Appellants suggested that because the award of punitive damages in this case is currently the largest in Georgia history, that it is excessive. An award of punitive damages, however, should not be viewed in the abstract or compared with awards from other cases. The punitive damages award must be viewed in its unique context, in light of the facts of the case and with reference to the actual damages awarded and the potential harm that could have resulted from the defendant’s conduct. See
Gore,
See, e.g., OCGA §§ 10-1-399 (c) (Fair Business Practices Act; treble damages for intentional violations); 16-14-6 (c) (RICO; treble damages for injury under section); 10-1-763 (b) (double damages for wilful misappropriation of trade secrets); 10-5-14 (h) (2) (treble damages for certain securities violations).
