Opinion
Civil No. 97-365-HA
October 26, 2000
Attorneys for Plaintiff :
J. Randolph, Pickett, Portland, Oregon
Marc Zwerling, Portland, Oregon
Kathryn H. Clarke, Portland, Oregon
Attorneys for Defendants :
Donald H. Pyle, Dian S. Rubanoff, Lane Powell, Spears Lubersky, Portland, Oregon
John C. Aisenbrey, Stinson, Mag Fizzell, Kansas City, Missouri
OPINION AND ORDER
On May 12, 2000, judgment was entered in this action on behalf of plaintiff, who received a favorable jury verdict following trial on April 10, 2000. Defendants subsequently filed a motion for judgment as a matter of law, or in the alternative a new trial (doc. # 173). Defendants have also moved for relief from judgment (doc. # 180). For the following reasons, these motions are denied.
1. Defendants' motion for judgment or new trial
Defendants seek judgment as a matter of law regarding the issue of the award of $1,250,000 in punitive damages, arguing that the evidence presented at trial was insufficient to support such an award. Judgment as a matter of law is appropriate when the evidence, construed in the light most favorable to the nonmoving party, permits only one reasonable conclusion, which is contrary to the jury's verdict. Omega Environmental, Inc., v. Gilbarco, Inc., 127 F.3d 1157, 1161 (9th Cir. 1997), citing Vollrath Co. v. Sammi Corp., 9 F.3d 1455, 1460 (9th Cir. 1993).
Defendants argue that a reasonable jury could not have concluded that it was "highly probable" that Crown acted with malice or reckless and outrageous indifference. After construing the evidence in the light most favorable to plaintiff, however, it cannot be said that only one reasonable conclusion, one which is contrary to the jury's, is permitted. The evidence presented at trial, if viewed most favorably for plaintiff, suggested the following: Crown's forklifts were unreasonably dangerous; the explanations proffered by Crown for failing to put doors on the forklifts were specious; Crown's collection of information was skewed and/or misleading; Crown committed misrepresentations; and Crown stood to possibly profit from disregarding important safety concerns involving the addition of forklift doors. This evidence, when accepted and viewed from a perspective favoring plaintiff, was sufficient to support the jury's decision to award punitive damages. Defendants' contentions offer rational interpretations of other evidence, which suggest that it would have also been reasonable for the jury to deny an award of punitive damages to plaintiff. While this is true, the possibility of reasonable alternatives to a jury's verdict is insufficient to compel judgment as a matter of law.
Defendants also contend that the punitive damages award should be construed as unconstitutional under BMW of North America v. Gore, 517 U.S. 559 (1996). That decision provides an analysis for determining whether a civil award can be deemed excessive. In part, the decision also instructs that a state court may not consider lawful conduct occurring outside of that state that had no impact on the state or its residents when determining punitive damages. Id. at 1597.
In concluding that the award of punitive damages was "grossly excessive" and therefore unconstitutional in the case before it, the Supreme Court identified various components to that conclusion, including: the notice the party being punished received regarding the possible severity of the punishment; the degree of reprehensibility in that party's conduct; the disparity of harm suffered by the injured party and the punished party; and the differences between the the punitive damages and the civil penalities authorized in comparable cases. Id. at 1598-99.
This court concludes that defendants had adequate notice of the potential punitive damages assessable in a personal injury lawsuit of the nature plaintiff presented. Moreover, the degree of reprehensibility has already been addressed above — when viewed in a light favorable to plaintiff, the evidence supports the jury's decision about punitive damages. The disparity that existed between the award and the injury suffered in BMW is lacking in this case, as well. In sum, defendants' reliance upon the decision in BMW is unavailing. The jury's award was not so excessive as to be unconstitutional, and lawful conduct by defendants that had no impact upon Oregon's residents was not used to inflate the punitive damages.
Defendants also seek judgment as a matter of law on grounds that plaintiff's theory that Crown's forklift was unreasonably dangerous because its design lacked a safety door should never have been submitted to the jury. Defendants contend that this claim is inconsistent with the federal regulatory scheme for forklifts, see Geier v. American Honda Motor Co., 120 S.Ct. 1913 (2000), and because plaintiff failed to present sufficient evidence in support of the theory. Plaintiff's "proposed alternative design," which — despite defendants' skewed construction — amounts to the addition of a safety door coupled with warnings and instructions, is not contrary to ANSI or OSHA standards to any extent that would prompt this court to declare that plaintiff's theory must be pre-empted.
Similarly, defendants' challenge of plaintiff's expert testimony regarding this theory is without merit. During trial defendants failed to object to plaintiff's experts on grounds that they did not follow reliable, scientific methodology. Defendants also failed to seek a Rule 104 hearing, and omitted these assertions in their pre-verdict motion for judgment as a matter of law. Moreover, defendants' arguments call for the court to weigh evidence and to assess the testimony presented — in short, defendants' untimely objections are directed at the proper weight the jury should have attributed to the expert evidence, and fail to establish that such evidence was insufficient. Plaintiff's evidence concerning design defects was adequate to present the issue to the jury.
In the alternative to obtaining judgment as a matter of law, defendants seek a new trial under Federal Rules of Civil Procedure 59(a), due to three alleged errors committed by the court. First, defendants assert that the court erred in excluding the admission of evidence concerning consultants' reports and military specifications. The court permitted defendants to present testimony that Crown's forklift was designed after consideration of test results from independent design consultants. The substance of those test results, however, was excluded. Similarly, defendants were allowed to testify that Crown relied upon military standards in designing its door-free forklift, but the military standards themselves were excluded.
Defendants contend that the exclusion of this evidence was error requiring a new trial, because the evidence was directly relevant to Crown's "state of mind" (at issue because of the claim for punitive damages), and was not offered to prove the truth of the matter asserted. This argument is rejected. The court permitted defendants to present relevant and sufficient "state of mind" evidence by introducing evidence of the independent sources relied upon for Crown's design decisions. It was not prejudicial error to exclude from the jury the content of the independent sources' work. The reasonableness of Crown's decisions and actions were at issue in the trial, not the relative wisdom or rationale contained in what the consultants concluded or what the military did. Toward that end, the jury was permitted to consider the sources relied upon by Crown, why Crown retained those sources and relied upon them, and the extent to which Crown acted in accordance with those sources' actions or decisions. Electing to preclude consideration of the merits or flaws of those other sources' actions or decisions fails to amount to prejudicial error necessitating a new trial.
Next, defendants complain that the court erroneously permitted plaintiff to add a claim for punitive damages without first conducting a hearing to examine the grounds for such damages under ORS 18.535. This court has previously concluded that the procedure identified in ORS 18.535 is not a mandatory requirement in federal court. See Pruett v. Erickson Air-Crane Co., 183 F.R.D. 248 (D.Or. 1998). Moreover, defendants' claims of being "ambushed" by testimony supporting an award of punitive damages are specious. The claim for punitive damages was added in early 1998, and this action went to trial in March, 2000. Defendants elected not to challenge the claim by motion for summary judgment, and received plaintiff's witness list (containing summaries of anticipated testimony) before trial.
Finally, defendants assert that the court erred prejudicially when it excluded the designated portions of the deposition of Victor Gonzalez, a forklift operator who jumped out of a forklift during an off-dock accident. At the pretrial conference, the court advised defendants that they would be permitted to present the videotaped deposition in response to the testimony defendants anticipated from plaintiff's expert witnesses Sevart and Harris. This ruling was confirmed at trial after these experts testified, and was issued formally in a Minute Order on March 29, 2000, which stated that defendants were allowed to present the unedited portions of the Gonzalez deposition "in light of Dr. Harris' testimony." See Doc. # 156-1. Defendants presented what they term "a short portion" of the videotape to the jury, and now seek a new trial because the entire deposition was not introduced. There was no offer of proof made regarding other portions of the videotape, and the court recalls no further argument or request regarding the introduction of other portions. The ruling at the pretrial conference was made in the context that defendants' counsel offered the designations to rebut the testimony expected (and ultimately received) from plaintiff's experts. The court advised defendants at the pretrial conference that they would be allowed to "show the videotape as to Mr. Gonzalez's injury" for impeachment purposes. No prejudicial error is present in the court's subsequent confirmation of this ruling, and in allowing defendants to, as the court order reads, "show the unedited portions of the video tape deposition of Victor Gonzalez."
2. Defendants' motion for relief from judgment
Defendants have also moved for relief from the judgment entered against them, and seek a new trial to permit a jury to assess newly discovered evidence, pursuant to Fed.R.Civ.P. 60(b)(2) and 60(b)(3). Rules 60(b)(2) and (3) gives the court power to vacate judgments on grounds of "newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b);" or "fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party."
Rule 60(b)(2) provides that a court may grant a party relief from a judgment based on "newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b)." Fed.R.Civ.P. 60(b)(2). The test for newly discovered evidence requires that the moving party show that the evidence: (1) existed at the time of trial, (2) could not have been discovered through due diligence, and (3) was "of such magnitude that production of it earlier would have been likely to change the disposition of the case." Coastal Transfer Co. v. Toyota Motor Sales, U.S.A., 833 F.2d 208, 211 (9th Cir. 1987).
Rule 60(b)(3) permits a losing party to move for relief from judgment on the basis of "fraud, . . . misrepresentation, or other misconduct of an adverse party." To prevail, the moving party must prove by clear and convincing evidence that the verdict was obtained through fraud, misrepresentation, or other misconduct, and that the conduct complained of prevented the losing party from fully and fairly presenting the defense. See Lafarge Conseils et Etudes, S.A. v. Kaiser Cement Gypsum Corp., 791 F.2d 1334, 1338 (9th Cir. 1986); Jones v. Aero/Chem Corp., 921 F.2d 875, 878-79 (9th Cir. 1990). Rule 60(b)(3) "is aimed at judgments which were unfairly obtained, not at those which are factually incorrect." In re M/V Peacock, 809 F.2d 1403, 1405 (9th Cir. 1987).
The genesis of defendants' motion for a new trial is an alleged misrepresentation by plaintiff's counsel at trial and in closing arguments regarding Crown's influence upon two employees of Price Club who were contemplating the purchase of forklifts from Crown in 1991. Plaintiff presented evidence through the testimony of one of the employees, Jim Perry, who had, with the second employee Derek Tatum, visited Crown's Ohio plant in May, 1991. Perry testified that during the meeting, Crown representatives said Crown would not put doors on Price Club's forklifts because doors would create a greater "category of risks," and that doors were prohibited by the American National Standards Institute ("ANSI"). Perry testified that this statement caused him to change his mind about preferring doors for Price Club forklifts, and that he had subsequently "come to realize that I was lied to." Perry Tr. at 31-32.
In his closing statements, counsel for plaintiff argued to the jury that both "Jim Perry and Derek Tatum wanted doors" on the forklifts for Price Club, and that "they had been persuaded not to pursue doors anymore because of what Crown told them." Defendants did not object to these closing arguments, but now assert that they went beyond the scope of the evidence presented at trial and amount to misconduct on the part of plaintiff's counsel.
Defendants also move for a new trial on the basis of newly discovered evidence, in the form of a declaration from Tatum, prepared and acquired after the trial, in which Tatum asserts that "Sometime during 1991 the question of putting doors on our stand ups came up. . . . My own conclusion was that a door would not improve the design of the truck." Tatum Declaration, Para. 2.
In the declaration, Tatum also stated that his "best recollection" from the Crown meeting in Ohio in May, 1991, was that Crown represented that a door "was against their design and that they would not put one on a stand up rider." Tatum said he did not recall "anyone from Crown saying that a door violated ANSI standards or that ANSI prohibited doors," and that he was confident that he would have remembered statements to that effect. Id. at Para. 3. Tatum also explained that he was contacted by plaintiff's counsel before the trial, and that Tatum had told the attorney that Tatum was "completely against adding doors to the Crown lift trucks." Id. at Para. 5. Defendants construe this as "newly discovered evidence," and contend that it contradicts both Perry's testimony, and a key basis for plaintiff's claim for punitive damages. Defendants also assert that the declaration reveals that plaintiff's counsel knowingly made false statements to the jury during his closing argument. Defendants seek a new trial on these grounds. Defendants' post-judgment acquisition of a declaration from a potential witness, the identity of whom was known to both parties before trial, fails to compel the court to grant a new trial because of "newly discovered evidence." The Rule requires the "newly discovered evidence" to be evidence "which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b)." Fed.R.Civ.P. 60(b)(2). Defendants present no persuasive argument that they were unable, with due diligence, to learn of Tatum's recollections of the May, 1991, meeting with Crown in time to move for a new trial under Rule 59(b). In his amended complaint, plaintiff alleged that Crown made false statements at the May 1991 meeting, and reiterated these claims in the pretrial order. Plaintiff's Exhibit 132, which was provided to defendants in the exchange of exhibits leading to trial, is a letter that Crown addressed to both Perry and Tatum following the May, 1991 meeting. In short, defendants knew before the trial that both Perry and Tatum attended the May, 1991 meeting on behalf of Price Club, and defendants knew before trial that plaintiff alleged that Crown made false statements to these men at the meeting.
Moreover, the evidence is not "of such magnitude that production of it earlier would have been likely to change the disposition of the case." Coastal Transfer Co., 833 F.2d at 211. A fair reading of Tatum's declaration establishes that he fails to recall whether the statements Perry testified to having heard were made at the May, 1991, but that Tatum believes he would have remembered them if they were. Tatum also came to the conclusion in 1991 that adding doors to a stand up forklift was not an improvement, and he indicated this position to plaintiff's counsel before trial. While such testimony, if defendants had chosen to obtain and present it, would have provided the jury with some grounds for discrediting Perry's differing recollections, it cannot be said that the jury's awareness of Tatum's failure to share Perry's recollections would have likely changed the trial's disposition.
Defendants' assertion that a new trial is necessary because plaintiff's attorney suggested in closing arguments that Tatum's views coincided with the witness Perry's is similarly without merit. As reviewed above, Rule 60(b)(3) permits a losing party to obtain a new trial upon proof by clear and convincing evidence that the verdict was obtained through fraud, misrepresentation, or other misconduct, and a showing that the conduct complained of prevented the losing party from fully and fairly presenting that party's case or defense. See Wharf v. Burlington Northern Railroad Co., 60 F.3d 631, 637 (9th Cir. 1995).
The declaration presented by defendants reveals that Tatum explained to plaintiff's counsel before trial that Tatum "was completely against adding doors to the Crown lift trucks." The evidence presented at trial suggested that both Perry and Tatum were "against adding doors" following their meeting with Crown in May, 1991, but that prior to the meeting, Perry and Tatum had preferred Crown forklifts to be "retrofitted" with rear doors to keep the operators' feet "inside the lifts during panic stops." Plaintiff's Ex. 131 (May 2, 1991 Price Club Memorandum).
Plaintiff's counsel's reference in closing statements that both "Jim Perry and Derek Tatum wanted doors" on the forklifts for Price Club, and that "they had been persuaded not to pursue doors anymore because of what Crown told them" was arguably objectionable for going beyond the scope of the actual evidence presented to the jury (although defendants made no such objections). Tatum's subsequent statement that he explained to plaintiff's counsel that he now opposes adding doors to forklifts, however, falls far short of clear and convincing evidence that the verdict was obtained through fraud or misconduct. As Tatum further explains in a supplemental declaration, his statement to counsel expresses Tatum's current "state of mind" about the issue of adding doors to forklifts. Tatum also explains that while he formed his opinion opposing doors on forklifts "sometime in 1991," he cannot recall whether he reached that conclusion before or after the meeting with Crown in May, 1991. See Supplemental Declaration of Derek Tatum, attached to Plaintiff's Response to Defendants' Motion for Relief from Judgment.
Accordingly, while plaintiff's counsel may have erred in attributing the testimony of one witness to represent the beliefs of both that witness and the beliefs of a co-worker, there was evidence before the jury that both Price Club employees initially preferred forklifts with doors, and changed their minds after meeting with Crown in May, 1991. Defendants did not object to these arguments by plaintiff's counsel when they were made. Defendants' subsequent submission of a declaration from Tatum that indicates only that he told plaintiff's counsel before trial that he opposes the addition of doors to forklifts fails to provide clear and convincing evidence of fraud or misconduct warranting a new trial.
CONCLUSION
For the reasons provided above, defendants' motions for judgment as a matter of law, or in the alternative a new trial (doc. # 173), and motion for relief from judgment (doc. # 180) are DENIED.
IT IS SO ORDERED.