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holding that $2.5 million compensatory damages award was not subject to State Farm ratio of 1 to 1 for substantial awards
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October 25, 2007 Session Heard at Maryville.
Oral argument was heard in this case in Maryville, Blount County, Tennessee, as part of this Court's S.C.A.L.E.S. (Supreme Court Advancing Legal Education for Students) project.
July 24, 2008.
Appeal from the Circuit Court for Davidson County, Hamilton V. Gayden, Jr., J.
Alan J. Hamilton, George W. Fryhofer, III, James E. Butler, Jr., and Leigh Martin May, Atlanta, Georgia, and Gail Vaughn Ashworth, Nashville, Tennessee, for the Appellants, Jeremy Flax and Rachel Sparkman.
Dominic Lanza and Theordore J. Boutrous, Jr., Los Angeles, California; James C. Ho, Dallas, Texas; Thomas H. Dupree, Jr., Washington, DC; and Joy Day and Lawrence A. Sutter, Franklin, Tennessee, for the Appellee, DaimlerChrysler Corporation.
Louis A. Stockell, Jr., Madison, Tennessee, Pro Se.
Allison Orr Larsen, K. Lee Blalack, II, and Matthew M. Shors, Washington, D.C., for the Amicus Curiae, Alliance of Automobile Manufacturers.
Christopher Landau and Robin S. Conrad, Washington, DC, and John Randolph Bibb, Jr., Nashville, Tennessee, for the Amicus Curiae, The Chamber of Commerce of the United States of America.
Jonathan M. Hoffman, Portland, Oregon, and Linda J. Hamilton Mowles, Knoxville, Tennessee, for the Amicus Curiae, The Product Liability Advisory Council, Inc.
JANICE M. HOLDER, J., delivered the opinion of the court, in which WILLIAM M. BARKER, C.J., joined. CORNELIA A. CLARK, J., concurring in part and dissenting in part. GARY R. WADE, J., concurring. WILLIAM C. KOCH, JR., J., concurring in part and dissenting in part.
OPINION
The plaintiffs filed this products liability case against DaimlerChrysler seeking damages for the wrongful death of their son and for emotional distress suffered by the mother. The plaintiffs also sought punitive damages. We granted review to determine: 1) whether a negligent infliction of emotional distress claim brought simultaneously with a wrongful death claim is a "stand-alone" claim that requires expert medical or scientific proof of a severe emotional injury; 2) whether the evidence presented at trial was sufficient to support an award of punitive damages; 3) whether the punitive damages awarded by the trial court were excessive; and 4) whether the trial court erred by recognizing the plaintiffs' second failure to warn claim. We hold that the simultaneous filing of a wrongful death suit does not prevent a negligent infliction of emotional distress claim from being a "stand-alone" claim. Therefore, negligent infliction of emotional distress claims brought under these circumstances must be supported by expert medical or scientific proof of a severe emotional injury. In addition, we conclude that the punitive damages awarded by the trial court were adequately supported by the evidence and were not excessive. Finally, we hold that the trial court erred by recognizing the plaintiffs' second failure to warn claim but conclude that the error did not prejudice the judicial process or more probably than not affect the jury's verdict. Accordingly, we affirm the Court of Appeals' reversal of the compensatory and punitive damage awards based on the negligent infliction of emotional distress claim and reverse the Court of Appeals' decision to overturn the punitive damage award related to the plaintiffs' wrongful death claim.
I. Facts and Procedural History
On June 30, 2001, Rachel Sparkman and her eight-month-old son, Joshua Flax, were passengers in a 1998 Dodge Grand Caravan ("the Caravan") operated by Ms. Sparkman's father, Jim Sparkman. Ms. Sparkman was seated in a captain's chair directly behind the driver's seat. Joshua Flax was restrained in a child safety seat in the captain's chair directly behind the front passenger's seat, which Joe McNeil occupied.
As Mr. Sparkman turned left from a private drive onto a public road, the Caravan was rear-ended by a pickup truck driven by Louis Stockell. According to the testimony of the accident reconstruction experts, the pickup truck was traveling between fifty and fifty-six miles per hour at the time of impact. The Caravan was traveling in the same direction at a speed between ten and fifteen miles per hour. At the moment of the impact, the Caravan experienced a change in velocity of approximately seventeen to twenty-three miles per hour. Accident reconstruction experts for both parties testified that Mr. Sparkman was not responsible for the accident and that the accident would not have occurred if Mr. Stockell had not been driving at an excessive speed.
The plaintiffs' expert testified that Mr. Stockell originally was traveling at approximately sixty miles per hour, and the defendant's expert testified that Mr. Stockell was traveling at approximately seventy miles per hour. The posted speed limit on the public road at the time of the accident was thirty-five miles per hour.
Upon impact, the backs of the seats containing Mr. Sparkman, Ms. Sparkman, and Mr. McNeil yielded rearward into a reclining position. Tragically, the front passenger's seatback collapsed far enough to allow the back of Mr. McNeil's head to collide with Joshua Flax's forehead. The collision fractured Joshua Flax's skull and caused severe brain damage. None of the other passengers in the Caravan suffered serious injuries. Experts for both parties acknowledged that Joshua Flax would not have been seriously injured if the seat in front of him had not yielded rearward.
Immediately after the Caravan came to a rest, Ms. Sparkman checked on her son's condition and saw that his forehead had been, in her words, "smashed in." Michael Loftis, one of the first people to arrive at the scene of the accident, testified that he saw Ms. Sparkman outside the vehicle holding Joshua Flax. Because he believed Ms. Sparkman was "kind of hysterical" and could have accidentally caused further injury to Joshua Flax, Mr. Loftis offered to hold the child. Although initially reluctant, Ms. Sparkman agreed to give her son to Mr. Loftis. At this point, Mr. Loftis first observed that Joshua Flax had "a hole in his forehead approximately the size of a golf ball and probably a half inch deep." A short time later, Joshua Flax was transported to the hospital by ambulance. He died of his injuries the next day.
On May 7, 2002, Ms. Sparkman and Joshua Flax's father, Jeremy Flax, filed a complaint against Mr. Stockell and DaimlerChrysler Corporation ("DCC"), the manufacturer of the Caravan. The complaint alleged that the Caravan's seats are defective and unreasonably dangerous, that DCC failed to warn consumers that the seats pose a danger to children seated behind them, and that DCC is strictly liable under the Tennessee Products Liability Act of 1978. Tenn. Code Ann. §§ 29-28-101 to -108 (2000). The plaintiffs further alleged that the condition of the seats and the failure to warn proximately caused Joshua Flax's death and caused Ms. Sparkman to suffer severe emotional distress. Finally, the plaintiffs alleged that punitive damages are warranted because DCC acted intentionally and recklessly in manufacturing, marketing, and selling the Caravan.
Mr. Stockell failed to attend his scheduled deposition and failed to respond to DaimlerChrysler's interrogatories and request for production of documents. As a sanction, Mr. Stockell was prohibited from testifying at trial and from raising a defense against the plaintiffs' claims. In addition, the trial court instructed the jury that Mr. Stockell was at fault. Mr. Stockell is not a party to this appeal, and neither party has appealed any findings of fact or conclusions of law with respect to Mr. Stockell.
After a lengthy trial, the jury found that the seats were defective and unreasonably dangerous, that DCC failed to warn the plaintiffs about the dangers of the seats at the time of sale, that DCC failed to warn plaintiffs about the dangers of the seats after the sale, and that DCC acted recklessly such that punitive damages should be imposed. The jury apportioned half of the fault to DCC and the other half to Mr. Stockell. Finally, the jury awarded $5,000,000 to the plaintiffs for the wrongful death of Joshua and $2,500,000 to Ms. Sparkman individually for negligent infliction of emotional distress ("NIED").
After the second stage of the trial, the jury awarded $65,500,000 in punitive damages to the plaintiffs for the wrongful death of Joshua Flax and $32,500,000 in punitive damages to Ms. Sparkman individually for NIED. Following the jury's verdict, the trial court conducted a review of the jury's award of punitive damages as required by Hodges v. S.C. Toof Co., 833 S.W.2d 896, 902 (Tenn. 1992). In its findings of fact and conclusions of law the trial court concluded that "the jury properly found that Daimler Chrysler [sic] acted recklessly and that punitive damages were warranted." The trial court also concluded that the jury's award of punitive damages was excessive because there was a very large discrepancy between the punitive damages, totaling $98,000,000, and the compensatory damages for which DCC was liable, totaling $3,750,000. Accordingly, the trial court reduced the punitive damages to $20,000,000, a remittitur of $78,000,000. In its final order, the trial court indicated that the plaintiffs were entitled to $13,367,345 in punitive damages for the wrongful death of Joshua Flax and that Ms. Sparkman was individually entitled to $6,632,655 in punitive damages for NIED.
On appeal, the Court of Appeals concluded that Ms. Sparkman's NIED claim was subject to the heightened proof requirements set forth in Camper v. Minor, 915 S.W.2d 437, 446 (Tenn. 1996). The Court of Appeals reversed the jury's award of compensatory and punitive damages related to Ms. Sparkman's NIED claim against DCC because the plaintiffs did not satisfy the heightened proof requirements for a "stand-alone" NIED claim. In addition, the Court of Appeals concluded that there was not clear and convincing evidence that DCC acted recklessly or intentionally. Accordingly, the Court of Appeals reversed the trial court's award of all remaining punitive damages. Finally, the Court of Appeals affirmed the trial court's award of $5,000,000 in compensatory damages for the wrongful death of Joshua Flax. The plaintiffs appealed the ruling of the Court of Appeals. We granted review.
II. Negligent Infliction of Emotional Distress
We begin our analysis with Ms. Sparkman's NIED claim. Our modern jurisprudence concerning NIED began with Camper. In that case, the plaintiff was operating a cement truck when a vehicle operated by the defendant pulled in front of him. The defendant was killed immediately in the resulting collision. Although the plaintiff suffered only minor physical injuries, he filed an NIED claim alleging that he suffered emotional injuries from viewing the defendant's body immediately after the accident.
We began our analysis in Camper by recognizing that the law governing NIED
is fundamentally concerned with striking a balance between two opposing objectives: first, promoting the underlying purpose of negligence law — that of compensating persons who have sustained emotional injuries attributable to the wrongful conduct of others; and second, avoiding the trivial or fraudulent claims that have been thought to be inevitable due to the subjective nature of these injuries.
Id. at 440. We then catalogued a variety of approaches used in other jurisdictions to meet these two opposing goals. Some jurisdictions held that a plaintiff could not recover for NIED unless he or she suffered a "physical impact" caused by the defendant's negligent conduct. Id. Other jurisdictions allowed a plaintiff to recover for NIED if the plaintiff suffered a "physical manifestation" of the emotional injury. Id. at 442. Still other jurisdictions required that the plaintiff be in the "zone of danger" created by the defendant's negligent conduct. Id.
Prior to our decision in Camper, Tennessee applied a version of the "physical manifestation" rule. Id. at 443; see also Memphis State Ry. Co. v. Bernstein, 137 Tenn. 637, 194 S.W. 902, 902 (1917). Unfortunately, the "physical manifestation" rule discouraged compensation for some meritorious claims by "ignor[ing] the fact that some valid emotional injuries simply may not be accompanied by a contemporaneous physical injury or have physical consequences." Camper, 915 S.W.2d at 446. Accordingly, Tennessee courts had "continually found it necessary to deviate from the `physical manifestation' rule by either formally creating exceptions to the rule or by applying the rule in a nonrigorous fashion." Id. at 445. To increase the fairness, clarity, and predictability of the law governing NIED, we abandoned the "physical manifestation" rule and adopted new requirements designed to distinguish between meritorious and frivolous cases. Id. at 446. Specifically, we held that a plaintiff who has not suffered a physical injury must demonstrate through expert medical or scientific proof that he or she has suffered a "severe" emotional injury. Id. We held that an emotional injury is "severe" if "`a reasonable person, normally constituted, would be unable to adequately cope with the mental stress engendered by the circumstances of the case.'" Id. (quoting Rodrigues v. State, 52 Haw. 156, 472 P.2d 509, 520 (1970)). Our holding in Camper therefore balances the goals of compensating victims and avoiding fraudulent claims by: 1) allowing a person with emotional injuries to bring NIED claims regardless of whether he or she has suffered any physical injury, and 2) requiring a higher degree of proof for emotional injuries under these circumstances.
In Ramsey v. Beavers, 931 S.W.2d 527, 530-31 (Tenn. 1996), we reaffirmed the principles set forth in Camper, rejected the argument that the "zone of danger" test could be integrated into our Camper analysis, and held that a plaintiff who saw his mother hit by a car could bring a suit for NIED regardless of whether he was physically injured or placed in immediate danger of being physically injured. Id. We emphasized that to prove his claim the plaintiff was required to present expert medical or scientific evidence that he had suffered a severe emotional injury. Id. at 532. In addition, we held that to recover for emotional injuries sustained as the result of the death or injury of a third party a plaintiff must establish: 1) that he or she was sufficiently near the injury-causing event to allow sensory observation of the event, and 2) that the injury was, or was reasonably perceived to be, serious or fatal. Id. at 531.
Our opinion in Ramsey stated that the closeness of the relationship between the plaintiff and the third party is relevant, but we stopped short of requiring plaintiffs to prove that a close relationship existed. 931 S.W.2d at 531-32; accord Lourcey v. Estate of Scarlett, 146 S.W.3d 48, 54 (Tenn. 2004).
We further clarified our holding in Camper in Estate of Amos v. Vanderbilt University, 62 S.W.3d 133 (Tenn. 2001). Amos involved a plaintiff who was infected with HIV during a blood transfusion. The plaintiff received no notice of the possibility that she had been exposed to HIV. Years later, the plaintiff gave birth to a daughter who was infected with HIV in utero. After her daughter died of an AIDS-related virus, the plaintiff was tested and learned that she had HIV. The plaintiff and her husband filed suit for wrongful birth, negligence, and NIED.
The defendants in Amos cited Camper and argued that the plaintiff was not entitled to recover for emotional injuries because she had failed to present expert or scientific testimony of serious or severe emotional injury. We rejected this argument and held that "[t]he special proof requirements in Camper are a unique safeguard to ensure the reliability of `stand-alone' negligent infliction of emotional distress claims." Amos, 62 S.W.3d at 136-37. Because "the risk of fraudulent claims is less . . . in a case in which a claim for emotional injury damages is one of multiple claims for damages[,]" we held that the heightened proof requirements set forth in Camper are inapplicable "[w]hen emotional damages are a `parasitic' consequence of negligent conduct that results in multiple types of damages." Id. at 137. In other words, we recognized a distinction between traditional negligence claims that include damages for emotional injuries and claims that are based solely on NIED.
The plaintiff in Amos alleged that she had suffered emotional injuries caused by her infection with HIV and by the subsequent infection of her daughter. Because the plaintiffs claim of emotional damages was not separate from her other claims of negligence, but rather was "parasitic" to those claims, her claim was properly characterized as a negligence claim that included damages for emotional injuries. As her claim was not based solely on NIED, we concluded that the proof requirements of Camper were inapplicable. Id.
With this history in mind, we now turn to the facts of the instant case. At trial, the plaintiffs failed to present expert medical or scientific proof that Ms. Sparkman suffered severe emotional injuries. DCC filed motions for directed verdict and judgment notwithstanding the verdict, arguing that Ms. Sparkman's NIED claim was invalid because plaintiffs failed to meet the Camper requirements. Plaintiffs argued that the heightened proof requirements of Camper were inapplicable because Ms. Sparkman's NIED claim was filed with a wrongful death claim and was therefore not a "stand-alone" claim. The trial court agreed with the plaintiffs and upheld the jury's verdict with respect to Ms. Sparkman's NIED claim.
On appeal, the plaintiffs continue to argue that the NIED claim is not a "stand-alone" claim because the plaintiffs also brought a wrongful death suit on behalf of Joshua Flax. We disagree. It is well settled that a wrongful death action is a claim belonging to the decedent, not the decedent's beneficiaries. Ki v. State, 78 S.W.3d 876, 880 (Tenn. 2002); see also Tenn. Code Ann. § 20-5-106 (Supp. 2006). "Although the living beneficiaries of the action may seek a limited recovery for their own losses in addition to those of the decedent, the right of action itself remains one that is `single, entire[,] and indivisible.'" Kline v. Eyrich, 69 S.W.3d 197, 207 (Tenn. 2002) (alteration in original) (citations omitted) (quoting Wheeler v. Burley, No. 01A01-9701-CV-00006, 1997 WL 528801, at *3 (Tenn.Ct.App. Aug. 27, 1997)). Accordingly, the wrongful death claim in the instant case belongs to Joshua Flax rather than to the plaintiffs.
This case is therefore distinguishable from Amos, a case in which the plaintiff sought to recover for emotional damages parasitic to negligence and wrongful birth claims that were personal to the plaintiff. See Smith v. Gore, 728 S.W.2d 738, 741 (Tenn. 1987) (holding that wrongful birth actions are actions by parents "on their own behalf"). Nothing in our opinion in Amos was intended to allow plaintiffs to avoid the heightened proof requirements of Camper by bringing a separate wrongful death suit on behalf of a decedent. Because Ms. Sparkman's NIED claim is the only claim that is personal to one of the plaintiffs, we must conclude that it is a "stand-alone" claim subject to the requirements of Camper.
Furthermore, this case is not meaningfully distinguishable from our decision in Ramsey, a case in which the plaintiff saw his mother killed when she was hit by a car. We held that to recover for emotional injuries sustained as the result of the death or injury of a third party a plaintiff must present expert medical or scientific proof of a severe emotional injury and establish proximity to the injury-causing event and severity of the injury to the third party. Ramsey, 931 S.W.2d at 531-32. Like the plaintiff in Ramsey, Ms. Sparkman seeks to recover for emotional injuries sustained as a result of witnessing the death of an immediate family member. That the plaintiffs in this case brought a wrongful death suit is not sufficient to exempt the NIED claim from the requirements set forth in Camper and Ramsey because the filing of a wrongful death suit does nothing to demonstrate the reliability of an NIED claim.
The plaintiffs also argue that the NIED claim is valid because Ms. Sparkman suffered minor physical injuries in the accident but chose not to bring a claim for those injuries. This argument has two flaws. First, the plaintiff in Camper also suffered minor injuries for which he did not file a claim. 915 S.W.2d at 439 (quoting the plaintiffs testimony that he suffered a scrape on his knee in the accident). Clearly, the plaintiffs minor injury in Camper did not prevent us from concluding that heightened proof requirements are necessary for NIED claims. See id. at 446. Second, the emotional injuries alleged by Ms. Sparkman are not parasitic to the minor injuries she sustained in the accident but rather are the result of witnessing the death of her child. Even if Ms. Sparkman had chosen to bring a claim for her minor physical injuries, her NIED claim would remain a "stand-alone" claim because the emotional injuries sustained from witnessing the death of her child are completely unrelated to any physical injuries she may have sustained. Of course, Ms. Sparkman would not have been required to meet the Camper requirements to recover for any mental and emotional suffering resulting from her own physical injuries. See Overstreet v. Shoney's, Inc., 4 S.W.3d 694, 715 (Tenn.Ct.App. 1999) (holding that damages for pain and suffering in a personal injury case may include a variety of mental and emotional injuries that accompany the physical injury). When a plaintiff suffers a physical injury there is some indication that allegations of emotional and mental injuries resulting from that injury are not fraudulent. See Amos, 62 S.W.3d at 137. On the other hand, having a potential claim for physical injuries does nothing to ensure the reliability of an NIED claim relating to the emotional injuries resulting from witnessing the death or injury of a third party. Accordingly, there is no good reason to relieve Ms. Sparkman of her burden of meeting the Camper requirements.
Finally, the plaintiffs argue that the heightened proof requirements of Camper are unnecessary in this case because the severity of Ms. Sparkman's emotional injuries is obvious. Although it is axiomatic that witnessing the death of one's child is a horrific experience, it is not at all obvious what impact such an event will have on any particular individual. Indeed, we constructed the Camper requirements precisely because emotional injuries are uniquely subjective. 915 S.W.2d at 440; Amos, 62 S.W.3d at 137. Although sympathy for a particular plaintiff may tempt us to hold that certain circumstances "obviously" result in severe emotional injuries, we must also recognize that such a holding would subvert the principles set forth in Camper and would likely lead to the kind of ad hoc decisions that originally made NIED case law unpredictable and incoherent. Furthermore, we do not believe the requirement that a severe emotional injury be proven by expert medical or scientific evidence is unduly burdensome to those plaintiffs who have suffered legitimate "stand-alone" emotional injuries. Accordingly, we decline to create an exception to the Camper requirements based on the particular circumstances of this case.
Based on the foregoing considerations, we hold that Ms. Sparkman's NIED claim was governed by the heightened proof requirements of Camper. It is uncontested that Ms. Sparkman failed to meet those requirements. We therefore affirm, albeit under slightly different reasoning, the Court of Appeals' reversal of the compensatory and punitive damage awards based on Ms. Sparkman's NIED claim.
III. Punitive Damages
Several issues relating to punitive damages have been hotly contested throughout the trial and appeal of this case. DCC continues to assert three arguments against the validity of the punitive damages awarded for the wrongful death of Joshua Flax. First, DCC argues that punitive damages are not warranted in this case because the evidence was insufficient to support a finding of recklessness. Second, DCC argues that the award of punitive damages is excessive in violation of the due process standards announced by the United States Supreme Court in BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996), and State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003). Finally, DCC argues that the trial court violated the due process requirements of Philip Morris USA v. Williams, 549 U.S. 346, 127 S.Ct. 1057, 166 L.Ed.2d 940 (2007), by allowing the jury to consider harm to non-parties when determining the amount of punitive damages to impose against DCC. We address each of these arguments in turn.
a. Sufficiency of Evidence Supporting Jury's Finding of Recklessness
DCC argues that the evidence submitted by the plaintiffs was insufficient to support the imposition of punitive damages. A verdict imposing punitive damages must be supported by clear and convincing evidence that the defendant acted intentionally, fraudulently, maliciously, or recklessly. Hodges v. S.C. Toof Co., 833 S.W.2d 896, 901 (Tenn. 1992). In Hodges, we held that evidence is clear and convincing when it leaves "no serious or substantial doubt about the correctness of the conclusions drawn." Id. at 901 n. 3. We also held that a person acts recklessly when "the person is aware of, but consciously disregards, a substantial and unjustifiable risk of such a nature that its disregard constitutes a gross deviation from the standard of care that an ordinary person would exercise under all the circumstances." Id. at 901. The jury in this case found that there was clear and convincing evidence that DCC's conduct was reckless.
When this Court is called upon to review the reasonableness of a jury's verdict, as we are in this case, we "are limited to determining whether there is material evidence to support the verdict." Id. at 898. In making this determination, we do not reweigh the evidence. Elec. Power Bd. of Chattanooga v. St. Joseph Valley Structural Steel Corp., 691 S.W.2d 522, 526 (Tenn. 1985). Rather, we are "required to take the strongest legitimate view of all of the evidence in favor of the verdict, to assume the truth of all that tends to support it, allowing all reasonable inferences to sustain the verdict, and to discard all to the contrary." Id. The jury's verdict must be affirmed if any material evidence supports it. Id. Therefore, our review of this issue is limited to determining whether any material evidence supports the jury's conclusion that there is no serious or substantial doubt that DCC consciously disregarded a known, substantial, and unjustifiable risk to the plaintiffs.
To determine whether there is any material evidence supporting the jury's verdict, we must summarize the evidence presented at trial in some detail. At trial, the plaintiffs sought to prove that DCC had known for over twenty years that its seats were defective and unreasonably dangerous but failed to remedy the problem or warn consumers of the danger. DCC countered by arguing that it designed the seats to yield rearward in rear-end collisions to absorb energy from the collision and protect the occupant of the seat. According to DCC, the Caravan design protects the greatest number of people in the greatest number of potential accidents and using stronger seatbacks would increase the danger to occupants of the seat. To further support its argument that its seat design was reasonably safe, DCC repeatedly noted that its seatbacks were similar to those used by other manufacturers and exceeded the federal regulation governing seatback strength, Federal Motor Vehicle Safety Standard 207 ("FMVSS 207").
As part of their effort to demonstrate that the Caravan's seatbacks posed a substantial and unjustifiable risk, the plaintiffs introduced the testimony of Dr. Saczalski, an expert on seat engineering. Dr. Saczalski testified that the Caravan's seats were defective and unreasonably dangerous because they posed a threat to children seated behind them. His testimony was based in part on crash testing he conducted in an attempt to recreate the accident underlying this case. During the crash test, Dr. Saczalski used vehicles of the same make and model as those involved in the accident and attempted to account for the weight, speed, and trajectory of each vehicle. The Caravan used in the crash test contained dummies approximating the size and weight of Mr. Sparkman, Mr. McNeil, Ms. Sparkman, and Joshua Flax. Dr. Saczalski replaced the driver's seat of the Caravan with a seat from a 1996 Chrysler Sebring, a DCC vehicle that had seats with backs approximately five times stronger than the seats used in the Caravan. Dr. Saczalski placed the Sebring seat in the crash test vehicle to demonstrate how a stronger seatback would perform under forces equivalent to those suffered by the Caravan in the actual accident.
Consistent with the circumstances of the actual accident, videos of the crash test show that the front passenger's seat yielded rearward allowing the McNeil surrogate's head to impact the head of the Joshua Flax surrogate. The Sebring seat also yielded rearward but to a far lesser degree. Significantly, the Sebring seat did not substantially encroach upon the seating area behind it. Dr. Saczalski concluded from the crash test that Joshua Flax would have survived the accident without serious injury had the Caravan been equipped with seats with backs as strong as those of the Sebring seat. Contrary to DCC's assertion that stronger seatbacks impose greater dangers to their occupants in rear-end collisions, the crash test dummy in the stronger Sebring seat experienced less head and neck acceleration than the dummy in the Caravan seat.
Dr. Saczalski also testified regarding several other crash tests he performed in which Sebring seats were placed side-by-side with other DCC minivan seats. These tests also demonstrated that DCC minivan seats have the capacity to cause injury to children seated behind them. The test results support the view that Sebring seats do not pose the same threat because they do not encroach upon the passenger space behind them. Furthermore, Dr. Saczalski testified that the dummy-occupants of the stronger Sebring seats tended to experience less acceleration to the head and neck than the dummy-occupants of weaker seats.
The plaintiffs also made a considerable effort to demonstrate that DCC was aware that the Caravan seats were defective and unreasonably dangerous for at least twenty years. The minutes from a DCC Engineer Safety Committee meeting dated December 10, 1980, appear to contain the first acknowledgment that yielding seat-backs could be a potential problem. In the meeting it was noted that the seatbacks had yielded to some degree in every crash test and that "improvements could be made, but would require development costs and a piece penalty would result." The Engineer Safety Committee did not make any recommendation to improve seatback strength because the seats performed as well as those of DCC's competitors, complied with federal requirements, and had not been demonstrated "to be a significant injury producing problem." Videos of crash testing performed by DCC confirm that in rear-impact collisions the seats yielded into the occupant space behind them. In addition, plaintiffs presented documentation showing that in at least one crash test conducted in 1989 the front seats were braced to prevent the seatbacks from impacting equipment occupying the back seat.
Although the minutes from the 1980 meeting indicate that there was no evidence that the seats were a "significant injury producing problem," DCC soon began to receive new information. According to an employee in DCC's customer relations department, during the mid-1980s, DCC began to receive reports of children injured by yielding seatbacks in rear-end collisions. DCC's records contained documentation of several rear-end collisions in which a yielding seatback caused a child to suffer skull or facial fractures. Other injuries sustained by children seated behind yielding seatbacks were also reported to DCC. In spite of these reports, DCC did not issue any warning to customers and continued to advertise the Caravan as a vehicle specifically designed to protect children.
The most significant testimony regarding DCC's knowledge of the danger presented by the Caravan seats was provided by Paul Sheridan, a former DCC employee. During his employment with DCC, Mr. Sheridan served as the chair of the Minivan Safety Leadership Team ("MSLT"), a committee formed to address safety concerns in DCC's minivans. The committee was comprised of persons from DCC's safety, engineering, marketing, sales, and design departments. One of the many safety issues the MSLT was formed to address was the issue of seatback strength. According to Mr. Sheridan, the MSLT had available to it complaints regarding injuries caused by yielding seat-backs. At a March 16, 1993, committee meeting, members of the MSLT reached a consensus that it was unacceptable for seats to yield rearward into the passenger space behind them and that the seats were inadequate to protect customers. After the meeting, Mr. Sheridan distributed the minutes of the meeting to various DCC executives. Some time thereafter, Ronald Zarowitz, a member of the MSLT representing DCC's safety office, instructed Mr. Sheridan to retrieve the minutes of the meeting and destroy them. Mr. Zarowitz informed Mr. Sheridan that this order came from Francois Castaing, the head of the engineering department. Mr. Sheridan retrieved the minutes as instructed, but he retained two copies in his office.
After the March 1993 meeting, Mr. Sheridan decided to investigate the seat-back issue further. To this end, Mr. Sheridan met with an engineer responsible for seat design and requested the seat design specifications that discussed how the seats were designed to yield. According to Mr. Sheridan, the engineer "didn't know what [he] was asking for" but provided the design specifications of the seats. These specifications did not state that the seats were designed to yield. In fact, Mr. Sheridan testified that he never heard any engineer state that seatbacks were designed to yield rearward as a safety precaution. In September 1994, Mr. Sheridan told his supervisor that he was going to go to regulators with his concerns about the minivan seatbacks. In November 1994, the MSLT was disbanded at the direction of Ted Cunningham, the executive with authority over minivan operations. Mr. Sheridan was fired on December 27, 1994, and the minutes from the March 1993 MSLT meeting and the seat design specifications were confiscated from his office.
Those documents are not included in the record before us. The plaintiffs allege that the documents were not produced during discovery.
We find little support in the record for Justice Koch's speculation that Mr. Sheridan's testimony "may very well reflect DaimlerChrysler's over-reaction to the Sixty Minutes story and the existence of some internal dissension regarding how best to respond to the concerns about car seat safety raised by the story." In fact, this characterization of Mr. Sheridan's testimony appears to have been rejected by the jury, which heard his testimony and was charged with resolving issues of credibility. Moreover, DCC presented no testimony that the formation of the MSLT was an "over-reaction," and it is clear from Mr. Sheridan's testimony that he believed the MSLT was necessary to address serious safety concerns. DCC's efforts to destroy the recommendations produced by the MSLT are a further indication of DCC's awareness of the seat-back problem and its determination to hide the problem rather than solve it. In our minds, this represents more than "some internal dissension regarding how best to respond to the concerns about car safety."
Justice Koch's efforts to discount Mr. Sheridan's testimony are inconsistent with our standard of review on appeal. The jury apparently accredited much of Mr. Sheridan's testimony, and, as we have stated, we are required to view his testimony in the light most favorable to the jury's verdict and assume the truth of his assertions that support the jury's verdict. Elec. Power Bd. of Chattanooga, 691 S.W.2d at 526. We therefore must assume that Mr. Sheridan was truthful when he denied leaking confidential information to Auto World magazine. We must also make the reasonable inference that Mr. Sheridan in fact was fired because he threatened to go to regulators with his safety concerns. In addition, whether Mr. Sheridan has been excluded from testifying in other cases is irrelevant to our review. The trial court denied DCC's motion to exclude Mr. Sheridan's testimony, and DCC has not appealed that aspect of the trial court's ruling. The actions of another court have no impact on our review of the testimony accredited by the jury.
The plaintiffs also sought to demonstrate that compliance with FMVSS 207 was insufficient to make the Caravan seats reasonably safe. A seat engineer employed by DCC testified that FMVSS 207 requires "inadequate seat strength to insure that the seat does not fail when the car is subject to severe rear impact." In addition, Mr. Sheridan testified that members of the MSLT agreed that compliance with FMVSS 207 was insufficient to ensure safety of consumers. Furthermore, both of DCC's experts on seat design agreed that compliance with FMVSS 207 alone is inadequate to protect passengers.
Finally, the plaintiffs argued that stronger seatbacks would not result in greater injuries to occupants of the seats. Specifically, the plaintiffs claimed that the Sebring seat, which was approximately five times stronger than the Caravan seat, was a reasonably safe seat. The results of Dr. Saczalski's crash testing provide some evidence that the Sebring seat offered a reasonable level of protection to its occupants. In addition, one of DCC's experts on seat-back engineering agreed that the Sebring seat was a reasonably safe seat.
In summary, the jury's finding that the Caravan seats posed a substantial and unjustifiable risk to consumers was supported by: 1) expert testimony that the seats were defective and unreasonably dangerous; 2) crash tests demonstrating that the yielding seatbacks consistently encroached upon the occupant space behind them; 3) Mr. Sheridan's testimony that safety officials and engineers employed by DCC believed that the Caravan's seats were unacceptably dangerous; and 4) crash test evidence and expert testimony that Joshua Flax would not have been killed had a stronger seat been in place. The jury's finding that DCC consciously disregarded the risks posed by the Caravan seats was supported by: 1) minutes of DCC meetings noting that seats yielded; 2) DCC crash tests demonstrating that seats consistently encroached upon the passenger space behind them; 3) DCC records of injuries caused by yielding seatbacks; and 4) Mr. Sheridan's testimony that executives ignored the MSLT's warning that the seatbacks were unacceptably dangerous. We conclude that this evidence adequately supports the jury's conclusion that there is no serious or substantial doubt that DCC consciously disregarded a known, substantial, and unjustifiable risk to the plaintiffs. The evidence that DCC executives failed to heed the warnings of the MSLT and ordered the destruction of the committee's findings is particularly compelling. Not only did DCC fail to warn customers or redesign its product, DCC hid the evidence and continued to market the Caravan as a vehicle that put safety first. Because the jury's verdict is supported by clear and convincing material evidence, we must affirm the jury's finding of recklessness. Elec. Power Bd. of Chattanooga, 691 S.W.2d at 526.
DCC's argument that risks associated with the Caravan seats were justified by the need for the seat to absorb energy from the collision and protect seat occupants is of no avail. This argument was presented to the jury, and the jury was apparently unconvinced by it. The jury could have reasonably accredited Mr. Sheridan's testimony that the seats were not intentionally designed to yield as a safety mechanism. The jury also could have reasonably concluded from testimony regarding the Sebring seat that seats need not yield as dramatically as the Caravan seats to protect seat occupants. DCC's argument that there is an ongoing debate regarding the optimum level of seatback strength is also without merit. The jury could have reasonably concluded that such a debate exists and simultaneously found that the Caravan's seats were weak enough to fall outside the range of reasonable debate.
With regard to DCC's proposed justification, Justice Koch fails to give proper deference to the jury's conclusions. He concludes that a "genuine principled debate" concerning the proper seatback strength led DCC to design "the front seats of the minivan to yield in a controlled manner in the event of a rear impact." Whether the seats were designed to yield "in a controlled manner" was contested at trial. The jury, apparently convinced by the accident reconstruction, the expert testimony, DCC's crash tests, and Mr. Sheridan's testimony, concluded that the manner in which the seats yielded was unreasonably dangerous and that DCC recklessly disregarded the danger to its customers. While Justice Koch may disagree with that conclusion, this Court is not free to reweigh the evidence or second-guess the jury's conclusions when they are supported by material evidence.
We are also unconvinced by DCC's arguments that compliance with federal regulations and custom within an industry should bar the recovery of punitive damages. It is true that compliance with FMVSS 207 entitled DCC to a rebuttable presumption that its product was not unreasonably dangerous. Tenn. Code Ann. § 29-28-104. It is equally true, for the reasons stated above, that the evidence in this case thoroughly rebutted that presumption. Tennessee Code Annotated section 29-28-104 was designed "`to give refuge to the manufacturer who is operating in good faith and [in] compliance of what the law requires him to do.'" Tuggle v. Raymond Corp., 868 S.W.2d 621, 625 (Tenn.Ct.App. 1992) (alteration in original). The statute was not designed to provide immunity from punitive damages to a manufacturer who is aware that compliance with a regulation is insufficient to protect users of the product. While evidence of compliance with government regulations is certainly evidence that a manufacturer was not reckless, it is not dispositive. See O'Gilvie v. Int'l Playtex, Inc., 821 F.2d 1438, 1446 (10th Cir. 1987); Silkwood v. Kerr-McGee Corp., 769 F.2d 1451, 1457-58 (10th Cir. 1985); Dorsey v. Honda Motor Co., 655 F.2d 650, 656 (5th Cir. 1981). To hold otherwise would create an overly inflexible rule that would allow some manufacturers knowingly engaged in reprehensible conduct to escape the imposition of punitive damages.
Similarly, if a manufacturer knows that a common practice in an industry presents a substantial and unjustifiable risk to consumers, then compliance with the common practice is not an absolute bar to the recovery of punitive damages. Cf. Surles ex rel. Johnson v. Greyhound Lines, Inc., 474 F.3d 288, 300-01 (6th Cir. 2007) (applying Tennessee law and concluding that compliance with federal regulations and common industry practices is evidence of the standard of care but does not conclusively establish the standard of care in negligence cases). Evidence that a manufacturer consciously disregarded substantial and unjustifiable risks to the public can, in some rare cases, overcome evidence that the manufacturer's practice was common in the industry. This is such a case. Because the jury could have reasonably concluded from the evidence presented that DCC was aware that compliance with the FMVSS 207 and the industry standard for seat design was insufficient, we hold that punitive damages were not barred in this case.
b. Due Process Concerns and the Excessiveness of the Punitive Damage Award
Having concluded that punitive damages were warranted in this case, we now review whether the size of the punitive damage award is excessive in violation of the due process standards announced by the United States Supreme Court in Gore and Campbell. We begin our analysis of this issue by reviewing the United States Supreme Court's punitive damage jurisprudence.
In Gore, the United States Supreme Court was called upon to determine the constitutionality of a punitive damage award. The Court concluded that due process requires that "a person receive fair notice not only of the conduct that will subject him to punishment, but also of the severity of the penalty that a State may impose." Gore, 517 U.S. at 574, 116 S.Ct. 1589. Accordingly, the Court adopted three guideposts for determining whether a defendant has adequate notice of the magnitude of the sanction that may be imposed. The first and most important guidepost is the reprehensibility of the defendant's conduct. Id. at 575, 116 S.Ct. 1589. The Court indicated that the presence of violence, deceit, reckless disregard for the safety of others, or repeated misconduct may be aggravating factors that increase the reprehensibility of the defendant's conduct. Id. at 575-76, 116 S.Ct. 1589. The second guidepost is the ratio between the punitive damage award and the actual harm suffered by the plaintiff. Id. at 580, 116 S.Ct. 1589. Although the Court declined to adopt any strict mathematical formula, it repeated the suggestion from a previous case that "a punitive damages award of `more than 4 times the amount of compensatory damages' might be `close to the line'" of constitutional impropriety. Id. at 581-82, 116 S.Ct. 1589 (quoting Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 23-24, 111 S.Ct. 1032, 113 L.Ed.2d 1 (1991)). The final guidepost requires courts to compare the punitive damage award to civil or criminal penalties that could be imposed for similar conduct. "[A] reviewing court engaged in determining whether an award of punitive damages is excessive should `accord "substantial deference" to legislative judgments concerning appropriate sanctions for the conduct at issue.'" Id. at 583, 116 S.Ct. 1589 (quoting Browning-Ferris Indus, of Vt., Inc. v. Kelco Disposal, Inc., 492 U.S. 257, 301, 109 S.Ct. 2909, 106 L.Ed.2d 219 (1989) (O'Connor, J., concurring in part and dissenting in part)). These legislative judgments are relevant because they provide defendants with notice of the severity of the penalty that may be imposed upon them. See id. at 584, 109 S.Ct. 2909.
The United States Supreme Court next considered the due process requirements for punitive damages in Campbell. The Court again observed that the reprehensibility of the defendant's conduct is the most important guidepost. Campbell, 538 U.S. at 419, 123 S.Ct. 1513. In an effort to provide guidance to lower courts, the Court stated that courts should determine reprehensibility
by considering whether: the harm caused was physical as opposed to economic; the tortious conduct evinced an indifference to or a reckless disregard of the health or safety of others; the target of the conduct had financial vulnerability; the conduct involved repeated actions or was an isolated incident; and the harm was the result of intentional malice, trickery, or deceit, or mere accident.
Id. The Court further stated, "The existence of any one of these factors weighing in favor of a plaintiff may not be sufficient to sustain a punitive damages award; and the absence of all of them renders any award suspect." Id. With regard to the second guidepost, the Court stated, "[I]n practice, few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process." Id. at 425, 123 S.Ct. 1513. In addition, "[w]hen compensatory damages are substantial, then a lesser ratio, perhaps only equal to compensatory damages, can reach the outermost limit of the due process guarantee." Id. The Court then qualified its previous statement by observing that "[t]he precise award in any case, of course, must be based upon the facts and circumstances of the defendant's conduct and the harm to the plaintiff." Id. Finally, when discussing the third guidepost, the Court held that
[t]he existence of a criminal penalty does have bearing on the seriousness with which a State views the wrongful action. When used to determine the dollar amount of the award, however, the criminal penalty has less utility. Great care must be taken to avoid use of the civil process to assess criminal penalties that can be imposed only after the heightened protections of a criminal trial have been observed, including, of course, its higher standards of proof. Punitive damages are not a substitute for the criminal process, and the remote possibility of a criminal sanction does not automatically sustain a punitive damages award. Id. at 428, 123 S.Ct. 1513.
Unlike the deferential standard of review employed when reviewing a jury's factual conclusions, we conduct a de novo review of the amount of a punitive damages award to determine whether the award meets due process requirements in light of the three guideposts. Id. at 418, 123 S.Ct. 1513.
Having reviewed the applicable United States Supreme Court precedents, we now turn to the application of the principles set forth therein. The evidence in this case clearly demonstrates that DCC's conduct was reprehensible. Obviously, the harm suffered in this case was physical rather than economic. The death of a child is undoubtedly a tragic experience that is far more serious than a mere economic loss. Furthermore, as we have summarized above, DCC's conduct evinces a conscious disregard for the safety of others. In addition, DCC deceitfully covered up evidence of the deficiencies of its seat design while simultaneously advertising the Caravan as a vehicle that put children's safety first. Finally, DCC's wrongdoing was not an isolated incident because DCC had knowledge of the danger its seats posed to the public for years and yet continued to sell its vehicles in an unreasonably dangerous condition throughout the State of Tennessee. We therefore conclude that under this first, most important guidepost DCC had fair notice that its conduct could subject it to a severe penalty.
We now turn to the second guidepost, the ratio between the punitive damages and compensatory damages. The trial court in this case remitted the punitive damages for the wrongful death of Joshua Flax to $13,367,345. We must compare this punitive damage award to the $2,500,000 in compensatory damages for which DCC is liable for the wrongful death of Joshua Flax. The ratio between these two awards is 1 to 5.35. This ratio is not clearly impermissible because it does not exceed a single digit ratio. See Campbell, 538 U.S. at 425, 123 S.Ct. 1513. There is, however, some doubt as to the propriety of a ratio of 1 to 5.35 because the United States Supreme Court has suggested that a ratio of more than 1 to 4 approaches the outer limits of constitutionality. Id.; Gore, 517 U.S. at 581, 116 S.Ct. 1589. The Court has also suggested that a ratio of 1 to 1 may be all that is permissible in cases where compensatory damages are "substantial." See Campbell, 538 U.S. at 425, 123 S.Ct. 1513. None of these ratios, however, present "rigid benchmarks," and the United States Supreme Court has thus far declined to adopt any fixed mathematical formula to determine the appropriateness of punitive damages. Id. Instead, the Court has held that "[t]he precise award in any case, of course, must be based upon the facts and circumstances of the defendant's conduct and the harm to the plaintiff." Id.
Having invalidated the trial court's award of compensatory and punitive damages based on NIED, we need only discuss the punitive damages arising out of the wrongful death claim.
In light of the first two guideposts, we believe that a ratio of 1 to 5.35 would be warranted in this case. Although the United State Supreme Court has made no effort to demonstrate when damages are "substantial," we do not believe that an award of $2,500,000 is so large as to require a ratio of 1 to 1. Furthermore, a punitive damage award of $13,367,345 is consistent with the concept that the reprehensibility of a defendant's conduct is the most important of the due process guide-posts and is justified by DCC's long-term pattern of conduct that resulted in severe injuries to the plaintiffs and showed a conscious disregard for the safety of Tennessee citizens. Accordingly, in light of the first two guideposts we would hold that a punitive damage award approaching the maximum ratio permitted by the due process clause is appropriate.
The third guidepost set forth in Gore seems to compel a dramatically different conclusion. The statute that most closely expresses the Tennessee General Assembly's judgment concerning the wrongfulness of DCC's conduct is the reckless homicide statute codified at Tennessee Code Annotated section 39-13-215 (2006). According to that statute, reckless homicide is "a reckless killing of another." Tenn. Code Ann. § 39-13-215. The meaning of the word "reckless" as it is used in that statute is identical to the meaning of "reckless" in a punitive damage context. Compare Hodges, 833 S.W.2d at 901, with Tenn. Code Ann. § 39-11-302(c) (2006). Because DCC's reckless conduct resulted in the death of Joshua Flax, reckless homicide is the criminal act most analogous to DCC's conduct. The maximum statutory punishment for corporations that commit reckless homicide is a fine of $125,000. Tenn. Code Ann. § 40-35-111(c)(4) (2006).
We express no opinion concerning whether DCC could actually be prosecuted for reckless homicide under Tennessee Code Annotated section 39-11-404 (2006). It is sufficient that the statutory definition of reckless homicide encompasses the conduct of DCC.
Pursuant to the holding of the United States Supreme Court, we must accord "substantial deference" to the General Assembly's decision that $125,000 is an appropriate sanction against corporations guilty of reckless homicide. Gore, 517 U.S. at 583, 116 S.Ct. 1589. Furthermore, we must "avoid use of the civil process to assess criminal penalties that can be imposed only after the heightened protections of a criminal trial have been observed." Campbell, 538 U.S. at 428, 123 S.Ct. 1513. Although the United States Supreme Court has never held that the third guidepost is dispositive, it appears that under this guidepost $125,000 would be the maximum punitive damage award that could be imposed in this case. Arguably, this is because DCC never had notice that it could be held liable for an amount greater than $125,000. Clearly, the result recommended by the third guidepost is dramatically at odds with the result suggested by the first two. We are unfortunately left with little guidance as to how to resolve this discrepancy because both Gore and Campbell are cases in which all of the guideposts suggest the same result. Other courts have experienced similar frustrations when attempting to apply the third guidepost, and some have chosen to ignore the third guidepost altogether. See, e.g., In re EXXON VALDEZ, 490 F.3d 1066, 1094 (9th Cir. 2007) (noting that if the Court of Appeals for the Ninth Circuit mentions the third guidepost at all, it does not review the amounts of legislative penalties but determines "whether or not the misconduct was dealt with seriously under state civil or criminal laws"); Willow Inn, Inc. v. Pub. Serv. Mut. Ins. Co., 399 F.3d 224, 237-38 (3d Cir. 2005) (noting the difficulty courts have in applying the third guidepost and declining to overturn a punitive damage award on that basis alone).
We find this reasoning somewhat peculiar considering that our decision in Hodges clearly set forth both the conditions under which a defendant could be held liable for punitive damages and the factors that would determine the amount of punitive damages available. See Hodges, 833 S.W.2d at 901-02. Although those standards were necessarily imprecise, our decision in that case would appear to be sufficient to provide DCC with notice that consciously disregarding the safety of Tennessee citizens could subject it to a considerably large punitive damage award.
Although we are somewhat unsure how to reconcile the third guidepost with the first two, we are inclined to give the first two guideposts considerably more weight. The Unites States Supreme Court has held that the first guidepost is the most important and has never stated that the third guidepost is dispositive. Furthermore, we are unaware of any state or federal case that has invalidated a punitive damage award solely because the award was greater than that contemplated by statutory penalties. In addition, the trial court's award in this case is far less drastic than the awards rejected in Gore and Campbell, which were 1,000 and 14,500 times greater, respectively, than the maximum civil or criminal penalty. See Campbell, 538 U.S. at 428, 123 S.Ct. 1513; Gore, 517 U.S. at 584, 116 S.Ct. 1589. Finally, we do not believe that a punitive damage award of $125,000 would adequately punish DCC or deter future instances of similar conduct. For these reasons, we conclude that a punitive damage award of $13,367,345 is constitutionally permissible in this case.
c. Due Process Concerns and Harm to Non-Parties
DCC also contends that its right to due process was violated because the jury was allowed to punish DCC for harm suffered by persons who were not parties to the action. In support of this argument, DCC cites the United States Supreme Court's recent decision, Philip Morris. In Philip Morris, the Court held that trial courts must, upon request, provide assurance that juries are not allowed to punish defendants for harm caused to nonparties. Id. at 1065. In the present case, DCC requested that the jury be instructed that it could not punish DCC for harm suffered by nonparties, but the trial court declined to give this instruction. Unfortunately, DCC did not question the rejection of its proposed jury instruction in the Court of Appeals. DCC now seeks to resurrect this issue before this Court. Litigants who hope to have an issue heard by this Court must first present that issue to the intermediate appellate court. See Brown v. Crown Equip. Corp., 181 S.W.3d 268, 281 n. 5 (Tenn. 2005); Va. Sw. R.R. Co. v. Sutherland, 138 Tenn. 266, 197 S.W. 863, 864 (1917). Accordingly, we do not reach the issue of whether the trial court erred by failing to instruct the jury not to punish DCC for harm suffered by nonparties.
The Court did attempt to clarify that injuries suffered by nonparties are relevant to demonstrate the reprehensibility of a defendant's conduct. Id. at 1064. As the Court stated, "conduct that risks harm to many is likely more reprehensible than conduct that risks harm to only a few." Id. at 1065. Upon motion by the parties, trial courts are required to instruct the jury that it may consider harm to nonparties to determine reprehensibility but should not directly punish defendants for harm to nonparties.
IV. Validity of Plaintiffs' Post-Sale Failure to Warn Claim
In their complaint, the plaintiffs asserted a claim based on DCC's failure to warn consumers that the Caravan's seat-backs posed a danger to children placed behind them. Prior to trial, the plaintiffs filed a trial brief clarifying that they were attempting to bring two separate failure to warn claims. The first claim is a traditional failure to warn claim alleging that DCC failed to provide a warning prior to or at the time the Caravan was sold. Tennessee courts have long held that a manufacturer may be held strictly liable for failing to warn consumers of the dangers of a particular product at the time of sale. White-head v. Dycho Co., lib S.W.2d 593, 596 (Tenn. 1989); Trimble v. Irwin, 59 Tenn. App. 465, 441 S.W.2d 818, 821 (1968). The General Assembly has also acknowledged that a failure to warn claim is a valid basis for a product liability action. Tenn. Code Ann. § 29-28-102(6) (2000). Accordingly, the trial court permitted the plaintiffs to proceed with the traditional failure to warn claim, and DCC has not appealed the trial court's ruling on that issue.
The plaintiffs' second failure to warn claim is more problematic. In their trial brief, the plaintiffs asserted that DCC should also be held liable for failing to warn the plaintiffs of the condition of the seatbacks after the Caravan was sold. Plaintiffs argued their second claim is what is commonly referred to as a "post-sale failure to warn" claim, a claim that has not been previously recognized in Tennessee. Irion v. Sun Lighting, Inc., No. M2002-00766-COA-R3-CV, 2004 WL 746823, at *17 (Tenn.Ct.App. Apr. 7, 2004). Under the assumption that their second claim was a post-sale failure to warn claim, the plaintiffs argued that the trial court should join the jurisdictions that recognize the post-sale failure to warn claims and adopt the post-sale failure to warn provisions of the Restatement (Third) of Torts. See Restatement (Third) of Torts: Products Liability § 10 (1998). The trial court was persuaded by the plaintiffs' arguments and allowed the plaintiffs to present evidence and argument at trial in support of their second failure to warn claim. At the conclusion of the trial, the jury found the defendants liable on the plaintiffs' second failure to warn claim.
For reasons that are explained below, we do not believe plaintiffs' second failure to warn claim is properly characterized as a post-sale failure to warn claim. Accordingly, we refer to their cause of action as the "second failure to warn claim" or the "second claim."
DCC contends that the trial court erred in recognizing the post-sale failure to warn claim. We agree. Although different states apply the doctrine differently, the vast majority of courts recognizing post-sale failure to warn claims agree that a claim arises when the manufacturer or seller becomes aware that a product is defective or unreasonably dangerous after the point of sale and fails to take reasonable steps to warn consumers who purchased the product. See, e.g., Lovick v. Wil-Rich, 588 N.W.2d 688, 693 (Iowa 1999); Patton v. Hutchinson Wil-Rich Mfg. Co., 253 Kan. 741, 861 P.2d 1299, 1313 (1993); Owens-Illinois, Inc. v. Zenobia, 325 Md. 420, 601 A.2d 633, 645-46 (1992); Comstock v. Gen. Motors Corp., 358 Mich. 163, 99 N.W.2d 627, 634 (1959); see also Douglas R. Richmond, Expanding Products Liability: Manufacturers' Post-Sale Duties to Warn, Retrofit and Recall, 36 Idaho L.Rev. 7, 18 (1999). Accordingly, courts apply the traditional failure to warn claim when a manufacturer or seller had knowledge of a defect at the time of sale and apply the post-sale failure to warn claim when a manufacturer or seller learns of the defect after the time of sale. Victor E. Schwartz, The Post-Sale Duty to Warn: Two Unfortunate Forks in the Road to a Reasonable Doctrine, 58 N.Y.U. L.Rev. 892, 893 (1983).
The distinction between the two causes of action is important because the burden of issuing a warning is much greater once the product has left the control of the manufacturer or seller. Restatement (Third) of Torts: Products Liability § 10 cmt. a. Therefore, jurisdictions that allow post-sale failure to warn claims generally consider the difficulty of identifying and communicating with product users when determining whether the manufacturer or seller acted reasonably. See id.; Lovick, 588 N.W.2d at 695-96. These difficulties are generally not an issue in traditional failure to warn claims.
Unlike plaintiffs in post-sale duty to warn cases, the plaintiffs in this case do not allege that DCC discovered problems with the seatbacks after the time of sale. On the contrary, the theory of the plaintiffs' case was that DCC had knowledge that the seats were defective and unreasonably dangerous as early as the 1980s. Furthermore, DCC does not deny that it had knowledge of the performance of its seats at the time of sale but argues that the seats functioned in a non-defective and reasonably safe manner. There is therefore no dispute regarding DCC's knowledge at the time of sale of the Caravan. Although the plaintiffs allege that DCC continued to receive notice that its product was dangerous after the sale, they do not allege that DCC received any new information during this period. Accordingly, this case does not present the facts necessary to allow us to consider the merits of recognizing post-sale failure to warn claims. Rather, the plaintiffs' allegation that DCC was negligent in failing to warn the plaintiffs after the sale is an attempt to impose liability a second time for what is essentially the same wrongful conduct. If a defendant negligently fails to warn at the time of sale, that defendant does not breach any new duty to the plaintiff by failing to provide a warning the day after the sale. Instead, the defendant merely remains in breach of its initial duty. For these reasons, we conclude that the trial court erred by adopting and applying the post-sale failure to warn claim in this case. We express no opinion, however, as to the merits of recognizing that cause of action in an appropriate case.
DCC claims the trial court's error was prejudicial to DCC in two ways. First, DCC claims that due process concerns are raised by allowing the jury to base its recklessness determination on a previously unrecognized cause of action. Essentially, DCC argues that it did not have notice that it could be punished for failing to issue a warning after the date of sale. See Gore, 517 U.S. at 574, 116 S.Ct. 1589 (holding that a defendant is entitled to fair notice of "the conduct that will subject him to punishment"). Although the jury did find DCC liable for the post-sale duty to warn claim, it also found DCC liable on three other grounds — designing, manufacturing, and selling the Caravan with defective seats; designing, manufacturing, and selling the Caravan with unreasonably dangerous seats; and failing to warn the plaintiffs at the time of sale. There was sufficient evidence of recklessness related to these three claims from which a reasonable jury could have determined that punitive damages were warranted. Furthermore, in the second phase of the trial, the trial court instructed the jury that it was not to base its award of punitive damages on the post-sale failure to warn claim. In spite of this instruction, the jury awarded $98,000,000 in punitive damages. The jury's belief that the three valid claims warranted such a substantial award is powerful evidence that the decision to impose punitive damages was not based upon the post-sale failure to warn claim. Furthermore, we are similarly unconvinced that the jury based the wrongful death award on the post-sale failure to warn claim. Under the circumstances of this case, the three valid claims were sufficient to support a wrongful death award of $5,000,000. Accordingly, we find this argument to be without merit.
Second, DCC claims that the post-sale duty to warn claim permitted the admission of evidence that otherwise would have been deemed irrelevant. Specifically, DCC argues that the evidence of other similar incidents occurring after the date of sale would not have been admissible. Indeed, the plaintiffs acknowledged at trial and in their response to DCC's Motion for Judgment Notwithstanding the Verdict and New Trial that the other similar incidents were tendered and admitted only to prove that DCC had notice of the condition of the seats. The jury was also instructed that it could consider the other similar incidents only for the purpose of showing that DCC had notice of the seat's condition. In their post-trial motions and responses, the parties appeared to agree that the documents supporting the other similar incidents would have been inadmissible hearsay if offered to prove that the seats were defective or unreasonably dangerous. Clearly incidents that occurred after the date the plaintiffs purchased the Caravan could not have provided DCC with notice that it should provide a warning at the time the Caravan was sold. It therefore appears that the trial court admitted evidence of the post-sale similar incidents to show notice with respect to the plaintiffs' second failure to warn claim. We agree that there would have been no valid reason to admit the post-sale similar incidents if the trial court had not recognized the plaintiffs' second failure to warn claim. Because we hold that the trial court should not have recognized this claim, the trial court erred in admitting evidence of the twenty-five other similar incidents that occurred after the Caravan was purchased in May 1998.
Our inquiry does not end here. DCC is entitled to reversal of the jury's verdict only if the trial court's error would have "more probably than not affected the judgment or would result in prejudice to the judicial process." Tenn. R.App. P. 36(b); accord Cumulus Broad., Inc. v. Shim, 226 S.W.3d 366, 375 (Tenn. 2007). "The greater the amount of evidence of guilt, the heavier the burden on the defendant to demonstrate that a non-constitutional error involving a substantial right more probably than not affected the outcome of the trial." State v. Rodriguez, 254 S.W.3d 361, 372 (Tenn. 2008).
Although the jury heard evidence of twenty-five post-sale similar incidents, the trial court instructed the jury that it could consider that evidence only for the purpose of determining whether DCC had notice of the condition of the seats. We presume that the jury followed the trial court's instruction and did not consider the other similar incidents for purposes of determining whether the seats were unreasonably dangerous. State v. Williams, 977 S.W.2d 101, 106 (Tenn. 1998). We therefore conclude that the trial court's instruction significantly reduced the danger of prejudice to DCC. In addition, the trial judge's remittitur of the punitive damages award also limited the danger that the evidentiary error affected the judgment in this case.
Most importantly, there was a wealth of evidence supporting the jury's verdict. There was testimony that DCC had received notice of children injured by yielding seatbacks as early as the mid-1980s. DCC's own crash test videos demonstrated that seatbacks consistently yielded into the passenger space behind them in rear-end collisions. Mr. Sheridan testified that the MSLT informed DCC executives that the seats were dangerous. Finally, the plaintiffs introduced twelve similar incidents that occurred before the date of sale. Of those twelve, three incidents involved a child suffering skull or facial fractures as a result of a yielding seat. Three others involved children suffering other injuries from yielding seatbacks. The jury's verdict is amply supported by this properly admitted evidence. In light of the wealth of evidence supporting the jury's verdict, we conclude that the twenty-five other similar incidents that were improperly admitted were not so significant as to affect the jury's verdict. Accordingly, we conclude that the trial court's decision to admit the post-sale other similar incidents did not prejudice the judicial process or more probably than not affect the judgment.
We are not indifferent to Justice Koch's concerns about the volume of improperly admitted evidence and the potential for prejudice when admitting other similar incidents. As we have stated, however, the proof of DCC's recklessness is so powerful that the jury was probably not affected by the trial court's error. Justice Koch has a very different view of the evidence in this case, and it is therefore unsurprising that his dissent expresses a greater estimation of the impact of the trial court's error.
V. Miscellaneous Rulings of the Trial Court
DCC also argues that it was prejudiced by various other rulings of the trial court. Specifically, DCC argues that the trial court abused its discretion by admitting the other similar incidents that occurred prior to the sale of the Caravan, excluding accident data proffered by DCC, and failing to grant a new trial as a sanction for the trial court's determination that plaintiffs abused the discovery process. DCC also argues that the absence of a valid ad damnum clause in plaintiffs' complaint should bar any award to the plaintiffs. For the reasons stated by the Court of Appeals, we conclude that each of these arguments is without merit.
VI. Conclusion
We hold that Ms. Sparkman's NIED claim is a "stand-alone" claim in spite of the fact that she simultaneously brought a wrongful death claim. Therefore, Ms. Sparkman's NIED claim should have been supported by expert medical or scientific proof of a severe emotional injury. Accordingly, we affirm the Court of Appeals' reversal of the compensatory and punitive damage awards based on Ms. Sparkman's NIED claim. In addition, we conclude that the punitive damages awarded by the trial court were adequately supported by the evidence and were not excessive. Therefore, we reverse the Court of Appeals' decision to overturn the punitive damage award related to the plaintiffs' wrongful death claim. Finally, we hold that the trial court erred by recognizing the plaintiffs' second failure to warn claim but conclude that the error did not more probably than not affect the judgment or prejudice the judicial process. Costs of this appeal are taxed equally to the appellee, DaimlerChrysler Corporation, and the appellants, Jeremy Flax and Rachel Sparkman, and their sureties for which execution may issue if necessary.
CORNELIA A. CLARK, J., concurring in part and dissenting in part. GARY R. WADE, J., concurring. WILLIAM C. KOCH, JR., J., concurring in part and dissenting in part.
The heart-wrenching facts of this wrongful death/emotional distress case, which are adequately set forth in the majority opinion, need not be restated here. The tragedy visited upon this family is indeed great. The record, like the trial itself, is lengthy. The trial testimony is extensive and, at times, contradictory. The fact that the members of this Court disagree as to how to resolve some of the difficult legal issues — which are hotly contested — is no surprise. The case is complex on multiple levels and resolving the issues presented while attempting to achieve a just result has proven to be no easy task.
I.
In light of the settled principles discussed in Part II of the majority opinion, I fully concur in this part of the opinion, which affirms the Court of Appeals' reversal of the compensatory and punitive damage awards to Ms. Sparkman based on her negligent infliction of emotional distress claim. Like the majority, I believe that such claims must be supported by expert medical or scientific evidence as required by Camper v. Minor, 915 S.W.2d 437 (Tenn. 1996). The present case is no exception, notwithstanding the difficult circumstances experienced by Ms. Sparkman immediately following the accident. Although I agree with the plaintiffs that some circumstances obviously result in severe emotional distress, creating an exception to the heightened proof requirements of Camper would, in my view, undermine Camper's goal of bringing a measure of consistency and predictability to an area of the law that had become unwieldy precisely because of exceptions. See Camper, 915 S.W.2d at 445 (noting that ad hoc exceptions in emotional distress cases had "robbed the law of logic, consistency and fairness"). In my view, requiring all plaintiffs to meet the heightened proof requirements of Camper provides a much needed common thread in cases for negligent infliction of emotional distress. Accordingly, the compensatory and punitive awards to Ms. Sparkman for her emotional distress cannot stand.
I further concur in that portion of Part IV of the majority opinion holding that the trial court erred in recognizing the plaintiffs' second failure to warn claim. The plaintiffs do not contend that the manufacturer of their minivan discovered problems with the seats after they purchased the vehicle. Thus, the case simply does not present facts necessary for us to consider the viability of a true post-sale failure to warn cause of action. For us to resolve that issue in the context of this case would be tantamount to giving an advisory opinion. See State v. Brown Williamson Tobacco Corp., 18 S.W.3d 186, 193 (Tenn. 2000) (noting that courts are not to render advisory opinions). In order to have a justiciable controversy, a real question rather than a theoretical or hypothetical one must be at stake. Id. If the rule were otherwise, the "courts might well be projected into the limitless field of advisory opinions." Story v. Walker, 218 Tenn. 605, 404 S.W.2d 803, 804 (1966) (internal citation omitted). It follows that deciding whether Tennessee common law should recognize a post-sale failure to warn claim must await another day.
I also concur in Part V of the majority opinion, which adopts the reasoning of the Court of Appeals in upholding miscellaneous evidentiary and other rulings of the trial court. These rulings concern the admission of similar incidents that occurred prior to the sale of the minivan, excluding accident data proffered by the manufacturer, the failure to grant a new trial as a sanction for purported discovery abuse by the plaintiffs, and not imposing a sanction for an invalid ad damnum clause in the complaint. Like the majority, I conclude that these largely collateral issues have no merit.
II.
Where I part ways with the majority is in its analysis of the punitive damages issue in Part III of the opinion. The jury awarded $5,000,000 in compensatory damages to the parents of Joshua for the child's wrongful death. The remitted amount of punitive damages awarded was $13,367,345 for the child's death. The majority affirms these awards, finding specifically that the punitive award is supported by clear and convincing evidence of recklessness and that the admission of twenty-five purportedly similar accidents after the minivan was sold is harmless error.
Concerning evidence of the post-sale accidents, I agree with all of my colleagues that the introduction of proof about those incidents was error. In my view, Justice Koch, in his separate opinion, properly emphasizes the frequency of references in plaintiffs' case to other allegedly similar incidents, and I specifically agree with him that, as to the finding of recklessness required in order to award punitive damages, the admission of the error did more probably than not affect the jury's decision to award punitive damages. Thus, the error cannot be deemed harmless under Tenn. R.App. P. 36(b). I concur in Justice Koch's analysis. Therefore, I would reverse the judgment of punitive damages and remand the case for a new trial on that issue.
While the introduction of the twenty-five post-sale accidents casts serious doubt on the legitimacy of the punitive award, it does not, in my view, destroy the jury's decision to find liability and award compensatory damages. The jury found the manufacturer liable on three grounds other than its breach of a post-sale duty to warn: (1) designing, manufacturing, and selling the minivan with defective seats, (2) designing, manufacturing, and selling the minivan with unreasonably dangerous seats, and (3) failing to warn at the time the vehicle was sold. I agree with the majority that, viewing the record as a whole, there is adequate evidence to support the jury's decision to impose liability and award compensatory damages, despite the introduction of the post-sale accidents. See State v. Mallard, 40 S.W.3d 473, 489 (Tenn. 2001) ("[W]hen looking to the effect of an error on the trial, we will evaluate that error in light of all of the other proof introduced at trial.").
A defective product is one that has a condition rendering the product "unsafe for normal or anticipatable handling and consumption." Tenn. Code Ann. § 29-28-102(2) (2000).
An unreasonably dangerous product is one that is "dangerous to an extent beyond that which would be contemplated by the ordinary consumer who purchases it, with the ordinary knowledge common to the community as to its characteristics, or that the product because of its dangerous condition would not be put on the market by a reasonably prudent manufacturer or seller, assuming that the manufacturer or seller knew of its dangerous condition." Tenn. Code Ann. § 29-28-102(8) (2000).
Because compensatory and punitive damage awards serve vastly different purposes, I have no difficulty affirming the compensatory award for the child's wrongful death. Although the improperly admitted evidence of post-sale incidents likely infected the jury's decision to deter and punish the manufacturer as an expression of moral condemnation, I do not believe the same can be said of the jury's decision to make the plaintiffs whole. That is, unlike with a punitive award, the reprehensibility of the manufacturer's actions in light of post-sale accidents was a nonfactor in evaluating whether to impose liability and calculate a compensatory award. Indeed, the entire concept of recklessness on the part of the manufacturer was irrelevant on those issues. Therefore, it is much less likely that the improperly admitted evidence tainted the jury's decision on issues having nothing to do with punitive damages. Accordingly, I would affirm the compensatory award for the child's wrongful death.
Compensatory damages are designed to make the plaintiff whole. Hodges, 833 S.W.2d at 902. In contrast, the purpose of punitive damages is to punish the wrongdoer and deter the wrongdoer and others from engaging in similar misconduct in the future. Id. at 900. Thus, unlike compensatory damages, an award of punitive damages is not designed to compensate the injured party. Id.
In summary, I concur with the majority on all issues except their affirmance of the punitive damages award. I would remand for a retrial only on the issue of punitive damages.
I concur with Justice Holder and Chief Justice Barker as to the propriety of the award of $5 million for the wrongful death of Jeremy Flax, apportioned one-half to the fault of the DaimlerChrysler Corporation [the "Defendant"] and the other one-half to Lewis Stockell. I further concur in their affirmance of the trial court's reduction of punitive damages against the Defendant regarding the wrongful death action from $65,500,000 to $13,367,345. Finally, I agree that the $2.5 million in compensatory damages awarded Rachel Sparkman for the negligent infliction of emotional distress, one-half of which was adjudged against the Defendant, and the punitive damages of $6,632,655, all of which was assessed against the Defendant, should be set aside.
Because of the lengthy trial in Davidson County and a transcript consisting of thousands of pages of pleadings, testimony, and exhibits, I commend the author, as well as the other members of this Court for the time and effort expended on record review and the resolution of these most difficult issues. I part with my colleagues who join in the lead opinion only as to the viability of a cause of action based upon the post-sale duty to warn. By way of explanation, I would acknowledge the Restatement (Third) of Torts: Products Liability § 10 (1998) as authority, as did the trial court. I believe, therefore, that the trial court (which, of course, could not have known prior to the verdict that the jury would ultimately sustain the pre-sale duty to warn claim) properly admitted testimony about similar accidents taking place after the sale of the 1998 Dodge Grand Caravan for the limited purpose of establishing that the Defendant had notice of the defective seat design, which contributed to the death of Joshua Flax. For that reason, I see no need for a harmless error analysis.
The complaint included allegations that the Caravan, manufactured by the Defendant and operated by Jim Sparkman at the time of the accident, included front seats that were defective and unreasonably dangerous, and which posed a danger to any children seated directly to the rear. Because the Defendant had failed to issue any warnings to consumers of that danger, there were allegations that the company was responsible for compensable damages under the Tennessee Products Liability Act of 1978. Tenn. Code Ann. §§ 29-28-101 to -108 (2000). Moreover, Jeremy Flax, Joshua's father, and Rachel Sparkman, his mother [the "Plaintiffs"], maintained that punitive damages were warranted because the Defendant, who knew or should have known of the safety defects, had acted intentionally and recklessly, by continuing to market and sell the Caravan as particularly safe for families with children.
In this state, the purpose of a complaint is to provide notice of a claim; "minimum general facts that would support a potential cause of action" are necessary. Wicks v. Vanderbilt Univ., M2006-00613-COA-R3-CV, 2007 WL 858780, at *13 (Tenn.Ct.App. Mar. 21, 2007).
About three weeks before the trial, the Plaintiffs filed a trial brief advocating jury instructions pertaining to the manufacturer's liability, not only for harm caused by a pre-sale failure to warn of the defective seating, but also for a post-sale failure to warn. More specifically, the Plaintiffs argued that a jury charge on post-sale failure to warn was warranted because many Caravan owners had notified the Defendant after 1998 about the poor performance of the seats in relatively minor accidents. The Plaintiffs sought permission to introduce as evidence several documents arising from telephone calls to "Cares," a call-in service offered by the Defendant to its customers. Some 385 instances were brought to the attention of the trial court in the pretrial proceedings. Many of these complaints involved collisions into the rear of the minivans where the front seats had yielded or collapsed in a backward manner, and a passenger was injured as a result. In several instances, children sitting behind the yielding seats were seriously injured. Following these reports, engineers employed by the Defendant inspected the vehicles and provided their findings to the company.
Shortly before the trial, the Defendant filed a reply brief, arguing that this state did not recognize a post-sale duty to warn and citing an unpublished opinion from the Court of Appeals as authority for that proposition. Irion v. Sun Lighting, Inc., No. M2002-00766-COA-R3-CV, 2004 WL 746823, at *17 (Tenn.Ct.App. Apr. 7, 2004) ("Although the Restatement (Third) of Torts adopts some post-sale duties, Tennessee had not adopted those provisions and, in any event, Ms. Irion's proof would not trigger those duties."). The Defendant further objected to the admission of the complaints on hearsay grounds.
At the conclusion of a pretrial hearing, the trial court held that the ruling in Irion did not preclude the application of the most recent version of the Restatement and permitted an alternative claim under the post-sale duty to warn theory. Because the trial court concluded that the telephone complaints about the seats were not to be admitted to prove the truth of the matter asserted, but to establish that the Defendant had adequate notice of the potential danger, thirty-seven of these complaints were held to be admissible. Twelve of the complaints were prior to the Plaintiffs' purchase of the Caravan. Twenty-five occurred afterward and, therefore, were only relevant to the theory of recovery based upon post-sale duty to warn. At trial, this evidence was presented as a part of the Plaintiffs' proof. At the conclusion of the testimony, the trial court instructed the jury to consider the complaints of the similar accidents only for the limited purpose of establishing that the Defendant was aware of the potential defect in the seats of the Caravan. Ultimately, the jury determined that the Defendant failed in its duty to issue warnings both prior to the sale of the vehicle and afterward, and awarded compensatory damages.
The Defendant filed a motion for an extraordinary appeal pursuant to Rule 10 of the Tennessee Rules of Appellate Procedure with regard to the post-sale duty issue. This motion was denied by the trial court and, later, also denied by the Court of Appeals. See Flax v. DaimlerChrysler Corp., No. M2005-01768-COA-R3-CV, 2006 WL 3813655, at *3 (Tenn.Ct.App. Dec. 27, 2006).
The Tennessee Rules of Civil Procedure allow for alternative pleadings:
A party may set forth two (2) or more statements of a claim or defense alternately or hypothetically. When two (2) or more statements are made in the alternative and one (1) of them if made independently would be sufficient, the pleading is not made insufficient by the insufficiency of one or more of the alternative statements. A party may also state as many separate claims or defenses as he or she has, regardless of consistency.
Tenn. R. Civ. P. 8.05(2) (2007); Barnes v. Barnes, 193 S.W.3d 495, 501 (Tenn. 2006) ("[A]lternative pleadings are expressly permitted, regardless of consistency."); see also Worley v. Weigel's, Inc., 919 S.W.2d 589, 594 (Tenn. 1996) ("An alternative pleading may not be used as an admission."). Like the trial judge, I believe that in these circumstances the Plaintiffs were entitled to present alternative theories of recovery as to duty to warn and that there was material evidence to support the verdict of the jury as to the viability of either claim. See Cover v. Cohen, 61 N.Y.2d 261, 473 N.Y.S.2d 378, 461 N.E.2d 864, 871 (1984) (stating that whether a duty to warn arises depends on the "degree of danger which the problem involves and the number of instances reported").
The relevant section of the Restatement provides as follows:
(a) One engaged in the business of selling or otherwise distributing products is subject to liability for harm to persons or property caused by the seller's failure to provide a warning after the time of sale or distribution of a product if a reasonable person in the seller's position would provide such a warning.
(b) A reasonable person in the seller's position would provide a warning after the time of sale if:
(1) the seller knows or reasonably should know that the product poses a substantial risk of harm to persons or property; and
(2) those to whom a warning might be provided can be identified and can reasonably be assumed to be unaware of the risk of harm; and
(3) a warning can be effectively communicated to and acted on by those to whom a warning might be provided; and
(4) the risk of harm is sufficiently great to justify the burden of providing a warning.
Restatement (Third) of Torts: Products Liability § 10.
One commentator has described the Restatement Third of Torts' summary of products liability law as "the most important development in the past three decades for those who must live in the `nuts and bolts' world of product liability law." Victor E. Schwartz, The Restatement (Third) of Torts: Products Liability: A Guide to its Highlights, 34 Tort Ins. L.J. 85 (1998). This Court has previously looked to the Restatement Third for guidance as to tort law in Tennessee. See, e.g., Mercer v. Vanderbilt Univ., Inc., 134 S.W.3d 121, 129 (Tenn. 2004).
In my assessment, a post-sale duty comports with both public policy and traditional tort theory. The many jurisdictions recognizing a duty of post-sale failure to warn agree that a claim for damages should be permitted when the manufacturer is aware that the product is defective or unreasonably dangerous after the sale and fails to take reasonable steps to warn those buyers who have purchased the product. See, e.g., Lovick v. Wil-Rich, 588 N.W.2d 688, 693 (Iowa 1999); Patton v. Hutchinson Wil-Rich Mfg. Co., 253 Kan. 741, 861 P.2d 1299, 1313 (1993); Owens-Illinois, Inc. v. Zenobia, 325 Md. 420, 601 A.2d 633, 645-46 (1992); Comstock v. Gen. Motors Corp., 358 Mich. 163, 99 N.W.2d 627, 634 (1959); see also, Douglas R. Richmond, Expanding Products Liability: Manufacturers' Post-Sale Duties to Warn, Retrofit and Recall, 36 Idaho L.Rev. 7, 18 (1999). The first state to recognize the duty to warn arising after a sale was Michigan. In a case involving defective breaks in the 1953 model Buicks, the Michigan Supreme Court held that a manufacturer, who after a sale discovers a latent defect in its product, may have the responsibility "to take all reasonable means to convey effective warning to those who" have already purchased the product. Comstock, 99 N.W.2d at 634. Since this decision, a growing number of states have recognized that a manufacturer's responsibility to try to prevent foreseeable harm to its consumers does not terminate at the time of the sales transaction. On occasion, it is essential for companies to actively issue "warnings about risks discovered after sale . . . to prevent significant harm to persons and property." Restatement (Third) of Torts: Products Liability § 10, cmt. a. A post-sale warning reduces "the chance of injury by equalizing the asymmetry of information between the parties." Lovick, 588 N.W.2d at 693. Because of its specialized knowledge and frequent dealings with a product, the manufacturer is in a far better position than the consumer to discover hidden defects that are not apparent to either the buyer or seller when a product is first sold. See Comstock, 99 N.W.2d at 634.
The requirements for a post-sale duty to warn differ from a pre-sale duty in more ways than just the timing of the transaction. Because it costs more to identify and warn consumers after the sale than before the product leaves the seller's control, see Patton, 861 P.2d at 1313, a jury should be required to conduct a cost-benefit analysis when assessing liability. Restatement (Third) of Torts: Products Liability § 10(b)(4). Other factors to consider include the kind of the warning to be issued, the people to whom it is to be given, the nature of the industry, the degree of the potential harm that may result, the difficulty in locating purchasers of the product, whether the warning will be heeded if given, the potential life of the product, the kind of product involved, and the number sold. See, e.g., Rekab, Inc. v. Frank Hrubetz Co., 261 Md. 141, 274 A.2d 107 (1971); Comstock, 99 N.W.2d at 634; Cover, 473 N.Y.S.2d 378, 461 N.E.2d at 871; Kozlowski v. John E. Smith's Sons Co., 87 Wis.2d 882, 275 N.W.2d 915 (1979). These authorities recognize that there is not "an absolute continuing duty, year after year, for all manufacturers to warn of a new safety device which eliminates potential hazards." Kozlowski, 275 N.W.2d at 923. Whether harm was foreseeable after a manufacturer knew or should have known of a latent defect is a key issue. See Olson v. Prosoco, Inc., 522 N.W.2d 284, 288-89 (Iowa 1994). As a threshold determination of whether a post-sale duty may arise in a given case, trial courts should "carefully examine the circumstances for and against imposing a duty to provide a post-sale warning." Restatement (Third) of Torts: Products Liability § 10 cmt. a.
Considering the manner in which the post-sale duty to warn has been described by other jurisdictions, I am persuaded that its function and goals are compliant with the state of tort law in Tennessee. Consumer protection is always a priority. Further, in my view, the language of our statute defining a "product liability action" does not preclude a credible claim made under a post-sale duty to warn. Tenn. Code Ann. § 29-28-102 (2000) (stating that product liability actions include a " breach of or failure to discharge a duty to warn or instruct, whether negligent, or innocent; misrepresentation, concealment, or nondisclosure, whether negligent, or innocent") (emphasis added).
In this case, there was material evidence for a reasonable jury to find a post-sale duty to warn. There was testimony as to each of the four elements. With regard to the first, a reasonable juror could have determined that the Defendant, fully aware of the complaints from its customers, knew or should have known that the seats in its minivans posed a substantial risk of harm. Because buyers of the Caravan would have been readily identifiable, and it can reasonably be assumed that the drivers would not know that the seats would yield so dramatically in a rear-end collision, the second element was satisfied. See Comstock, 99 N.W.2d at 634 (imposing liability for post-sale failure to warn against an automobile manufacturer because of latent defects in the automobile). The third element was met because the Defendant could have issued warnings about the potential for injury to those occupants located directly behind the defective front seats. Fourth and finally, considering the nature of the reported injuries — serious bodily harm to children — a reasonable juror could have found that "the risk of harm is sufficiently great to justify the burden of providing a warning."
As stated, it is my view that the trial court did not err by admitting for notification purposes only the twenty-five similar incidents that occurred after the sale of the Caravan. For this reason, I believe the harmless error analysis in the lead opinion with regard to this evidence is unnecessary; otherwise, I fully concur.
By concurring with the majority, I am especially mindful that under our constitution, "the right of trial by jury shall remain inviolate." Tenn. Const. Art. I, § 6. The right to trial by jury has its origin in the common law and in the Constitution of North Carolina at the time of the formation and adoption of the Tennessee Constitution in 1796. Patten v. State, 221 Tenn. 337, 426 S.W.2d 503 (1968); Garner v. State, 13 Tenn. (5 Yer.) 159 (1833). The right to jury includes the entitlement to have all factual issues resolved during a trial. Hurt v. Earnhart, 539 S.W.2d 133 (Tenn.Ct.App. 1976). It guarantees that the issues of fact will be determined by twelve jurors properly instructed by the trial court. State v. Garrison, 40 S.W.3d 426 (Tenn. 2000); see also Grooms v. State, 221 Tenn. 243, 426 S.W.2d 176 (1968). Although not generally applicable to litigation of an equitable nature, the right to jury must not be hampered by conditions or encumbrances. Smyrna v. Ridley, 730 S.W.2d 318 (Tenn. 1987); Neely v. State, 63 Tenn. (4 Baxt.) 174 (1874). Most importantly, a jury verdict limits the scope of review on appeal, as Justice Holder has so accurately acknowledged; this court is limited to determining whether there is material evidence to support the verdict, and, in making that determination, we must take the strongest legitimate view of all the evidence in favor of the verdict, allowing all reasonable inferences in its favor and discarding all inferences to the contrary. Crabtree Masonry Co. v. C R Constr., Inc., 575 S.W.2d 4 (Tenn. 1978). The right to trial by jury is too precious to ignore. Our duty, in general, is to yield to the will of a well-informed jury, which has seen and heard first-hand the quantity and quality of the evidence, rather than conduct and independent review from a written record. To substitute our judgment for that of the jury denigrates the importance of this basic principle in our system of jurisprudence.
The Court has decided to uphold a judgment for $18,367,345 in compensatory and punitive damages arising out of the death of an eight-month-old child in a collision between a minivan and a truck. While the parents' loss of their child is heart-wrenching and tragic, I cannot concur in affirming the awards of either compensatory or punitive damages against the manufacturer of the minivan in which the child was a passenger. The child's parents are not entitled to $13,367,345 in punitive damages because they have failed to present clear and convincing evidence that the manufacturer acted recklessly in the design, construction, or marketing of the minivan. They are likewise not entitled to recover $5,000,000 in compensatory damages because of the erroneous admission of evidence regarding twenty-five "similar incidents" occurring after the date that the minivan was sold. Accordingly, rather than approving the award of $18,367,345 in compensatory and punitive damages, I would remand the case for a new trial on the issue of compensatory damages only.
I.
In June 2001, Jim and Sandra Sparkman resided in Kingston Springs, Tennessee with their adult daughter, Rachel Sparkman, and Joshua Flax, Rachel Sparkman's eight-month-old son. The Sparkmans owned a 1998 Dodge Caravan minivan manufactured by DaimlerChrysler Corporation ("DaimlerChrysler"). On the morning of June 30, 2001, shortly after Mr. Sparkman turned left onto Old Charlotte Pike from a private driveway, a truck being driven by Louis A. Stockell, Jr. crashed into the rear of the Sparkmans' minivan. Mr. Stockell's truck was traveling between fifty and fifty-five miles per hour despite a thirty-five mile per hour speed limit. The force of the collision propelled the minivan off the roadway, up a small hill, and head-on into a tree. The minivan's rear bumper sustained almost two feet of crash damage, and the force of the collision jammed the doors shut.
Mr. Stockell's truck also veered off the road and followed the minivan up the hill. After the minivan struck the tree, Mr. Stockell's truck collided with the rear of the minivan a second time.
When the collision occurred, Mr. Sparkman was in the driver's seat, and another adult passenger was in the front passenger's seat. Rachel Sparkman was seated in a captain's chair style seat immediately behind her father, and Joshua Flax was strapped in a forward-facing baby seat in the captain's chair style seat immediately behind the front passenger seat. Two other adults were seated in a third row of seats. None of the adults in the minivan were seriously injured. However, Joshua Flax sustained severe head injuries when the collision caused the back of the seat in front of him to yield backward and to strike him on the head. Joshua Flax died at the hospital the following day.
On May 7, 2002, Rachel Sparkman and Jeremy Flax, along with the Sparkmans filed a complaint in the Circuit Court for Davidson County against DaimlerChrysler and Mr. Stockell. Of particular relevance to this appeal, Rachel Sparkman and Jeremy Flax sought to recover compensatory and punitive damages for the wrongful death of Joshua Flax. For her own part, Rachel Sparkman also sought compensatory and punitive damages for negligent infliction of emotional distress.
Jeremy Flax is Joshua Flax's biological father.
The wrongful death claims included allegations that DaimlerChrysler was negligent in the design, manufacture, and sale of the minivan and that the front seats in the minivan were defective and unreasonably dangerous. Rachel Sparkman and Jeremy Flax also alleged that DaimlerChrysler had violated its post-sale duty to warn owners about the defective and dangerous seats in the minivan. They also alleged that DaimlerChrysler knew that the seats were dangerous but had recklessly failed either to correct them or to warn the minivan owners of the danger.
The trial before a Davidson County jury began on November 3, 2004. On November 22, 2004, the jury returned a verdict finding that both DaimlerChrysler and Mr. Stockell were fifty percent at fault for Joshua Flax's death and for Ms. Sparkman's emotional injuries. The jury returned a $5,000,000 verdict on the wrongful death claim and a $2,500,000 verdict on Ms. Sparkman's negligent infliction of emotional distress claim. The jury also decided that DaimlerChrysler had acted recklessly and, therefore, that DaimlerChrysler could be required to pay punitive damages. The jury retired to deliberate further and, on November 23, 2004, returned a verdict against DaimlerChrysler awarding $66,500,000 in punitive damages on the wrongful death claim and $32,500,000 in punitive damages on Ms. Sparkman's negligent infliction of emotional distress claim.
DaimlerChrysler filed the usual post-trial motions challenging both the awards of compensatory damages and the awards of punitive damages. On July 11, 2005, the trial court filed a final order and judgment affirming the compensatory damages awards. Exercising its authority under Hodges v. S.C. Toof Co., 833 S.W.2d 896 (Tenn. 1992), the trial court reduced the punitive damages award on the wrongful death claim from $66,500,000 to $13,367,345 and the punitive damages award on Ms. Sparkman's negligent infliction of emotional distress claim from $32,500,000 to $6,632,655.
DaimlerChrysler, as well as Ms. Sparkman and Mr. Flax, appealed to the Court of Appeals. Following oral arguments in July 2006, the appellate court filed a lengthy and detailed opinion on December 27, 2006. Flax v. DaimlerChrysler Corp., No. M2005-01768-COA-R3-CV, 2006 WL 3813655 (Tenn.Ct.App. Dec. 27, 2006). The Court of Appeals affirmed the $5,000,000 award of compensatory damages for the wrongful death of Joshua Flax. However, the court reversed the compensatory and punitive damage awards for Ms. Sparkman's negligent infliction of emotional distress claim because Ms. Sparkman had failed to present expert evidence that she had sustained serious and severe emotional injuries. The appellate court also reversed the $13,367,345 award for punitive damages for the wrongful death of Joshua Flax after concluding that Rachel Sparkman and Jeremy Flax had failed to present clear and convincing evidence that DaimlerChrysler had acted recklessly.
We granted Rachel Sparkman's and Jeremy Flax's application for permission to appeal to review the Court of Appeals' decision to dismiss Ms. Sparkman's claim for negligent infliction of emotional distress and to reverse the $13,367,345 award for punitive damages for the wrongful death of Joshua Flax. In accordance with Tenn. R.App. P. 13(a), DaimlerChrysler has also asserted that it is entitled to a new trial on the wrongful death claim.
The Court has now determined that the Court of Appeals properly reversed the awards for compensatory and punitive damages for Ms. Sparkman's negligent infliction of emotional distress claim. The Court has also affirmed the $5,000,000 award of compensatory damages and has reinstated the $13,367,345 award of punitive damages for the wrongful death of Joshua Flax. While I concur fully with the reasoning and the result of the Court's disposition of the negligent infliction of emotional distress and post-sale failure to warn claims, I cannot concur with the decision to affirm the awards of compensatory and punitive damages on the wrongful death claims.
II. THE PUNITIVE DAMAGES AWARD
Punitive damages have been awarded by Tennessee's courts for almost one hundred and seventy years. Their two-fold purpose is to punish wrongful conduct and to deter others from engaging in similar conduct in the future. Miller v. United Automax, 166 S.W.3d 692, 697 (Tenn. 2005); Concrete Spaces, Inc. v. Sender, 2 S.W.3d 901, 906-07 (Tenn. 1999). As salutary as these purposes are, the courts have recognized that awards of punitive damages pose an acute danger of arbitrary deprivation of property, Honda Motor Co. v. Oberg, 512 U.S. 415, 432, 114 S.Ct. 2331, 129 L.Ed.2d 336 (1994), and that they have a devastating potential for harm when imposed indiscriminately, State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 417, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003) (quoting Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 42, 111 S.Ct. 1032, 113 L.Ed.2d 1 (1991) (O'Connor, J., dissenting)).
Wilkins v. Gilmore, 21 Tenn. (2 Hum.) 140, 141 (1840). By 1870, punitive damages awards were so well-established, that this Court, despite its strong misgivings, declined to discontinue them. Dougherty v. Shown, 48 Tenn. (1 Heisk.) 302, 305-06 (1870). During this time, punitive damages have been referred to as "exemplary damages," "vindictive damages," and "smart money." Liberty Mut. Ins. Co. v. Stevenson, 212 Tenn. 178, 180, 368 S.W.2d 760, 761 (1963).
Sixteen years ago, this Court, acknowledging the potential difficulties with punitive damages awards, limited the circumstances in which punitive damages could be awarded and prescribed procedures to assure that punitive damages were not arbitrarily and capriciously awarded. Hodges v. S.C. Toof Co., 833 S.W.2d 896 (Tenn. 1992). We recognized that punitive damages could be a deterrent against "truly reprehensible conduct," Hodges v. S.C. Toof Co., 833 S.W.2d at 901, and thus we limited punitive damages awards to circumstances in which the defendant has acted intentionally, fraudulently, maliciously, or recklessly. Hodges v. S.C. Toof Co., 833 S.W.2d at 901.
At the same time that we circumscribed the circumstances in which punitive damages could be awarded, we prescribed four procedures designed to assure that punitive damages, when warranted, were imposed in only the "most egregious cases" and then, in a manner consistent with the Due Process Clause of the Fourteenth Amendment to the United States Constitution and Article I, Section 8 of the Constitution of Tennessee. See Hodges v. S.C. Toof Co., 833 S.W.2d at 900-02. These procedures include: (1) a bifurcated trial, (2) a heightened burden of proof, (3) specific instructions, and (4) independent judicial oversight over punitive damages awards. This case requires consideration of the plaintiffs heightened burden of proof and the courts' oversight of punitive damages awards.
Hodges v. S.C. Toof Co., 833 S.W.2d at 901.
Hodges v. S.C. Toof Co., 833 S.W.2d at 901.
Hodges v. S.C. Toof Co., 833 S.W.2d at 901-02.
Hodges v. S.C. Toof Co., 833 S.W.2d at 902.
We decided in Hodges v. S.C. Toof Company that plaintiffs seeking punitive damages must present "clear and convincing evidence" that the defendant's acts that caused their injury were intentional, fraudulent, malicious, or reckless. Hodges v. S.C. Toof Co., 833 S.W.2d at 901 n. 3. The clear and convincing evidence standard requires that the truth of the proposition sought to be established by the evidence be highly probable. Teter v. Republic Parking Sys., Inc., 181 S.W.3d 330, 341 (Tenn. 2005). Clear and convincing evidence leaves no serious or substantial doubt about the correctness of the conclusions to be drawn from the evidence. In re Valentine, 79 S.W.3d 539, 546 (Tenn. 2002); Hodges v. S.C. Toof Co., 833 S.W.2d at 901 n. 3. Thus, clear and convincing evidence produces in the fact-finder's mind a firm belief or conviction regarding the truth of the facts sought to be established. In re Tiffany B., 228 S.W.3d 148, 155-56 (Tenn.Ct.App. 2007); Hibdon v. Grabowski, 195 S.W.3d 48, 63 (Tenn.Ct.App. 2005); Wiltcher v. Bradley, 708 S.W.2d 407, 411 (Tenn.Ct.App. 1985).
Giving juries discretion to award punitive damages creates the potential that juries will use their verdicts to express biases against big businesses, especially ones without a strong local presence. Honda Motor Co. v. Oberg, 512 U.S. at 432, 114 S.Ct. 2331. Accordingly, in Hodges v. S.C. Toof Company, we required the trial courts to review punitive damages awards differently than the way they customarily review jury verdicts and compensatory damages awards. Rather than performing their traditional task as the thirteenth juror, we directed trial courts to "review the award, giving consideration to all matters on which the jury is required to be instructed." Hodges v. S.C. Toof Co., 833 S.W.2d at 902. We also directed trial courts to "clearly set forth the reasons for decreasing or approving all punitive awards in findings of fact and conclusions of law demonstrating a consideration of all factors on which the jury is instructed." Hodges v. S.C. Toof Co., 833 S.W.2d at 902.
Because punitive damages awards are different, they also require a different standard of appellate review. This standard of review consists of two steps.
A heightened burden of proof requires a heightened standard of appellate review. Accordingly, the first step in reviewing a punitive damages award on appeal is to review the record to determine whether it contains material evidence that supports a finding by clear and convincing evidence that the defendant acted intentionally, fraudulently, maliciously, or recklessly. See, e.g., Buell-Wilson v. Ford Motor Co., 73 Cal.Rptr.3d 277, 312 (Cal.App. 2008); Budget Car Sales v. Stott, 662 N.E.2d 638, 639 (Ind. 1996); York v. InTrust Bank, N.A., 265 Kan. 271, 962 P.2d 405, 429 (1998); Flippo v. CSC Assocs. III, L.L.C., 262 Va. 48, 547 S.E.2d 216, 223 (2001). At this stage, the appellate court must determine whether the jury could reasonably have been persuaded that the required factual findings were proved to be highly probable. Shrader-Miller v. Miller, 855 A.2d 1139, 1145 (Me. 2004). Stated another way, the appellate court must ask whether sufficient material evidence was presented to produce in the mind of a reasonable fact-finder a firm belief or conviction as to the matters required to be proven. Tele-check Servs., Inc. v. Elkins, 226 S.W.3d 731, 735 (Tex.Ct.App. 2007). Any lesser standard of review dilutes the sixteen-year-old requirement that plaintiffs seeking punitive damages must prove by clear and convincing evidence that the defendant acted intentionally, fraudulently, maliciously, or recklessly.
Sw. Bell Tel. Co. v. Garza, 164 S.W.3d 607, 627 (Tex. 2004).
Cf. Shell v. Law, 935 S.W.2d 402, 405 (Tenn.Ct.App. 1996) (stating that "when we reach issues requiring the evidence to be clear, cogent and convincing, [we will] examine the record to determine if there is sufficient proof to constitute clear, cogent and convincing evidence to support the findings of the jury.").
Hodges v. S.C. Toof Co., 833 S.W.2d at 901.
If the appellate court determines that the plaintiff has proved by clear and convincing evidence that it is entitled to punitive damages, the second step of the appellate review process requires the appellate court to engage in an exacting appellate review to ensure that the punitive damages award is based on an application of the law rather than the decision-maker's caprice. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. at 418. Rather than being deferential to the trial court, Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 440, 121 S.Ct. 1678, 149 L.Ed.2d 674 (2001), this review must be "independent." Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. at 435.
At this stage of the review, the appellate court must engage in an independent, de novo evaluation of the three "guideposts" for punitive damages first required in BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 574-75, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996). State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. at 418, 123 S.Ct. 1513; Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. at 436, 121 S.Ct. 1678. These guideposts include (1) the degree of reprehensibility of the defendant's conduct, (2) the disparity between the actual and 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. BMW of N. Am., Inc. v. Gore, 517 U.S. at 575, 116 S.Ct. 1589.
An award of punitive damages is an expression of moral condemnation. Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. at 432, 121 S.Ct. 1678. The purpose of this exacting appellate review is to assure that the defendant's conduct is the "most egregious of wrongs," Cf. Cambio Health Solutions, LLC v. Reardon, 213 S.W.3d 785, 792 (Tenn. 2006), and that it is so reprehensible that it must be both punished and deterred. Cf. Culbreath v. First Tenn. Bank Nat'l Ass'n, 44 S.W.3d 518, 528-29 (Tenn. 2001); Metcalfe v. Waters, 970 S.W.2d 448, 450 (Tenn. 1998). Using these principles, respectfully, it is my view that this case is neither close nor difficult. Ms. Sparkman and Mr. Flax have failed to prove by clear and convincing evidence that DaimlerChrysler acted so recklessly with regard to the design, construction, and marketing of the 1998 Dodge Caravan that it should be punished by an award of punitive damages.
At the time the 1998 Dodge Caravan was designed and manufactured, there was a genuine principled debate in the automotive community regarding just how rigid or stiff car seatbacks should be. Some, like the plaintiffs' witness, Kenneth Saczalski, favored using seats that were more rigid than the seats that were generally being used in American vehicles. Others, like DaimlerChrysler, were wary of using more rigid seats because of their concern that making the front seats more rigid would expose the occupants of a vehicle to other, equally serious injuries. Accordingly, balancing the risks presented by impact occurring from various directions, DaimlerChrysler designed the front seats of the minivan to yield in a controlled manner in the event of a rear impact.
The evidence showed that the design of car seats is a complex engineering issue that requires reasonable safety trade-offs. In fact, the National Highway Traffic Safety Administration issued a report while this trial was in progress that stated: "Improving seating system performance is more complex than simply increasing the strength of the seatback. A proper balance in the seatback strength and compatible interaction with head restraints and seat belts must be obtained to optimize injury mitigation." Neither the industry nor the government regulators have sided with Dr. Saczalski's proposals.
All the witnesses, including those testifying for DaimlerChrysler, stated that the FMVSS 207 standard that had been in place for thirty years was inadequate. Accordingly, when DaimlerChrysler designed and built the 1998 Dodge Caravan, it set goals for seat strength that doubled the standards in FMVSS 207. The seat that DaimlerChrysler actually designed and installed in the 1998 Dodge Caravan exceeded even DaimlerChrysler's internal standards. It was essentially undisputed that the front seats in this minivan were "mainstream" seats, that is, that they were very similar to almost every other front out-board seat in similar vehicles.
49 C.F.R. § 571.207 (2007). The purpose of this standard is to establish "requirements for seats, their attachment assemblies, and their installation to minimize the possibility of their failure by forces acting on them as a result of vehicle impact." 49 C.F.R. § 571.207, S1.
There is no question that persons have been injured riding in the Dodge Caravan. The trial court determined that out of the 7,000,000 minivans that had been sold, there were thirty-seven similar incidents. However, all of the witnesses testified that automobiles should be designed in a way that enables them to be as safe as possible in light of the innumerable ways in which accidents can occur. While DaimlerChrysler may not have satisfied Dr. Saczalski, its seats were triple the strength required by FMVSS 207, and they exceeded the strength of many other automobile seats. On these objective facts, I find it difficult to conclude that the plaintiffs presented clear and convincing evidence that DaimlerChrysler acted so recklessly that the company should be punished beyond being required to pay compensatory damages.
A manufacturer's compliance with applicable governmental safety regulations and industry standards does not, by itself, prevent awards of punitive damages. However, evidence of a manufacturer's compliance with governmental and industry standards is evidence that the manufacturer did not recklessly disregard safety. See, e.g., David G. Owen et al., Madden Owen on Products Liability § 18.6, at 305 (3d ed. 2000); Victor E. Schwartz et al., Guide to Multistate Litigation § 10.07, at 202 (1985); David G. Owen, Problems in Assessing Punitive Damages Against Manufacturers of Defective Products, 49 U. Chi. L.Rev. 1, 40-42 (1982) [hereinafter "Owen, Problems"]. Many government safety standards, including the numerous standards issued by the National Highway Transportation Safety Administration, have been adopted within a "gray area where the difficulties of defining defectiveness (the `proper' mix of safety and its tradeoffs) are especially great." Owen, Problems, 49 U. Chi. L.Rev. at 41-42 n. 196. The difficulty for manufacturers is heightened even further when an industry is making safety decisions upon which experts and government regulators have been unable to reach any consensus. Accordingly, decisions made within these gray areas should not generally warrant a punitive damages award. See Owen, Problems, 49 U. Chi. L.Rev. at 40-42 n. 196.
The plaintiffs' evidence regarding DaimlerChrysler's recklessness includes the testimony of a former employee, Paul Sheridan, who chaired DaimlerChrysler's Minivan Safety Leadership Team. This committee was apparently created in late 1992, partially in response to an investigative story regarding the safety of car seats that had been aired on Sixty Minutes in February 1992. Its purpose was to advise upper level management about what needed to be done in the area of safety. Mr. Sheridan, who has been excluded from testifying regarding seatback design in other cases, Gardner ex rel. Gardner v. Chrysler Corp., 89 F.3d 729, 737-38 (10th Cir. 1996), testified that he showed the Sixty Minutes story at a team meeting in March 1993 and that the team discussed seatback strength. He also testified that he was ordered to collect and destroy the minutes of the March 1993 meeting and that the team was disbanded in November 1994. Chrysler discharged Mr. Sheridan in December 1994 after accusing him of leaking confidential developmental testing information to Auto World magazine. Mr. Sheridan denied the accusation. See Chrysler Corp. v. Sheridan, No. 227757, 2003 WL 327714 (Mich.Ct.App. Feb. 11, 2003), perm. app. denied, 469 Mich. 863, 666 N.W.2d 668 (2003) (Table). Mr. Sheridan's testimony may very well reflect DaimlerChrysler's over-reaction to the Sixty Minutes story and the existence of some internal dissension regarding how best to respond to the concerns about car seat safety raised by the story. However, taken in the context of all the evidence in this case, it does not demonstrate clearly and convincingly that DaimlerChrysler's engineers were acting recklessly when they designed a front seat for the 1998 Dodge Caravan that was intended to yield in a controlled way when the minivan was struck from behind.
III. THE EVIDENCE OF THE TWENTY-FIVE POST-SALE INCIDENTS
As part of the proof to support their post-sale duty to warn claim, Ms. Sparkman and Mr. Flax presented evidence regarding twenty-five incidents that occurred after the sale of the Sparkmans' minivan and that allegedly were similar to the accident that occurred on June 30, 2001. The Court has properly determined that the evidence of these incidents should not have been introduced because Ms. Sparkman and Mr. Flax cannot assert a post-sale failure to warn because they claimed that DaimlerChrysler was aware of the alleged dangerousness of the minivan's front seats before the time of the sale. However, the Court has also determined that the introduction of the evidence of these twenty-five post-sale incidents was harmless error. I respectfully cannot agree.
The Court has not directly addressed DaimlerChrysler's argument that many of these incidents were not substantially similar to the collision that gave rise to this lawsuit. Based on my review of the record, it appears that DaimlerChrysler is correct, and thus there is a second, equally valid, basis for concluding that the admission of the evidence involving many of these incidents was error.
When appellate courts conduct a harmless error analysis under Tenn. R.App. P. 36(b), they must avoid acting like a second jury by basing their analysis on their own assessment of the defendant's guilt. State v. Rodriguez, 254 S.W.3d 361, 373-74 (Tenn. 2008). Rather, harmless error scrutiny focuses on the actual basis for the jury's verdict, State v. Mallard, 40 S.W.3d 473, 489 (Tenn. 2001), and the impact that the erroneously admitted evidence had on the jury's decision-making. See State v. Denton, 149 S.W.3d 1, 16-17 (Tenn. 2004). A harmless error analysis requires a careful examination of the entire record to determine whether the erroneously admitted evidence more probably than not affected the judgment or resulted in prejudice to the judicial process. State v. Rodriguez, 254 S.W.3d at 373-74.
We visited the outer boundaries of the harmless error doctrine in 2004 when the Court, by a divided vote, upheld a $7,366,000 verdict in a medical malpractice case by deciding that a trial judge's critical comment regarding a key witness's credibility in the presence of the jury was harmless error. Mercer v. Vanderbilt Univ., Inc., 134 S.W.3d 121, 134 (Tenn. 2004). The Court is returning to the outer boundary between harmful and harmless error in order to uphold this $18,367,345 verdict. I cannot follow along.
The trial court stated in the jury's presence that the witness had changed her testimony. Mercer v. Vanderbilt Univ., Inc., 134 S.W.3d at 144 (Drowota, C.J., dissenting).
Any objective reader of this voluminous record cannot help being struck by the frequency of the references in the plaintiffs' case to the other allegedly similar incidents in which persons riding in Chrysler minivans were injured when the seats yielded in rear end collisions. The plaintiffs' lawyers repeatedly argued to the jury that "[y]ou're going to hear about a bunch of them . . . There is no way to know for sure how many times Chrysler or DaimlerChrysler seatbacks have collapsed in wrecks" or that "the weak seatbacks . . . have killed and injured a lot of people" or that "[t]here is no evidence from DaimlerChrysler Corporation that those 37 are the only ones killed and injured."
Courts are generally cautious in the admission of similar incident evidence precisely because of the prejudice that it can carry. Such evidence has been described as "extremely harmful to the defense" and "highly prejudicial," and it has been noted that the presentation of repetitive accident evidence can prejudice the jury.
1 McCormick on Evidence § 2000m, at 800 (Kenneth S. Broun ed., 6th ed. 2006).
John Deere Co. v. May, 773 S.W.2d 369, 374 (Tex.Ct.App. 1989).
Whaley v. CSX Transp., Inc., 362 S.C. 456, 609 S.E.2d 286, 300 (2005).
David Crump, Evidence, Economics, and Ethics: What Information Should Jurors be Given to Determine the Amount of a Punitive-Damage Award?, 57 Md. L.Rev. 174, 229 (1998).
The references to other similar incidents in this case are so numerous that a reasonable person cannot be sure what evidence eventually tipped the jury in favor of holding DaimlerChrysler liable for the wrongful death of Joshua Flax or in calculating the compensatory and punitive damages or both. It is highly unlikely that the jury was not influenced in some way by the sheer volume of these allegedly similar incidents. Under these circumstances, the jury's assessment of DaimlerChrysler's liability and the amount of damages was, more probably than not, affected by the evidence of other similar incidents that should not have been admitted.
IV.
I do not relish the prospect of requiring these parties to try this case again. However, when reversible error infects the fact-finding process, a new trial is the only suitable remedy. For the reasons stated herein, I would reverse the judgment and remand the case for a new trial on the issue of compensatory damages only.