McGowan et al v. Murphy-Brown, LLC

Filing 323

ORDER granting 308 Motion to Impose Statutory Cap on Punitive Damages regarding Jury Verdict. Signed by Senior Judge W. Earl Britt on 9/17/2018. (Herrmann, L.)

UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
SOUTHERN DIVISION
No. 7:14-CV-00182-BR
WOODELL MCGOWAN, et al.,
Plaintiffs,
v.
MURPHY-BROWN, LLC, d/b/a
SMITHFIELD HOG PRODUCTION
DIVISION,
Defendant.

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ORDER

This matter is before the court on defendant’s 11 July 2018 motion to impose statutory
cap on punitive damages. (DE # 308.) With leave of court, plaintiffs filed a revised response to
the motion on 23 August 2018. (DE # 318-1.) Defendant has not filed a reply, and the time
within which to do so has expired.
On 29 June 2018, the jury awarded plaintiffs Elvis Williams and Vonnie Williams each
$65,000 in compensatory damages and $12.5 million in punitive damages. In accordance with
the court’s decision in the related case of McKiver v. Murphy-Brown, LLC, No. 7:14-CV-190BR, defendant requests that the court reduce the punitive damages award to $250,000 per each of
these plaintiffs. In McKiver, the court recognized:
“In a diversity case, state substantive law governs the circumstances
justifying an award and the amount of punitive damages, and federal law governs
district and appellate court review of the jury award.” Def. Indus., Inc. v. Nw.
Mut. Life Ins. Co., 938 F.2d 502, 504-05 (4th Cir. 1991). North Carolina
substantive law applies here. N.C. Gen. Stat. § 1D-25(b) provides in relevant part
that “[p]unitive damages awarded against a defendant shall not exceed three times
the amount of compensatory damages or two hundred fifty thousand dollars
($250,000), whichever is greater.”

Id. (DE # 277, at 1). Relying on the North Carolina Supreme Court’s decision in Rhyne v. KMart Corporation, 594 S.E.2d 1 (N.C. 2004), the court rejected plaintiffs’ argument that § 1D25(b) violates their right to a jury trial under the North Carolina Constitution, Article I, Section
25, and imposed the statutory cap on those plaintiffs’ punitive damages awards. Id. (DE # 277,
at 2-3).
As they did in McKiver, plaintiffs contend that § 1D-25 violates Article I, Section 25, of
the North Carolina Constitution. (DE # 318-1, at 14.) Additionally, they argue that the statutory
provision violates the due process and equal protection clauses of the United States and North
Carolina Constitutions and the separation of powers and open courts clauses contained in Article
I of the North Carolina Constitution. (Id. at 15.) Rhyne, which, again, the court is bound to
follow on relevant state law issues, precludes plaintiffs’ arguments that the statutory provision is
unconstitutional under the cited clauses of the North Carolina Constitution.1
As for the constitutionality of North Carolina’s punitive damages cap under the United
States Constitution, plaintiffs do not address the standard under which this court must evaluate a
federal due process or equal protection challenge to a state statute. Out of the three cases
plaintiffs cite in support of their federal constitutional challenge, only one, Duren v. Suburban
Community Hospital, 495 N.E.2d 51, 56 (Ohio C.P., Cuyahoga Cty., 1985), held that the state
statutory damages cap violated the United States Constitution. There, the trial court examined
Ohio’s medical malpractice general damages cap, see id. at 55-56, a statute vastly different from

 The Rhyne court considered different arguments regarding § 1D-25’s constitutionality under the separation of
powers and open courts clauses. However, its rationale applies equally to plaintiffs’ argument that § 1D-25(c),
which prohibits the trial court from making the punitive damages cap known to the jury, infringes on the court’s
obligation to inform the jury of the law and on the jury’s entitlement to know the law. See Rhyne, 594 S.E.2d at 8-9
(recognizing that the legislature has the authority to modify common law, in which punitive damages hold “an
established place,” and holding § 1D-25 does not violate the separation of powers clause as it “is a modification of
the common law within the General Assembly’s policy-making authority to define legally cognizable remedies”); id.
at 18 (because a plaintiff does not have a right to recover punitive damages, holding the statutory limitation on
punitive damages does not violate the open courts clause).
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the statute at issue here, and relied primarily on another state court decision that held that the
state’s statutory cap on non-economic losses in malpractice actions violated the state
constitution’s equal protection clause, see id. at 56 (citing Carson v. Maurer, 424 A.2d 825 (N.H.
1980)). Absent sufficient briefing, including pertinent case law, the court declines to resolve
whether § 1D-25(b) is unconstitutional under the due process and equal protection clauses of the
United States Constitution.
Defendant’s motion is ALLOWED, and the judgment shall reflect that the amount
awarded to each plaintiff for punitive damages is $250,000.
This 17 September 2018.

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W. Earl Britt
Senior U.S. District Judge

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