Ebersole v. Kline-Perry et al
Filing
105
MEMORANDUM OPINION. Signed by District Judge James C. Cacheris on 8/29/2012. (rban, )
IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF VIRGINIA
Alexandria Division
RUSSELL L. EBERSOLE, d/b/a
ABERDEEN ACRES PET CARE
CENTER,
Plaintiff,
v.
BRIDGET KLINE-PERRY,
Defendant.
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1:12cv26 (JCC/TRJ)
M E M O R A N D U M
O P I N I O N
This matter is before the Court on Defendant Bridget
Kline-Perry (“Defendant” or “Kline-Perry”)’s Motion for New
Trial or, in the Alternative, to Alter the Judgment 1 [Dkt. 90]
and Plaintiff Russell L. Ebersole, d/b/a Aberdeen Acre Pet Care
Center (“Plaintiff” or “Ebersole”)’s Motion for Attorneys’ Fees
and Costs [Dkt. 88].
For the following reasons, Defendant’s
Motion for New Trial or, in the Alternative, to Alter the
Judgment is denied insofar as it seeks to set aside the jury’s
award of punitive damages or a reduction of that award as a
matter of law.
Defendant’s motion is denied conditionally
insofar as it seeks a new trial, dependent on Plaintiff’s
acceptance of a remitted award of punitive damages.
1
The Court
As explained below, the Court construes Defendants’ motion as including an
alternative request for remittitur.
1
will defer ruling on Plaintiff’s Motion for Attorneys’ Fees and
Costs pending his decision on remittitur.
I. Background
This case involves allegedly libelous statements made
by Kline-Perry about Ebersole and his pet care business,
Aberdeen Acres Pet Care Center.
Kline-Perry also allegedly
engaged in a conspiracy to harm Ebersole’s business.
Kline-
Perry is a breeder of horses, who owns a horse-breeding farm
called Norsire Farms.
In April 2009, Kline-Perry sold a German
Shepherd puppy named “Zeus” to Georgie and Bill Straub,
customers of Aberdeen Acres.
The following month, Kline-Perry
went to Aberdeen Acres to watch Zeus being trained, at which
point, according to her testimony, she observed Zeus in a choke
collar and witnessed Ebersole stomp on the puppy’s paw.
In November 2011, stories were published in local
newspapers and broadcasted on local television regarding an
investigation of Ebersole arising from alleged acts of animal
abuse at Aberdeen Acres.
Kline-Perry then made a number of
statements in which she accused Ebersole of animal abuse and
violating laws pertaining to dog training.
These statements
were published in various e-mails and Facebook postings.
For
example, Kline-Perry posted to her Norsire Farms Facebook page a
letter composed by her and her friend, Charlie Oren, accusing
Ebersole of animal abuse and fraudulent acts, and asked others
2
to share it.
Kline-Perry also sent a letter to People for the
Ethical Treatment of Animals (“PETA”), asking the organization
to stage a protest regarding Ebersole and Aberdeen Acres due to
the alleged instances of animal abuse.
On December 13, 2011, Ebersole, proceeding pro se,
filed suit in Loudon County Circuit Court.
[Dkt. 1.]
On
January 9, 2012, Defendants timely removed the action to this
Court on the basis of diversity jurisdiction.
[Id.]
Ebersole
subsequently retained counsel [Dkt. 14] and filed an amended
complaint on March 23, 2012 [Dkt. 31].
In the amended
complaint, Ebersole alleged libel, business conspiracy in
violation of Va. Code § 18.2-499, and tortious interference with
a business expectancy.
On July 23, a jury trial commenced.
After the close
of Plaintiff’s evidence, Defendant moved for judgment as a
matter of law pursuant to Federal Rule of Civil Procedure 50
with respect to the business conspiracy and tortious
interference claims as well as a portion of the libel claim.
The Court granted Defendant’s Rule 50 motion as to the tortious
interference claim.
The Court also granted Defendant’s Rule 50
Motion as to certain of Kline-Perry’s allegedly libelous
statements.
The business conspiracy claim and the libel claim
(as to the remaining allegedly libelous statements) were
3
ultimately submitted to the jury.
The statements submitted to
the jury on the libel claim were as follows:
(1)
In an e-mail of November 25, 2011, to “Charlie”:
(a)
(b)
(2)
“You need to click on the link I put on you
[sic] page and have a read about people
leaving dogs and coming back to find they
were dead and the bodies were ‘disposed’ of
before they got their [sic] to pick up their
dog, dogs being drop kicked across a room,
dogs being shocked on the highest shock
until they passed out with blood running out
of their mouths and eyes or died, employees
getting their cell phones taken from them
and smashed with [sic] they tried to take
pictures of Russ beating the dogs, dogs
being chocked [sic] and swung over his head
like a helicopter . . . this is on tape with
the drug people in DC on cam, dogs being
shocked until they screamed in pain and
crawled on their belly to Russ to try to
please him and the [sic] would call them and
pet them as he shocked the shit out of
them.”
“He will get more time for the fraud of
training handicap dogs for non handicap
people, because it is a felony fraud of the
public than he will for the abuse!”
In an e-mail of November 26, 2011, to Bill
Straub:
(a)
(3)
“[W]hen you see Zeus being abused on tape
would the [sic] convince you?”
In an e-mail of November 28, 2011, to employees
of PETA:
(a)
“He has choked dogs to the point they pass
out with blood running out of their mouths
and eyes . . . documented by Vets and the
staff has tried for years to report it, but
he would intimidate them and/or destroy
their cell phones.”
4
(4)
In an e-mail of November 27, 2011, to employees
of PETA:
(a)
(b)
(5)
“[T]he man is still running the kennel and
he should be arrested and in jail for the
numberous [sic] dogs that have died at his
hands just his [sic] summer alone and they
are not doing anything about it.”
“He is also training dogs for the handicap
of which [it] is illegal and a felony for
handicap people and he is not certified to
train a knat [sic]!”
In a letter of November 28, 2011:
(a)
“People have had their dogs die and some
injured.”
(b)
“Another lady went to pick up her boarded
dog only to find that the dog died and was
lied to about the cause. She wasn’t even
able to retrieve his body.”
(c)
“There is a saved email about a dog being
trained as a Service Dog and the owner’s
[sic] have no disability. The email states,
‘Russ told them it was against the law for
anyone to ask them if they were disabled.’”
(d)
“Training a Service Dog by an uncertified
trainer could be another scam, a felony.
How many people have believed in him and
paid much money for a Service Dog for a
child that can’t perform?”
(e)
“Does it take the death of a child to wake
everyone up when a Service Dog is not
properly trained.”
(f)
“Now, he is allegedly getting away with
abusing people’s beloved pets and most
likely defrauding the public with his
Service Dog operation.”
On July 25, 2012, the jury returned a verdict in favor
of Plaintiff.
The jury awarded Plaintiff $7,500 in compensatory
5
damages on his libel claim, $7,500 in compensatory damages on
his business conspiracy claim, and $60,000 in punitive damages.
On August 6, 2012, Plaintiff filed his Motion for
Attorneys’ Fees and Costs [Dkt. 88] and Defendant filed her
Motion for New Trial or, in the Alternative, to Alter the
Judgment [Dkt. 90].
The parties filed their respective
oppositions on August 13, 2012, [Dkts. 99-100].
Plaintiff filed
his reply on August 15, 2012, [Dkt. 101], while Defendant filed
her reply on August 16, 2012, [Dkt. 102].
The parties’ motions are before the Court.
II.
A.
Standard of Review
Motion for New Trial
Under Federal Rule of Civil Procedure 59(a), a new
trial may be granted in an action in which there has been a
trial by jury “for any of reason for which a new trial has
heretofore been granted in actions at law in federal court.”
Fed. R. Civ. P. 59(a).
“On a Rule 59(a) motion, a district
court may set aside the jury's verdict and grant a new trial
only if ‘(1) the verdict is against the clear weight of the
evidence, or (2) is based upon evidence which is false, or (3)
will result in a miscarriage of justice even though there may be
substantial evidence which would prevent the direction of a
verdict.’”
Attard Indus., Inc. v. U.S. Fire Ins. Co., No.
1:10cv121, 2010 WL 4670704, at *2 (E.D. Va. Nov. 9, 2010)
6
(quoting Atlas Food Sys. & Servs. Inc. v. Crane Nat'l Vendors,
Inc., 99 F.3d 587, 594 (4th Cir. 1996)).
In considering a Rule
59 motion, “courts may make credibility judgments in determining
the clear weight of the evidence.”
Id. (citing Knussman v.
Maryland, 272 F.3d 625, 647 (4th Cir. 2001)).
“The grant or
denial of a motion for new trial is entrusted to the sound
discretion of the district court and will be reversed on appeal
only upon a showing of abuse of discretion.”
Cline v. Wal–Mart
Stores, Inc., 144 F.3d 294, 305 (4th Cir. 1998).
B.
Alternative Motion to Alter the Judgment
Defendant’s alternative Motion to Amend the Judgment
pertains to the jury’s award of punitive damages.
Defendant
requests that the award be set aside or, at a minimum, reduced.
Courts have occasionally reduced verdicts in this manner when
“it is apparent as a matter of law that certain identifiable
sums included in the verdict should not have been there.”
Liberty Mut. Fire Ins. Co. v. J.T. Walker Industries, Inc., No.
2:08-2043-MBS, 2012 WL 3292973, at *13 (D.S.C. Aug. 10, 2012)
(quotation omitted) (citing Westchester Fire Ins. Co. v. Hanley,
284 F.2d 409 (6th Cir. 1960)).
“However, courts have more often
found such a practice to infringe the Seventh Amendment right to
trial by jury.”
Id. (citing Brewer v. Uniroyal, Inc., 498 F.2d
973, 976 (6th Cir. 1974)).
7
When faced with a verdict the court deems excessive,
the general practice is to order a remittitur.
See Cline, 144
F.3d at 305 n.2 (“[F]or purposes of avoiding conflict with the
Seventh Amendment, the preferable course, upon identifying a
jury’s award as excessive, is to grant a new trial nisi
remittitur . . . .”).
Remittitur, which is used in connection
with Rule 59(a), is a process by which the “court orders a new
trial unless the plaintiff accepts a reduction in an excessive
jury award.”
Id. at 305.
While “[t]here is no specific
provision for remittitur under the Federal Rules of Civil
Procedure, [] it is well established that a remittitur should be
ordered when a jury award will result in a miscarriage of
justice.”
Bennett v. Fairfax Cnty., 432 F. Supp. 2d 596, 599
(E.D. Va. 2006) (citing Cline, 144 F.3d at 305).
Accordingly,
the Court construes Defendant’s motion as including a request
for remittitur.
See Liberty Mutual, 2012 WL 3292973, at *13.
III. Analysis
A.
Unfair Prejudice and Surprise
Defendant argues that she is entitled to a new trial
because the Court erred in admitting seven videos, which
depicted Plaintiff training various dogs without any incident of
animal abuse.
Defendant asserts that five of those videos were
not produced during discovery, and two were produced as proposed
exhibits when Plaintiff filed his exhibit list on May 21, 2012.
8
The Court excluded the videos during Plaintiff’s case-in-chief
for not being timely produced.
During Defendant’s case-in-
chief, however, several witnesses testified as to specific acts
of animal abuse by Plaintiff.
Thereafter, Plaintiff was allowed
to introduce the seven videos in rebuttal, as they were relevant
for impeachment purposes. 2
Defendant claims that she was
unfairly prejudiced and surprised by the admission of these
videos, and that a new trial is therefore warranted.
Federal Rule of Civil Procedure 26 generally does not
require pre-trial disclosure of evidence that may be offered at
trial solely for impeachment.
Alphonso v. Esfeller Oil Field
Const., Inc., 380 F. App’x 808, 810 (11th Cir. 2010)
(unpublished).
There is an exception, however, in that a party
must disclose impeachment evidence in response to a specific
discovery request.
Newsome v. Penske Truck Leasing Corp., 437
F. Supp. 2d 431, 436 (D. Md. 2006).
The Court allowed Plaintiff
to introduce the videos in rebuttal based on the representation
by Plaintiff’s counsel that Defendant had not requested them.
Defendant now points out that in her document requests, which
were served on Plaintiff on March 27, 2012, she requested
“[c]omplete copies of all customer boarding and/or training
2
In her reply brief, Defendant points out that two of her witnesses were
excluded on the basis of untimely disclosure, and proceeds to argue that
“what is good for the goose should be good for the gander.” (Def.’s Reply
[Dkt. 102] 6.) However, Defendant omits that these witnesses were “precluded
from testifying except for impeachment purposes.” (Mem. Op. [Dkt. 68] 10, 12
(emphasis added).) Thus, the Court’s evidentiary rulings were entirely
consistent with respect to both parties.
9
files including, but not limited to, intake forms, pet medical
instruction forms, pet medical waivers, contracts, agreements
and other documents pertaining to the services provided.”
(Def.’s Mem. in Supp. of R. 59 Mot. (“Def.’s Mem.”) [Dkt. 91]
9.)
This document request is broad enough that it could
certainly be construed as encompassing the videos at issue.
However, the context of the case reveals that if Plaintiff did
not construe the request accordingly, he was not entirely
unreasonable in doing so.
The evidence at trial revealed that
Plaintiff uploaded dog-training videos to YouTube and Facebook
to share with the dogs’ owners as well as the public.
As such,
they appear to have been a tool designed primarily for marketing
and customer relationships rather than a form of recordkeeping
-- the latter being more akin to the documents described in
Defendant’s document request.
Plaintiff also represents that
after uploading the videos to YouTube and Facebook, he simply
kept electronic backup files on his laptop computer, rather than
storing physical copies in “training files.” 3
As such, it is
plausible that Plaintiff genuinely did not understand the videos
at issue as falling within Defendant’s document request.
3
Illustrative of the unique facts of this case, Plaintiff further states that
his laptop computer was seized by local police pursuant to a search warrant
executed in November 2011, and that the computer has not been returned to
him. Thus, it also appears that these backup files were not in Plaintiff’s
possession during discovery, further demonstrating that his failure to
produce them was not in bad faith.
10
It is also apparent that Defendant was aware that such
videos existed during discovery.
In his opposition, Plaintiff
includes excerpts from a number of e-mails produced in discovery
(some by Defendant), which reference the videos and, in certain
instances, even provide corresponding links to Facebook.
Opp’n [Dkt. 97] 9-12.)
(Pl.’s
Defendant could, then, have more
specifically phrased her document request and asked for copies
of the videos outright.
She also could have conferred with
Plaintiff’s counsel if dissatisfied with Plaintiff’s response to
the document request at issue. 4
Lastly, even construing Plaintiff’s response to the
discovery request as error, the admission of the videos was not
sufficiently prejudicial to constitute a miscarriage of justice,
and hence does not warrant a new trial. 5
Apart from Defendant’s
awareness of dog-training videos during discovery, Defendant was
provided with a number of links to pictures and videos uploaded
to YouTube and Facebook when Plaintiff updated his Rule 26(a)
4
It bears mentioning that the trial in this case was replete with objections
by both sides involving discovery issues that could and should have been
resolved by the parties well ahead of time.
5
Defendant does not specify which of the Rule 59(a) grounds she believes
entitles her to a new trial. Given that Defendant did not file a renewed
motion for judgment as a matter of law pursuant to Rule 50(b), the Court
assumes that she primarily rests her argument on the “miscarriage of justice”
ground. Defendant does suggest that the videos may have been improperly
edited, or that Plaintiff may have lied about the date and time that they
were filmed –- thereby positing that false evidence may have been presented
to the jury. Defendant has not, however, affirmatively demonstrated this to
be the case. It is also worth pointing out that Defendant questioned one of
her own witnesses about the circumstances under which the dog-training videos
were filmed, was able to cross-examine Plaintiff regarding the same, and
raised the issue in closing argument. The issue was, then, effectively
presented to the jury.
11
disclosures near the end of discovery. 6
As Defendant points
out, only two of the seven videos admitted were available
through these links.
However, all seven videos were of the same
general character and introduced by Plaintiff for the same
purpose –- namely, to rebut the testimony of Defendant’s
witnesses regarding animal abuse.
As such, Defendant’s claim
that she was surprised and prejudiced by the admission of the
undisclosed videos is somewhat overstated.
In short, the
admission of the videos was not so prejudicial as to entitle
Defendant to a new trial.
B.
Lack of Foundation and Speculation
Defendant also argues that she is entitled to a new
trial because evidence as to the number of “likes” appearing on
Defendant’s Facebook page was admitted without proper
foundation.
According to Plaintiff’s evidence, a “like” is
recorded whenever a Facebook user clicks the “like” button
corresponding to another user’s Facebook page or posting.
This
copies the “liked” page or posting to the Facebook page of the
user who clicked the “like button.”
Evidence adduced at trial indicated that Defendant’s
Facebook page for Norsire Farms had in excess of 5,000 “likes.”
6
Again, because Plaintiff was without possession of his laptop computer, it
appears the only means of obtaining the videos was through these links.
Plaintiff also represents that he provided Defendant with copies of these
files after downloading them himself.
12
Defendant contends that this evidence was admitted without
proper foundation.
Specifically, Defendant argues that there
was no offered as to when these “likes” occurred, or whether any
of them occurred during or after the four-day period in November
2011 when Defendant made the statements at issue.
According to
Defendant, there was no evidence from which the jury could
conclude that any of the “likes” resulted in others reading
these statements, and thus resulted in pure speculation.
The Court disagrees.
The number of “likes” on
Defendant’s Norsire Farms Facebook page is indicative of its
popularity.
The greater the number of “likes” on the page, the
more likely it is that others visited the page and viewed
whatever Defendant posted there, including the aforementioned
letter.
The evidence was therefore relevant as to how widely
disseminated the letter was, a fact that was of consequence to
the publication element of Plaintiff’s libel claim.
See Fed. R.
Evid. 401 (“Evidence is relevant if it has any tendency to make
a fact more or less probable than it would be without the
evidence and the fact is of consequence in determining the
action.”).
The evidence was also, generally speaking, germane
as to Defendant’s intent in posting the letter -- namely to
reach a large audience.
Indeed, Defendant testified as much at
13
trial.
Accordingly, the Court did not err in admitting the
number of “likes” on Defendant’s Norsire Farms Facebook page. 7
C.
Punitive Damages
Lastly, Defendant argues that the jury’s punitive
damages award of $60,000 was so excessive as to violate her
rights under the Due Process Clause.
It is axiomatic that “the
Constitution imposes a substantive limit on the size of punitive
damages awards.”
420 (1994).
Honda Motor Co., Ltd. v. Oberg, 512 U.S. 415,
The Supreme Court has articulated three guideposts
for courts to consider when determining whether a jury’s award
of punitive damages violates due process: “(1) the degree of
reprehensibility of the defendant’s misconduct; (2) the
disparity between the actual or potential harm suffered by the
plaintiff and the punitive damages award; and (3) the difference
between the punitive damages awarded by the jury and the civil
penalties authorized or imposed in comparable cases.”
State
Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 418 (2003).
Together, these guideposts ensure that defendants have fair
notice about the severity of the penalty they may face for
engaging in prohibited conduct.
BMW of N. Am., Inc. v. Gore,
7
Defendant also points out that Plaintiff’s counsel, in closing argument,
argued that the jury should consider the number of “likes” on Defendant’s
Norsire Farms Facebook page in determining punitive damages. Specifically,
Plaintiff’s counsel suggested that the jury assign a value of $20 to each
“like.” Whether this suggestion by Plaintiff’s counsel called for
speculation, and whether the jury’s award of punitive damages is
unconstitutionally excessive, are questions separate and distinct from
whether evidence of the number of “likes” was admissible for any purpose at
all. The Court will therefore address the former issues separately.
14
517 U.S. 559, 574 (1996).
The Court will consider each
guidepost in turn.
“[T]he most important indicium of the reasonableness
of a punitive damages award is the degree of reprehensibility of
the defendant's conduct.”
Gore, 517 U.S. at 575.
Courts are
instructed to determine the reprehensibility of a defendant’s
acts by considering whether: (1) the harm caused was physical as
opposed to economic; (2) the tortious conduct evinced an
indifference to or a reckless disregard of the health or safety
of others; (3) the target of the conduct had financial
vulnerability; (4) the conduct involved repeated actions or was
an isolated incident; and (5) the harm was the result of
intentional malice, trickery, or deceit, or mere accident.
State Farm, 538 U.S. at 419.
“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.
Evaluating these factors, Defendant’s conduct involved
economic harm rather than physical harm, and did not evince an
indifference or reckless disregard for the health or safety of
others. 8
Plaintiff testified at trial that he was in the midst
8
With regard to the latter point, Plaintiff argues that Defendant sought to
have him prosecuted for conduct which the evidence at trial demonstrated to
be legal -- namely training dogs without certification. However, the
evidence merely demonstrated that Defendant sought to have authorities
investigate Plaintiff (including for animal abuse, which is decidedly
illegal). It also bears mentioning that Plaintiff was, in fact, under
15
of a Chapter 11 bankruptcy at the time the allegedly libelous
statements were published.
He was, therefore, financially
vulnerable, and thus this case does involve the third factor.
The fourth factor is whether the conduct involved
repeated actions or was an isolated incident.
The allegedly
libelous statements submitted to the jury were limited to a
four-day period, and hence were not made over an extended period
of time. 9
There was also no evidence that Defendant had ever
engaged in similar conduct with respect to any other person.
See Bridgeport Music, Inc. v. Justin Combs Publ’g, 507 F.3d 470,
487 (6th Cir. 2007) (stating that “[t]he repeated conduct factor
requires that the similar reprehensible conduct be committed
against various different parties rather than repeated
reprehensible acts within the single transaction with the
plaintiff.”) (internal quotation marks and alteration omitted).
That the conduct at issue constitutes an isolated incident is “a
consideration that other courts have found highly persuasive
when considering whether a punitive damages award violates due
process.”
Wallace v. Poulos, --- F. Supp. 2d ----, 2012 WL
993380, at *13 (D. Md. Mar. 22, 2012) (citations omitted).
investigation for animal abuse at the time the allegedly libelous statements
were made, as disclosed in local news stories.
9
Other statements and acts outside this time period were admitted into
evidence, as they were relevant to Plaintiff’s business conspiracy claim.
However, Plaintiff did not request, and this Court did not give, a jury
instruction authorizing punitive damages for that claim. See Wallace v.
Poulos, --- F. Supp. 2d ----, 2012 WL 993380, at *12 (limiting the facts to
those integral to the claims supporting the award of punitive damages is “the
more reasoned choice”).
16
Finally, in awarding punitive damages, the jury found
by clear and convincing evidence that Defendant published the
allegedly libelous statements with actual malice.
Defendant
does not seek to overturn the award of punitive damages on the
ground that insufficient evidence existed for the jury to reach
this finding, but rather challenges the award as
unconstitutionally excessive.
That said, Defendant testified,
and credibly so, that her actions were motivated by a desire to
protect the animals in Plaintiff’s care rather than to harm or
injure Plaintiff.
See Attard Indus., 2010 WL 4670704, at *2
(noting that a court “may make credibility judgments” in
evaluating a Rule 59 motion); see also Cooper Indus. Inc. v.
Leatherman Tool Grp., Inc., 532 U.S. 424, 440 (2001) (noting
that district courts have a “somewhat superior vantage over
courts of appeals” with respect to the reprehensibility inquiry,
primarily due to “issues turning on witness credibility and
demeanor.”)
Indeed, Defendant made the statements at issue
following stories in the local news media reporting allegations
of animal abuse by Plaintiff. 10
Defendant had previously
observed Plaintiff engage in training methods of which she
disapproved, and the news stories prompted her to take action.
This evidence undercuts the notion that Defendant’s conduct was
10
Defendant presented other witnesses, including former employees of
Plaintiff, who also credibly testified that Plaintiff indeed engaged in acts
of animal abuse.
17
purely malicious, and the Court will adjust the fifth factor
accordingly.
In sum, Defendant’s conduct was not extraordinarily
reprehensible, but was sufficiently blameworthy that the jury
was justified in awarding punitive damages.
As noted above,
Plaintiff was financially vulnerable at the time of the alleged
libel.
Moreover, Defendant accused Plaintiff of violating the
law by training dogs without certification, which the evidence
at trial revealed to be legal.
However, given that three of the
factors weigh against a finding of reprehensibility, there
appears to be a disconnect between Defendant’s conduct and the
punitive damages awarded, which suggests that a reduction of the
award could well be appropriate. 11
“The second and perhaps most commonly cited indicium
of an unreasonable or excessive punitive damages award is its
ratio to the actual [or potential] harm inflicted on the
plaintiff.”
Gore, 517 U.S. at 580.
To satisfy this factor, the
punitive damages must bear a reasonable relationship to the
11
It is worth noting here that the only metric Plaintiff offered the jury for
calculating punitive damages was his suggestion, during closing argument,
that the jury award Plaintiff $20 for each of the 5,000 “likes” on
Defendant’s Norsire Farms Facebook page. While evidence of the “likes” was
relevant, as discussed above, this suggestion by Plaintiff’s counsel was
ungrounded and arbitrary. The jury, meanwhile, was denied other potential
metrics. For example, “a defendant’s financial position is a proper
consideration in assessing punitive damages.” See Haslip, 499 U.S. at 22;
see also Gore, 517 U.S. at 591 (Breyer, J., concurring) (“[A] fixed dollar
award will punish a poor person more than a wealthy one, [so] one can
understand the relevance of [the defendant’s financial position] to the
State’s interest in retribution”). No evidence of Defendant’s financial
position was introduced at trial, however, impeding the jury’s ability to
calculate a punitive damages award with an appropriate retributive focus.
18
compensatory damages.
Id.
The Supreme Court has declined to
adopt a bright line ratio which no punitive damages award can
exceed, but has counseled that an award of punitive damages more
than four times the amount of compensatory damages “might be
close to the line of constitutional impropriety.”
State Farm,
538 U.S. at 425 (citing Pac. Mut. Life Ins. Co. v. Haslip, 499
U.S. 1, 23-24 (1991)).
Here, Plaintiff recovered $7,500 in compensatory
damages on his libel claim, and thus the ratio of punitive
damages to compensatory damages is 8:1.
The $7,500 in
compensatory damages Plaintiff recovered was substantial, given
that Plaintiff’s reputation was tarnished prior to Defendant’s
alleged libel.
Specifically, Plaintiff had previously been
convicted of twenty-five felonies for wire fraud, and, as
mentioned above, local news media had published stories
regarding alleged animal abuse by Plaintiff just prior to
Defendant’s publication of the allegedly libelous statements.
The latter point also raises a question as to whether the
economic harm alleged by Plaintiff was caused by Plaintiff or
external forces.
For these reasons, the 8:1 ratio of
compensatory damages to punitive damages is constitutionally
suspect.
The third and final guidepost is the disparity between
the punitive damages award and the “civil penalties authorized
19
or imposed in comparable cases.”
State Farm, 538 U.S. at 428.
“[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.’” Gore, 517 U.S. at 583
(quoting Browning–Ferris Indus. of Vt., Inc. v. Kelco Disposal,
Inc., 492 U.S. 257, 282, 301 (1989) (O’Connor, J., concurring in
part and dissenting in part)).
With regard to this factor, Defendant points out that
Virginia imposes a criminal penalty for slander and libel.
Va. Code § 18.2-417.
See
A criminal conviction under this statutory
provision is a class 3 misdemeanor, id., and is punishable by a
maximum fine of $500, id. § 18.2-11(c). 12
Given that Plaintiff’s
libel claim was comprised of five allegedly libelous statements,
the maximum criminal penalty Defendant would face is $2,500.
The Supreme Court has cautioned that while the “existence of a
criminal penalty does have a bearing on the seriousness with
which a State views [a] wrongful action,” such a penalty has
“less utility” when determining the dollar amount of the award.
State Farm, 538 U.S. at 418.
Thus, the presence of a $2,500
maximum criminal penalty does not mean that the Court should
automatically reduce punitive damages to that amount.
12
See
Plaintiff’s discussion of the criminal penalty for a business conspiracy
pursuant to Va. Code § 18.2-499, (see Pl.’s Opp’n 8 & n.6), is misguided, as,
again, pursuant to Plaintiff’s proposed jury instructions, the jury was only
authorized to give punitive damages for libel.
20
Cretella v. Kuzminski, 640 F. Supp. 2d 741, 746-47 (E.D. Va.
2009) (granting remittitur as to punitive damages awards on four
defamation claims, three of which were reduced to $5,000 (a 75%
reduction), and one to $8,000 (also a 75% reduction)).
That
said, the fact that the jury’s award of punitive damages is
twenty-four times greater than the maximum criminal penalty
Defendant would face for her conduct does indicate that the
award is grossly excessive.
Evaluation of all three guideposts leads to the
conclusion that the punitive damages award in this case violates
Defendant’s due process rights.
The Court concludes that a 75%
reduction to the jury’s punitive damages award is appropriate.
The resulting award of punitive damages is $15,000, and the
resulting ratio to compensatory damages is 2:1.
The Court finds
that such an award comports with Defendant’s conduct in this
case, and satisfies the deterrence objective of punitive
damages.
Having concluded that the jury’s punitive damages
award is unconstitutionally excessive, the question of remedy
remains.
After determining that a punitive damages award is
unconstitutionally excessive, some courts have entered judgment
for the maximum amount of constitutionally acceptable punitive
damages.
See Wallace v. Poulos, 2012 WL 993380, at *15.
These
courts have reasoned that a reduction in punitive damages to
21
comply with the Due Process Clause is a “federal constitutional
issue,” not a fact issue requiring jury consideration.
See
Jones v. United Parcel Serv., Inc., 674 F.3d 1187, 1208 n.2
(10th Cir. 2012).
While the Fourth Circuit has not squarely
addressed this issue, it has stated that a new trial would be
appropriate even where punitive damages are found to be
unconstitutional.
See EEOC v. Fed. Express Corp., 513 F.3d 360,
376 (4th Cir. 2008) (citing Cline, 144 F.2d at 305) (“If a
punitive damages award is unconstitutionally excessive, it is
our obligation to order a remittitur or award a new trial.”).
In light of this language, the Court will not lower the jury’s
punitive damages award without offering Plaintiff the option of
a new trial.
See Thomas v. iStar Fin., Inc., 652 F.3d 141, 146-
47 (2d Cir. 2011) (noting that courts in the Second Circuit
provide plaintiffs with the option of a new trial even where a
punitive damages award has been held unconstitutionally
excessive and that “the Constitution does not prohibit this
cautious approach”) (quoting Johansen v. Combustion Eng’g, Inc.,
170 F.3d 1320, 1332 (11th Cir. 1999))).
Accordingly, the jury’s
punitive damages award is remitted to $15,000.
Plaintiff shall
have ten days to accept the remitted amount or request a new
trial.
22
D.
Attorneys’ Fees
Given the Court’s conclusion that a remittitur is
warranted in this case, the Court will hold its decision on
Plaintiff’s Motion for Attorneys’ Fees in abeyance, pending
Plaintiff’s decision on whether to accept the remitted award of
punitive damages or request a new trial.
IV.
Conclusion
For these reasons, Defendant’s Motion for New Trial
or, in the Alternative, to Alter the Judgment is denied insofar
as it seeks to set aside the jury’s award of punitive damages
or, in the alternative, a reduction of that award as a matter of
law.
Defendant’s motion is denied conditionally insofar as it
seeks a new trial, dependent on Plaintiff’s acceptance of a
remitted award of punitive damages.
The Court will defer ruling
on Plaintiff’s Motion for Attorneys’ Fees and Costs pending his
decision on remittitur.
An appropriate Order will issue.
August 29, 2012
Alexandria, Virginia
/s/
James C. Cacheris
UNITED STATES DISTRICT COURT JUDGE
23
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