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Owens-Corning Fiberglas Corp. v. Malone6/5/1998
ment (Second) of torts § 908 (1979). Comment e discusses what evidence the fact finder should properly consider to determine whether punitive damages are appropriate, and if so, the proper award. Comment e lists factors such as the defendant's conduct and motives, the plaintiff's harm, and the defendant's wealth. See Restatement (Second) of torts § 908 cmt. e (1979). OCF relies on a part of comment e that suggests that it may also be "appropriate to take into consideration both the punitive damages that have been awarded in prior suits and those that may be granted in the future . . . ." Restatement (Second) of torts § 908 cmt. e (1979).
While we agree with section 908, we do not subscribe to comment e's suggestion that in considering the amount of punitive damages necessary to satisfy the goals of punishment and deterrence, the fact finder should be allowed to consider unpaid punitive damages. See Restatement (Second) of torts § 908 cmt. e (1979). As comment e also explains, the "greater weight" should be placed on prior awards. Restatement (Second) of torts § 908 cmt. e (1979). Moreover, as we have concluded, only prior paid awards and settlements for punitive damages should be considered by the fact finder. To hold otherwise risks unfair prejudice and jury confusion. See Tex. R. Evid. 403; Roginsky, 378 F.2d at 839. As commentators have recognized, many punitive damage awards are reduced after trial, reversed on appeal, or settled at a discount. See W-307 (1987)(observing that in product liability cases, "punitive damage awards are more likely to be reversed than are other outcomes" and otherwise noting that "many awards are reduced by the trial Judge or on appeal"); Owen, Punitive Damages in Products Liability Litigation, 74 Mich. L. Rev. 1258, 1324 (1976)(Owen I)(noting that at the Conclusion of the MER/29 mass tort litigation, "the only mass disaster products liability litigation that has run its course," only three verdicts included punitive damages and that of those, one was reversed and the other two were substantially reduced on appeal).
Studies also confirm that punitive damage awards are "likely to be greatly reduced by posttrial actions." Michael G. Shanley & Mark A. Peterson, The Institute For Civil Justice, Posttrial Adjustments to Jury Awards 36 (1987); see also Landes & Posner, supra, at 304; Galanter, Real World Torts: An Antidote To Anecdote, 55 Md. L. Rev. 1093, 1115-1130 (1996)(citing several studies about reduction and payment of punitive damages); Milo Geyelin, Product Suits Yield Few Punitive Awards, Wall St. J., Jan. 6, 1992, at B1 (discussing study that revealed that punitive damages are "rarely paid" and otherwise "frequently reduced after trial"). We also agree with courts that have recognized that the impact of other punitive damages awards can only be measured if they have actually been paid. See, e.g., Stevens, 57 Cal. Rptr.2d at 536-37; Spaur, 510 N.W.2d at 868; Fischer, 512 A.2d at 480; see also Dunn, 1 F.3d at 1389-90 (requiring proof of punitive damages "actually paid in the past" and rejecting consideration of "non-final awards of punitive damages" and of settlements where OCF did not segregate settlement amounts paid as punitive damages); Johnson v. Celotex Corp., 899 F.2d 1281, 1287-88 (2d Cir. 1990)(rejecting defendant's request that appellate court take judicial notice of other punitive damage awards because defendant did not provide any documentation about "exactly how much money they have actually paid in punitive damages").
At oral argument, Malone asserted that, if evidence to mitigate punitive damages is relevant, the trial court should consider it as a legal issue rather than submit it to the fact finder. However, we believe that the
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