United States District Court, W.D. Arkansas, Fayetteville Division
OPINION AND ORDER
P.K.
HOLMES, III CHIEF U.S. DISTRICT JUDGE
Before
the Court is Defendant Silverstar Automotive, Inc.'s
(“Silverstar”) motion (Doc. 65) to alter or amend
the judgment and brief (Doc. 66) in support. Plaintiff Hamid
Adeli (“Adeli”) filed a response (Doc. 74),
Silverstar filed a reply (Doc. 77), and Adeli filed a
surreply (Doc. 81) with leave of Court. Silverstar contends
that the punitive damages amount must be reduced because the
amount violates its due process rights under the Fourteenth
Amendment. Silverstar also seeks a remittitur on the
incidental damages amount. For the reasons stated below,
Silverstar's motion will be granted in part and denied in
part.
I.
Background
This
case arises from the sale of a used Ferrari F430. The
relevant facts leading up to the sale are outlined in the
Court's order (Doc. 49) on summary judgment entered on
September 13, 2018. The case proceeded to trial and the jury
returned a unanimous verdict for Adeli on his claims for
breach of contract, fraud, and deceptive trade practices.
(Doc. 59). On September 27, 2018, the Court entered judgment
in favor of Adeli in the amount of $6, 835 in compensatory
damages, $13, 366 in incidental damages, and $5, 800, 000 in
punitive damages. (Doc. 62). Silverstar filed a post trial
motion for judgment as a matter of law[1] and this post
trial motion to alter or amend the judgment. Silverstar
contends that the punitive damages award is
unconstitutionally excessive and should be reduced to $28,
000. Silverstar further argues that the incidental damages
should be reduced to $1, 575.
II.
Analysis
Because
Silverstar's punitive damages argument is premised on the
appropriate ratio of punitive damages to compensatory
damages, the Court's decision on the incidental damages
award may impact the Court's analysis on the proper
punitive damages amount. The Court will therefore address
Silverstar's request for a remittitur as to the
incidental damages first and then turn to punitive damages.
A.
Incidental Damages
Silverstar
seeks a remittitur on the incidental damages award, arguing
the amount of damages the jury awarded lacked evidentiary
support and was the result of passion and prejudice. The
Court may order a remittitur “when it believes the
jury's award is unreasonable on the facts.”
Ross v. Kansas City Power & Light Co., 293 F.3d
1041, 1049 (8th Cir. 2002) (citation omitted). “A trial
court is within its discretion in remitting a verdict only
when, after reviewing all the evidence in the light most
favorable to the awardee, it is convinced that the verdict is
clearly excessive, resulted from passion, bias, or prejudice,
or is so excessive . . . as to shock the judicial conscience
of the court.” Wallace v. FedEx Corp., 764
F.3d 571, 593 (6th Cir. 2014); see also 11 Charles
A. Wright et al., Federal Practice & Procedure,
§ 2815 (3d ed. 2018).
The
Court issued the following instruction for incidental
damages:
The elements of incidental damages that Adeli claims are
expenses reasonably incurred in the inspection, receipt,
transportation of the Ferrari, and any other reasonable
expenses incident to the breach of warranty. Whether this
element of damages has been proved by the evidence is for you
to determine.
(Doc. 74-1, p. 337). The jury returned an incidental damages
award of $13, 366. The Arkansas model instruction provides
the jury with discretion in deciding what “other
reasonable expense[s]” are incident to the breach. AMI
Civ. 2521 (2017). Based on the evidence presented at trial,
the figure does not appear to be so excessive as to shock the
conscience. Nor is the amount so large as to indicate the
jury acted with bias or prejudice. Adeli presented a clear,
detailed summary of the expenses he incurred in the months
after purchasing the car. The instructions properly
instructed the jury of the costs which it could consider as
incidental, as well as its role in assessing the amount of
damages. The incidental damages awarded were not untethered
from Adeli's evidence. It is not the Court's task to
decide whether the amount of damages returned is correct, but
only whether it is reasonable. See Wallace, 764 F.3d
at 593-94. The incidental damages award will stand.
B.
Punitive Damages
Silverstar
next argues that the punitive damages award is
unconstitutionally excessive and violates its due process
rights. Juries maintain flexibility in determining the amount
of punitive damages, but “the Due Process Clause of the
Fourteenth Amendment prohibits the imposition of grossly
excessive or arbitrary punishments.” State Farm
Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 416
(2003). When analyzing whether a punitive damages award is
grossly excessive, “the relevant constitutional line is
inherently imprecise.” Cooper Indus., Inc. v.
Leatherman Tool Group, Inc., 532 U.S. 424, 434-35
(2001). However, the Supreme Court identified three
“guideposts” a reviewing court should focus on:
(1) the degree of reprehensibility of the defendant's
conduct; (2) the disparity between actual or potential harm
suffered and the punitive damages award; and (3) the
difference between the punitive damages awarded and the civil
penalties that could be imposed in comparable cases. See
BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 574-75
(1996).
The
first guidepost, the degree of reprehensibility of the
defendant's conduct, is often considered the most
important indicator of the reasonableness of a punitive
damages award. Campbell, 538 U.S. at 419 (citing
Gore, 517 U.S. at 575). The Supreme Court has
directed courts ...