MCPHERSON v. Suburban Ann Arbor, LLC

District Court, E.D. Michigan·Decided July 31, 2024·No. 2:20-cv-13152·Unknown

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION TINA MCPHERSON,

Plaintiff, Case Number 20-13152 v. Honorable David M. Lawson

SUBURBAN ANN ARBOR, LLC,

Defendant. ________________________________________/

OPINION AND ORDER DENYING DEFENDANT’S MOTION FOR REMITTITUR Included in the jury’s verdict in favor of the plaintiff on her several claims was an award of $350,000 in punitive damages. The defendant, contending that the award is excessive and violative of its rights under the Due Process Clause, moves to reduce the verdict. Because the evidence supports the jury’s verdict, and the award falls within the guidelines mapped out by the Supreme Court’s due process jurisprudence, the Court will deny the motion. I. The facts of the case are familiar to the parties and the Court. See McPherson v. Suburban Ann Arbor, LLC, 2024 WL 841205, at *1-2 (E.D. Mich. Feb. 28, 2024). To summarize, plaintiff Tina McPherson purchased a used motor vehicle from defendant Suburban Ann Arbor, a licensed new and used car dealer. After the papers were signed — including a purchase contract disclosing certain finance terms — and title was transferred to McPherson, the defendant later attempted to unwind the transaction and compel the plaintiff to accept different financing terms, eventually repossessing the car when she did not accede to the defendant’s demands. McPherson sued the car dealership alleging claims under the Fair Credit Reporting Act (FCRA), Equal Credit Opportunity Act (ECOA), Michigan Regulation of Collection Practices Act (MRCPA), Michigan Motor Vehicle Sales Finance Act (MMVSFA), and Michigan Credit Reform Act (MCRA), and for improper repossession under the Uniform Commercial Code (U.C.C.), and conversion of personal property. At trial, the jury heard evidence of the contract formation, the interaction between the parties, the defendant’s attempt to back out of the deal, the repossession, and the consequent

damages to the plaintiff. The jury returned a verdict for the plaintiff on all of her federal claims under the FCRA and ECOA, and on all her claims under Michigan law, which are the MRCPA, MMVSFA, and MCRA, as well as on her claims for improper repossession under the U.C.C. and conversion of personal property. The state conversion claim authorized the court to treble the damages, which the Court declined to do. The federal claims allowed the imposition of punitive damages. The jury also answered a special interrogatory finding that the defendant’s violation of the MRCPA was willful. It awarded the plaintiff $15,000 in actual damages, answered a special interrogatory fixing the value of the converted property at $23,000, and awarded the plaintiff $350,000 in punitive damages. Following the decision on certain post-trial motions, the Court entered judgment in favor

of the plaintiff in the amount of $394,433.75 on February 28, 2024. The defendant then filed its motion for remittitur. II. Although the defendant raises several procedural grounds for alteration of the jury verdict — which are meritless and do not warrant much discussion — the core argument presented by the defendant’s motion is that the punitive damages award is constitutionally excessive under the rubric of BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996), where the Court held that awards of punitive damages that result in an excessive multiple over the compensatory damages awarded for the same claims may violate the Due Process Clause. McPherson responds that a fair reading of the trial record — which the defendant selectively cites in a misleading way — supports the conclusion that the defendant’s conduct was willful, harmful, repetitive, illegal, and worthy of strong deterrence. She says that the amount of the punitive award is not excessive and falls within the guidelines established by the Supreme Court.

To start, the Court has the authority to reduce a jury’s damages verdict, but it should do so “‘only when, after reviewing all the evidence in the light most favorable to the prevailing party, it is convinced that the verdict is clearly excessive; resulted from passion, bias, or prejudice; or is so excessive or inadequate as to shock the conscience of the court.’” Corbin v. Steak ‘n Shake, Inc., 861 F. App’x 639, 645 (6th Cir. 2021) (quoting American Trim, LLC v. Oracle Corp., 383 F.3d 462, 475 (6th Cir. 2004)). The Sixth Circuit has counseled that “a trial court should not reduce an award unless it is (1) beyond the range supportable by proof; (2) so excessive as to shock the conscience; or (3) the result of mistake.” Ibid. (citing Bickel v. Korean Air Lines Co., Ltd., 96 F.3d 151, 156 (6th Cir. 1996)). Conversely, “[i]f there is any credible evidence to support a verdict, it should not be set aside.” American Trim, 383 F.3d at 475.

The authority to reduce a damages verdict, of course, includes the power to decrease the amount of punitive damages awarded. Certain guidelines apply, however. In BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996), the Court observed that punitive damages exceeding “single digit” multiples of an actual damage award may survive due process scrutiny only in the most exceptional cases. Id. at 582 (“[L]ow awards of compensatory damages may properly support a higher ratio than high compensatory awards, if, for example, a particularly egregious act has resulted in only a small amount of economic damages. A higher ratio may also be justified in cases in which the injury is hard to detect or the monetary value of noneconomic harm might have been difficult to determine.”). The Court extended that caution in State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003), emphasizing that the “jurisprudence and the principles it has now established demonstrate . . . that, in practice, few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process.” Id. at 425. Following suit, the Sixth Circuit explained that “[i]n more extreme cases, where many

or all of the reprehensibility factors are satisfied, due process still constrains an ensuing punitive damages award. In those cases, a punitive damages award of more than four times the amount of compensatory damages might be close to the line of constitutional impropriety. A higher ratio may be justified where the compensatory damages award is relatively low, yet even then, a nine- to-one ratio between punitive and compensatory damages is likely the outer limit that due process will permit.” Kidis v. Reid, 976 F.3d 708, 715-16 (6th Cir. 2020) (cleaned up). In later rulings explicating the rule laid down in Gore, the Supreme Court has reiterated the underlying principle that “the most important indicium of the reasonableness of a punitive damages award is the degree of reprehensibility of the defendant’s conduct.” State Farm, 538 U.S. at 419 (quoting Gore, 517 U.S. at 575). The Court has “instructed [lower] courts to determine the

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Related

BMW of North America, Inc. v. Gore
517 U.S. 559 (Supreme Court, 1996)
State Farm Mutual Automobile Insurance v. Campbell
538 U.S. 408 (Supreme Court, 2003)
Fischer v. United Parcel Service, Inc.
390 F. App'x 465 (Sixth Circuit, 2010)
Bickel v. Korean Air Lines Company, Ltd.
96 F.3d 151 (Sixth Circuit, 1996)
American Trim, L.L.C. v. Oracle Corporation
383 F.3d 462 (Sixth Circuit, 2004)