The Bert Company v. Turk, Aplts.

• Court: Supreme Court of Pennsylvania
• Decided: July 19, 2023
• Docket: 14 WAP 2022
• Status: Published

Opinion

[J-59A-2022 and J-59B-2022] [MO: Donohue, J.] IN THE SUPREME COURT OF PENNSYLVANIA WESTERN DISTRICT

THE BERT COMPANY D/B/A : No. 13 WAP 2022 NORTHWEST INSURANCE SERVICES : : Appeal from the Order of the : Superior Court entered May 5, 2021 v. : at No. 817 WDA 2019, affirming the : Judgment of the Court of Common : Pleas of Warren/Forest County MATTHEW TURK, WILLIAM COLLINS, : entered June 3, 2019 at No. AD 260 JAMIE HEYNES, DAVID MCDONNELL, : of 2017. FIRST NATIONAL INSURANCE AGENCY, : LLC, FIRST NATIONAL BANK, AND FNB : ARGUED: October 25, 2022 CORPORATION : : : APPEAL OF: MATTHEW TURK, FIRST : NATIONAL INSURANCE AGENCY, LLC, : FIRST NATIONAL BANK, AND FNB : CORPORATION :

THE BERT COMPANY D/B/A : No. 14 WAP 2022 NORTHWEST INSURANCE SERVICES : : Appeal from the Order of the : Superior Court entered May 5, 2021 v. : at No. 975 WDA 2019, dismissing as : moot the cross-appeal from the : Judgment of the Court of Common MATTHEW TURK, WILLIAM COLLINS, : Pleas of Warren/Forest County JAMIE HEYNES, DAVID MCDONNELL, : entered June 3, 2019 at No. AD 260 FIRST NATIONAL INSURANCE AGENCY, : of 2017. LLC, FIRST NATIONAL BANK AND FNB : CORPORATION : ARGUED: October 25, 2022 : : MATTHEW TURK : : : v. : : : : THE BERT COMPANY, NORTHWEST : BANK, AND NORTHWEST BANCSHARES, : INC. : : : APPEAL OF: MATTHEW TURK, FIRST : NATIONAL INSURANCE AGENCY, LLC, : FIRST NATIONAL BANK, AND FNB : CORPORATION :

CONCURRING OPINION

JUSTICE MUNDY DECIDED: JULY 19, 2023 The Majority holds that the constitutional permissible ratio of punitive to

compensatory damages in cases with multiple joint and several liable tortfeasors – where

compensatory damages are awarded in a lump sum against all defendants while punitive

damages are awarded on an individual basis – should be calculated on a per defendant

basis. I agree that this is an acceptable basis to calculate the punitive to compensatory

damages ratio in the case currently before the Court.1 As the Supreme Court has

consistently refused to create strict mechanical tests in determining the constitutionality

of punitive damages awards, however, I would hold open the possibility that other

approaches to calculating the ratio would also be constitutionally permissible.

In BMW of North America, Inc. v. Gore, 57 U.S. 559 (1996), the High Court set out

three guideposts courts must follow in considering the constitutionality of a punitive

damages award. The second guidepost being the ratio between the punitive damages

and compensatory damages awarded. Gore, 57 U.S. at 580. The purpose in considering

this ratio is that there must be a “reasonable relationship” between punitive and

compensatory damages. Id. The Court also recognized that it has “consistently rejected

1I also agree with the Majority that potential harm caused by a tortfeasor’s actions is a permissible consideration in comparing the relationship between a punitive damages award and a compensatory damages award.

[J-59A-2022 and J-59B-2022] [MO: Donohue, J.] - 2 the notion that the constitutional line is marked by a simple mathematical formula[,]” id. at

582, and again refused to “draw a mathematical bright line between the constitutionally

acceptable and the constitutionally unacceptable that would fit every case.” Id. at 583

(quoting Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 18 (1991)).

Then in State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408

(2003), the Court refined the Gore guideposts. In discussing the second Gore guidepost,

the Court again acknowledged it has been “reluctant to identify concrete constitutional

limits on the ratio between harm, or potential harm, to the plaintiff and the punitive

damages award.” State Farm, 538 U.S. at 424. The Court again declined to “impose a

bright-line ratio which a punitive damages award cannot exceed.” Id. In the absence of

such a bright-line ratio, courts must assure that a punitive damages award is reasonable

and proportionate to the amount of harm sustained by the plaintiff and to the

compensatory damages recovered. Id. at 426.

The Supreme Court’s continued reluctance to set a rigid benchmark for a

permissible punitive-to-compensatory damages ratio allows courts to consider the facts

and circumstances of a specific case in considering the constitutionality of a particular

punitive damages award. This flexibility should extend to the method by which the ratio

itself is calculated. In multiple defendant cases courts have calculated the ratio in one of

two ways. The first is the per-defendant approach, which divides the punitive damages

assessed against an individual defendant by the compensatory damages awarded

against that defendant. See, e.g., Planned Parenthood of Columbia/Williamette Inc., v.

Am. Coal. of Life Activists, 422 F.3d 949 (9th Cir. 2005); Horizon Health Corp. v. Acadia

Healthcare Co., Inc., 520 S.W.3d 848 (Tex. 2017). The second is the per-judgment

approach, which divides the punitive damages assessed against all defendants by the

compensatory damages assessed against all defendants. See, e.g., Advocat, Inc. v.

[J-59A-2022 and J-59B-2022] [MO: Donohue, J.] - 3 Sauer, 111 S.W.3d 346 (Ark. 2003); Cooley v. Lincoln Elec. Co., 776 F.Supp.2d 511 (N.D.

Ohio 2011).

Instantly, the Majority adopts the per-defendant approach. It reasons that the per-

defendant approach “assesses the individualized impact intended by the punitive

damages awards, whereas the per-judgment approach distorts the analysis by obscuring

the due process rights of the individual defendants.” Maj. Op. at 42. The Majority

continues that the per-judgment approach “undoes the jury’s determination of an

individual’s reprehensibility and need for deterrence as reflected in the punitive award.”

Id. This reasoning may be applicable when courts are calculating the ratio solely using a

plaintiff’s actual damages. However, as the Majority correctly finds, courts are permitted

to consider not only a plaintiff’s actual damages but also the potential harm caused by a

defendant’s conduct. See State Farm, 538 U.S. at 424 (“[W]e have been reluctant to

identify concrete constitutional limits on the ratio between harm, or potential harm, to

the plaintiff and the punitive damages award.” (emphasis added)).

Unlike compensatory damages, the jury does not make a finding of the amount of

potential harm caused by the defendants’ tortious conduct let alone allocate that potential

harm amongst the several defendants. In such circumstances, employing the per-

judgment approach and using the combined total of the compensatory damages and

potential harm as the denominator and the total amount of punitive damages awarded by

the jury as the numerator may be more appropriate because it would give fuller

consideration to the reprehensibility of the defendants’ conduct. It would also be

impossible for the court to accurately appropriate the amount of potential harm

attributable to each individual defendant without a specific finding by the jury, making it

practically impossible to employ the per-defendant approach when considering potential

harm.

[J-59A-2022 and J-59B-2022] [MO: Donohue, J.] - 4 The Majority finds that “[c]umulating the punitive verdicts as required under the

per-judgment approach obliterates the jury’s assessment of each defendant’s

reprehensibility, and we cannot conceive a reason for doing so where the Defendants are

not a single corporate entity.” Maj. Op. at 44. As seen from the complications potential

harm can have in the employment of the per-defendant approach, there are instances

where the per-judgment approach would be more appropriate, and the Court should not

be so quick to dismiss the possibility that other instances may arise that are not currently

before it. For those reasons, and in light of the fact the Supreme Court has continuously

refused to create mechanical rules in considering the constitutionality of the punitive-to-

compensatory damages ratio, I would leave open the possibility that approaches other

than the per-defendant approach could be permissible.

[J-59A-2022 and J-59B-2022] [MO: Donohue, J.] - 5