Declarations and Exclusions

Shooting Spree Update: 9th Circuit's Decision on Gun Manufacturer Liability Continues to Draw Criticism

On November 20, we reported on the 9th Circuit's decision permitting a claim against gun manufacturers arising from the infamous Jewish Community Center shootings. That decision continues to inspire comment and to draw criticism.

Today, Walter Olson of Overlawyered links to an extended discussion of the Constitutional and federalism issues raised by the case by law-and-baseball (!?!) weblogger, Dan McLaughlin: Gunning For Interstate Commerce. Dan is particularly troubled by the Court's permitting the manufacturers to be pursued and, possibly, punished in California when all of the firearms involved were obtained in the more loosely-regulated state of Washington. Well worth reading, especially as it ties in to the U.S. Supreme Court's recent revisitation of the law of punitive damages (on which we reported most recently here).

Absence Makes the Recovery Grow Smaller: Court Properly Reduced Asbestos Plaintiff’s Recovery, Despite U.S. Navy’s Immunity From Suit

Under California’s Proposition 51, a defendant is only liable for an injured plaintiff’s non-economic damages (e.g., pain and suffering) in proportion to that defendant’s particular fault in bringing about the injury.  When some portion of the injury was caused by a party absent from the lawsuit, or by a party that cannot be sued directly, the plaintiff cannot recover that portion of his non-economic losses.  In an asbestos case, the Court of Appeal has held that the plaintiff’s non-economic recovery was properly reduced by the 16% fault attributed to the U.S. Navy, despite the Navy’s immunity from suit.

Plaintiff David Taylor worked in the Navy and Navy Reserve in various capacities from 1962 to 1986.  During that period of service, he worked with asbestos-containing packing materials manufactured by John Crane Inc. In 2001, Taylor was diagnosed with mesothelioma, with a life expectancy of weeks or months.  He brought suit against John Crane Inc. and others for his injuries.  At trial, Taylor was awarded economic damages of slightly more than $1 Million and non-economic damages of $1.79 Million.  John Crane Inc. was found to be 31% at fault, and the U.S. Navy was found to be 16% at fault.

Both John Crane Inc. and Taylor appealed.  The Court of Appeal affirmed the judgment against John Crane Inc., rejecting claims that the trial court had applied an improper rule of liability or had erred in some of its decisions on admitting evidence.  The appellate court also affirmed the allocation of 16% fault to the Navy, rejecting Taylor’s argument that it was improper to allocate any fault to a party (the Navy) not present at trial and probably immune from suit.  That 16% portion of the non-economic harm is simply not recoverable from anyone under Proposition 51.

[U]nder Proposition 51, fault will be allocated to an entity that is immune from paying for its tortious acts, but will not be allocated to an entity that is not a tortfeasor, that is, one whose actions have been declared not to be tortious.  We are aware of no declaration stating the government breaches no duty to military personnel when it exercises its discretion or when a serviceman is injured in the course of military service. Indeed, the cases make clear the government is immune from claims based on such conduct even if it has been negligent. . . .  Accordingly, whatever the merits of plaintiffs’ position that the Navy was immune . . . , we conclude the trial court did not err in allowing the jury to allocate fault to the Navy for purposes of determining defendant’s proportionate share of responsibility.

The decision in Taylor v. John Crane, Inc. (Nov. 26, 2003), Case Nos. A098044 and A098587, can be found at these links in PDF and Word formats.

Court Reverses Damages for Wrongful Death for Improper Inclusion of Emotional Distress

Emphasizing the limitations on the amounts permitted to be awarded as damages under California’s wrongful death statute, the Court of Appeal has reversed an award of $1.3 Million in damages to parents who had not seen their son in 20 years prior to his death.

The deceased, Dwayne Nelson, was arrested and restrained by officers of the Los Angeles County Sheriff’s Department when, freshly released from prison, he was found in the middle of an intersection shooting a gun into the air and at passing motorists. The police applied a “total appendage restraint procedure,” at the end of which Nelson had lost consciousness. Paramedics were unable to revive him, and he died. His parents, Lottie and Wallace Nelson, sued the county for damages for their son’s death. At trial, the jury found the county liable and awarded the Nelson’s $2 Million in damages; that amount was reduced to $1.3 Million based on the jury’s finding that Dwayne Nelson was 35 percent responsible for bringing about his own death. The county appealed.

While rejecting many of the county’s arguments -- including claims that the Nelsons had no standing to sue and that the cause of death had not been adequately proven -- the Court of Appeal agreed that the amount of damages awarded was excessive as a matter of law. Damages for wrongful death are strictly limited by statute in California (as in most other jurisdictions) and the amount awarded could not be explained other than by the jury’s consideration of improper elements of damage.

A plaintiff in a wrongful death case is entitled to recover damages for his own pecuniary loss, which may include (1) the loss of the decedent’s financial support, services, training and advice, and (2) the pecuniary value of the decedent’s society and companionship -- but he may not recover for such things as the grief or sorrow attendant upon the death of a loved one, of for his sad emotions, of for the sentimental value of the loss.

The evidence established that the parents had separated when Dwayne was 12 years old, that Dwayne left home at age 18 and that neither of the parents had actually seen him for the next 20 years. Not only did they not know his whereabouts at the time of death, they did not know of his drug addiction and repeated incarcerations. He had provided his parents no financial support at any time. As the court put it, “[c]haritably, . . . Dwayne’s future financial prospects at the time of his death were limited,” especially given that he would likely have been sentenced for as long as 21 years for the various felonies he was committing when he was arrested. The jury’s $2 Million verdict could not be justified except as compensation for the parents’ “understandable but noncompensable emotional distress” or as an improper attempt to punish the county (which would not be permissible in a case founded on negligence). The Court of Appeal reversed and remanded the case for a new trial on the issue of damages.

The decision in Nelson v. County of Los Angeles (November 25, 2003), Case No. B161431 can be found at these links in PDF and Word formats.

A Sea Change in Punitive Damages: Court of Appeal Reduces Punitive Award By 90%+ on Remand from U.S. Supreme Court

In a further consideration of the impact of the U.S. Supreme Court’s decision in State Farm v. Campbell (April 2003), a California Court of Appeal has concluded that the fundamental underpinnings of California punitive damage law must be reconsidered.  As a result of such a reconsideration, the court has directed the reduction of a punitive damage award against the Ford Motor Company from $290 Million to $23,723,287.

Three members of the Romo family were killed and three others were seriously injured when their 1978 Ford Bronco rolled over while trying to avoid another vehicle.  The Bronco’s metal roof structures collapsed and its fiberglass structures shattered.  In the original trial, the jury awarded the various family members and the estates of the deceased victims compensatory damages of approximately $5 Million and punitive damages of $290 Million.  In a prior appeal, the Court of Appeal affirmed that verdict. Following its decision in Campbell, the U.S. Supreme Court granted review; it then remanded the case to the state Court of Appeal to reconsider the punitive damage award in light of Campbell.  (Our report on a prior California consideration of the impact of Campbell can be found here.)

Although the Court of Appeal disclaims any intent to “write a treatise on the subject of punitive damages,” the Court’s 30-page decision does essentially that.  The Court first looks to the historical development of punitive damage law in California.  Initially, the rationale underlying punitive damages was to impose additional punishment for private wrongs, i.e., the particular wrongdoing that had harmed the plaintiff(s) in a particular case.  That philosophy changed “in the era of products liability litigation.”

In cases of mass-produced consumer goods or company-wide practices of large insurers, outrageous or malicious wrongdoing was no longer simply an affront to the dignity of a single victim. Instead, the affront was to all affected by the goods or services or, given the reach of the misconduct, the affront was viewed as one to society as a whole.  In this view, because the ‘wrong’ was directed beyond the immediate plaintiff, punitive damages awards needed to be based on the overall scope of the wrong in order to deter the mass torts.

This is the approach that the court determines was rejected by the Supreme Court in Campbell.  “[A]s a matter of due process under the federal Constitution, the court adopted the more limited, historically based view of punitive damages.”  As a result,

the legitimate state goal that punitive damages may seek to achieve is the ‘condemnation of such conduct’ as has resulted in ‘outrage and humiliation’ to the plaintiffs before the court; it is not a permissible goal to punish a defendant for everything else it may have done wrong.

Because the $290 Million punitive award could be explained only as a means of punishing Ford for its entire course of conduct in connection with Bronco rollover risks -- the plaintiffs' attorney had argued memorably at trial that the jury should return an award “large enough to force Ford to recall all remaining 1978-1979 Broncos still on the road and ‘crush them to dust’” -- the Court of Appeal conditionally reduced the punitive damage award to $23,723,287.  If the plaintiffs do not accept that reduction, the case is remanded for a new trial strictly on the punitive damages issue.

The opinion in Romo v. Ford Motor Company (November 25, 2003), Case No. F034241 can be found at these links in PDF and Word formats.

Shooting Spree II: 9th Circuit Finds Gun Manufacturers Potentially Liable for Shootings at Jewish Community Center

The August 1999, shooting rampage by admitted anti-Semite Buford Furrow at the North Valley Jewish Community Center in Granada Hills, California, continues to generate appellate decisions. We previously reported here on the state Court of Appeal's decision that the Community Center itself could not be held liable for any of the injuries or deaths inflicted by Furrow. Today, however, the 9th Circuit U.S. Court of Appeals has held in a 2-1 decision that the manufacturers and distributors of the guns used and possessed by Furrow may be held liable for negligence or for creating a public nuisance.

The case before the 9th Circuit had been dismissed at the pleadings stage: the District Court had concluded that even if all of the facts alleged by the plaintiffs were taken as true, they did not amount to a claim congnizable under California law. The District Court relied, among other things, on the California Supreme Court's decision in Merrill v. Navegar (2001) "that, although the plaintiffs characterized their action as a negligence claim, it was in reality a products liability action and therefore barred by then-existing California Civil Code section 1714.4, which barred gun manufacturers from liability
in a products liability action." The 9th Circuit decision concludes that the claims alleged by Furrow's victims are not based on product liability theories, that is, that they are not based on an argument that the guns were "defective" or "unreasonably dangerous." Rather, the 9th Circuit assumes that the guns were not defective and concludes that the plaintiffs have alleged facts that, if ultimately proven, would establish that the defendants were negligent in the manner in which they conducted the distribution of their non-defective product. The Court summarizes the plaintiffs' allegations concerning distribution, which it presumes to be true for purposes of its decision:

Plaintiffs allege that Glock’s marketing and distribution strategy includes the purposeful oversupply of guns to police departments and the provision of unnecessary upgrades and free exchange of guns with police departments to create a supply of post-police guns that can be sold through unlicensed dealers without background checks to illegal buyers at a profit. Glock allegedly targets states like Washington, where the gun laws are less strict than in California, in order to increase sales to all buyers, including illegal purchasers, who will take their guns into neighboring California. The ATF has provided Glock with the names of the distributors who are responsible for the sales of guns that end up in the hands of criminals, but Glock has ignored the information and continues to supply these same distributors.

Based on this theory, the Court finds that California's bar to product liability theories against the defendants does not apply to the defendants' independent negligence in their methods of distribution:

Unlike the Merrill plaintiffs, who alleged that the gun manufacturers’ decision to distribute the guns in question to the general public was negligent in light of the guns’ alleged defective design features and therefore was “simply a reformulated claim that the weapon, as designed, fails the risk/ benefit [products liability] test,” . . . here plaintiffs focus on the negligent distribution of a nondefective product. The focus is on the defendants’ affirmative actions in distributing their products to create an illegal secondary market for guns that targets illegal purchasers.

(Emphasis added.) On this basis, as well as on an extended analysis of nuisance law, the 9th Circuit majority (Judges Richard Paez and Sidney Thomas) reverses the order of dismissal and send the case back to the District Court for further proceedings.

The 9th Circuit's decision in Ileto v. Glock, Inc. (Nov. 20, 2003) Case No. 02-56197, can be read here.

Down on the Corner, Out in the Street: Busy Crosswalk is Not a "Dangerous Condition on Public Property"

Shirley Brenner was injured when she was struck by an automobile while using a crosswalk in the City of El Cajon. She filed suit agianst the city alleging that the placement of the crosswalk and the absence at the site of additional traffic controls constituted a dangerous condition on public property for which the City could be held liable. The trial court found the allegations of Brenner's complaints insufficient and dismissed the case on demurrer; the Court of Appeal has affirmed that decision.

The Court of Appeal summarizes the three grounds on which Brenner claimed that an actionable dangerous condition existed, none of which it found persuasive:

Brenner's complaint, shorn of its generalized allegations and conclusions, cites three factors to support her claim of the dangerous condition of Chase Avenue. First, she alleges the expansion of Chase Avenue to a four-lane street resulted in an increase in the numbers of cars traveling the road and the speed at which they traveled. Second, she alleges an increased number of pedestrians cross Chase Avenue at or near the Chase/Estes intersection to patronize a park, two bus stops, a convenience store and a school in the area. Third, she alleges City did not install traffic regulation or safety devices to reduce the dangers to pedestrians posed by crossing Chase Avenue.

The appellate panel emphasized that a dangerous condition can only be assessed by assuming that those in the area will themselves be acting with reasonable care for their own protection and of those around them. Nothing alleged in Brenner's complaints tended to show that the conditions around the crosswalk were such that "a driver using due care while traveling along Chase Avenue would be unable to stop for pedestrians who were using due care while crossing at the Chase/Estes intersection." (Italics added.) Moreover, the court emphasized that Brenner's third theory -- that additional safety devices should have been installed -- is precluded by statute.

The opinion in Brenner v. City of El Cajon (Nov 19, 2003), Case No. D040579, can be found at these links in PDF and Word formats.

The End of the Affair -- School District Not Liable for Parents' Emotional Distress on Discovery of Daughter's Sexual Relationship with Teacher

Continuing its busy day of ordering its earlier decisions published (see following post), the Court of Appeal for the Fourth District has ruled that the parents of an 11th grade daughter may not recover damages from the school district for the emotional distress that they sustained when they discovered -- despite her best efforts to hide it from them -- that their daughter had become involved in a sexual relationship with one of her teachers.

The case concerns only the emotional distress of the parents; all claims involving injury and damage directly to these plaintiffs' daughter were resolved on terms not discussed in the decision. The appellate court concludes that the parents -- who unquestionably sustained a significant emotional shock on the discovery of their daughter's situation -- have no cognizable claim under any of the theories permitting emotional distress recovery under California law:

1. The parents were not "bystanders" who directly perceived physical harm being inflicted on a family member. To the contrary, their daughter apparently went to no little trouble to see to it that her parents did not perceive what was happening between her and her teacher.

2. The parents could not claim status as "direct victims" of any negligence in the school district's supervision of the teacher. The court concluded that nothing in the district's action or inaction had been "directed at" the parents. While the parents' distress might have been a consequence of the district's negligence, the direct cause of that distress was not that negligence but the daughter's sexual relationship itself.

3. The parents could not recover under the theory of Bro v. Glaser -- a case whose value as precedent is open to doubt -- which suggested that "outrageous" conduct toward a family member will allow a relative to recover. While the teacher's conduct might be deemed outrageous, the conduct of the district or his fellow teachers was not.

4. Finally, the court found that the broad, general analysis by which California courts can recognize new "duties" giving rise to liability did not favor imposing liability on the district in this case.

The decision in Steven F. v. Anaheim Union High School District (Sept. 22, 2003, publication ordered Oct. 22, 2003), Case No. G026457 can be found at these links in PDF and Word formats.

Jewish Community Center Not Liable for Injuries to Children in Anti-Semitic Shooting Spree

In a notorious incident in August 1999, admitted anti-Semite Buford Furrow entered the property of the North Valley Jewish Community Center in Granada Hills, California, where the Center was offering a children's summer camp. He opened fire on staff and campers, injuring a receptionist, a teenage counselor and three little boys, among them 5-year old Benjamin Kadish. In a case revisiting California law on the duty of property owners to protect against the criminal acts of third parties, the Second District Court of Appeal has ruled the the Community Center cannot be held liable to Benjamin or to his brother (who witnessed the shooting) or parents for damages arising from Benjamin's injuries.

The appellate court's decision offers a useful compilation of California law in this area, and engages in a detailed analysis of the application of the principles of landowner liability first set forth by the California Supreme Court in Rowland v. Christian (1968) 69 Cal.2d 108. The Court reaffirms the general principle that a landowner is unlikely to be held liable for criminal attacks unless there is a history of at least one prior similar incident. In particular, the Court rejected arguments that the Community Center should have heightened security based on an increase in amorphous and unspecific threats, none of which were traceable to the person who eventually launched an attack. The court's conclusion:

The [Center] did not know of have reason to know that someone was planning to shoot and kill children attending Camp Valley Chai. Nothing in the [Center's] past experience of the place or character of the community center or the camp provided even a hint of what was to come.

In closing, we note that events subsequent to the shooting at the North Valley Center have instilled public fear of criminal acts never before imagined. The Twin Towers in New York City were destroyed in a matter of minutes with great loss of life. The United States Department of Homeland Security issues warnings of possible future terrorist activities. And snipers pick off people who are going about their daily routines.

In this day and age, new threats are often imagined, but the question before us depends upon an application of the Rowland factors to actual threats made prior to Furrow's rampage at the North Valley Centery on August 10, 1999. Accordingly, as stated, the [Center] did not have a duty to protect plaintiffs from harm.

The decision in Kadish v. Jewish Community Centers of Greater Los Angeles (October 10, 2003), Case No. B159740, is available at these links in PDF and Word formats.

California Court Reduces Punitive Damage Award in Tobacco Case

A California Court of Appeal has issued the first appellate decision in this state to provide a detailed application of the limitations on punitive damage awards adopted by the U.S. Supreme Court in State Farm v. Campbell (April 2003). Following the dictates of the Supreme Court's decision, the California court has ordered the reduction of a punitive damage award against Philip Morris, Inc. from $25 million to $9 million.

In the underlying litigation, plaintiff Patricia Henley sought damages from Philip Morris for permanent bodily injury she sustained from 35 years of smoking Marlboro cigarettes. At the conclusion of the trial, the jury returned a verdict awarding Henley compensatory damages for her injuries of $1.5 million, with additional punitive damages of $50 million. Philip Morris moved for a new trial, with the result that the trial judge reduced the punitive damage award to $25 million. A series of appeals followed. The Court of Appeal initially affirmed the judgment, including the $25 million in punitives. Following the U.S. Supreme Court's decision in the Campbell case, the California Supreme Court remanded the case again to the Court of Appeal for review of the punitive damage award in light of the Campbell standards. Applying that analysis in detail, the appellate court has determined that the punitive component of the judgment must be reduced to $9 million. If plaintiff does not accept that reduction, a new trial must be held on the punitive damage issue.

The Court of Appeal summarized the U.S. Supreme Court's involvement with punitive damage issues:

* * * Because civil punitive damage awards present a significant risk of arbitrary punishment exceeding that of which the defendant had fair notice, the Supreme Court has undertaken to 'constitutionalize' the field by adopting a variety of substantive and procedural safeguards against excessive awards. Among the procedural safeguards is the requirement, which we assume applies to the present case, that appellate scrutiny of punitive awards be governed by a 'de novo' standard of review. (Campbell, supra, at p. 1520; cf. Cooper Industries, Inc. v. Leatherman Tool Group, Inc. (2001) 532 U.S. 424, 431, 436 (Cooper Industries).)

In determining the sustainability of a punitive award the constitutional “guideposts” to be considered are (1) the degree of the defendant’s culpability, i.e., the reprehensibility of his or her conduct, (2) the ratio between the punitive award and the harm to the victim caused by the defendant’s actions, and (3) the sanctions imposed in other cases for comparable misconduct. (Campbell, supra, at p. 1520; Cooper Industries, supra, 532 U.S. 424 at pp. 447-448; see Gore, supra, 517 U.S. at p. 575.)

Applying each of the "guideposts," the Court of Appeal determined that Philip Morris' conduct in producing and marketing cigarettes was indeed reprehensible but that the $25 million award could not withstand a comparison to the degree of actual harm done to Henley. Because the conduct was deemed so reprehensible, however, the court opted to approve an actual-to-punitive damage ratio on the high end of what the U.S. Supreme Court suggested is constitutionally permissible.

In light of Campbell we do not believe the 17-to-1 ratio reflected in the present judgment can withstand scrutiny. As we read that case, a double-digit ratio will be justified rarely, and perhaps never in a case where the plaintiff has recovered an ample award of compensatory damages. Indeed, where a plaintiff has been fully compensated with a substantial compensatory award, any ratio over 4 to 1 is “close to the line.” (Campbell, supra, 123 S.Ct. at p. 1525.) Nonetheless we believe a higher ratio (6 to 1) is justified here by the extraordinarily reprehensible conduct of which plaintiff was a direct victim. There is no reason to believe that the compensatory damages were inflated so as duplicate elements of the punitive award. Moreover, as we have noted, plaintiff’s injuries were not merely economic, but physical, and nothing done by defendant mitigated or ameliorated them in any respect.

The decision in Henley v. Philip Morris, Inc. (Sept. 25, 2003), Case No. A086991, can be found at these links in PDF and Word formats.

Restaurant Owner May Owe Duty to Intervene or Summon Aid When Customer is Attacked on the Premises

The Fourth District Court of Appeal in San Diego has held that a restaurant owner owed no duty to customers to prevent third parties -- gang members -- from commencing a criminal attack against customers on the premises, but that the owner may have owed a duty to intervene and come to the victim’s aid -- if only by calling the police -- once the attack had commenced.

Charles Morris was attacked by gang members while waiting for companions at a taco shop. As the fight proceeded, a gang member entered the shop, grabbed a knife from the kitchen and used it to stab Morris. When Morris sued the owner of the taco shop (De La Torre) for his injuries, the trial court granted summary judgment in the owner’s favor, finding there was no duty to prevent criminal conduct by third parties. The Court of Appeal reversed and remanded the case for trial.

In finding that De La Torre and his employees may have owed a duty to intervene once the attack on Morris started, the Court of Appeal found a “special relationship” existed between the business and Morris:

The circumstances here fully support the existence of a special relationship between Morris and the business, as well as the extension of De La Torre's duty to reasonably respond to ongoing criminal conduct on property he used for business purposes. Morris had frequently been a customer at the taco shop on other occasions; on the night of the assault he was with friends who entered the taco shop to purchase food; the gang violence was directed at Morris as well as his friends (who were customers that very night) when the latter joined the melee in the parking lot after ordering their food; and the assailant used the taco shop's premises to effectuate the assault by entering the taco shop and retrieving the knife. Further, the taco shop's lease included the use of the parking lot to service the parking needs of its customers, and the parking lot was visible through the glass front of the taco shop. These facts create a sufficient nexus between the business and the victim and the location of the assault to create a special relationship and to justify imposition of a duty to respond to the assault with reasonable measures; i.e., by summoning aid. Thus, the court erred in concluding no duty existed and granting summary judgment on the basis that Morris was not a customer.

The appellate court emphasized that even with this finding of the existence of a duty, Morris has a significant issue that he will need to address: was it “more probable than not that if the employees had summoned help when they observed a dangerous situation on the premises, injury to Morris could have been prevented or lessened.”

The decision in Morris v. De La Torre (Sept. 3, 2003), Case No. D040278, can be found at these links in and Word formats.