# Petition — Riegel Textile Corp. v. Gryc ex rel. Gryc > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_0300%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1980 - **Citation:** 449 U.S. 921 ## Text et upreme Court. U. S. | ; Faw 2 80-279 AUG2 1 1980 No. — | MigtAsh suns. JR., CLERK IN THE ‘ Supreme Court of the Anited States October Term, 1980 RIEGEL TEXTILE CORPORATION, Petitioner, VS. LEE ANN GRYC, by her mother and natural guardian, JACQUELYN GRYC, and JACQUELYN GRYC, individually, Respondents. PETITION FOR WRIT OF CERTIORARI TO THE SUPREME COURT OF MINNESOTA JARDINE, LOGAN & O’BRIEN Donald M. Jardine Kent E. Charpentier Attorneys for Petitioner on Appeal Only 1350 Northern Federal Building St. Paul, Minnesota 55102 Phone: (612) 227-0601 1980—Northwest Brief Printing Co., 316 Chicago Avenue, Minneapolis 55415—338-5078 i Questions Presented 1. Whether a state court is pre-empted from assess- ing punitive damages against a fabric manufacturer when the fabric claimed to have been defectively manufactured admittedly complied with the safety standards contained within the applicable United States Statute, Flammable Fabrics Act of 1953, Ch. 164, §4, 67 Stat. 111, as amend- ed, Ch. 833, 68 Stat. 770 (1954)? 2. Whether a state court is pre-empted from finding that fabric is defective and unreasonably dangerous where the fabric manufacturer admittedly complied with protec- tive standards contained within the Flammable Fabrics Act of 1953, Ch. 164, §4, 67 Stat. 111, as amended, Ch. 833, 68 Stat. 770 (1954) and where under that stat- ute the flammability of the fabric is classified as normal? 3. Whether a state court may refuse to apply a Fed- eral statute because the state court finds the standard con- tained within the Federal statute is invalid? 4. Whether an assessment, pursuant to a jury verdict, of $1,000,000.00 in punitive damages against a fabric manufacturer who has complied with. all applicable Fed- eral statutes and regulations is a denial of due process under the Fourteenth Amendment to the United States Constitution? 1Petitioner considered an appeal under 28 U.S.C. §1257(1) based upon the Minnesota Supreme Court’s express affirmance of the trial court’s finding that the standard contained within the Flammable Fabrics Act of 1953 is invalid. While petitioner still believes an appeal may be appropriate, a Petition for Certiorari was made due to uncertainty as to whether the declaration of invalidity by the Minnesota Supreme Court was within the scope of 28 U.S.C. §1257(1). 11 5. Whether the trial court’s jury instruction gave proper evidentiary weight to undisputed evidence that the manufacturer complied with the Flammable Fabrics Act of 1953, Ch. 164, §4, 67 Stat. 111, as amended, Ch. 833, 68 Stat. 770 (1954).? 2The pertinent portion of the instruction was as follows: “Now, repeated reference has been made in this case to a test called CS 191-53, which is a part of the Flammable Fabrics Act of 1953 as amended, and it is contended by the defendant Riegel Textile Cor- poration that the cotton flannelette manufactured by it was in com- pliance with that test; however, since the Flammable Fabrics Act is a criminal statute, compliance with that test is not the standard by which the conduct of the defendant Riegel Textile Corporation is to be measured. As I told you before, the conduct of the defendant Riegel Textile is to be measured by whether the cotton flannelette was in a defective condition unreasonably dangerous to users, or consumers, at the time it left the factory. In reaching our conclusion on that point, you will consider, examine, and weigh with care all of the evidence in this case, including the CS 191-53 test, to determine whether the cotton flannelette failed to perform reasonably, adequately, and safely as pajamas, or sleepwear, in a setting in which it might be accidentally exposed to heat or flame.” [Tr. 2051] iii TABLE OF CONTENTS Page SED RONINOS 5: cle's 4 aV Slew se bane bao we waet i SE I So oss hace 0 abn UD OO WRN nee Ol 1 Grounds Upon Which Jurisdiction is Invoked ...... 2 Statutes and Constitutional Clauses' Involved ....... 2 PE OG TD SD cc kere s hn estes ohne. eves 3 How Federal Question Was Presented ............ 5 Reasons for Granting the Writ ........ccccrecnes 6 RE Ce ee res yee re 13 APPENDIX INDEX Opinion of Minnesota Supreme Court ............. A-1 Order Denying Petition for Rehearing ............ A-40 Order and Memorandum of the Trial Court ....... A-41 Jury Instructions Nos. 3 and 4 ............0.0ee- A-75 Transcript of Motion for Directed Verdict ........ A-75 Text of the Flammable Fabrics Act of 1953, as Amend- ed in 1954, Prior to 1967 Amendment and Revision 16 C.F.R. §1610—Standard for the Flammability of NE EMIS 55 4.6 b:w'aep Rk Mik lew tr Amb Ne A-81 Slip Opinion of Ralph Nader Connecticut Citizen Ac- tion Group v. Allegheny Airlines, Inc. .......... A-89 Fourteenth Amendment to the United States Constitu- SS EE hbk) d 60m bn bee ots ween baw anes A-102 Commerce Clause of the United States Constitution, FE I hein oor Oe eRe dae A-103 Supremacy Clause of the United States Constitution, pe a le GAP See rE a a Me ae FP A-103 Excerpts from Riegel Textile Corp.’s Post Trial Motions SOP Ee ER LE PERT TOT TORT ELE TORT ETS A-104 Excerpts from Riegel Textile Corp.’s Briefs in Sup- OOM Of POR TUG MIOUGR: vie cc secressccens A-106 iV TABLE OF AUTHORITIES Constitutional Provisions: Fourteenth Amendment to the United States Constitu- RS Be Oo ee tins palon es age eid 2 Commerce Clause of the United States Constitution, PE Ce a ee Set Oh eee RVS a ORR DORKS pe Supremacy Clause of the United States Constitution, Se oe ha nde kn eh es Ck Mees when y Se Statutes and Rules: United States Code: ee PEED bs bc b's Sakon a 08 hve ko eae o' 2 IE a 6 xn ds 6 EKER ORa dee 2 ee Pe Oe CP os a's V0.0 oes cea weeNs 2 Flammable Fabrics Act of 1953, Ch. 164, 67 Stat. 111, Etienne Oe 4k eee 6 a, a Me Te Oe ee ee en: WE oo oe ae Cae. 3 Cases: Bellotte v. Zayre Corp., 531 F.2d 1100 (1st Cir. 1976) 11 Benson Coop. Creamery Assn. v. First Dist. Assn., 276 Minn. 520, 151 N.W.2d 422 (1967) ............ 9 Howard v. McCrory Corp., 601 F.2d 133 (4th Cir. je RPGS Ree enter cag rr ate OTe rer ae 11-12 Jones v. Rath Packing Co., 430 U.S. 519 (1977) ..8, 9 Kirschbaum v. Lowrey, 165 Minn. 233, 206 N.W. 171 Ce ee we inte ee rk er de AA ly oie Te 9 Northern States Power Co. v. State of Minn., 447 F.2d 1143 (8th Cir. 1971) aff'd., 405 U.S. 1035 ...... 6 Ralph Nader Connecticut Citizen Action Group v. Al- legheny Airlines, Inc. (U.S.C.A., D.C., filed May 16, BE REED as Ov hep halos 0s bw ek Oe cee ah 10 Ray v. Atlantic Richfield Co., 435 U.S. 151 (1978)... EIT OPE rn Teer Lee ee EE EET EP ECS 6, 8, 9 Raymond v. Riegel Textile Corp., 484 F.2d 1025 (1st ME) BAR Anes oe Pare etree 11 Simien v. S. S. Kresge Co., 566 F.2d 551 (Sth Cir. SPER SONAR RCAEER ONES SARL EADE CEE UER ERS 11, 12 IN THE Supreme Court of the Gnited States October Term, 1980 No. RIEGEL TEXTILE CORPORATION, Petitioner, vs. LEE ANN GRYC, by her mother and natural guardian, JACQUELYN GRYC, and JACQUELYN GRYC, individually, Respondents. PETITION FOR WRIT OF CERTIORARI TO THE SUPREME COURT OF MINNESOTA Petitioner, Riegel Textile Corporation, prays that a Writ of Certiorari issue to review the judgment and opinion of the Supreme Court of the State of Minnesota, filed on May 23, 1980. Opinions Below The Supreme Court of the State of Minnesota filed its opinion on May 23, 1980. It has not yet been reported. A copy is located in the Appendix at A-1. An Order denying a Petition for Rehearing, dated July 10, 1980 and which is also unreported, appears at A-40. The Opin- ion of May 23, 1980, affirmed a judgment entered in the 2 County of Ramsey in the Second Judicial District of the State of Minnesota entered pursuant to an Order and Memorandum of the trial court dated August 7, 1978. The Order and Memorandum appear at A-41. Grounds Upon Which Jurisdiction Is Invoked The Opinion of the Supreme Court for the State of Minnesota was filed on May 23, 1980. Rehearing was denied on July 10, 1980. This Petition is timely in that it is filed prior to the expiration of the 90-day period allowed by 28 U.S.C. §2101(c). Jurisdiction of this Court is invoked pursuant to 28 U.S.C. §1257(3) and Rule 17(1)(b) and (c) of the Rules of the Supreme Court of the United States. Statutes and Constitutional Clauses Involved The questions presented in this Petition for Certiorari involve the Flammable Fabrics Act of 1953, Ch. 164, 67 Stat. 111, as amended, Ch. 833, 68 Stat. 770 (1954). The standard of flammability is contained within Sec. 4 of the Act. The entire act has been reproduced in the Appendix at A-78. Sec. 4 incorporates by reference the commercial standard promulgated by the Secretary of Commerce effective January 30, 1953 and identified as “Flammability of Clothing Textiles, Commercial Standard 191-53”. CS 191-53 as set out in 16 C.F.R. §1610, et seq., and has been reproduced at A-81. The questions presented also involve the Fourteenth Amendment to the United States Constitution as well as the Commerce Clause and the Supremacy Clause of the United States Constitution. Art. 1, Sec. 8, Cl. 3 and Art. 3 VI, Cl. 2. These sections of the United States Constitu- tion have been reproduced at A-102-3. Statement of the Case Plaintiff Jacquelyn Gryc initiated this product liability action in Ramsey County District Court in the Second Judicial District of the State of Minnesota to recover dam- ages for burn injuries sustained by her minor daughter, Lee Ann. The incident occurred on December 8, 1969, when Lee Ann, then just short of five years of age, climbed up on a chair or counter and reached over three operat- ing burners on an electric kitchen range for the purpose of turning off an overhead timer. Apparently while do- ing this, her flannelette pajamas ignited. The flannelette material was manufactured in August of 1967. Plaintiff joined as defendants: appellant Riegel Textile Corporation, the manufacturer of the cotton flannelette cloth used in the pajamas; Style Undies, Inc., the designer and manufacturer of the pajamas; Associated Merchan- dising Corporation (AMC), the wholesaler of the pajamas; and Dayton-Hudson Corporation, the retailer. All of the defendants except for Riegel Textile Corporation settled with plaintiff prior to trial. The matter was tried before the Court and a six-member jury in Ramsey County District Court. The jury found, by a 5/6 verdict,*® that the cotton flannelette contained in the pajamas worn by Lee Ann Gryc and manufactured by petitioner Riegel was defective and that the defect was a cause of the injuries sustained by Lee Ann. The jury found that Riegel Textile Corporation was 90 percent oe. the six jurors joined in the verdict as provided for in Minn. Stat. 01, 4 responsible and Lee Ann Gryc was 10 percent respon- sible for her own injuries. The trial court subsequently held as a matter of law that Lee Ann could not be re- sponsible for her own injuries. Compensatory damages were awarded in the amount of $750,000.00 and punitive damages were assessed against Riegel in the amount of $1,000,000.00. The judgment entered pursuant to the ver- dict was affirmed in all matters by the Minnesota Su- preme Court in its opinion of May 23, 1980. It was undisputed that the flannelette material contained in the subject pajamas complied with Commercial Stan- dard 191-53, which is incorporated into and made a part of the Flammable Fabrics Act of 1953, Ch. 164, §4, 67 Stat. 111, as amended, Ch. 833, 68 Stat. 770 (1954). Under the Act, the flammability of the subject flannelette is classified as normal. Flammable Fabrics Act of 1953, Ch. 164, §4, 67 Stat. 111, as amended, Ch. 833, 68 Stat. 770 (1954); 16 C.F.R. §1610.3(a) (1) (ii). The trial court v’ ‘mately ruled that compliance with the Flammable Fabnivs Act and CS 191-53 did not pro- vide a defense for Riegel since the CS 191-53 test was an “invalid” test, (Order and Memorandum, A-52 and 68.) The Minnesota Supreme Court affirmed the trial court’s finding that the CS 191-53 test was invalid. (Opin- ion of May 23, 1978, A-14.) The Minnesota Supreme Court further held the state court was not pre-empted by the Flammable Fabrics Act and the Supremacy Clause of the United States Constitution from awarding compen- satory damages and assessing $1,000,000.00 in punitive damages against a manufacturer whose product fully com- plied with the Flammable Fabrics Act. 5 How Federal Question Was Presented Based in part upon the fact that there was full com- pliance with the Flammable Fabrics Act and the CS 191-53 test, motions for a directed verdict on both compensatory and punitive damages were made by Riegel.* Petitioner requested two jury instructions concerning the weight to be given the undisputed compliance by the manufacturer with the Flammable Fabrics Act.> Both instructions were denied by the trial court. The trial court’s instruction concerning the Flammable Fabrics Act and specifically the CS 191-53 standard was raised in Riegel’s post trial motions. The issue was also extensively briefed at this point.° The trial court discussed this issue in its Order and Memorardum denying the post trial motions. A-49. The issue was again raised in both Petitioner’s Appellate Brief and its Petition for Re- hearing. The Minnesota Supreme Court was silent on this issue. The issue of whether the Flammable Fabrics Act pre- empts the enforcement of any inconsistent state law or court ruling was initially raised by Riegel’s Motion for a Directed Verdict based, in part, upon its undisputed com- pliance with the CS 191-53 standard of the Flammable Fabrics Act.” The issue was again raised and extensively briefed during the post trial motions® and in Petitioner’s ‘This appears at Pages 1705 and 1708-9 of the trial transcript which has been reproduced at A-75. 5The requested jury instructions have been Sgro at A-75. ®Excerpts of the post trial motion and briefs in support of the post trial motion have been reproduced at A-104. TSee Pages 1705 and 1708-9 of the trial transcript reproduced at A-75. SExcerpts from Riegel’s Post Trial Motion and supporting briefs have been reproduced at A-104. 6 Appellate Brief. The Minnesota Supreme Court devoted a significant portion of its opinion to this issue. The due process issue was first raised as a separate issue in the Petition for Rehearing. It was raised in re- sponse to the Minnesota Supreme Court’s holding that the Flammable Fabrics Act does not pre-empt the state court’s imposition of punitive damages. The Court did not ad- dress the issue in its Order denying the Petition for Re- hearing. Reasons for Granting the Writ 1. To decide an important Federal constitutional issue. An analysis of the pre-emption issue in a case such as this requires at the outset a determination as to whether Congress intended to pre-empt the area, in this case, the regulation of flammable fabrics. The intent of Congress is revealed by the statutory scheme and its legislative his- tory. Ray v. Atlantic Richfield Co., 435 U.S. 151 (1978); and Northern States Power Co. v. State of Minn., 447 F.2d 1143 (8th Cir. 1971) affirmed, 405 U.S. 1035. A review of the statute and the legislative history of the Flammable Fabrics Act of 1953, Ch. 164, 67 Stat. 111, as amended, Ch. 833, 68 Stat. 770 (1954) clearly in- dicates an intent by Congress to obtain a uniform stan- dard and to pre-empt state action.® %Senate report No. 400 demonstrates this intent. It states in part: “Moreover, the committee was urgently requested to take prompt action on this legislation. It was pointed out that if this legislation is not enacted, a variety of State and local regulations lacking in uni- formity might very well ensue. It seems obvious that uniformity of regulation in this matter is necessary.” (emphasis added) 1953 U.S. Code and Administrative News, 1722, 1724. 7 Given the clear intent of Congress to pre-empt state action in order to obtain a uniform set of regulations for fabric manufacturers, there should be no argument that The danger of State regulation in this area is more clearly stated in the testimony of Charles W. Dorn, Chairman of the Technical Com- mittee of the National Retail Dry Goods Association, who appeared before the Committee in support of the legislation. Mr. Dorn’s testi- mony quoted in the Committee report was termed “another cogent reason for its [Flammable Fabrics Act] enactment”. He testified in part: “* * * The confusion which is bound to result if the several states were to legislate individually on the subject is obvious, for in the absence of a national standard, each state and local community would provide for different guides or measurements. I can readily testify that this is not an idle conclusion, for in the past months the possibility of a Federal enactment has been the sole basis for post- poning very unsatisfactory legislation in several States. “Failure by this Con to act undoubtedly will cause a flood of haphazard local legislation which will not only bring on an — sible situation in the textile industries, but, more important, will deny to many consumers the responsible protection contained in the pro- posed bills. “The manufacturers of your respective States would have great dif- ficulty in producing garments or fabrics which would comply with the different requirements of two or twenty different state acts, to say nothing of different local ordinances * * * 1953 U.S. Code and Administrative News at 1727. The Flammable Fabrics Act amended in 1967 to add an explicit pre-emption provision: “This Act is intended to supersede any law of any State or political subdivision thereof inconsistent with its provisions.” Flammable Fab- rics Act, Pub.L. No. 90-189, §16, 81 Stat. 568. An explanation of this pre-emption provision was contained within the Committee report on the Flammable Fabrics Act, 103 Congres- sional Record 20328 (July 27, 1967): “EFFECT ON STATE LAW “The mass production, high volume, and national marketing char- acter of the textile industry requires that flammability standards be uniform throughout the country. Accordingly, the bill would pre- empt any law of any state or political subdivision thereof which is inconsistent with its provision. “This bill would not affect the state’s ability to set more stringent requirements for their own procurement and for state and local fire building codes. However, it would avoid multiple regulation of manufacturers covered by the federal law.” (Emphasis added.) Minnesota would be precludea from enforcing legislation imposing a $1,000,000.00 fine on textile manufacturers whose products, while fully complying with the standards set out in the Flammable Fabrics Act, did not comply with Minnesota’s own safety standards. Ray v. Atlantic Richfield Co., supra, and Jones v. Rath Packing Co., 430 U.S. 519 (1977). The affront to Congress’ stated intent of uniformity is even greater in the case of an ad hoc decision of five randomly selected jurors than in the case of fifty differ- ent state regulatory schemes throughout the nation. In the case of the state regulatory schemes, the schemes are enacted by the legislature or promulgated by a reg- ulatory agency after notice and hearings complying with certain due process requirements. Obviously, that is not the case with an ad hoc decision of five jurors. Even more importantly, in the case of the fifty state regula- tory schemes, the fabric manufacturers would be aware of the regulations and able to take actions to conform with the regulations. In stark contrast, the fabrics manu- facturers have little indication as to the criteria to be used by randomly selected jurors who are given extremely vague criteria in their instructions. Upholding such punitive damage awards would have an undue burden on interstate commerce and would have a chilling effect on product manufacturers. In order to safeguard itself from the imposition of punitive damages, the manufacturer would be compelled to refrain from man- ufacturing and marketing many useful and relatively in- expensive products. Instead, the manufacturer would be compelled to manufacture products, which while being 9 marginally safer, would likely be inferior in quality, less useful and more expensive. Such a result may be a legiti- mate policy decision, but such policy decisions are ex- clusively within the province of Congress to make. Such a decision was made at the time of the enactment of the Flammable Fabrics Act of 1953. A jury of five should not be able to replace the judgment of Congress with its own. The assessment of a $1,000,000.00 penalty against pe- titioner cannot be justified by calling the punitive dam- age assessment a private remedy which is not provided for in the Act. The purpose of punitive damages are not to compensate the plaintiff for her injuries. Rather, puni- tive damages are intended to punish the actor for his malicious acis and deter others from performing similar acts. Benson Coop. Creamery Assn. v. First Dist. Assn., 276 Minn. 520, 151 N.W.2d 422 (1967); Kirschbaum v. Lowrey, 165 Minn. 233, 206 N.W. 171 (1925). Obviously, the injunctive relief and sanctions available under the Flammable Fabrics Act are provided for the same purpose. The doctrine of pre-emption precludes a manufacturer from being punished by sanctions much more severe than those available under the United States statute when the actions being punished are in conformity with applicable safety regulations contained within the United States statute. Ray v. Atlantic Richfield Co., supra, and Jones v. Rath Packing Co., supra. 10 2. The issue of whether a state is pre-empted from pun- ishing a manufacturer of a fabric which substantially exceeds applicable safety standards contained in a United States statute has never been considered by a United States Appellate Court. Petitioner has been unable to locate any appellate de- cision, save for the subject decision by the Minnesota Supreme Court, which has considered the issue of wheth- er punitive damages can be assessed when the subject fabric undisputedly complies with the CS 191-53 standard contained in the Flammable Fabrics Act of 1953. In fact, petitioner has been unable to locate any appellate deci- sion allowing punitive damages when a manufacturer has complied with all Federal regulations.?° This is an issue of great importance which will arise again and again in the immediate future as increasingly more jurisdictions allow punitive dam- ages in products liability actions. Guidance from the United States Supreme Court is imperative to settle the issue as to whether compliance with an appli- cable federal safety standard precludes the imposition of punitive damages against the complying manufac- turer. 10Reference should be made, however, to Ralph Nader Connecticut Citi- zen Action Group v. Allegheny Airlines, Inc. (U.S.C.A. D.C., filed May 16, 1980), reproduced at A-89. There, the Court held it was err to assess punitive damages against an airlines for overbooking when the airlines’ action “conformed to the standards set and the practices ap- proved by the agency charged with the duty of regulating it—standards and —— that the agency has found to be in the public interest.” (A-97). The same can be said for the standards regulating fabric manu- facturers contained in the Flammable Fabrics Act which was found by Congress to be in the public interest. 11 3. Both the jury instruction concerning the evidentiary weight fo be given Riegel’s undisputed compliance with the CS 191-53 test of the Flammable Fabrics Act and the trial court’s holding that the CS 191-53 was invalid, conflict with circuit court decisions construing and applying the Flammable Fabrics Act. Riegel requested the trial court instruct the jury as follows: “You are instructed that ev.dence that the fabric sold by defendant Riegel Textile passed the Federal Flammable Fabrics Act test, CS 191-53, is evidence that the fabric was not unreasonably dangerous at the time of its sale.” The request was denied. The trial court determined that the CS 191-53 test con- tained in Section 4 of the Flammable Fabrics Act was invalid. (Order and Memorandum at A-52 and 68). Based upon this finding, the trial court refused to give an instruc- tion giving evidentiary weight to Riegel’s compliance with the Act. In fact, Riegel’s compliance with the Act was termed by the trial court to be “hid[ing] behind the invalid CS 191-53 Flammability test” and a basis for an award of punitive damages (Order and Memorandum A-64). The Minnesota Supreme Court affirmed the finding that CS 191-53 was invalid. (Opinion of May 23, 1980, A-14.) Circuit court decisions which have considered the issue have held to the contrary. Simien v. S. S. Kresge Co., 566 F.2d 551 (Sth Cir. 1978); Bellotte v. Zayre Corp., 531 F.2d 1100 (1st Cir. 1976); Raymond v. Riegel Textile Corp., 484 F.2d 1025 (1st Cir. 1973); and Howard v. 12 McCrory Corp., 601 F.2d 133 (4th Cir. 1979). While the cases hold that compliance with the Flammable Fab- rics Act and the CS 191-53 standard is not in itself con- clusive evidence that the fabric is not unreasonably haz- ardous, compliance with the Act and the standard have been consistently held to be relevant evidence that the subject fabric was not unreasonably hazardous. In fact, in Simien v. S. S. Kresge Co., supra, the Court held that an instruction that compliance with the Commercial Stan- dard was evidence that the subject jacket was defective was in and of itself grounds for reversal. Id. 566 F.2d 554-5. The Court further held that the erroneous instruc- tion, when considered in light of the charge as a whole, could at best be considered internally inconsistent. Since this inconsistency may well have deprived Kresge of the benefit of its persuasive evidence on the issue of liability, a reversal was granted. Jd. 566 F.2d at 555. Exactly the same can be said of the trial court’s instruction in this case. The Minnesota State Court’s failure to give proper evi- dentiary weight to compliance with the Federal Act and Standard is an insult to the Federal system and a clear violation of both the Commerce Clause and the Supremacy Clause of the United States Constitution. (Art. I, Sec. 8, Cl. 3 and Art. VI, Cl. 2.) 13 CONCLUSION Petitioners respectfully request the Court to issue a writ of certiorari to the Supreme Court of Minnesota. Respectfully submitted, JARDINE, LOGAN & O’BRIEN /s/ DONALD M. JARDINE /s/ KENT E. CHARPENTIER 1350 Northern Federal Building St. Paul, MN 55102 Phone: (612) 227-0601 Attorneys for Petitioner on Appeal Only A-1 APPENDIX No. 4 Ramsey County Todd, J. Lee Ann Gryc, by her mother and natural guardian, Jac- quelyn Gryc, and Jacquelyn Gryc, individually, Respondents, vs. Dayton-Hudson Corp., et al, Defendants, Riegel Textile Corp., Appellant. Endorsed Filed May 23, 1980 John McCarthy, Clerk Minnesota Supreme Court 49334 and 49525 SYLLABUS 1. Punitive damages may properly be awarded in an appropriate strict liability case. 2. Appellant’s compliance with an applicable federal safety standard does not preclude a punitive damages award as a matter of law. 3. The preemption provision of the federal Flammable Fabrics Act and the Supremacy Clause of the United States Constitution do not prohibit the imposition of puni- tive damages on a defendant who has complied with that Act. A-2 4. Since appellant failed to object below to the trial court’s instruction to the jury on the issue of punitive damages, the instruction became the law of the case and is not subject to review on appeal. 5. There was sufficient evidence to support the award of punitive damages. 6. Policy considerations do not dictate against an award of punitive damages in this case. 7. The award of $1,000,000 in punitive damages is not clearly excessive as a matter of law. 8. There was sufficient evidence to support the find- ing that appellant manufactured a defective product and that respondents were not aware of the defect. 9. The jury verdict was not perverse when it found appellant to have caused respondents’ injuries while at the same time finding that the other defendants in the stream of commerce did not cause those injuries. 10. Appel'ant was not prejudiced by the trial court’s dismissal of appellant’s counterclaim against Jacquelyn Gryc when the jury found that Jacquelyn Gryc was not at fault. 11. The trial court did not err in finding that the 4- year-old child, Lee Ann Gryc, could not be comparatively at fault as a matter of law. 12. There is no merit to appel’ant’s contention that the trial court committed cumulative errors and that re- spondents’ counsel engaged in misconduct which denied appellant a fair trial. A-3 13. The award of $750,000 in compensatory damages is not clearly excessive as a matter of law. Affirmed. Heard, considered, and decided by the court en banc. OPINION TODD, Justice. On December 8, 1969, Lee Ann Gryc, ten 4 years of age, was clothed in pajamas made from a cotton material manufactured by defendant Riegel Textile Corporation (Riegel). The material was commercially known as “flan- nelette.” It was not treated but did meet the minimum federal standards of product flammability. Lee Ann reached across the electric stove in her home to shut off a timer. Her pajamas were instantly ignited and she received severe burns over her upper body. The jury found Riegel liable for these injuries and awarded Lee Ann $750,000 in compensatory damages and $1,000,000 in punitive damages. We affirm. At the time of the incident, the Gryc family consisted of Gerry Gryc, his wife Jacquelyn, and their two children, Tammy, age 6, and Lee Ann, age 4. On the morning of December 8, 1969, Jacquelyn Gryc, after sending Tam- my to school, began doing housework around her home. She was cooking various items on three burners of an elec- tric stove. Just prior to the accident, she set a timer situated above the stove and went down into the basement to do some laundry. At that time, Lee Ann was watching televi- sion in the living room. She was clothed in pajamas, the fabric of which was 100 percent untreated cotton flannel- A-4 ette manufactured by Riegel. Gerry Gryc had just risen and was getting dressed in an upstairs bedroom. It appears that, at approximately 9:30, the timer on the stove went off, Lee Ann went into the kitchen, pulled a chair over to the stove, climbed onto it, reached above the stove, and turned off the timer. Her pajama top came in contact with a lighted burner and ignited. Her parents heard Lee Ann scream. Jacquelyn, who had been pro- ceeding up the back stairway to turn off the timer, ran up the stairs and saw Lee Ann standing near the top of the stairs. Lee Ann’s pajama top was engulfed in flames. Jacquelyn grabbed a towel, wrapped it around Lee Ann, and extinguished the flames. It was estimated that the pa- jama top burned for 8 to 12 seconds before it was extin- guished. Gerry Gryc ran downstairs and immediately drove Lee Ann to a nearby hospital. Lee Ann remained in the hospital through January 1970. As a result of the incident, she suffered severe sec- ond- and third-degree burns and resultant scars on 20 per- cent of her body in the regions of her arms, chest, breasts, stomach, back, neck, and chin. During her hospitalization, Lee Ann underwent skin grafting procedures. Lee Ann has additional scars on her thighs as a result of these pro- cedures. Lee Ann’s scars are permanent—her appearance cannot be improved through plastic surgery. At trial, plaintiffs contended and presented evidence which tended to prove that the fabric used in the Gryc pajamas was defective. They claimed and their evidence tended to show that: (1) the cotton flannelette was unrea- sonably dangerous for use in children’s sleepwear because of its highly flammable characteristics; (2) there were A-5 commercially available durable flame retardant chemicals which could have significantly increased the safety of the product; (3) there were inherently flame retardant syn- thetics which could have been used for children’s sleep- wear instead of cotton flannelette; (4) garment manu- factures, sellers, and consumers should have been warned of the flammable characteristics of the cotton flanne'ette; and (5) consumers should have been instructed of a simple home remedy which could have been used to flame retard the fabric after each washing. Riegel defended the action by attempting to prove that the cotton flannelette was not unreasonably dangerous be- cause: (1) it complied with the federal Flammable Fab- rics Act; (2) no warning was necessary since cotton flan- nelette contained only normal and obvious hazards; and (3) the state of the art during the relevant time period was such that there were no chemical durable flame retardant chemicals available for use on cotton flannelette which would not negatively affect the fabric and make it unsale- able, and there were no availab’e inherently retardant syn- thetics for use in children’s sleepwear. The pajamas worn by Lee Ann were two-piece, loose- fitting, and the pajama top flared out at the waist. The flannelette used in the pajamas was manufactured by Rie- gel and distributed to defendant Style Undies, Inc., on or before August 31, 1967. An employee of defendant As- sociated Merchandising Corporation (AMC) contacted Style Undies, Inc., about producing cotton flannelette s'eepwear for children. The employee of AMC selected the fabric and design of the pajamas. After Style Undies, Inc., manufactured the pajamas, AMC distributed them to its member store, defendant Dayton-Hudson Corpora- A-6 tion. Jacquelyn Gryc bought the pajamas at a Dayton- Hudson store in the summer or fall of 1969. The flannelette used in Lee Ann’s pajamas was woven material made from yarns spun from natural cotton fiber. The fabric was brushed on one side which created a nap. Flannelette is light weight, warm, and absorbent. It has a soft feel or “hand”, breathes well, and is launderable and durable. It is relatively inexpensive. Flannelette was very popular during the relevant time period because of these qualities and was the dominant fabric used in children’s winter sleepwear. The flannelette used in Lee Ann’s pajamas was not treated with any flame retardant. Its flammable charac- teristics were demonstrated by one of plaintiffs’ expert witnesses, Dr. Robert Johnson, by film at trial. Dr. John- son reconstructed Lee Ann’s accident by making a copy of Lee Ann’s pajamas, placing them on a mannequin the size of Lee Ann, and using an ignition source similar to the Gryc electric burner. The film showed that the fabric ignited instantaneously when the hem of the pajama top was placed in contact with the ignition source. The front of the pajama top burned from hem to neck in 4 to 5 sec- onds. The same experiment was performed on a pair of pajamas of the same design but constructed of newsprint. The newsprint pajamas burned only slightly faster than did the untreated flannelette pajamas. Plaintiff's experts concluded that the untreated cotton flannelette was unreasonably dangerous for use in child- ren’s sleepwear because of the instantaneous manner in which the fabric ignited, the speed at which it burned, _ the amount of heat produced when it burned, and the dif- ficulty of extinguishing the flames. Defendant’s experts A-7 characterized these burning characteristics as “normal” for the mass of the fabric and as a “natural” phenomenon for cotton, the characteristics of which had not changed for hundreds of years. They conc!uded, therefore, that the fabric used in the Gryc pajamas was not defective. The bulk of the testimony at trial concerned the state of the art with respect to flame-retardant processes at the time the fabric used in the Gryc pajamas was manufactured. It was not seriously disputed at trial that there were products available from the early 1950’s through 1967 which were capable of being applied to lightweight cotton flannelette which would flame retard the fabric and which were dur- able, i. e., would remain on the fabric through 50 wash- ings. These products were manufactured by various com- panies and were identified at trial by various trade names —Proban, Pyrovatix, Roxel, and Lynrus FR-1. All of these products were made from the chemical tetrakis hy- dromethyl phosphonium chlorida (THPC). It was shown at trial that the safety of cotton flannelette could be significantly increased by applying this type of product to the fabric. Dr. Johnson, by film, demonstrated the flammable characteristics of flame retarded cotton flannelette. He created a pair of pajamas like those which Lee Ann had worn, except that they were treated with a flame-retardant process available in 1967. The pajamas were placed against a heat source similar to an electric burner for 30 seconds. The pajamas blackened, burned, and charred but did not flame in an area 6 inches wide and 8 inches Jong in that 30 seconds. When the fabric was removed from the heat source, the blackening and char- ring stopped. A-8 The serious dispute between the experts concerned the availability of flame-retardant processes during the rele- vant time period which would not destroy the desirable characteristics of cotton flannelette. Plaintiffs’ experts testified that, as early as 1962, there were flame-retardant processes which would be applied to the fabric without adversely affecting its qualities enough to make it unsale- able. Plaintiffs also showed that, in England, flannelette- like sleepwear was required by law to be flame retarded since the 1950's. Defendant’s experts were of the opposite view. They testified that there were no durable flame retardant chem- icals which could be applied to the fabric without severely reducing its tensile and tear strength, its soft feel, increas- ing its weight and cost, and adversely affecting the color of the fabric. Plaintiffs’ witnesses admitted that there were no mills producing flame retarded flannelette for public consump- tion in any volume in 1967. However, both of plaintiffs’ experts testified that the flame retardant chemicals and the process for applying them could have been made com- mercially available as early as 1962-1966, if only the tex- tile mills had so desired. There was limited testimony concerning the availability of inherently flame retardant synthetics for use in child- ren’s sleepwear in 1967. Plaintiffs’ expert testified that such products could have been made at that time. Defen- dant’s experts testified that these products could not be spun finely enough to make flannelette-type yarn, were not soft, would shrink, and were unreasonably costly. Defendant’s experts contended that no warning of the flammable characteristics of cotton flannelette was nec- A-9 essary on the Gryc pajamas because its burning character- istics are obvious and natural for the mass of the fabric. However, p’aintiffs introduced a great amount of testi- mony tending to show that garment manufacturers, whole- salers, retailers, and consumers were not aware of the highly flammable characteristics of untreated cotton flan- nelette. Their evidence tended to show that Riegel and other garment manufacturers were uniquely aware of these characteristics. Defendant’s experts were also of the opinion that a warning would not be feasible or practical because Riegel could not be assured that such a warning wou'd get be- yond the garment manufacturers. However, there was testimony that for other purposes Riegel could and did use tags which were sent through the chain of commerce and did reach consumers. Defendant’s experts were also of the opinion that a warning would “stigmatize” Riegel’s flannelette and make it unmarketable as compared with identical flannelette from competitor mills. Plaintiffs also claimed that defendant Riegel should have instructed consumers of a home remedy which would temporarily flame retard flannelette pajamas. This remedy, a water base so'ution of boric acid and borax, would come out in the wash, but could be simply sprinkled on cloth- ing after each washing. Dr. Johnson conducted a test with a pair of flannelette pajamas treated with such a solution. The pajamas did not ignite when they were held against a hot plate for 5 seconds. The issues presented on this appeal are: (1) Whether the award of punitive damages is an ap- propriate remedy in a products liability case; A-10 (2) Whether defendant’s compliance with an applica- ble federal safety standard precludes a punitive damages award; (3) Whether the imposition of punitive damages on a defendant who has complied with the federal Flam- mable Fabrics Act is prohibited by the preemption provi- sion of that Act or by the Supremacy Clause of the United States Constitution; (4) Whether the trial court applied the proper legal standard in instructing the jury on the issue of punitive damages; (5) Whether there was sufficient evidence to support the award of punitive damages in this case; (6) Whether policy considerations dictate against an award of punitive damages in this case; (7) Whether the award of $1,000,000 in punitive damages is excessive; (8) Whether there was sufficient evidence to support a finding that defendant manufactured a defective product and that plaintiffs were not aware of the defect; (9) Whether the jury verdict was perverse when it found defendant Riegel to have caused plaintiffs’ injuries while at the same time finding that the other defendants in the stream of commerce did not cause those injuries; (10) Whether defendant was prejudiced by the trial court’s dismissal of defendant’s counterclaim against Jac- quelyn Gryc when the jury found that Jacquelyn Gryc was not at fault; A-11 (11) Whether the trial court erred in finding that the 4-year-old child, Lee Ann Gryc, could not be comparatively at fault as a matter of law; (12) Whether the trial court committed cumulative errors and plaintiffs’ counsel ensaged in misconduct which denied defendant a fair trial; (13) Whether the award of $750,000 in compensa- tory damages is excessive. 1. This case presents the question, not heretofore considered by this court, of whether punitive damages may be appropriately awarded in the context of a strict liability action. There is ample authority from many juris- dictions approving this remedy in strict liability cases.’ An exhaustive article, Owen, Punitive Damages in Prod- ucts Liability Litigation, 74 Mich. L. Rev. 1258 (1976), discusses the pros and cons of allowing such an award. The author concludes that punitive damages are an ap- propriate remedy in such cases based on the following rationale: Manufacturers have a powerful hold over the means for discovering and correcting product hazards. Through the processes of design, testing, inspection 1See Hoffman v. Sterling Drug, Inc., 485 F, 2d 132 (3rd Cir. 1973); Gillham vy. Admiral Corp., 523 F. 2d 102 (6th Cir. 1975), cert. de- nied, 424 U.S. 913 (1976); Boehm v. Fox, 473 F. 2d 445 (10th Cir. 1973); Maxey v. Freightliner Corp., 450 F. Supp. 955 (N. D. Tex. 1978); Drake v. Wham-O Mfg. Co., 373 F. Supp. 608 (E. D. Wis. 1974); Sturm, Ruger & Co. v. Day, 594 P. 2d 38 (Alaska 1979); Toole v. Richardson-Merrell, Inc., 251 Cal. App. 2d 689, 60 Cal. Rptr. 398 (1967); Moore v. Jewel Tea Co., 116 Ill. App. 2d 109, 253 N. E. 2d 636 (1969), aff'd, 46 Ill. 2d 288, 263 N. E. 2d 103 (1970); Rinker v. Ford Motor Co., 567 S. W. 2d 655 (Mo. Ct. App. 1978). But see Roginsky v. Richardson-Merrell, Inc., 378 F. 2d 832 (2nd Cir. 1967). A-12 and collection of data on product safety performance in the field, the manufacturer has virtua'ly exclusive access to much of the information necessary for ef- fective control of dangers facing product consum- ers. 9 © © Most manufacturers, both from a desire to avoid liability and from a generalized sense of social re- sponsibility, prudently use their resources to prevent excessively hazardous products from reaching or staying on the market. On occasion, however, man- ufacturers abuse their control over safety information and market defective products in flagrant disregard of the public safety. * * * A legal tool is needed that will help to expose this type of gross miscon- duct, punish those manufacturers guilty of such flagrant misbehavior, and deter all manufacturers from acting with similar disregard for the public wel- fare. The punitive damages remedy is such a tool. Id. at 1258-60. Based on this rationale, we recognize today that puni- tive damages, in an appropriate case, may properly be awarded in a strict liability action. 2. The Flammable Fabrics Act of 1953, Chap. 164, § 4, 67 Stat. 111, as amended, Chap. 833, 68 Stat. 770 (1954), in effect at the time this cause of action arose,’ applied to fabrics sold in interstate commerce for wearing apparel. This statute sets forth a test to determine whether a fabric is dangerous when used in clothing. This test, ?The Flammable Fabrics Act was subsequently amended to provide for more stringent regulation of fabric used for children’s sleepwear. How- ever, these revisions are inapplicable to this cause of action. A-13 termed CS 191-53, requires that sample fabrics be dried out and cut into 2-inch by 6-inch lengths. The samples are mounted in an enclosed testing box at a 45° angle. The sample is then impinged with a standard 5/8 inch flame at the top of the fabric for 1 second. If the fabric ignites, the number of seconds it takes the flame to burn 5 inches is measured. A napped fabric which does not ignite in 1 second or which ignites and burns 5 inches in more than 4 seconds is considered to be of intermediate flammability, passes the test, and may be used in wearing apparel. See 16 C.F.R. §§ 1610.3(2), 1610.4 (1977). The fabric in the Gryc pajamas passed the CS 191-53 test. The fabric did not ignite in 1 second and when a forced ignition test was used, the fabric ignited in an av- erage time of 1.8 seconds and the average burning time was 9.8 seconds. Therefore, under the Flammab'e Fab- rics Act, the Riegel ‘lannelette was properly saleable in interstate commerce. Riegel argues that its compliance with the federal Act precludes, as a matter of law, a finding of that guilty state of mind which is a necessary prerequisite to a puni- tive damages award. It argues that it was justified in rely- ing on the Act in determining which fabrics were safe for dissemination in the marketplace. The trial! court addressed this issue in its post-trial memorandum and found: The difficulty with [Riegel’s] argument is that it does not assess the validity of the test. It was proven almost conclusively at trial that this test did not and could not properly determine the flammability of fabrics such as cotton flannelette. Moreover, it was almost conclusively established, in addition, that de- A-14 fendant Riegel knew not only that the test was in- valid but that it could not evaluate the flammability of its products * * *. Knowing full well at all times after the passage of the Flammable Fabrics Act that CS 191-53 was unreliable, the defendant cannot to- day say that punitive damages should not be al- lowed simply because its cotton flannellette passed an unreliable test. Riegel’s argument that it had a right to act on the basis of the legislation * * * is a specious one, because such actions were not taken in good faith and must be viewed in the context of the knowledge that Riegel had that its cotton flannelette was extreme'y dangerous to the public because of its racing flammability. On reviewing the record, we have determined that the trial court’s findings are supported by the evidence and that its conclusions are correct. There was substantial evi- dence at trial which established that the CS 191-53 test was not a valid indicator of the flammable characteristics of fabrics and did not take into account the uses to which a fabric would be put in determining its safety.* It was shown that newspaper passed the CS 191-53 test with a 48-percent margin of safety. It was also shown that the original intent of Congress in passing the CS 191-53 test into law was primarily to 3The commentators have agreed. See Swartz, Product Liahility: The Torch Cases, 76 Case & Comment, No. 1, p. 3 (1971); Comment, Dressed to Kill: The Flammable Fabrics Act of 1953, 4 Cum.-Sam. L. Rev. 358 (1973); Note, The Human Torch—An Exegesis About the Clothes We Wear, 23 S. S.C. L. Rev. 787 (1971); Note, Flammahle Fabrics Act Protection: Fire Resistants v. Industry Resistance, 39 Geo. Wash. L. Rev. 608 (1971); Campbell & Vargo, The Flammable Fabrics Act and Strict Liability in Tort, 9 Ind. L. Rev. 395 (1976). A-15 protect the public against certain highly flammable syn- thetic products, not all unreasonably dangerous clothing. 1953 U.S. Code Cong. & Ad. News 1723.* Furthermore, there was evidence that the test was adopted as a result of industry influence and, therefore, served to protect the textile industry rather than the pub- lic. It was the textile industry which originally formulated the test, and in 1960 one of Riegel’s vice presidents stated: The AATCC [American Association of Textile Chemists and Colorists] not only developed an ade- quate testing mechanism, but was instrumental in guiding the government toward drawing up regula- tions and specifications. [Emphasis added. ] The evidence established that Riegel knew of the in- validity of the CS 191-53 test and was aware that unrea- sonably dangerous fabrics passed the test. Rigel’s head of research, Linton C. Reynolds, knew that newspaper ‘In 1967, the Consumer Subcommittee of the Senate Committee on Com- merce, in discussing the need for amendments to the federal Flam- mability Act, noted: Congress enacted the Flammable Fabrics Act (which became ef- fective on July 1, 1954) to protect the public from newly introduced highly flammable clothing, including “torch sweaters” and certain children’s cowhoy chaps. Congress set the level of protection by incorporating fixed standards of flammability into the Act. These fixed standards were stringent enough to halt the marketing of the highly flammable articles of clothing noted above, but did not af- fect the marketing of most materials and articles of clothing that were then—and are still nov—commonly in use. Therefore, while the Act has been successful in preventing the marketing of newer highly flammable materials, theerby preventing a likely increase in clothing fire injury and death rates, it has not re- duced those rates—they remain unabated. To Amend the Flammable Fatrics Act: Hearings on S.1003 before Consumer Subcomm. of the Senate Comm. on Commerce, 90th Cong., Ist Sess. 7 (1967). A-16 and 19 other samples of paper passed the CS 191-53 test and communicated this to a Riegel top official. In addition, Riegel knew that persons were suffering severe burn injuries when Riegel’s flannelette ignited. In 1956, one of Riegel’s top officials wrote in a memorandum, “We are always sitting on somewhat of a powder keg as re- gards our flannelette being so infiammable.” The memo- randum was entitled “Flammability—Liability.” Several courts have addressed the issue of whether com- pliance with the CS 191-53 test precludes liability for compensatory damages as a matter of law and have con- cluded that it does not. See Raymond v. Riegel Textile Corporation, 484 F. 2d 1025 (1st Cir. 1973); LaGorga v. Kroger Co., 275 F. Supp. 373 (W. D. Pa. 1967), affd, 407 F. 2d 671 (3rd Cir. 1969); Howard v. McCrory Corp., 601 F. 2d 133 (4th Cir. 1979); Sherman v. M. Lowenstein & Sons, Inc., 28 App. Div. 2d 922, 282 N.Y.S. 2d 142 (1967). These courts reasoned that since it was shown that the test was invalid, compliance with that test did not preclude a finding that a product was unrea- sonably dangerous. For the same reason, we conclude that while compliance with this test may be relevant to the issue of punitive damages, it does not preclude such an award as a matter of law. 3. In 1967, the Flammable Fabrics Act was amended to include the following preemption provision: This Act is intended to supersede any law of any State or political subdivision thereof inconsistent with its provisions. A-17 Flammable Fabrics Act, Pub. L. No. 90-189, § 16, 81 Stat. 568. Riegel contends that the imposition of punitive damages on the defendant who has complied with the Flammable Fabrics Act constitutes an inconsistent state law which is preempted by the Act. Riegel argues, there- fore, that the punitive damages award in this case is vio- lative of the Act and the Supremacy Clause of the United States Constitution. In the case of Northern States Power Co. v. Minnesota, 447 F. 2d 1143, 1146-47 (8th Cir. 1971), aff'd, 405 U.S. 1035 (1972), the Eighth Circuit succinct'y stated the general trramework of analysis to be applied in determin- ing whether a particular state law is preempted by federal legislation: Once it is ascertained that the federal government possesses the power to regulate in a given area, the question is whether Congress has exercised its power of legislation in such a manner as to exclude the states from asserting concurrent jurisdiction over the same subject matter. First, as the Supreme Court noted in Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142-143, 83 S. Ct. 1210, 1217, 10 L. Ed. 2d 248 (1963), “[a] holding of federal exclusion of state law is inescapable and requires no inquiry into congres- sional design where compliance with both federal and state regulations is a physical impossibility * * *. [Citations omitted. ] Second, absent inevitable collision between the two schemes of regulation it must be determined whether Congress manifested an intent to displace coincident A-18 state regulation in a given area. Where Congress has unequivocally and expressly declared that the author- ity conferred by it shall be exclusive, then there is no doubt but that states cannot exert concomitant or sup- plementary regulatory authority over the identical ac- tivity. [Citations omitted. ] Third, even where Congress has not expressly pro- hibited dual regulation nor unequivocally declared its exclusionary exercise of authority over a particular subject matter, federal preemption may be implied. [Citations omitted.] Key factors in the determina- tion of whether Congress has, by implication, pre- empted a particular area so as to preclude state at- tempts at dual regulation include, inter alia: (1) the aim and intent of Congress as revealed by the statute itself and its legislative history [Citations omitted]; (2) the pervasiveness of the federal regulatory scheme as authorized and directed by the legislation and as carried into effect by the federal administra- tive agency, [Citations omitted]; (3) the nature of the subject matter regulated and whether it is one which demands “exclusive federal regulation in order to achieve uniformity vital to national interests.” [Ci- tations omitted]; and ultimately (4) “whether, under the circumstances of (a) particular case (state) law stands as an obstacle to the accomplishment and ex- ecution of the full purposes and objectives of Con- gress.” [Citations omitted.] It is evident that Congress properly promulgated the Flammable Fabrics Act pursuant to the Commerce Clause A-19 power granted to it by the United States Constitution. Therefore, we must first determine whether Congress ex- pressly intended, by the Act’s preemption provision, to pre- clude the state private remedy of punitive damages. The stated purpose of this preemption provision was to preclude the multiple regulation of textile manufacturers by providing a “uniform” federal regulation. Report of the Senate Commerce Committee, 113 Cong. Rec. 20328 (1967). Riegel argues that the punitive damages remedy serves to frustrate this stated purpose by imposing a higher . duty on a textile manufacturer than is required by the federal Act. The punitive damages remedy serves to pun- ish a textile manufacturer for and deter that manufacturer from willfully, wantonly, or maliciously marketing a fabric which is unreasonably dangerous under state law. As such, it does place a higher duty on a manufacturer by requiring it to forbear from se'ling such a fabric even though that fabric is in compliance with the Flammable Fabrics Act. However, we have determined upon review- ing the federal statute and its legislative history that the punitive damages remedy is not the type of inconsistent state law which Congress expressly intended to preempt. It is clear that the imposition of punitive damages on a manufacturer who has complied with the Act is not in- consistent with that Act in the sense that it would be im- possible for a textile manufacturer to comply with the state-established duty and at the same time comp’y with the federal Act. The punitive damages remedy merely serves to impose a higher duty on that manufacturer. It appears that the preemption provision of the Act, as originally drawn, was given varying interpretations. Some viewed the Act as merely establishing minimum safety A-20 standards while others viewed it as establishing a manda- tory national requirement. 1976 U.S. Code Cong. & Ad. News 1003-4. In response to this confusion, Congress en- acted an amendment to the 1967 preemption provision which was intended to clarify it and was designed to meet the competing interests of those who viewed the Act as setting mere minimum requirements and those who opted for a uniform requirement. Jd. The 1976 amendment to the preemption provision, Flammable Fabrics Act, 15 U.S.C.A. § 1203 (West, 1979), provides in part: (a) Except as provided in subsections (b) and (c) of this section, whenever a flammability standard or other regulation for a fabric * * * is in effect under this chapter, no State or political subdivision of a State may establish or continue in effect a flamma- bility standard or other regulation for such fabric * * * if the standard or other regulation is designed to protect against the same risk of occurrence of fire with respect to which the standard or other regula- tion under this chapter is in effect unless the State or political subdivision standard or other regulation is identical to the Federal standard or other regula- tion. * * * * * (c)(1) Upon application of a State or political sub- division of a State, the Commission may * * * ex- empt from subsection (a) * * * any flammability standard or other regluation of such State or political subdivision applicable to a fabric * * * subject to a standard or other regulation in effect under guides at the rear of the chamber over the guide ring, and that the weiyht j. hooked in place close to and just beloy the guide ring, Set the stop wateh a zero. Close the door of the appasacus 426 ‘ A-88 Chapter ll—Consumer Product Safety Commission Conduct the test in a draft-free room with the apparatus at room tempera- re. “oO Bring the starting lever over to the extreme right and release it. This starts the timing mechanism and ap- plies the flame to the specimen for a period of 1 second. This shoul! be done within 45 seconds of the time the specimen was removed from the desic- cator. Timing is automatic, starting upon application of the flame and ending when the weight is released by the burning of the stop cord. (6) Record the time of flame spread (reading of stop watch) of each speci- men and note whether the base of each specimen having a raised-fiber surface is ignited or fused to a point where the damage is appare.it trom the bottom of the specimen. (1) Results—(i) Time of flame spread. The time of flame spread of the tex. tile is taken as an average time ior 5 specimens. Results of tests of speci. mens before and after dry cleaning and washing shall be recorded and re- ported separately. If the time of f!ame spread is less than 4 seconds" or if the specimens do not burn, test 5 addition- al specimens. The time of flame spread is then taken to be the average time for the 10 specimens or for as many of them as burn. (ii) Base fabric ignition or fusing. Base fabric ignition or fusing of tex- tiles having raised-fiber surfaces shall be reported when the base fabric of more than 1 of the 5 (or 2 of the 10) specimens tested ignites or fuses.' (8) Reporting results. The reported result shall be the flammability before or after dry cleaning and was‘ing, whichever is the lower; and, bas«d on this result, the textile shall be piaced ‘In the Flammabl« Fabrics Act, Congress adopted CS 191-53 as the Commercial Standard to be applied under the law. On August 23, 1954, the Flammable Fab- rics Act was amended, changing the test for the time of flame spread for plain-surfaced fabrics, provided in paragraphs 3.1.1.1 and 3.1.3.1 (codified as §§1610.3(ax1i) and 1610.3(aX3)i)), by reducing the burning time from 4 to 3% seconds. For the purposes of the administration of that act, therefore, the 3%-second burning time for plain-surfaced fabrics is applicable. ‘See § 1610.61(c3) for a clarification of: the criterion for class!:ication of Class 3. § 1610.31 in the proper classification as given in § 1610.3. § 1610.5 Notes. The methods of test and classifica- tions outlined herein agree with all es- sential requirements of the Standard Test Method for Flammability of Clothing Textiles, of the American As- sociation of Textile Chemists and Colorists. Subpart B—Rulas and Regulations Autnowiry: Sec. 5, 15 U.S.C. 1194, unless otherwise noted. Note: An interpretation, with respect to Ornamental Veils cr Vellings, issued by the Federal Trade Commission at 32 FR 11850, Aug. 17, 1967, provides as follows: Ornamental millinery veils or veilings when used as a part of, in conjunction with. or as a hat, are not to be cons: Jered such a “covering for the neck, face, or shoulders” as would, under the first proviso of section 21d) of the Flammable Fabrics Act, cause the hat to be included within the definition of the term “article of wearing apparel" where such ornamental millinery veils or veilinns do not extend more than nine (9) inches from the tip of the crown of the hat to which they are attached and do not extend more than two (2) inches beyond the edge of the brim of the hat. Where hats are composed entirely of or- namental millinery veils or veilings such hats will not be considered as subject to the Flammable Fabrics Act if the veils or veil- ings from which they are manufactured were not more than nine (9) inches in width and do not extend more than nine (9) inches from the tip of the crown of the completed hat. § 1610.31 Terms defined. As used in this part, unless the con- text otherwise specifically requires: (a) The term “act” means the “Flammable Fabrics Act" (aprroved June 30, 1953, Pub. Law 88, 83d Con- gress, lst sess., 15 U.S.C. 1191; 67 Stat. 111) as amended, 68 Stat. 770, August 23, 1954. (b) The terms “rule”, “rules”, “regu- lations”, and “rules and regulations”, mean the rvies and regulations pre- scribed by the Commission pursuant to section 5(c) of the act. (c) The term “United States" means. the several States, the District of Co- lumbia, the Commonwealth of Puerto 427 A-89 LEVEL 1—3 OF 10 CASES RALPH NADER CONNECTICUT CITIZEN ACTION GROUP v. ALLEGHENY AIRLINES, INC., APPEL- LANT No. 78-1251 United States Court of Appeals for the District of Columbia Circuit Slip Opinion Argued February 28, 1979 May 16, 1980 Appeal from the United States District Court for the District of Columbia (D.C. Civil Action No. 1346-72) Frank F. Roberson with whom William A. Bradford, Jr. was on the brief for appellant. John Cary Sims with whom Alan B. Morrison was on the brief for appellee. Slip Opinion David R. Murchison and James E. Landry were on the brief for Amicus Curiae urging reversal. ROBB Before MacKINNON, ROBB and WILKEY, Circuit Judges. Opinion for the Court filed by Circuit Judge ROBB ROBB, Circuit Judge. This is an appeal by Allegheny Airlines from a judgment of the District Court awarding the plaintiff Ralph Nader compensatory and punitive dam- ages for fraudulent misrepresentation in the sale of an airline ticket. A-90 The facts giving rise to Nader’s claim are not disputed. He was scheduled to address a rally in Hartford, Connecti- cut at noon on April 28, 1972. On April 25, 1972 he reserved a seat on Allegheny flight &64, scheduled to de- part from Washington, D.C. for Hartford at 19:15 A.M. on April 28. His reservation was a “confirmed reserva- tion”. He arrived at the boarding and check-in area ap- proximately five minutes before the scheduled departure time but was told by Allegheny’s agent that he could not be accommodated on flight 864 because all the seats were occupied. He was offered an alternative air taxi flight by way of Philadelphia but he decided not to accept it be- cause of uncertainty as to whether he would arrive in Hartford in time for the noon rally. As a result he was prevented from attending the rally. The Allegheny agent at the Washington check-in area tendered to Nader the denied boarding form required by CAB regulations (14 C.F.R. § 250.9). This form notifies holders of tickets on flights that are “oversold” that they are entitled to compensation from an airline if they are “bumped”, that is, denied transportation. Nader told the agent that he did not need the form because he already had one. In fact, he had received such a form when he was bumped from an American Airlines flight on April 23, 1972, two days before he made his reservation on Allegheny. Six months before that he and five other peo- ple had been bumped by Eastern Airlines. On both occa- sions he held a confirmed reservation. Pursuant to CAB regulations Allegheny mailed to Na- der a check in the amount of $32.41 as denied boarding compensation. Nader’s attorney returned the check to Alle- gheny, together with a letter characterizing the denied A-91 boarding compensation as a “wholly inadequate offer of settlement.” On July 7, 1972 Nader filed suit in the District Court, asserting Allegheny’s liz.vility on two theories: (1) a com- mo nlaw action based on fraudulent misrepresentation in that Allegheny failed to inform Nader of its “booking prac- tices” and (2) a stututory action under section 404(b) of the Federal Aviation Act, 49 U.S.C. § 1374(b), arising from Allegheny’: alleged failure to afford Nader the board- ing priority specified in its rules, filed with the Civil Aeronautics Board pursuant to 14 C.F.R. § 250.3. The District Court, sitting without a jury, entered a judgment for Nader on both claims, and awarded him a total of $10.00 in compensatory damages and $25,000 in punitive damages. Nader v. Allegheny Airlines, Inc., 365 F, Supp. 128 (D.D.C. 1973). On appeal this court re- versed. Nader v. Allegheny Air Lines, Inc., 167 U.S. App. D.C. 350, 512 F.2d 527 (1975). The judgment based on Allegheny’s alleged violation of section 404(b) was re- versed and the District Court was instructed to make new findings of fact and conclusions of law. The award of punitive damages on the common law claim was reversed. We pointed out that “[since] punitive damages require a finding of malice or reckless disregard for the rights of others, the defendants’ motivations are crucial”, but “the trial judge never considered whether Allegheny reasonably believed that its policies were completely lawful and in fact carried the approval of the board.” Id. at 374, 512 F, 2d at 551. We directed the District Court to award punitive damages “only on the terms set forth in this opin- ion.” Id. at 375, 512 F. 2d at 552. The award of punitive A-92 damages on the statutory claim was reversed on the ground that Allegheny’s conduct in applying its boarding priority rule contained no elements of intentional wrong- doing or conscious disregard for Nader’s rights. Finally, we held that under the doctrine of primary jurisdiction the CAB must be allowed to determine in the first in- stance whether failure to disclose the practice of over- booking was deceptive within the mea:..ng of section 411 of the Federal Aviation Act, 49 U.S.C. § 1381. The Dis- trict Court was instructed to stay further action on this issue pending reference to the CAB. The Supreme Court of the United States reversed the order of this court granting a stay to give the CAB an opportunity to act. Nader v. Allegheny Airlines, Inc., 426 U.S. 290 (1976). The Court concluded that the common law action could be heard by the trial court without prior reference to the CAB. Accordingly, we entered an amend- ed judgment and the case was remanded to the District Court. On remand the District Court found that Allegheny vio- lated section 404(b) of the Act, 49 U.S.C. § 1374(b), by its failure to board Nader in accordance with its own priority boarding rules. For this the court awarded him $10.00 in compensatory damages. The court also found that Allegheny’s failure to notify Nader of the chance that he would not be seated constituted fraudulent misrepre- sentation, and that “defendant Allegheny wantonly im- plemented its policy of nondisclosure and misrepresenta- tion in conscious, deliberate, and callous disregard of the effect of its policy on its passengers, including plaintiff Nader.” The Court awarded Nader $15,000 in punitive damages “to punish defendant Allegheny for its willful and A-93 wanton policy of nondisclosure and misrepresentation and . . . to deter defendant from engaging in such practices in the future.” Nader v. Al'egheny Airlines, Inc., 445 F. Supp. 168, 178, 179 (D.D.C. 1978). Compensatory dam- ages On the claim were assessed at $10.00. On this appeal Allegheny challenges only the award of compensatory and punitive damages on the claim based upon fraudulent misrepresentation. Nader’s reservation was not honored because Allegheny had accepted more reservations for flight 864 than it could accommodate. In other words, the flight had been “overbooked”. In its opinion in Nader v. Allegheny Air- lines, supra, the Supreme Court discussed the practice of overbooking: [Overbooking] is a common industry prac- tice, designed to ensure that each flight leaves with as few empty seats as possible despite the large number of “No- shows”—reservation-holding passengers who do not ap- pear at flight time. By the use of statistical studies of no- show patterns on specific flights, the airlines attempt to predict the appropriate number of reservations necessary to fill each flight. In this way, they attempt to ensure the most e‘ficient use of aircraft while preserving a flexible booking system that permits passengers to cancel and change reservations without notice or penalty. At times the practice of overbooking results in oversales, which oc- cur when more reservation-hoiding passengers than can be accommodated actually appear to board the flight. When this Occurs, some passengers must be denied boarding (“Bumped”). The chance that any particular passenger will be bumped is so negligible that few prospective passen- gers aware of the possibility would give it a second thought. In April 1972, the month in which petitioner’s La A-94 reservation was dishonored, 6.7 confirmed passengers per 10,000 enplanements here denied boarding on domestic flights. For all domestic airlines, oversales resulted in bumping an average of 5.4 passengers per 10,000 en- planements in 1972, and 4.6 per 10,000 enp'anements in 1973. In domestic operations respondent oversold 6.3 seats per 10,000 enplanements in 1972 and 4.5 seats per 10,- 000 enplanements in 1973. Thus, based on the 1972 ex- perience of all domestic airlines, there was only slightly more than one chance in 2,000 that any particular passen- ger would be bumped on a given flight. [Footnotes omitted] 426 U.S. at 293-94, The issues presented in this case must be considered in context with the extended consideration which the Civil Aeronautics Board has given to the practice of overbook- ing. In 1967, after notice and comment in a rulemaking proceeding, the Board rejected a proposal to include in its rules provisions requiring notice to passengers of an overbooked condition on flights for which they hold tick- ets. Instead of such a provision the Board promulgated part 250 of its regulations, 14 C.F.R. § 250, which per- mitted overbooking practices to continue on condition that “carriers file tarifs providing prompt, effective and ade- quate compensation to the denied boarding passengers”. In an explanatory statement the Board made its views on overbooking clear to the airlines and to the public. In short, the Board concluded that the practice was in the public interest. This practice stems from the fact that there A-95 is substantial reservations turnover before flight departure time occasioned by changes in passengers’ plans and can- ce'lation of their reservations. In addition, the practice is used to allow for multiple reservations made by some passengers and for “no-shows”—passengers who neglect to cancel reservations they do not intend to use. Reserva- tions turnover can be projected and compensated for by booking in excess of the capacity of the aircraft to a pre- determined extent. By carefully controlling overbooking in this manner on certain flights, carriers can reduce the chance of aircraft departing with empty seats. At the same time, through the carriers’ acceptance of reservations in excess of inventory, passengers are able to secure space on flights which can in fact accommodate them and are also benefited by being offered maximum flexibility in secur- ing, cancelling and changing reservations without charge or penalty. However, where carriers overestimate reserva- tions turnover on a particular flight, overbooking can result in oversales and passengers holding confirmed re- served space are denied boarding. [Were] the carrier prevented from overbooking, large numbers of passengers would be denied reservations on flights which, because of reservations turnover and “No- shows”, would depart with empty seats. In our view, any realistic appraisal of the practice of overbooking leads to the conclusion that, while it results in oversales, it also contributes to flexibility and freedom in securing, changing, and cancelling reservations. Thus, any rigid controls over overbooking, as now practiced, would inevitably lead to restrictions on privileges which contribute greatly to the convenience of air transportation, and have come to be relied upon by the traveling public. A-96 In addition such controls would reduce load factors, and the additional cost would ultimately have to be borne by the traveling public. In light of the above, it can be seen that the present reservations systems of the carriers in general benefit the traveling public. 32 Fed. Reg. 460, 461. This case presents two questions: (1) was Allegheny liable to Nader in tort for fraudulent misrepresentations? and (2) assuming such liability was the award of puni- tive damages proper? We first address the second ques- tion and conclude that assuming liability the award of punitive damages was clearly erroneous. The Civil Aeronautics Board in 1967 had publicly and formally expressed its approval of the practice of over- booking and had declined to issue a rule requiring notice to holders of tickets for an overbooked flight. As we ob- served in the first Nader case, 167 U.S. App. D.C. at 358, 512 F.2d at 535, the Board’s determination to permit the carriers to continue the practice of nondisclosure was based on the recognition that disclosure “would create anxiety and confusion in the public, would cause the pub- lic to make a great number of duplicative and protective reservations, wou'd produce a rap‘d turnover in reserva- tions within the twenty-four hours before the. depar- ture of a flight and would increase the no-show problem. The Board concluded that “any rigid controls over over- booking, as now practiced, would inevitably lead to re- strictions on privileges which contribute greatly to the con- venience of air transportation, and have come to be relied upon by the traveling public. In addition, such controls would reduce load factors and the additional cost would ultimately have to be borne by the traveling public.” 32 A-97 Fed. Reg. at 461 (1967). In summary the Board stated that the reservation systems of the carriers “in general benefit the traveling public.” Id. The Board had not mod- ified or retreated from this position when Nader made his reservation in 1972. Allegheny’s policies and practices as applied to Nader therefore carried the approval of the Board; and Allegheny must have believed that they were approved. Under these circumstances it was clearly er- roneous to find as did the District Court that Allegheny’s “policy of nondisclosure” was “willful and wanton” and showed a “conscious, deliberate and callous disregard” for its passengers. An airline may not be condemned as a wanton wrongdoer for conforming to the standards set and the practices approved by the agency charged with the duty of regulating it—standards and practices that the agency has found to be in the public interest. The award of punitive damages must be set aside. A representation may be false and fraudulent in a tech- nical sense, although it is not so gross and wanton that it justifies an award of punitive damages. We therefore turn to the question whether Allegheny was guilty of fraudulent misrepresentation in failing to disclose to Nader that his “confirmed reservation” was subject to the contingency that he might be denied boarding if his flight was over- booked. The elements of the tort of fraudulent misrepresentation are (1) a false representation, (2) in reference to a material fact, (3) made with knowledge of its falsity, (4) and with intent to deceive, (5) with action taken in reliance upon the representation. Nader v. Allegheny Airlines, Inc.. 167 U.S. App. D.C. at 364 n. 32, 512 F. 2d at 541 n. 32 (1976). A-98 In the first Nader case we reversed as clearly erroneous the District Court’s finding that Allegheny affirmatively represented to Nader that he had a reservation guarantee- ing him a seat. Id. at 365, 512 F. 2d at 542. We he'd that Allegheny’s fault, if any, was its failure to disclose that its policy of deliberate overbooking qualified the meaning of a “confirmed reservation”. The District Court found that Allegheny had a duty of disclosure to Nader, that its failure to disclose amounted to a false representation, and that by a preponderance of the evidence Nader had proved the other elements of the tort of fraudu'ent misrepresen- tation. The record discloses that in the seventeen months pre- ceding the Nader incident Allegheny had experienced only two oversales on flight 864, and statistical analyses had shown that in 1972 there was only slightly more than one chance in two thousand that a ticket holder would be de- nied boarding because of an oversale. Stated another way the chance that a ho'der of a confirmed reservation would be boarded was approximately 99.95 out of 100. Alle- gheny argues that because the chance that Nader would be denied boarding was thus “so negligible as to be prac- tically insignificant” the possibility that bumping might Occur was not a material fact and the airline cannot be charged with misrepresentation in failing to disclose it. The theory of the airline is that a confirmed reservation is not a guarantee but is only a “reasonable assurance” of being flown, because any flight may be cancelled as the result of weather conditions, mechanical problems, or the like. The airline says that Nader had that reasonable as- surance of being flown; the chance of being bumped be- cause of overbooking was too remote to affect the assur- A-99 ance, and silence about such a chance therefore did not amount to a false representation in reference to a material fact. As the District Court found, however, confirmation of a reservation connotes a guarantee of flight subject only to contingencies beyond the contro] of the airline. The possibility of being bumped because of overbooking is a factor within the airlines’ control. That the possibility may be slight does not make it immaterial, it is still a factor in the equation, and as Nader’s experience demon- strates it may be an important factor. No one who has suffered the disruption of travel plans by denial of board- ing would believe otherwise. Six years after the Nader incident the Civil Aeronautics Board confirmed our opinion that the practice of over- booking is a material fact which should be brought to the attention of those purchasing tickets. This the Board did by promulgating 14 C.F.R. § 250.11, 43 Fed. Reg. 24, 284 (1978). This regulation requires carriers to post in their ticket offices and include with each ticket sold a no- tice that “Airline flights may be overbooked, and there is a slight chance that a seat will not be available on a flight for which a person has a confirmed reservation.” Nader could not recover on his tort claim unless the evi- dence established that Allegheny intended to deceive him when it failed to notify him of its overbooking practice. The District Court found in summary fashion that Alle- gheny had such an intent to deceive. The Court’s entire discussion of this issue was: There can be no doubt that the nondisclosure of the existence of defendant’s overbooking practice was the re- sult of a conscious and deliberate po'icy implemented by A-100 Allegheny in order to deprive passengers of information about its overbooking practice so as not to distinguish Allegheny’s reservation practices from those of its compe- titors. 445 F. Supp. at 175. We think this finding is unsupported by the evidence and clearly erroneous. As we have seen the matter of overbooking had been thoroughly explored by the Civil Aeronautics Board in public hearings. In public comments filed in those pro- ceedings Allegheny had acknowledged its practice of over- booking and explained its benefits. The record discloses that the Board’s Office of Consumer Affairs had issued and distributed 400,000 copies of a booklet on consum- ers’ rights in air travel which covered the subject of de- nied boarding. Overbooking had been discussed in period- icals of general circulation." The Board had promul- gated rules published in the Code of Federal Regulations and specifically designed to address situations caused by the practice of overbooking. 14 C.F.R. § 250 (1972). In short, the practice of overbooking in the air transporta- tion industry was public information, openly discussed by the carriers, the Board and publications of national circulation. In the light of these facts we cannot accept 1See Ruppenthal, K.M. “Bumping the Passenger,” NATION, June 25, 1960, at 551-53; “He who got bumped,” TIME, February 2, 1962, at 50; “Bumpy Departures on the airlines. Failure to Honor Reserva- tions,” CONSUMER REPORT, November, 1967, at 565-66: “Board Proposes Hike in Airline Overbooking Penalties,” AVIATION WEEK AND SPACE TECHNOLOGY, January 23, 1967, at 39; “CAB Tightens Enforcement on Oversales, "AVIATION WEFK, June 29, 1970, at 28; “What Are Your Rights When You Buy a Plane Ticket,” BETTER HOMES AND GARDENS, January 1972, at 10, “CAB tay - yt Cut in 1972,” AVIATION WEEK, February ‘ , at . A-101 the District Court’s conclusion that Allegheny’s failure to notify Nader of its overbooking practice was motivated by deceit and the desire to deprive him of information. The practice of overbooking was no secret, no covert opera- tion, but was openly carried on, and Allegheny was en- titled to believe that any knowledgeable passenger knew of the practice. The court’s finding that Allegheny har- bored an intent to deceive is, we think, contrary to the evidence. An airline which intends to deceive by conceal- ing facts does not advertise the facts in public pro- ceedings. Moreover, in order to recover for the tort of fraudulent misrepresentation, the false representation must have played a material and substantial part in leading the plaintiff to adopt his particular course, and when . . . it is clear that he was not in any way influenced by it, . . . his loss is not attributed to the defendant. In order to be influenced by the representation, the plaintiff must of course have relief upon it, and believed it to be true. If it appears that he knew the facts, or believed the statement to be false, or that he was in fact so skepti- cal as to its truth that he reposed no confidence in it, it cannot be regarded as a substantial cause of his conduct. [footnotes omitted] W. PROSSER, LAW OF TORTS § 108 at 714 (4th Ed. 1971). The plaintiff Nader was an extraordinarily knowledgeable passenger, an able laywer and a famous and distinguished advocate of consumer rights, including the rights of airline passengers. On April 23, 1972, only two days before he made his reservation on Allegheny flight 864, Nader was bumped from an Ameri- can Airlines flight. Six months earlier he had been bumped by Eastern Airlines. On both occasions he held a con- A-102 firmed reservation. In addition, upon being told that he could not be accommodated on flight 864 because all the seats were occupied, and being tendered the denied boarding form required by CAB regulations, Nader in- formed the Allegheny ticket agent that he was familiar with the form. On deposition Nader explained that he told the agent he did not need the form because “I already knew what it said”. In fact he had received such a form when he was bumped from the American Airlines flight. The form stated: Tariffs filed by this carrier with the Civil Aeronautics Board provide denied boarding compen- sation to a passenger holding confirmed reserved space where the flight for which the passenger holds such space is unable to accommodate him and departs without him. [See 14 C.F.R. § 250.9 (1972)] Therefore, the evidence demonstrates that Nader “knew the facts” that a confirmed reservation did not exclude the possibility that he might not be boarded. “[One] who has special knowledge, ex- perience and competence may not be permitted to rely on statements for which the ordinary man might recover.” See W. PROSSER, supra at 717. It cannot be said that Nader relied on his confirmed reservation with Allegheny as a guarantee of passage. The judgment for both compensatory and punitive dam- age is reversed. Fourteenth Amendment to the United States Constitution, Sec. I: “Section 1. All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State A-103 wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immuni- ties of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.” Commerce Clause of the United States Constitution, Art. I, Sec, 8, Cl. 3: “The Congress shall have Power . . . To regulate commerce with foreign nations, and among the sev- eral States, and with the Indian tribes.” Supremacy Clause of the United States Constitution, Art. VI, Cl. 2: “2. This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.” STATE OF MINNESOTA DISTRICT COURT County of Ramsey Second Judicial District LEE ANN GRYC, by her mother and natural guardian, JACQUELYN GRYC, and JACQUELYN GRYC, in- dividually, Plaintiffs, vs. DAYTON-HUDSON CORP., a Minnesota corporation; STYLE UNDIES, INC.; RIEGEL TEXTILE CORP.; and ASSOCIATED MERCHANDISING CORP., Defendants. NOTICE OF MOTION 407340 TO THE PLAINTIFFS AND THEIR ATTORNEYS: PLEASE TAKE NOTICE that upon all the files, ex- hibits, minutes of the Court, depositions read during trial and a transcript of the reporter’s notes, defendant Riegel will move the Court, the Honorable Hyam Segell presid- ing in chambers, 14th floor, Room 1409, Ramsey County Court House, St. Paul, MN on the 27th day of June 1978 at 9:30 o’clock A.M., or at such other time as may be set by order of this Court, for an Order setting aside the Findings of Fact of the Jury and the Conclusions of Law and Order for Judgment of the Court pursuant thereto, and granting judgment to defendant Riegel notwithstand- ing the verdict. In the alternative, defendant Riegel will A-105 move the Court for amended Findings of Fact, Conclu- sions of Law and Order for Judgment, or for a new trial on all issues. * * & MOTION FOR JNOV RE PUNITIVE DAMAGES Defendant Riegel moves the Court for Judgment Not- withstanding the Verdict for punitive damages of $1,000,- 000 on the following grounds: a 14. Error of the Court in submitting the issue of puni- tive damages to the jury. * * * MOTION FOR JNOV RE COMPENSATORY DAM- AGES Defendant Riegel moves the Court for Judgment Not- withstanding the Verdict for compensatory damages of $751,000 on the following grounds: 1. On all grounds stated above, as if repeated here. * * * 4. Errors of Court in refusing Riegel’s written requests for jury instructions. * * * MOTION FOR A NEW TRIAL: In the alternative, Riegel moves the Court for a new trial on all issues on the following grounds: 1. On all grounds stated above, as if repeated here. * * * A-106 7. Error of the Court in instructing the jury that the Flammable Fabrics Act and the test CS 191-53 is not a standard by which the conduct of defendant Riegel is to be measured. Dated: June 19, 1978 PETERSON, HOLTZE & TREAT, P.A. /s/ R. C. HOLTZE Attorneys for Defendant Riegel 1238 Baker Bldg. Minneapolis, MN 55402 333-4381 STATE OF MINNESOTA DISTRICT COURT County of Ramsey Second Judicial District GRYC, et al., vs. RIEGEL TEXTILE CORP. et al., DEFENDANT RIEGEL’S MEMORANDUM ON THE COURT’S CHARGE 407340 Defendant Riegel’s post-trial motions are based in part upon its claim that the jury reached its verdict in reli- ance upon mis-statements of the applicable law. Other than the Court’s instructions on punitive damages, which A-107 are treated in a separate memorandum, the errors in the instructions can be grouped into three general categories: 1) Failure to give instructions requested by Riegel, 2) Mis-statements of the applicable law, and 3) Undue and prejudicial emphasis on Defendant Riegel, its product, and the theory advanced against it. * * b. Defendant suggests that the Court’s charge on the Flam- mable Fabrics Act of 1953 and the test incorporated there- in, CS 191-53, were serious mis-statements of the appli- cable law. In its trial brief on the subject, Defendant Riegel provided the Court with authority for the instructions re- quested by Defendant Riegel on the point. Defendant Riegel submits that the law is that evidence that a par- ticular cloth passed the test is evidence that it is normally flammable and that it is not unreasonably dangerous. Bellotte v. Zayre Corp., 531 F.2d 1100 (1976); Simien v. §. S. Kresge Co., 556 F.2d 551 (1978). By instructing the jury that CS 191-53 is only a part of a criminal statute and therefore not the test by which Riegel’s conduct is to be measured, and by letting plaintiffs devote a sub- stantial portion of their case to attacking this Federal Stat- ute, the Court deprived Defendant Riegel of a defense to which it was entitled by law. Moreover, the Court’s state- ment that the Flammable Fabrics Act of 1953 is only a criminal statute is inaccurate. That Act provides that vio- lation of its provisions subject the violator not Only to criminal penalties but also to the FTC Act and sanctions available under it, including injunctive relief and seizure of the goods. If the Court were trying an automobile A-108 accident case and a defendant who was exceeding the speed limit requested a similar instruction directing the jury to disregard the speed statute, the Court would not eveti give that request serious consideration. The evidence shows that the cloth in the Gryc pajamas did not ignite after a one second exposure to flame, as required by the CS 191-53 test. Forced ignition using that test required two seconds and the cloth strip burned far enough to release the trip cord in approximately 10 seconds, as compared with a 4 second standard in the CS 191-53 test. Consequently, the cloth is more than twice as safe as the minimum required to pass this test. As stated by the Simien Court, 566 F.2d at 557: This testimony that the fabric far exceeded the mini- mum Federal requirements is evidence, indeed sub- stantial evidence, that the jacket was not unreason- ably dangerous. (Citing Bellotte.) The Court’s charge deprived Defendant Riegel of this substantial evidence. It should also be noted that the Simien Court reversed the trial court for incorrectly in- structing on this very point. x* * & PETERSON, HOLTZE & TREAT, P.A. /s/ R. C. HOLTZE /s/ TODD MAXWELL HENSHAW Attorneys for Defendant Riegel 1238 Baker Bldg. Minneapolis, MN 55402 333-4381 A-109 STATE OF MINNESOTA DISTRICT COURT County of Ramsey Second Judicial District LEE ANN GRYC, by her mother and natural guardian, JACQUELYN GRYC, and JACQUELYN GRYC, in- dividually, Plaintiffs, VS. DAYTON-HUDSON CORP., a Minnesota corporation; STYLE UNDIES, INC.; RIEGEL TEXTILE CORP.; and ASSOCIATED MERCHANDISING CORP., Defendants. MEMORANDUM OF RIEGEL ON PUNITIVE DAMAGES * vs 2 eee FLAMMABLE FABRICS ACT OF 1953 The testimony unequivocally showed, and plaintiffs had no evidence to the contrary, that the flannelette in the pajamas, when tested, passed the Flammable Fabrics Act of 1953 and the Commercial Standards Test 191-53, promulgated in accordance with that Act. It is the posi- tion of the defendant Riegel that the Court should have instructed the jury in substance that compliance with that Act and the Commercial Standard 191-53, could be con- sidered by the jury as evidence that, among other things, the cloth was not defective. Certainly, successful compli- ance with that Federal regulation should have been con- sidered by the jury when they are considering the assess- ment of punitive damages against the defendant Riegel. A-110 Instead, the Court charged the jury as follows: “Now repeated reference has been made in this case to a test called CS 191-53 which is a part of the Flammable Fabrics Act of 1953 as amended, and it is contended by the defendant Riegel Textile Corpo- ration that the cotton flannelette manufactured by it was in compliance with that test; however, since the Flammable Fabrics Act is a criminal statute, com- pliance with that test is not the standard by which the conduct of the defendant Riegel Textile Corpora- tion is to be measured.” This is basically an error of law, both on the question of compensatory damages and punitive damages. Attention is directed to Simeon v. S. S. Kresge Co., 566 F.2d 551, USCCA Sth Cir. 1/20/78. In that action the Court approved an instruction to the jury that would have advised the jury that in passing upon whether the design or the material of a jacket was defective, they were per- mitted to take into consideration accepted standards in the jacket industry and may take into consideration that the jacket was manufactured in compliance with the Fed- eral Flammable Fabrics Act or Commercial Standard 191-53. The Circuit Court granted a new trial to the defendant Kresge because in the Court’s charge the Court inadver- tently said that compliance would be evidence that the jacket was defective rather than that the jacket was not defective. We quote as follows from the case of Simeon v. S. S. Kresge, supra: A-111 “Compliance with these federal statutory safety re- quirements and industry standards is evidence that a product is not defective. United States v. Estremera, 531 F.2d 1103 (2nd Cir. 1976) (that a fabric is ‘normally flammable’ under the Flammable Fabrics Act is evidence that the fabric is not unreasonably dangerous); cf. Muncie Aviation Corp. v. Party Doll Fleet, Inc., 519 F.2d 1178 (Sth Cir. 1975) (Fed- eral Aviation Administration advisory circulars are admissible as bearing on the standard of care in de- termining negligence).” * * * We respectfully submit, on the basis of the foregoing authority, that this Court grant judgment notwithstanding the verdict in favor of the defendant Riegel on the issue of punitive damages. Such a verdict is not justified by the evidence or authorized by the laws of the State of Minnesota. Respectfully submitted, JARDINE, LOGAN & O’BRIEN By DONALD M. JARDINE A-112 STATE OF MINNESOTA DISTRICT COURT County of Ramsey Second Judicial District LEE ANN GRYC, by her mother and natural guardian, JACQUELYN GRYC, and JACQUELYN GRYC, in- dividually, Plaintiffs, vs. DAYTON-HUDSON CORP., a Minnesota corporation; STYLE UNDIES, INC.; RIEGEL TEXTILE CORP.; and ASSOCIATED MERCHANDISING CORP., Defendants. SUPPLEMENTAL MEMORANDUM OF RIEGEL ON PUNITIVE DAMAGES Defendant Riegel requests the opportunity to supple- ment its memorandum on punitive damages previously submitted on the pending post-trial motions. The memo- randum is addressed to the narrow issue of whether there is sufficient evidence that Riegel acted in reckless disre- gard of the rights of the consuming public in the light of the action taken by Congress in 1953 establishing CS 191-53 as the test dividing unreasonably dangerous cloth- ing fabrics from those of normal flammability which were permissible for manufacture and sale. x* * * A second reason why punitive damages should not be allowed in this situation is that to do so will permit any Six persons, chosen at random in any State of the Union A-113 to override the regulatory judgment of Congress that a standard product—such as cotton fabric—is safe enough to be permitted to be sold in interstate commerce. The principal functions of huge punitive damage verdicts, such as here, are punishment and deterrence. It seems highly anomalous that a manufacturer can be punished for sell- ing a product which Congress expressly authorized him to sell. Similarly it runs counter to the basic theory of democratic government to authorize a random group of six persons to determine that a popular and widely used _ product should be banned from sale even though the elected representatives of all the people had determined that it need not be. Yet where, as here, the commodity cannot be made sufficiently safe to avoid totally the known hazard, the intended effect of punitive damage awards is to force the product off the market. Logic and federal-state comity both dictate that punitive damages should not be allowed in this type of case. * * * Not only is a businessman—or any other citizen—not liable for damages for obtaining favorable legislation which may injure others, but he has the same right to act on the basis of that legislation as he does to rely on any other legislative enactment. Thus Riegel must, as a mat- ter of law, be held to have acted in good faith in 1967 when it sold the fabric involved in the Gryc accident in complete compliance with the Flammable Fabrics Act. Having acted in good faith, it cannot be held in punitive damages for that sale. A-114 Respectfully submitted. JARDINE, LOGAN & O’BRIEN Donald M. Jardine Kent E. Charpentier Attorneys for Petitioner on Appeal Only 1350 Northern Federal Building St. Paul, Minnesota 55102 Phone: (612) 227-0601 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_0300%3A1. Public record. Not legal advice.