Opposition Brief — Aluminum Co. of America v. Alm

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NO. 90-52 ~

IN THE

Supreme Court of the TMnited States

OcTOBER TERM, 1990

ALUMINUM COMPANY OF AMERICA,

Petitioner,

V.

JAMES E. ALM,

Respondent.

ON PETITION FOR WRIT OF CERTIORARI

TO THE SUPREME COURT OF TEXAS

RESPONDENT'S BRIEF IN OPPOSITION

W. DouGLAs MATTHEWS

Counsel] of Record

TIMOTHY F. LEE

SCHMIDT & MATTHEWS, P.C.

2140 First Interstate Bank Plaza

1000 Louisiana

Houston, Texas 77002

(713) 651-1133

Counsel for Respondent

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Alpha Law Brief Co., Inc.— $748 Westpark — Houston, Texas 77063

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TABLE OF CONTENTS

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REASONS FOR DENYING THE WRIT .............. 13

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TABLE OF AUTHORITIES

CASES

Alamo Nat. Bank v. Kraus, 616 S.W.2d 908 (Tex. 1981)

Amarillo Oil Co. v. Energy-Agri Prod., 33 Tex. Sup. Ct. J

623 (June 27, 1990) .... cece eee eee ee ee eee eee eee

Bankers Life & Casualty Co. v. Crenshaw, 108 S.Ct. 1645

(1938)

Browning-Ferris Indus. v. Kelco Disposal, Inc., 109 S.Ct.

rt MO | ) ere weer rr ary pc

Burk Royalty Co. v. Walls, 016 S.W.2d 911 (Tex. 1981)

Cardinale v. Louisiana, 394 U.S. 437 (1909) 2.2... eee eee

Castleberry v. Branscum, 721 S.W.2d 270 (Tex. 1986)

Dow Chem. Co. v. Alfaro, 786 SW.2d 674 (Tex. 1990) ..

Duke Power Co. v. Carolina Envtl. Study Group, 438 U.S.

59 (1978)

Florez v. Fourth Ct. of Appeals, 777 SW.2d 38 (Tex. 1989)

Ford Motor Co. v. Durrill, 714 S.W.2d 329 (Tex. App.

1986). vacated, 754 S.W.2d 646 (Tex. 1988)

Harisiades v. Shaughnessy, 342 US. 580 es

In re Asbestos Litig., 829 F.2d 1233 (3rd Cir. 1987)

Jilani v. Jilani, 707 S.W.2d 671 (Tex. 1988) ........+--.

Karl v. Bryant Air Conditioning Co., 705 F.2d 164 (6th

* Ay...) PPP PRETECTT COTE TT Te ee

Lujan v. Houston Gen. Ins. Co., 750 S.W.2d 299 (Tex.

19838)

Lunsford v. Morris, 746 S.W.2d 471 (Tex. 1988) ......-.

Missouri Pac. R.R. v. Cross, 501 S.W.2d 868 (Tex. 1973)

Pacific Mutual Life Ins. Co. v. Haslip, 553 So.2d 537 (Ala.

1989). cert. granted, 110 S.Ct. 1780 (1990) ...........

Sliman v. Aluminum Co. of America, 112 Idaho 277, 731

3 TIGR £EGGOR ch 03.0 ws 4 eM Oe ele ee eee eee

Southern States Transp. Inc. v. Texas, 774 S.W.2d 639

‘Be. Ma 2 eT RTP ETUTCRT TTT oe ee ee

Sterner v. Marathon Oil Co., 767 S.W.2d 686 (Tex. 1989)

Tynberg v. Cohen, 76 Tex. 409, 13 S.W. 315 (1890) .....

Vail v. Texas Farm Bureau Mut. Ins. Co., 754 S.W.2d 129

(Tee PORE) cic ks cba ph bed see eene eee eee

Webh vw. Webb. 451 U.S. 493 (I9R1) nna vceash keke eee

Williams v. Georgia, 349 U.S. 375 (1955)

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FEDERAL STATUTE

STATE STATUTES AND RULES

Tex. Civ. Prac. & Rem. Code Ann. § 41.001, et seq.

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PUBLICATIONS

Restatement (Second) of Torts (1965) ................. 12

L. Tribe, American Constitutional Law (2nd ed. 1988) .. 18

| NO. 90-52

| IN THE

Supreme Court of the United States

OCTOBER TERM, 1990 |

ALUMINUM COMPANY OF AMERICA,

Petitioner,

V.

JAMES E. ALM,

Respondent.

ON PETITION FOR WRIT OF CERTIORARI

TO THE SUPREME COURT OF TEXAS

RESPONDENT'S BRIEF IN OPPOSITION

JURISDICTION

Petitioner asserts jurisdiction under 28 U.S.C. $ 1257(a).

Petitioner’s constitutional claims were not pressed or pass-

ed upon below and are raised here for the first time. The

Court therefore lacks jurisdiction because it is prevented

from deciding federal constitutional claims not raised

below. Cardinale v. Louisiana, 394 U.S. 437, 438-39

(1969). If the Court decides that its “not pressed or

passed upon” rule is merely prudential and not jurisdic-

tional, it should still decline to review petitioner’s claims

as it has done in other recent decisions where constitu-

tional attacks, which had not been raised in the lower courts,

were made on punitive damages awards. Browning-Ferris

Indus. v. Kelco Disposal, Inc., 109 S.Ct. 2909, 2921

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(1989); Bankers Life & Casualty Co. v. Crenshaw, 108

S.Ct. 1645, 1649-51 (1988).

STATEMENT OF THE CASE

A. Statement of Facts

This case involves one of at least 507 claims and lawsuits’

filed against petitioner Alcoa as a result of serious injuries

caused by an aluminum bottle cap designed by and pro-

duced under agreements with Alcoa. In each of these

cases a consumer was injured when a twist-off bottle cap

exploded off a soft-drink bottle. Due to design defects

resulting in misapplication of the cap, aluminum bottle

caps with “weak threads” will “blow off’ of bottles with

great force, like the cork of a champagne bottle, rather

than releasing the pressurized gas gradually and safely.

If one of these exploding caps hits a consumer’s eye, a

very serious injury will result. For more than a decade—

until long after respondent Alm was injured—Alcoa

steadfastly opposed warning consumers about the dangers

of its closure system. Finally in the late 1980’s, warnings

began to appear on bottles using the Alcoa closure system

and other caps:

1. The figure of 507 bottle cap blow-off claims and lawsuits

between 1967 and 1987 comes from a list produced in another bottle

cap blow-off case which respondent’s counsel handled. The list was

produced during the deposition of Bing Welch, Alcoa’s Senior Pack-

aging Engineer. Deposition of Bing Welch, 36-57, taken on January

5, 1987 in Morel v. Aluminum Co. of America, No, 83-17268 (165th

Dist. Ct., Harris County, Texas.). This figure of 507 lawsuits was

a substantial increase from the number demonstrated in the Alm

case of 127 claims and lawsuits from 1967 through 1975. In vet

another bottle cap blow-off case against Alcoa, the evidence showed

that by 1979, 229 consumers had been injured by the Alcoa closure

system. Sec Sliman v. Aluminum Co, of America, 112 Idaho 277,

731 P.2d 1207, 1269 (1986). After the Idaho Supreme Court affirmed

a jury award of punitive damages against Alcoa, this Court denied

Alcoa’s petition for writ of certiorari in Sliman. Aluminum Co. of

{merica v. Sliman, 486 U.S. 1031 (1988) (No. 86-1569).

NO REFILL

Soft Drink Label With Warning

(Bottie purchased in 1987.)

This warning is almost identical to the product warning

Suggested by respondent's expert at trial. S.F. 554.

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4

At the time when respondent was injured, however, the

product which caused his injury had no such warning.

More than 14 years ago, on June 3, 1976, respondent

James Alm was hit in the right eye by an aluminum twist-

off bottle cap which blew off of a Seven-Up bottle Mr.

Alm was trying to open.” Respondent lost most of the

vision ii: his eye when it was struck by the cap. The bottle

cap was part of a soft drink closure system which Alcoa

had designed, patented, and marketed to the soft drink

industry.” Alcoa had also designed and manufactured the

machine which applied the cap.* The bottling machine in

question had been sold by Alcoa to J.F.W., a Houston,

Texas firm. J.F.W., using the Alcoa capping machine and

cap, bottled and assembled the product which injured

respondent and sold it under the trade name “Seven-Up”

The Seven-Up Company itself had no direct role in the

production of the soda or the capping of the bottle, but

had franchised J.F.W. to produce the soft drink bearing

its trademark. The Seven-Up Company was not in the

chain of distribution of the cap, the bottle or the capping

machine and was not a party to this lawsuit.

Alcoa knew of the hazard of consumer injury from the

time the closure system was first developed.* In 1970, an

2. Aim v. Aluminum Co. of America, 717 S.W.2d 588, 590 (Tex

1986), Appendix C to the petition for writ of certiorari at A33.

(Hereinafter, the first Texas Supreme Court decision in this case

will be referred to as ‘“sldm J.” The second Texas Supreme Court

opinion will be referred to as “Adm //.” Since all four Texas appellate

court opinions are reprinted in the appendices to the Petition for

Writ of Certiorari, references will be to the page number of the

appendices, i.e., Pet. App. at A33.)

Alm I, Pet. App. at A33

4 idm J7, Pet. App. at A3

5

Alcoa employee conducted a study of the Alcoa closure

system and concluded that “[fJaulty performance can cause

serious injury to a would-be consumer if the closure blows

off. . . .”" By 1975, there had been at least 127 other

claims and lawsuits filed against Alcoa invoiving the Alcoa

closure system’ and Aloca was already defending thirty-

four other personal injury lawsuits involving eye injuries

from blow-offs of its bottle caps.*

Alcoa’s Manager of Closure Technology acknowledged

that between 1967 and 1975 the number of lawsuits and

the frequency of the lawsuits per closure sold had both

been steadily increasing.® That official testified that there

would “certainly” have to be more than the one hundred

Technology: “Oh, we have always known that if a cap is improperly

applied that it can blow off and mjure someone.” S.F. 435. (Refer-

eaces to the reporter’s transcript of the testimony, referred to as the

statement of facts in Texas practice, will be abbreviated “S.F.”

followed by a page number.)

6. “Blow-Off Performance of the 28 TSPP Closure.” Jaye Gibbs,

Plaintiff's Exhibit No. 9.

7. Testimony of George Overturt:

Q. (Mr. Matthews): How many claims and lawsuits do you

claim to have, Mr. Overturf?

A. (Mr. Overturi): There were 100, approximately 125 through

1975.

Q: What year did that begin with?

A: From the beginning of the sale of the closures, in 1967.

Q: So from 1967 to when?

A: Through 1975.

Q: Through 1975. Mr. Overturf says—how many?

A: 127.

S.F. 261-262.

8. Alm II, Pet. Apo. at A6.

9. Alm v. Aluminum Co. of America, 753 S.W.2d 478, 482 (Tex.

App.—Houston [14th Dist.] 1988); Pet. App. at A20.

ee,

6

and twenty-seven injuries before Alcoa would treat the

problem as important enough to warrant warning con-

sumers about the risk-involved.*’ Alcoa had a substantial

financial stake in the closure system, primarily because

of the market it created for literally billions of bottle caps

to be produced out of its most significant product,

aluminum.'? Alcoa may have believed that this market

would be harmed if consumer warnings decreased accept-

ance of the closure system by consumers and bottlers.

See Appendix A at 2a.

Respondent's primary theory against Alcoa at trial and

on appeal was that Alcoa negligently failed to warn the

ultimate consumer, i.e.. the purchaser of the soft drink,

of the hazard of personal injury from bottle-cap blow-off.

There was substantial evidence in this case that Alcoa,

had it wished to do so, could have caused a warning to

consumers to be placed on the product which was in-

volved in Mr. Aim’s injury. A patent and licensing expert

10. Testimony of George Overturf:

Q (Mr. Matthews): What number of injuries would have to

occur in order for Alcoa to feel, or for you to determine, that

a warning should be given to the public?

A (Mr. Overturf): I wouldn’t want to make an estimate about

that. Really, I don't know.

Q: Would it have to be a higher number than 127 between 1965

and 1967 and 1975?

A: I would say, certainly, yes.

Q: It would have to be, say—would 500 do it?

A: I wouldn't want to make a guess like that, Mr. Matthews.

S.F. 269-270. The jury may have concluded that 127 claims and

lawsuits from blow-ofis were only the “tip of the iceberg” since Mr.

Overturf refused to produce the relevant Alcoa documents concerning;

claims and lawsuits filed against Alcoa during trial. S.F. 232-38;

464, 1422-23.

11. S.F. 1147-1148.

—— al

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7

testified that because of Alcoa’s control of the patents and

licenses over its closure system, Alcoa could have required

J.F.W. to put a warning on the soft drink bottle.’? At

trial, Alcoa consistently took the position that no warning

of this hazard was necessary or should be given to the

consumer. Prior to respondent’s injury in 1976, Alcoa

did not intend for consumers to be warned of this hazard

—cither by itself or by any other entity and Alcoa knew

that no such warnings were being given.’®

12. Testimony of David Groves, plaintiff's patent and licensing

warnings expert:

Q (Mr. Matthews): I want to ask you, sir, from your knowl-

edge and experience, and having examined all of these patents

and licensing arrangements, do you have an opinion as to a way

by which Alcoa could in fact control the placement of a warning

on this product?

A (Mr. Groves): Yes, sir.

Q: And what is that opinion?

A: They most certainly could have required notices to be placed

on the product.

Q: All right, sir. Explain. if you would, sir, how that could

come about.

A: Okay. It would be very simple. At the time of any of these

three licensing agreements, they simply could have had another

paragraph in there stating that the licensee shall require all of

those to whom it sells to place a notice on the container.

It wouldn't have to be that specific. It could say “On the con-

tainer,” or it could say “On any kind of product that the con-

tainer may be marketed by.”

They could require a notice and a certain minimum size, like

letters one-inch high, certain point size, anything that makes it

visible to the ultimate-end consumer.

They could require the licensee to agree to require everybody

that buys from him to put that notice on there.

S.F. 998-1000.

13. Testimony concerning Alcoa’s mental attitude concerning con-

sumer warnings about this hazard is collected in Appendix A.

8

Despite a growing number of serious injuries, Alcoa

never warned the Houston bottler, J.F.W., that the Alcoa-

made bottling machine and closure system which J.F.W.

was using could produce dangerous products. J.F.W.’s

plant superintendent testified that Alcoa never told him of

“any hazard associated with caps blowing off.”' Alcoa

asserts that it provided bottlers with wall charts, a slide

show presentation, and “various other written communi-

cations” dealing with the hazard. Petition at 4. In fact,

however, none of these materials ever reached J.F.W.”°

The Alcoa technical service representative who dealt with

J.F.W. never told J.F.W. or any other bottler in his 6

state area of the danger of blow-offs because Alcoa of-

ficials never disclosed that growing problem to their own

field representative.'” The Texas Supreme Court con-

14. Testimony of Charles Ferro, J.F.W.’s plant superintendent:

Q (Mr. Marshall): 1 think you told Mr. Connelly ... that you

were not aware in 1976 of any hazard associated with caps

blowing off: is that right?

A (Mr. Ferro): I never heard of any.

Q: Alcoa never told you of any?

A: No, sir.

S.F. 1540-1541.

15. Testimony of Charles Ferro:

Q (Mr. Marshall): In fact, Mr. Ferro, the first time you ever

saw a copy of that brochure was when J showed you one,

wasn't it?

A (Mr. Ferro): Yes, sir.

S.F. 1542.

16. Testimony of Richard Condra, Alcoa’s Technical Service

Representative:

Q (Mr. Marshall): Did you tell [the J.F.W. employee whom Mr.

Condra instructed in the operation of the Alcoa capping machine]

that Alcoa at that time was aware that people were getting

injured across the country from cap blow-offs?

9

cluded that “[t]he undisputed evidence shows that at the

time of Alm’s injury in 1976, Alcoa was acutely aware

of the danger of cap blow off, but there is no evidence

that it did anything to warn J.F.W. or the purchasers of

J.F.W.’s products about the very real nature of this

danger.”"’

The jury found that both Alcoa and the soft drink

bottler, J.F.W., were negligent. The jury also concluded

that Alcoa was grossly negligent. The jury awarded actual

damages of $305,000 and punitive damages against Alcoa

in the amount of $1,000,000. Petitioner no longer con-

tests the finding of negligence or the award of compensa-

tory damages. Only the findings of gross negligence and

resulting punitive damages findings are at issue before

this Court.

B. Procedural History

Under Texas law, a jury may award punitive damages

if a tort defendant is found guilty of gross negligence.’

A (Mr. Condra): No. I didn’t know that.

Q: You weren’t aware of that?

A: No.

Q: Alcoa never told you that?

A: No.

S.F. 1702.

Q (Mr. Matthews): If you didn’t know anything about the

number of injuries being caused across the country from the

cap blow-offs, | guess there was no way to say anything about

that, top, side or bottom, was there?

A (Mr. Condra): No. I didn’t know about it.

S.F. 1705.

17. Alm II, Pet. App. at A7.

18. Burk Royalty Co. v. Walls, 616 S.W.2d 911 (Tex. 1981).

10

The verdict form submitted to the jury in this case de-

fined gross negligence as “that entire want of care which

would raise the belief that the act or omission complained

of was the result of a conscious indifference to the rights

or welfare of the person or persons to be affected by it.””®

Despite oral and written objections to the charge at

trial, Alcoa did not make the objections that it makes

to this Court regarding the punitive damages instruc-

tion and special verdict question. Indeed, Alcoa’s trial

counsel was in effect the co-author of the very instruc-

tion to which Alcoa’s appellate counsel now objects.

After the trial, Alcoa moved for a new trial and for

judgment notwithstanding the jury’s verdict, but did not

raise any objections concerning alleged constitutional vio-

lations. The trial court set aside the findings of gross

negligence and the punitive damages award.”

Both respondent and Alcoa appealed. In this case’s first

appearance before the Texas Court of Appeals, Alcoa

attacked the negligence and actual damages findings, and

respondent sought reinstatement of the gross negligence

and punitive damages findings. The Court of Appeals

held that Alcoa did not have a duty to warn the purchaser

of the soft drink. The intermediate court remanded the

case for a new trial.**

Respondent Alm appealed the decision of the Court

of Appeals to the Texas Supreme Court. In the Texas

Supreme Court, respondent argued that the lower court

had erred in holding that Alcoa had no duty to warn

19. Charge of the Court, Question 11, Pet. App. at A79.

20. Alm IJ, Pet. App. at A42-A43.

21. Alm v. Aluminum Co. of America, 687 S.W.2d 374, 382 (Tex.

App.—Houston [14th Dist.] 1985), Pet. App. at A68-A71.

11

the ultimate consumer. Respondent also asked for a re-

instatement of the gross negligeiice and punitive damages

findings. Although supporting the decision of the Court

of Appeals on other grounds, Alcoa again failed to object

on constitutional grounds to the jury instructions or special

verdict questions regarding gross negligence and punitive

damages. Alcoa also advanced no challenge to the amount

of punitive damages.

In a seven-two decision, the Texas Supreme Court

reversed the Court of Appeals, holding that Alcoa indeed

had a duty to warn consumers of the hazard of bottle

cap blow-offs, and reinstated the jury’s findings of gross

negligence.*~ The Supreme Court remanded to the Court

of Appeals for further review on several issues, including

the sufficiency of the evidence supporting the gross negli-

gence findings.

On remand, the Court of Appeals affirmed the jury’s

verdict on ordinary negligence and acutal damages; it

reversed and remanded for new trial the jury findings of

gross negligence and punitive damages.** After the second

opinion of the Court of Appeals, both respondent and

Alcoa again sought review by the Texas Supreme Court.

In Alm II, the Texas Supreme Court rejected Alcoa’s

attacks on the ordinary negligence and actual damages

found by the jury. The Court also held that the “evi-

22. Alm I, Pet. App. at A35-A38, A42-A43.

23. The Court of Appeals held that the gross negligence findings

were supported by evidence which was “factually insufficient’. This

is a term of art in the Texas practice for one of two standards of

evidentiary review. In spite of Alcoa’s protest to the contrary, a hold-

ing of this nature can be reversed by the Texas Supreme Court if

that court holds that the jury finding is supported by all of the

evidence, which is referred to in Texas as a finding established “as

a matter of law.” Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690

(Tex. 1989).

12

dence shows conclusively that Alcoa was consciously in-

different about the possibility of bottle cap blow-off,”

and affirmed the gross negligence and punitive damages

award.-' The Texas Supreme Court concluded that Alcoa

could not discharge its duty to warn the ultimate con-

sumer through conduct directed toward Seven-Up.*” Since

Alcoa had warned neither J.F.W. nor consumers, the

Texas Supreme Court concluded that “there is no evidence

in the record to negate the jury’s finding of gross negli-

gence.”~” In the Supreme Court, Alcoa did not raise, and

the court thus did not address, any objection regarding

the size of the punitive damage award. Justice Gonzalez,

a prolific writer of exceptionally strong-worded and color-

ful dissents,~‘ dissented in Alm IJ as he had in Alm I.

24. Alm II, Pet. App. at A6.

25. Petitioner suggests that the Texas Supreme Court’s rulings

concerning the Seven-Up evidence were “unforeseeable” and “sur-

prised everyone.” Petition at 15 & 6, n.3. In fact, the court relied

upon § 388 of the Restatement (Second) of Torts (1965), long an

established part of Texas tort law. Pet. App. at A5. Since Seven-Up

was not in the chain of distribution of the cap, the bottle or the

capping machine, the court held that it was not an appropriate inter-

mediary for Alcoa to warn in order to satisfy its duty to warn

consumers. This is a particularly reasonable conclusion in the instant

case, where the evidence showed that Alcoa could have caused a

warning to be placed on the product had it attempted to do so with

its customers who were in the chain of distribution, but had no such

control over the Seven-Up Company. Sce note 12.

26. Id., Pet. App. at A7.

27. Alcoa relies upon Justice Gonzalez’s dissent in a number of

places. In order to put the matter in an appropriate context, it is

only fair to observe that Justice Gonzalez expresses himself in

flamboyant terms. See, inter alia, the following Gonzalez dissents

from the last two terms: -lmarillo Oil Co. v. Energy-Agri Products,

Inc., 33 Tex. Sup. Ct. J. 623, 629 (June 27, 1990) (Majority’s

opinion will create “chaos.”’); Dow Chem. Co. v. Aljaro, 786 S.W.2d

674, 690 (Tex. 1990) (Opinion makes Texas “an irresistible forum

for all mass disaster lawsuits.”); “lorez v. Fourth Ct. of Appeals

777 S.W.2d 38, 44 (Tex. 1989) (Opinion requires litigants and

13

REASONS FOR DENYING THE WRIT

(1) The first question raised by the petition is whether

the jury instruction regarding punitive damages in this

case was unconstitutional because it did not establish a

sufficiently specific standard regarding liability for, or the

amount of, punitive damages that might be awarded.

Petitioner urges that its constitutional argument is related

to one of the issues now before the Court in Pacific

Mutual Life Insurance Co. v. Haslip, 553 So.2d 537

(Ala. 1989), cert. granted, 110 S.Ct. 1780 (1990) (No.

89-1279). Although petitioner presents three constitution-

al arguments, this is the only one which supports peti-

tioner’s claim that this case should be held pending this

Court’s determination of Haslip. The fatal defect in this

contention is that petition never presented this con-

Sstitutional claim to the Texas courts. Under 28 U.S.C.

§ 1257, this Court has consistently required that a peti-

tioner’s claims be presented to the courts below. Bankers

Life & Casualty Co. v. Crenshaw, 108 S.Ct. 1645, 1651

(1988); Cardinale v. Louisiana, 394 U.S. 437, 438-39

(1969).

When the trial judge in this case indicated his intent

to give the instruction to the jury” regarding punitive

judges “to accomplish the impossible.”’); Southern States Transp.

Inc. v. Texas, 774 S.W.2d 639, 643 (Tex. 1989) (“[S]lubterfuge or

legal mumbo jumbo. . . .”); Jilani v. Jilani, 767 S.W.2d 671, 679

(Tex. 1988) (Opinion makes judicial system “a forum for a_ spec-

tacle... .”); Lujan v. Houston Gen. Ins. Co., 756 SW.2d 295, 299

(Tex. 1988) (Opinion “has great potential! for mischief.”); Vail v.

Texas Farm Bureau Mut. Ins. Co., 754 S.W.2d 129, 138 (Tex. 1988)

(“[T]he majority has had to resort to a tortured reading. . . .”);

Lundsford v. Morris, 746 S.W.2d 471, 474 (Tex. 1988) (‘[P]re-

posterous. .. .’’).

28. The jury instructions, as is the normal Texas practice, were

contained in part in the Questions, or special verdict forms, submitted

to the jury. The gross negligence and punitive damages issues were

submitted as Questions 11 and 12. Pet. App. A79-A8O.

14

damages, Alcoa’s trial counsel made non-constitutional

objections to which the trial court acceded.*” Alcoa’s trial

counsel then did not object further to the final wording

of the jury charge. Under Texas procedure, the lack of

a contemporaneous objection is an absolute bar to any

subsequent challenge to a jury instruction. Tex. R. Civ.

P. Ann. r. 272, 274 (Vernon Supp. 1990). Rule 274

of the Texas Rules of Civil Procedure provides explicitly:

A party objecting to a charge must point out distinct-

ly the objectionable matter and the grounds of the

objection. Any complaint as to a question, defini-

tion, or instruction, on account of any defect, omis-

sion, or fault in pleading, is waived unless specifically

included in the objections.

Texas courts have consistently and strictly enforced this

contemporaneous objection requirement.”” This Court has

held that failure to comply with a state procedural rule

will result in the waiver of federal questions. Williams v.

Georgia, 349 U.S. 375, 382-83 & n.6 (1955).

29. Petitioner, in commenting on the first draft of the trial court’s

proposed charge, asked that the instruction in Question 11 utilize

the language from Burk Royalty v. Walls, 616 S.W.2d 911, 921

(Tex. 1981), which refers to conscious indifference “to the rights or

welfare of the person or persons to be affected by it.” Defendant’s

Objections to the Charge have been attached as Appendix B at 3a.

The trial court then reworded the instruction to read exactly as peti-

tioner had requested. See Petition at 4, n.2. The objections refer to

Questions 12 and 13 but the trial court re-numbered them to Ques-

tions 11 and 12.

30. Castleberry v. Branscum, 721 SW.2d 270, 276 (Tex. 1986)

(“The purpose of Rule 274 is to afford trial courts an opportunity

to correct errors in the charge, by requiring objections both to cleariy

designate the error and to explain the grounds for complaint. An

objection which does not meet both requirements . . . does not

preserve error on appeal.” (citations omitted)); Missouri Pacific

R.R. v. Cross, 50! S.W.2d 858, 873 (Tex. 1973) (“One of the main

purposes of Rule 272 is to enable the trial court to submit a proper

charge to the jury and to have the prior benefit of counsel's objec-

tions so as to correct any errors that might otherwise occur.”).

15

During the nine years following the jury verdict, peti-

tioner filed in the Texas appellate courts a total of 18

briefs totalling 436 pages. Not once in those briefs did

petitioner assert that the jury instruction violated the fed-

eral constitution. In fact, in a 1987 brief filed by Alcoa,

petitioner commended the instruction.*' At no time were

the Texas courts asked to, or afforded an opportunity to,

consider any constitutional objection with regard to the

instruction at issue. The courts below were never called

upon to, and never did, decide any question related to

Haslip.

The lack of a contemporaneous objection is particularly

significant because, had an objection been made, the jury

instruction might have been framed differently. Texas re-

quires reasonable proportionality between compensatory

and punitive damages and has established factors

for evaluating the reasonableness of punitive damage

awards.*~ Petitioner could have requested a more specific

jury instruction had it chosen to do so. Having deliberately

31. “The charge to the jury on gross negligence is the very one

approved in the Burk [Royalty Co. v. Walls, 616 S.W.2d 911 (Tex.

1981)1 case.” Reply Brief to Application for Writ of Error, 39, No.

C-4093.

32. Texas courts have long held that the amount of punitive dam-

ages must be reasonably related to the amount of compensatory dam-

ages, a standard which prevents the award of excessive punitive

damages. Tynberg v. Cohen, 76 Tex. 409, 13 S.W. 315, 316-17 (1890)

Additionally, the Texas courts have established six factors for evalu-

ating punitive awards, which further protect defendants from excessive

punitive damages. llamo Nat. Bank v. Kraus, 616 S.W.2d 908, 910

(Tex. 1981). Both the trial courts and the courts of appeals have

supervisory jurisdiction over the amounts of Texas punitive damage

awards. See Ford Motor Co. v. Durrill, 714 S.W.2d 329, 346-47

(Tex. App.—1986), vacated upon settlement, 754 SW.2d 646 (Tex.

1988). (The amount of punitive damages was reduced by the trial

court and court of appeals to only 10° of the jury award.)

16

chosen not_to request that the jury be given a more

specific instruction with regard to punitive damages, peti-

tioner Cannot now complain that such an instruction was

not given.

,

The other questions before the Court in Haslip are

not presented by the circumstances of this case. Petitioner

in Haslip apparently raised its constitutional objections

at every point at which the Alabama legal system requires

an objection be made.*” In this case, the petitioner has

wholly failed to raise any constitutional objection to the

punitive damage instruction before the Texas courts at

any point. Arguably, in Haslip the award of punitive

damages may be as much as 250 times the award of

actual damages sustained by the plaintiff in that case.*’

In the instant case, the punitive award was only three

times the compensatory damages.*’ Moreover, petitioner

in this case does not contend that either the punitive

award or the underlying compensatory award were exces-

sive. Finally, Petitioner does not contend that any of the

other issues in Haslip—such as whether a punitive dam-

age award can be based on respondeat superior—are in

any way presented by this case.

Petitioner also suggests that this case would be an

appropriate vehicle for resolving constitutional questions

33. While the briefs in //asiip are not particularly clear on this

point, the respondent in //aslip does not seem to argue that the

petitioner failed to satisfy state law in the presentation of the

constitutional questions.

34. See Brief of petitioner at 10-11, Pacific Mutual Life Ins. Co.

v. Haslip (No. 89-1279). Petitioner argues that the punitive award

of $1,000,000 is excessive in light of a $3,923.24 actual damages

award.

35. The compensatory damages awarded were $305,000. The puni-

tive damages awarded were $1 million.

17

regarding punitive damages because “there has been no

legislative change in the Texas rules governing imposition

of and computation of punitive damages.” Petition at 10.

That is incorrect. In 1987, as part of the general reform

of state tort law, Texas adopted specific statutory provi-

sions regulating punitive damages. See $ 41.001, et seq..

Tex. Civ. Prac. & Rem. Code Ann. (Vernon Supp. 1990).

parts of which are reprinted in Appendix C at 6a.

Under the new Texas statute, a punitive damage award

may not exceed $200,000, or 4 times the compensatory

award, whichever is greater. Petitioner does not suggest

that there is any constitutional defect in the present Texas

statutory scheme. Although the Texas law did not literally

apply to the instant case, because it was tried prior to

1987, the punitive award falls within the limits now set

by Texas law.

In short, no issue concerning the jury instructions on

gross negligence or punitive damages has been properly

raised by the petitioner in this case. This is the only issue

under review in Haslip which is common to this case.

Consequently, this case should not be held pending dis-

position of Haslip and the issue is not worthy of plenary

consideration.

(2) The second and third questions raised by the peti-

tion concern an appellate ruling, rather than trial court jury

instructions. The jury was instructed that it could award

punitive damages if it concluded that petitioner had been

“grossly negligent.” Petitioner does not challenge the jury

verdict as such, but questions only the legal theory under

which that verdict was upheld by the Texas Supreme

Court.

18

Petitioner grounds its constitutional arguments on an

assertion that, in sustaining the jury verdict, the Texas

Supreme Court made a drastic, sudden, and totally un-

foreseeable change in state law. Insofar as this was a

change in the law that prevailed at the time of the tort

in 1976, petitioner argues, it violated the Ex Post Facto

Clause."* Insofar as this was an alteration of prevailing

law at the time of trial in 1981. petitioner contends, it

violated procedural due process. Neither of these consti-

tutional questions is presented in this case. however, be-

cause the suggested transformation in Texas law alleged

by petitioner simply did not occur.*?

The standard for an award of punitive damages in

Texas remains today what it has always been—gross

negligence. The substantive definition of gross negligence

36. Petitioner's argument ignores the consensus that ex post facto

principles only have application in cases which are criminal or involve

civil penalties which “were really criminal penalties for which civil

form was a disguise.” Harisiades v. Shaughnessy, 342 U.S. 380, 598

(1952). While some of this Court’s earliest cases do not clearly limit

the sweep of the ex post facto principle, “[dJuring the early years

of the 20th century, the uncertainty over the scope of the ex post

facto clauses which marked the early cases was replaced by a con-

sensus in favor of the narrow view that only criminal punishment is

prohibited by the ban.” L. Tribe, .lmerican Constitutional Law 635

(2nd ed. 1988).

37. Neither the due process nor the ex post facto arguments

petitioner makes to this Court were made to the Texas courts.

Petitioner claims to have raised these questions in its Brief on

Remand. Petition at 6, n.3. In that document, however, petitioner

took the position that its constitutional rights were violated because

the Texas Supreme Court had imposed on it a “new legal duty”

to warn the consumer. In this Court, petitioner now claims for the

first time that the Texas Supreme Court changed the definition of

gross negligence. These are not the same constitutional questions.

This Court should decline to consider questions which were not clearly

presented to the courts below. See Webh v. Webb, 451 US. 493.

498-502 (1981) (Simple invocation of words “full faith and credit”

did not properly raise federal Full Faith and Credit Clause issue.).

19

remains just as it was framed in the jury instruction given

in this case—whether the plaintiff proved:

that entire want of care which would raise the belief

that the act or omission complained of was a result

of a conscious indifference to the rights or welfare

of the person or persons to be affected by it.**

Nothing in Alm J] changed this standard. In fact, the

Texas Supreme Court observed that “[g]ross negligence,

to be the ground for exemplary damages, should be that

entire want of care which would raise the belief that the

act or omission complained of was the result of conscious

indifference to the right or welfare of the person or

persons to be affected by it.” Pet. App. at A6 (citing

Burk Royalty, 616 S.W.2d at 920).

Petitioner does not deny that “conscious indifference”

remains the touchstone of a claim for punitive damages

in Texas. Nor does petitioner present any constitutional

attack on the sufficiency of the evidence on which the

jury found conscious indifference. The Texas Supreme

Court concluded that “the evidence shows conclusively

that Alcoa was consciously indifferent about the possi-

bility of bottle cap blow-off.” Alm //, Pet. App. at A6.

In the face of a pattern of blow-off injuries, petitioner

certainly had good reason to understand that its action

was tortious and that it was imperiling the safety of con-

sumers. Petitioner not only made a deliberate decision

not to warn consumers, but it also failed to warn the

bottler—J.F.W.—of the increasing number of serious

bottle cap related injuries. Petitioner's argument that it

had no warning that it could be deemed grossly negligent

simply has no support in the record.

38. Question 11, Pet. App. at A79 (emphasis added).

20

Petitioner asserts that the theory on which liability was

based was entirely different from “the standard under

which the case was tried and appealed.” Petition at 12.

Petitioner insists that the decision of the Texas Supreme

Court in this case departed from prior state decisions

which had held that a claim of gross negligence must be

assessed in light of “all the surrounding circumstances.”

Petition at 11, citing Burk Rovalty Co. v. Walls, 616

S.W.2d 911, 921 Tex. 1981). The Texas Supreme Court

opinion, however. did not purport to establish any other

legal standard; indeed. the opinion below expressly cited

and relied on Burk Royalty. Petitioner argues that it

would have prevailed under a proper application of Burk

Royalty, and that there must thus have been some un-

spoken change in the underlying state legal standard.

However, a majority of the Texas Supreme Court concluded

that its decision in this case was entirely consistent with

Burk Royalty.

Seizing on the fact that Burk Royalty based the deter-

mination regarding punitive damages on “all of the sur-

rounding circumstances,” petitioner asserts that Alcoa’s

communications with Seven-Up should have barred, or

weighed heavily against, punitive damages.** Petitioner

39. Petitioner asserts that the case was “tried to the jury” under

a standard requiring an evaluation of “all the surrounding circum-

stances.” Petition, 11, see also, id. at 12 (“the standard under which

the case was tried.’). That is incorrect: the jury instruction, to

which petitioner did not obiect on this basis. did not contain the

phrase “all of the surrounding circumstances.” Petitioner asserts that

the existence of this standard was “undisputed” in 1976, when the

tort at issue occurred. Petition at 15. That too is incorrect. Burk

Royalty, upon which petitioner relies and which established that

standard, was not decided until 1951. shortly before this case was

tried in August and September, 1981.

b]

21

makes this argument even though it knew that Seven-Up

itself issued no warnings to consumers. Under these cir-

cumstances, the Texas Supreme Court acted neither un-

reasonably or unforeseeably when it concluded that “the

evidence shows conclusively that Alcoa was consciously

indifferent about the possibility of bottle cap blow-off.”

Pet. App. at A6. Petitioner’s constitutional claim is at

bottom simply a fact-bound contention that the Texas

Supreme Court incorrectly evaluated petitioner’s exculpa-

tory evidence.

Petitioner does not challenge the constitutionality of

the present Texas standard of gross negligence. Neither

does petitioner challenge the constitutionality of the stand-

ard that prevailed under Texas law in 1981. Petitioner’s

constitutional claim rests solely on its argument that the

1981 and 1990 standards, although not inherently defec-

tive, differ significantly. In reality, Texas law has not

changed materially, if at all; petitioner is simply ag-

grieved because it disagrees with the manner in which

the Texas Supreme Court applied established legal prin-

ciples to the facts of this case.

40. Even assuming petitioner is correct that the Texas Supreme

Court changed the standard for determining gross negligence in 1990,

no due process violation has been shown. The most that petitioner

can claim is that it lost a potential defense—the defense that it

discharged its duty to warn consumers because it claimed to have

warned Seven-Up. However. no party has a vested right to a common

law defense. Duke Power Co. v. Carolina Envtl. Study Group, 438

U.S. 59, 88 n.32 (1978). The lower courts which have addressed

similar due process challenges have been sensitive to the “notion that

tort law ... belongs almost exclusively to the states,” and have up-

held state court decisions altering state tort law. /n re Asbestos Litig.,

829 F.2d 1233, 1243, 1244 (3rd Cir. 1987) (Elimination of “‘state

of the art” asbestos defense did not offend due process.): Karl v.

Bryant Air Conditioning Co., 705 F.2d 164, 166 (6th Cir. 1983)

(Retroactive application of comparative negligence statute did not

violate due process.).

22

The constitutional principle which petitioner urges this

Court to adopt is that any new state court decision regard-

ing tort law, or the law in any other civil case, is pre-

sumptively a violation of the Due Process Clause. The

doctrine proposed by petitioner, at least with regard to

procedural due process, would extend to cases involving

no punitive damages, and, with regard to the Ex Post

Facto Clause, to any case in which the application of

State law to a particular set of facts was reasonably debat-

able. Were this Court to adopt such a rule, it would raise

constitutional issues regarding virtually every civil case

in every state court in the nation. Every unsuccessful civil

litigant with a colorable claim of a shift in state law

would have a plausible basis for seeking review in this

Court, and that invitation to further litigation would swell

substantially the number of certiorari petitions filed each

term. Neither this Court nor any lower court has ever

contemplated adoption of such a constitutional doctrine.

and the decision of the Texas courts in this case do not

conflict with the decision of any state or federal court.

CONCLUSION

This case is based on an incident and serious injury

which occurred fourteen years ago. The litigation has

been on appeal for almost nine years. At the eleventh

hour, petitioner asserts that this Court should hold the

case for still another year, pending the decision in Haslip.

Petitioner's argument based on Haslip was never presented

to the trial court, the Texas Court of Appeals or the Texas

Supreme Court. This case should be brought to a con-

clusion.

23

The petition for writ of certiorari should be denied.

August 20, 1990

Respectfully submitted,

W. DouGLaAs MATTHEWS

Counsel of Record

TIMOTHY F. LEE

SCHMIDT & MATTHEWS, P.C.

2140 First Interstate Bank Plaza

1000 Louisiana

Houston, Texas 77002

(713) 651-1133

Counsel for Respondent

James E. Alm

la

APPENDIX A

Testimony of Petitioner’s Witnesses

Concerning Warnings

Testimony of George Overturf, Alcoa’s Manager of

Closure Technology, corporate representative at trial and

expert witness:

Q.

2 > OD

S.F.

Prior to June 3, 1976, Alcoa didn’t require that any-

one who operated under these patents put a warning

on the product; is that correct?

That is correct.

Prior to June 3, 1976, Alcoa didn’t recommend a

warning to anyone; is that correct?

That is correct.

264.

We already have gone over some of these details, but

Alcoa didn’t require or recommend a warning be

placed on products using this closure?

No, sir.

. 298.

* * *

Are you saying that Alcoa does not require or insist

that a warnings be placed on this cap or on this

bottle?

We do not. No.

458-59.

ok * K

Testimony of Jaye Gibbs, former Alcoa employee and

expert witness at trial:

Q.

Prior to the time of this occurrence, did Alcoa re-

commend to bottlers that they place a warning either

OPrOoe

OP

2a

on the cap or on the bottle concerning this hazard,

this danger to the public?

Not that I am aware of.

Never told them they ought to do that?

Not that I am aware of. ’

Did they make any such recommendation to manu-

facturers of bottles that they knew would be used

with the Alcoa aluminum cap?

I don’t believe so.

840-41.

I suppose when you give warnings, Mr. Gibbs,

whether they are printed on the bottle or on the cap

or they are put out in the newspaper or over the TV

or however they are put out, that has the potential

also of reducing the sales of the product, doesn’t it?

It has that potential, I suppose.

Yes. Because people sometimes get a little scared if

they read about a product that might have some

danger or some hazard?

Yes, they could.

841.

* *K *

Yes, sir. | know you don't like to respond, but what

i am trying to find out is at what point the problem

becomes severe enough that Alcoa gets concerned

enough to let the public know about it?

And I said I don't really know.

848.

I see. Considering this danger and hazard to con-

sumers of soft drink bottles, soft drinks with this type

of cap, this pilfer-proof aluminum cap, Mr. Gibbs,

did Alcoa come up with any type of warning to warn

people like Mr. Alm about this problem?

No, they didn’t.

955.

3a

APPENDIX B

Petitioner’s Objections to the Gross

Negligence and Punitive

Damages Questions

No. 1,101,479

IN THE DISTRICT COURT OF

HARRIS COUNTY, TEXAS

80th JUDICIAL DISTRICT

JAMES E. ALM

v.

OWENS-ILLINOIS, INC., ET AL

OBJECTIONS TO THE COURT’S CHARGE

To The Honorable Judge of Said Court:

Now COMES, ALUMINUM COMPANY OF AMERICA

(hereinafter “Alcoa”), and makes its objections to the

Court’s Charge at the conclusion of all the evidence and

prior to submission of this case to the jury, and recites

the basis of its objections as follows:

X. Questions Nos. 12 and 13.

1. There are no pleadings to support the submission

of these issues.

2. There is no evidence, or in the alternative, the

evidence is legally insufficient, or in the alternative, it is

against the great weight and preponderance of the evi-

dence to support the submission of these issues.

4a

3. Question No. 12 contains, and Question No. 13

relies upon, an incorrect definition of “grossly negligent”

under the standards set out in the Burk Royalty case,

which describes the test as conscious indifference “to the

right or welfare of the person or persons to be affected

by it.”

WHEREFORE, PREMISES CONSIDERED, Alcoa

submits these objections to the Court’s Charge and prays

that its objections be sustained and that the charge be

revised in accordance with these objections and in accord-

ance with the issues submitted in substantially correct

form and filed with the Clerk of the Court, and for such

other relief to which it may be justly entitled.

Respectfully submitted,

BUTLER, BINION, RICE,

COOK & KNAPP

By: /s/ MICHAEL CONNELLY

Michael Connelly

TBC No. 04685000

Daniel Lichty

TBC No. 12344700

110 Esperson Building

Houston, Texas 77002

(713) 237-3209

Attorneys for Defendant

Aluminum Company of America

Sa

CERTIFICATE OF SERVICE

This is to certfy that a true and correct copy of the

above and foregoing Objections to the Court’s Charge

has been hand delivered to all counsel of record on this

the 17th day of September, 1981.

/s/ MICHAEL CONNELLY

Michael Connelly

6a

APPENDIX C

Sections 41.001 and 41.007, Texas Civil

Practice and Remedies Code

(Vernon Supp. 1990)

§ 41.001 Definitions

In this chapter:

(1) “Claimant” means a party, including a plaintiff,

counterclaimant. cross-claimant, or third party plaintiff,

seeking recovery of exemplary damages. In a cause of

action in which a party seeks recovery of exemplary

damages related to injury to another person, damage to

the property of another person, death of another person,

or other harm to another person, “claimant” includes both

that other person and the party seeking recovery of exemp-

lary damages.

(2) “Defendant” means a party, including a counter-

defendant, cross-defendant, or third-party defendant, from

whom a Claimant seeks relief with respect to exemplary

damages.

(3) “Exemplary damages” means any damages

awarded as an example to others, as a penalty, or by way

of punishment. “Exemplary damages” includes punitive

damages.

(4) “Fraud” means fraud other than constructive fraud.

(5) “Gross negligence” means more than momentary

thoughtlessness, inadvertence, or error of judgment. It

means such an entire want of care as to establish that the

act or omission was the result of actual conscious indiffer-

ence to the rights, safety, or welfare of the person affected.

7a

(6) “Malice” means:

(A) conduct that is specifically intended by the

defendant to cause substantial injury to the claimant; or

(B) an act that is carried out by the defendant

with a flagrant disregard for the rights of others and with

actual awareness on the part of the defendant that the act

will, in reasonable probability, result in human death,

great bodily harm, or property damage.

Added by Acts 1987, 70th Leg., Ist C.S., ch.2, § 2.12,

eff. Sept. 2, 1987.

§ 41.007. Limitation on Amount of Recovery

Except as provided by Section 41.008, exemplary

damages awarded against a defendant may not exceed

four times the amount of actual damages of $200,000,

whichever is greater.

Added by Acts 1987, 70th Leg., Ist C.S., ch.2, § 2.12,

eff. Sept. 2, 1987.