Petition for Writ of Certiorari — Burke v. Deere & Co.
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93-988
No.
IN THE
SUPREME COURT OF THE UNITED STATES
October Term, 1993
CLAIR W. BURKE,
Petitioner,
Vv.
DEERE & COMPANY, a/k/a JOHN DEERE COMPANY,
Respondent.
PETITION FOR A WRIT OF CERTIORARI TO
THE UNITED STATES COURT OF APPEALS FOR
THE EIGHTH CIRCUIT
PETITION FOR A WRIT OF CERTIORARI
Kirk T. May Jefferson D. Sellers*
Brant M. Laue Jack B. Sellers
1010 Walnut Street, Suite 400 JACK B. SELLERS LAW
Kansas City, Missouri 64106 ASSOCIATES, INC.
(816) 471-7700 P.O. Box 730
Sapulpa, OK 74067-0730
(918) 224-9070
*Counsel of Record
Counsel for Petitioner
QUESTIONS PRESENTED
1. Whether the time for filing a notice of appeal under Fed.
R. App. P. 4(a)(4) is tolled by a motion that refers to Fed. R.
Civ. P. 59(e), but which is in substance a motion under Fed. R.
Civ. P. 60(a).
2. Whether the “unique circumstances” exception of
Thompson v. INS, 375 U.S. 384 (1964), should apply to permit
appellate jurisdiction absent a timely notice of appeal in this
case.
LIST OF PARTIES
Plaintiff-Appellee below was Clair W. Burke. Defendant-
Appellant was Deere & Company, also known as the John Deere
Company.
iii.
TABLE OF CONTENTS
Page
Ey SEED BREED cocevccsosccsurccessesesesooesusesonseveesecseeness i
Tico ies cciastcrnservnpiptecvenedseinonooneeeestien ii
RE FE EE EOI es eceececscvetsecevocescesecessocetysocovestveees iv
a EE I NO ae ae |
il aesiver ephveiitinbtniavevenbiourbatnnsseneroess 2
FEDERAL RULES PROVISIONS INVOLVED .................. 2
STATEMENT AND INTRODUCTION OF THE CASE..... 3
Bi IN sen cs ccncvsncvsnnsenteocersosesevscucvorcssvenes 3
B. Proceedings Before The District Court And
i oc dodueeoesdes 4
REASONS FOR GRANTING THE PETITION ................... 8
TE a 13
iv.
TABLE OF AUTHORITIES
CASES Page
Alimenta (U.S.A.), Inc. v. Anheuser-Busch Cos.,
BOS F.Dd 1 16D 1 1s Cie. FSG G) cccececvcvssccccressccceeccctsorscns 8,9
Browder v. Director, 434 U.S. 257 (1978) .........c:cceeeeeeees 9,11
Christopherson v. Deere & Co., 941 F.2d 692
Os Ce BIE sisicceccisictincthcseisdeincnersicmnnintnecnubantbnsneiiaseinedan 3
Jackson v. Schoemehl, 788 F.2d 1296 (8th Cir. 1986) .......... 9
Lockley v. Deere & Co., 933 F.2d 1378 (8th Cir. 1991)........ 3
Martinez v. Sullivan, 874 F.2d 751 (10th Cir. 1989) ............. 9
Miller v. Transamerican Press, Inc., 709 F.2d 524
Ee: Fe cise nctincabatasn coasciedbcscaicicimtannmdtaniedeecevomseciee 8
Offshore Prod. Contractors, Inc. v. Republic Underwriters
Ins. Co., 910 F.2d 224 (Sth Cir. 1990) ..........cccccceseeeeseeeees 8
Osterneck v. Ernst & Whinney, 489 U.S. 169 (1989) .......... 12
St. Paul Fire & Marine Ins. Co. v. Continental Casualty Co.,
Ra OG ee, ) 8,9, 11
Thompson v. INS, 375 U.S. 384 (1964) .......:cccceeeeeeeeeeteees 12
United States v. One Urban Lot, 882 F.2d 582
(Bat Ce; BDI) sccenscctrrccrasnensecesnernoversccesuevecvssseqovecosecoueneess 9
Western Indus., Inc. v. Newcor Canada Litd.,
pO EE a enero 8,9
V.
Wheeler v. John Deere Co., 862 F.2d 1404
a, I sehisie int idaidaihinecchahcdircaicidietiscssonnceceidcaesasssoe 3
White v. New Hampshire Dep't of Employment Sec.,
Se i I ET dehicclnencescsinctanchucvnsivincnssacisoneseidsebiseiesal 10
FEDERAL RULES
I te a 8
Ss I ae 8
I ME I hice a passim
Es TE III aicirsskcicpitscnee’eniestesshainsipebtaecliseanaia passim
OTHER AUTHORITIES
Charles W. Adams, The Timing of Appeals under
Rule 4(A)(4) of the Federal Rules of Appellate
Procedure, 123 F.R.D. 371 (1988) .........cccccccceeeeeceeeeees 8,9
No.
IN THE
SUPREME COURT OF THE UNITED STATES
October Term, 1993
CLAIR W. BURKE,
Petitioner,
V.
DEERE & COMPANY, a/k/a JOHN DEERE COMPANY,
Respondent.
Petition for a Writ of Certiorari to
the United States Court of Appeals for
the Eighth Circuit
PETITION FOR A WRIT OF CERTIORARI
Petitioner Clair W. Burke respectfully requests that a writ of
certiorari issue to review the judgment of the United States
Court of Appeals for the Eighth Circuit in this case.
OPINIONS BELOW
The order of the court of appeals denying the motion to
dismiss the appeal is unreported and is included in the Appendix
at p. la., and the order of the court of appeals denying
reconsideration is included in the Appendix at p. 2a. The opinion
of the court of appeals is reported at 6 F.3d 497 (8th Cir. 1993),
and is included in the Appendix at pp. 3a. - 44a. The order of the
court of appeals denying rehearing is included in the Appendix
at p. 45a. The decision of the district court on motions for
judgment notwithstanding the verdict and for new trial is reported
at 780 F. Supp. 1225 (S.D. Iowa 1991).
JURISDICTION
The judgment of the court of appeals was entered on August
13, 1993. Rehearing was denied on September 22, 1993. This
Court has jurisdiction under 28 U.S.C. § 1254(1). Jurisdiction in
the court of appeals was based upon 28 U.S.C. § 1291. The court
of appeals denied Petitioner's motion to dismiss the appeal for
lack of jurisdiction based on the untimely filing of the notice of
appeal. This Petition seeks review of that ruling.
FEDERAL RULES PROVISIONS INVOLVED
Federal Rule of Appellate Procedure 4(a)(1) provides, in
pertinent part:
In a civil case in which an appeal is permitted by law as of
right from a district court to a court of appeals the notice of
appeal required by Rule 3 shall be filed with the clerk of the
district court within 30 days after the date of entry of the
judgment or order appealed from; ... .
Federal Rule of Appellate Procedure 4(a)(4) provides, in
pertinent part:
If a timely motion under the Federal Rules of Civil Procedure
is filed in the district court by any party . . . under Rule 59 to
alter or amend the judgment . . . the time for appeal for all
parties shall run from the entry of the order. . . granting or
denying . . . such motion.
Federal Rule of Civil Procedure 59 (e) provides:
A motion to alter or amend the judgment should be served not
later than 10 days after entry of the judgment.
Federal Rule of Civil Procedure 60(a) provides, in pertinent
part:
Clerical mistakes in judgments, orders or other parts of the
record and errors therein arising from oversight or omission
may be corrected by the court at any time of its own initiative
or on the motion of any party and after such notice, if any, as
the court orders.
STATEMENT AND INTRODUCTION OF THE CASE
A. Factual Background
This products liability action was tried toa jury in November
1990. The only witness that Respondent Deere & Company
(“Deere”) presented in its defense was a retained expert. No
Deere officer or employee appeared before the jury to defend
Deere’s product and explain its conduct. Deere is the world’s
largest manufacturer of agricultural machinery. The unsavory
history of Deere’s Titan series combine causing numerous
amputations and other injuries is chronicled in various reported
appellate opinions. See, e.g., Christopherson v. Deere & Co.,
941 F.2d 692 (8th Cir. 1991); Lockley v. Deere & Co., 933 F.2d
1378 (8th Cir. 1991); Wheeler v. John Deere Co. ,862 F.2d 1404
(10th Cir. 1988). Clair W. Burke (“Burke”) was injured by a
Deere Titan series combine on November 9, 1984, three years
after Deere had determined that the combine design that caused
Burke's injury was unsafe. Burke's injury was the twenty-fourth
known injury caused by Deere’s defective design of and failure
to warn about the combine’s auger and lower cleanout door. At
the time of this trial, there had been twenty-nine such accidents
reported to Deere, the latest accident having occurred in January
1990.
The jury returned a verdict for Burke and determined his
compensatory damages to be $650,000. The jury found Burke
40% at fault and Deere 60% at fault, resulting in a $390,000 net
recovery to Burke. The jury specifically found that Deere’s
conduct constituted a willful and wanton disregard for the rights
or safety of others, and awarded $50 million in punitive damages.
After carefully reviewing the jury's punitive damage award, the
district court sua sponte remitted the award to $28 million,
which represents 1% of Deere’s $2.78 billion net worth. Burke
accepted that remittitur.
B. Proceedings Before the District Court And
The Court of Appeals
A judgment on the jury verdict was entered November 26,
1990. Deere filed motions for a new trial and judgment
notwithstanding the verdict in December 1990. The district
court denied the motion for judgment notwithstanding the
verdict and denied the motion for new trial on the condition that
Burke accept a remittitur. Burke v. Deere & Co., 780 F. Supp.
1225 (S.D. Iowa 1991). Burke consented to the remittitur on
December 23, 1991.
On January 9, 1992, the district court entered an order
awarding Burke prejudgment interest from the filing of the
action. An Amended Judgment was entered by the court clerk on
January 9, 1992. That Amended Judgment reflected Burke's
consent to the remittitur and the award of prejudgment interest
from September 15, 1986 to the date of the Amended Judgment.
On January 17, 1992, Burke filed a motion to amend the
January 9, 1992 Amended Judgment in the following respects:
(a) to show the punitive damage judgment to Burke to be $28
million rather than $7 million; (b) to specify hovember 26, 1990
as the date from which post-judgment interest was to run; and (c)
to specify the rate of post-judgment interest. On February 18,
1992, the district court entered an order granting Burke's motion
to amend the Amended Judgment. In that order, the district court
found that post-judgment interest was to be calculated from
November 26, 1990. On February 18, 1992, the court clerk
entered a Second Amended Judgment pursuant to Fed. R. Civ.
P. 58. That Second Amended Judgment reflected the district
court's February 18, 1992 order, with the exception that the court
clerk erroneously omitted the November 26, 1990 date set forth
in the district court's order as the date from which post-judgment
interest was to run.
On February 28, 1992, Burke filed a motion captioned
"Plaintiff's Motion to Amend Second Amended Judgment of
February 18, 1992.” Although Burke cited Fed. R. Civ. P. 59(e),
the motion expressly requested that the February 18, 1992
Second Amended Judgment entered by the court clerk be
amended “to cause that judgment to agree with the court's order
of February 18, 1992.” The motion stated, “Contrary to [the
February 18, 1992 order], the Second Amended Judgment fails
to specify the correct date and rate upon which post-judgment
interest pursuant to 28 U.S.C. § 1961 is to accrue.” Burke did not
ask the district court to address any substantive issue or reconsider
any prior decision. Deere did not even respond to Burke's
February 28, 1992 motion.
The district court entered an order on April 1, 1992, granting
Burke's motion to amend the Second Amended Judgment. To
correct the error arising from its prior omission of the November
26, 1990 post-judgment interest date, the court clerk entered a
Third Amended Judgment on April 1, 1992. The Second
Amended Judgment and the Third Amended Judgment, each
entered by the court clerk pursuant to its ministerial duty under
Rule 58, are set forth below. The difference between the two
judgments is the insertion of the November 26, 1990 date. The
Third Amended Judgment did not change the district court's
prior disposition of the merits or any other issues raised in the
case.
SECOND AMENDED JUDGMENT
IT IS ORDERED AND ADJUDGED that judgment is
rendered in favor of the plaintiff, Clair W. Burke, for
$390,000.00 actual damages plus interest at 10% per annum
from and after September 15, 1986, until date of this order,
and interest thereafter at a rate as provided by law pursuant to
28 U.S.C. § 1961.
IT Is FURTHER ORDERED that judgment is rendered
against the defendant in the amount of $28,000,000 in punitive
damages. Of this amount, $7,000,000, plus reasonable attorney
fees and costs, are awarded to the plaintiff. The remaining
balance is to be held in an interest bearing account by the
Clerk of this Court until further order of this court.
IT IS FURTHER ORDERED that judgment be rendered
in favor of the plaintiff for costs in this action in the amount
of $9422.00, following the Order of the Clerk of Court
entered January 9, 1992, denying the plaintiff's motion for
additional costs.
Dated this 18th day of February, 1992.
THIRD AMENDED JUDGMENT
IT IS ORDERED AND ADJUDGED that judgment is
rendered in favor of the plaintiff, Clair W. Burke, for $390,000
actual damages plus interest at 10% per annum from September
15, 1986, until November 26, 1990, and interest thereafter at
the rate in effect November 26, 1990, as provided by law
pursuant to 28 U.S.C. section 1961.
IT IS FURTHER ORDERED that judgment is rendered
against the defendant in the amount of $28,000,000 in
punitive damages plus interest from November 26, 1990, at
the rate in effect November 26, 1990, as provided by law
pursuant to 28 U.S.C. section 1961. Of this amount $7,000,000
plus reasonable attorney fees and costs, and post-judgment
interest thereon, are awarded to the plaintiff. The remaining
balance is to be held in an interest bearing account by the
Clerk of this Court until further order of this Court.
IT IS FURTHER ORDERED that judgment be rendered
in favor of the plaintiff for costs of this action of $9,422.00,
to be entered as of November 26, 1990. All other requests for
additional costs are denied.
April 1, 1992.
Deere filed its notice of appeal on April 29, 1992, more than
thirty days after the Second Amended Judgment. Burke moved
in the court of appeals to dismiss Deere’s appeal because the
notice of appeal was untimely under Fed. R. App. P. 4(a)(1). The
court denied the motion on August 4, 1992, App. 1a., and also
denied a subsequent motion for reconsideration on September
15, 1992, App. 2a.
The court of appeals entered its opinion reversing the district
court's judgment on August 13, 1993. The August 13 opinion
was subsequently vacated and a new opinion was entered on
August 27, 1993.
REASONS FOR GRANTING THE PETITION
1. The Eighth Circuit's decision denying the motion to
dismiss the appeal conflicts with the decisions of other circuit
courts which have found that motions referring to Rule 59(e)
cannot toll the time for filing a notice of appeal when they are in
substance motions under Rule 60(a). E.g., Alimenta (U.S.A.),
Inc. v. Anheuser-Busch Cos., 803 F.2d 1160, 1162-63 (1 1th Cir.
1986); Miller v. Transamerican Press, Inc., 709 F.2d 524, 527
(9th Cir. 1983); St. Paul Fire & Marine Ins. Co. v. Continental
Casualty Co., 684 F.2d 691, 693-94 (10th Cir. 1982); see also
Offshore Prod. Contractors, Inc. v. Republic Underwriters Ins.
Co., 910 F.2d 224, 229 (Sth Cir. 1990) ("The mere fact that a
court reenters a judgment or revises a judgment in an immaterial
way does not affect the time within which litigants must pursue
an appeal.”). The thirty-day period of Fed. R. App. P. 4(a)(1) for
filing a notice of appeal is tolled if any party files a timely motion
under Fed. R. Civ. P. 59. Fed. R. App. P. 4(a)(4). A motion to
correct a clerical mistake pursuant to Fed. R. Civ. P. 60(a) does
not toll the thirty-day period.
This case thus raises what one circuit has referred to as “the
recurrent -- one might also say incessant -- problem of
distinguishing between motions” under Rules 59 and 60. Western
Indus., Inc. v. Newcor Canada Ltd., 709 F.2d 16, 16 (7th Cir.
1983). As one commentator has noted: “The difficulties that the
seemingly straightforward paragraph [Fed. R. App. P. 4(a)(4)]
has caused the appellate courts since its adoption in 1979 are
shown by the large number of appellate decisions that have dealt
with it.” Charles W. Adams, The Timing of Appeals under Rule
4(A)(4) of the Federal Rules of Appellate Procedure, 123
F.R.D. 371, 372 (1988). The Court should grant the Petition to
resolve this issue.
A number of circuits have stated an inclination toward
finding that any post-trial motion, regardless of substance, filed
within the ten-day period for filing a Rule 59(e) motion tolls the
time for filing a notice of appeal. E.g., United States v. One
Urban Lot, 882 F.2d 582, 584 (lst Cir. 1989); Martinez v.
Sullivan, 874 F.2d 751, 753 (10th Cir. 1989); Jackson v.
Schoemehl, 788 F.2d 1296, 1298 (8th Cir. 1986); Western
Indus., Inc. v. Newcor Canada Ltd., 709 F.2d 16, 17 (7th Cir.
1983). Because Burke's motion was in substance a Rule 60(a)
motion that was filed within the ten-day period for filing a Rule
59(e) motion, the Eighth Circuit's order is consistent with the
ten-day approach discussed in those cases and contrary to the
substance of the motion. As with the circuit court that was
reversed in Browder v. Director, 434 U.S. 257, 264 (1978),
however, the Eighth Circuit here failed to elaborate its findings
on appellate jurisdiction.
Simply because a motion refers to Rule 59 does not make it
a Rule 59 motion that tolls the time for filing a notice of appeal.
E. g., Alimenta, 803 F.2d at 1162-63. The substance of a motion
must be evaluated when characterizing it for purposes of
determining whether the motion tolls the time for filing a notice
of appeal. St. Paul Fire & Marine, 684 F.2d at 692-93 (in
determining whether motion tolls the time for appeal “the courts
look beyond the form of the document to determine its
substance”). Burke’s February 28, 1992 motion to amend the
Second Amended Judgment was in substance a motion seeking
to correct the court clerk's oversight resulting in the clerk’s Rule
58 judgment not reflecting the district court's February 18, 1992
order.
10.
Motions seeking mere technical changes in the form of a
judgment are not Rule 59(e) motions and do not toll the time
for filing notice of appeal; rather they are akin to Rule 60(a)
motions to correct clerical errors in a judgment.
Id. at 693. “[T]he federal courts generally have invoked Rule
59(e) only to support reconsideration of matters properly
encompassed in a decision on the merits.” White v. New
Hampshire Dep't of Employment Sec. ,455 U.S.445, 451 (1982).
Burke's February 28, 1992 motion did not seek to have the
district court determine whether prejudgment or post-judgment
interest should be awarded, nor did it raise the issue of from what
date interest was to run. Those issues had been raised previously
by Burke, disputed by Deere, and resolved by the district court.
Burke was not asking the district court to recor sider any issue
previously decided. In reducing the district u»#*s order to a
judgment pursuant to Rule 58, the court clerk mistakenly
omitted the November 26 date from which interesi was to run.
That clerical mistake was the subject matter of Burke’s February
28, 1992 motion.
There is no better demonstration that Burke’s motion was to
correct a clerical mistake than the fact that it was unopposed by
Deere. Deere did not oppose Burke’s February 28, 1992 motion
because the motion did not raise any issues related to the merits
and did not ask the district court to reconsider matters previously
decided. If the motion had concerned anything other than a
clerical mistake, then it would have been opposed by Deere.
Burke’s motion was unopposed because it concerned solely the
court clerk’s ministerial duty to reduce to a “judgment” the
district court’s orders. Notwithstanding this acknowledgement
of the nature of Burke’s motion, Deere failed to file its notice of
appeal within thirty days of the February 18, 1992 Second
Amended Judgment.
11.
In St. Paul Fire & Marine, a party filed a paper that in
substance “sought only to have the judgment recite the essential
terms of, or incorporate by reference, the [court's prior]
Memorandum and Order.” 684 F.2d at 894. The Tenth Circuit
rejected the argument that this was a Rule 59(e) motion, and
concluded that the thirty-day period for filing a notice of appeal
had not been tolled. As with the filing at issue in St. Paul Fire
& Marine, Burke's motion simply sought to have the Second
Amended Judgment recite the November 26 date set forth in the
district court's prior order.
In Alimenta, a party filed a motion styled “Rule 59” motion
but which asked the district court to reconsider its decision
requiring each party to bear its costs. 803 F.2d at 1162. Faced
with the issue of whether the “Rule 59” motion stayed the period
for filing a notice of appeal and therefore made the appellant's
notice of appeal premature, the Eleventh Circuit looked beyond
the Rule 59 labeling and evaluated the substance of the motion.
Contrary to the labeling of the motion, the Eleventh Circuit
concluded that it was not a Rule 59 motion. 803 F.2d at 1 162-63.
Burke's motion was not addressed to those matters encompassed
by Rule 59, but instead was concerned with correcting a clerical
mistake encompassed by Rule 60(a).
The Third Amended Judgment in this case did not materially
revise the Second Amended Judgment or any prior decision or
orders of the district court. The Third Amended Judgment
simply inserted a date that the district court had previously
determined was to be part of the judgment in the case. As a
consequence, the time for filing the notice of appeal ran from the
date of the Second Amended Judgment. The timely filing of a
notice of appeal is mandatory and jurisdictional. Browder v.
Director, 434 U.S. 257, 264 (1978). Accordingly, the court of
appeals did not have jurisdiction over this case and the appeal
12.
should have been dismissed. The Eighth Circuit's decision is
inconsistent with the decisions of other circuits involving nominal
Rule 59(e) motions that were in substance Rule 60(a) motions,
and merits this Court's review.
2. This case also presents an issue regarding the “unique
circumstances” exception established by the court in Thompson
v. INS, 375 U.S. 384 (1964). Deere urged in the court of appeals
that even if its notice of appeal was untimely filed the court of
appeals nonetheless should have heard its appeal based on the
rationale of Thompson. The Court's statement that “Thompson
applies only where a party has performed an act which, if
properly done, would postpone the dead|ine for filing his appeal
and has received specific assurance by a judicial officer that this
act has been properly done,” demonstrates the limited nature of
the Thompson exception. Osterneck v. Ernst & Whinney, 489
U.S. 169, 179 (1989). Any reliance on the “unique circumstances”
exception here was thus improper, inasmuch as Deere never
sought or received specific assurances that its appeal was timely
filed. See Osterneck, 489 U.S. at 179.
13.
CONCLUSION
The petition for a writ of certiorari should be granted.
Respectfully submitted,
Kirk T. May
Brant M. Laue
1010 Walnut Street, Suite 400
Kansas City, MO 64106
Tele: (816) 471-7700
Jefferson D. Sellers*
Jack B. Sellers
Jack B. Sellers Law *
Associates, Inc.
P.O. Box 730
Sapulpa, OK 74067-0730
Tele: (918) 224-9070
Counsel for Petitoner
*Counsel of Record
December 1993
APPENDICES
la.
United States Court of Appeals
FOR THE EIGHTH CIRCUIT
No. 92-1990SICB
Clair W. Burke
Plaintiff-Appellee Appeal from the United States
District Court for the
VS. Southern District of Iowa
Deere & Company, etc.
Defendant-Appellant
Appellee’s motion to dismiss the appeal has been considered
by the Court and is hereby denied.
August 4, 1992
Order Entered at the Direction of the Court:
oC “Ay
\idned 7. Qe
Clerk, U.S. Court of Appeals, Eighth Circuit
eee aii
2a.
United States Court of Appeals
FOR THE EIGHTH CIRCUIT
No. 92-1990SICB
Clair W. Burke
Plaintiff-Appellee
Appeal from the United States
vs. District Court for the
Southern District of Iowa
Deere & Company, etc.
Defendant-Appellant
Appellee’s suggestion for reconsideration en banc of the
order of August 4, 1992 is denied. Appellee’s motion for
reconsideration is also denied.
September 15, 1992
Order Entered at the Direction of the Court:
' y tv
\Ndad T. Qe
Clerk, U.S. Court of Appeals, Eighth Circuit
"
- :
c's
3a.
United States Court of Appeals
FOR THE EIGHTH CIRCUIT
AMENDED
No. 92-1990
Clair W. Burke,
Appellee,
Appeal from the United States
ve. District Court for the
Southern District of Iowa
Deere & Company, a/k/a
John Deere Company, a
Delaware Corporation,
Appellant.
Submitted: December 17, 1992
Filed: August 27, 1993
Before MAGILL, Circuit Judge, HEANEY, Senior Circuit
Judge, and BEAM, Circuit Judge.
BEAM, Circuit Judge.
This is a products liability case tried in federal court under
diversity jurisdiction. The jury awarded plaintiff, Clair W.
Burke, $650,000 for compensatory damages, and $50,000,000
for puniiive damages. The compensatory damages were reduced
to $390,000 under a finding of comparative fault and the punitive
damages were reduced to $28,000,000 through a district court
order of remittitur. Deere & Company (Deere) appeals citing
numerous trial errors. We reverse.
I. BACKGROUND
This case is governed by Iowa law. The issues, though
4a.
significant, should have been relatively uncomplicated.
Unfortunately, the litigation went awry due to confusion about
various theories of recovery and defense and the admissibility
and use of evidence under these theories. The facts are set forth
in the district court's order on Deere’s motion for judgment
notwithstanding the verdict, for new trial or for remittitur. Burke
v. Deere & Co., 780 F. Supp. 1225, 1230-34 (S.D. lowa 1991).
We will repeat them only as necessary for our discussion.
Burke was injured on November 13, 1984, when a vertical
auger ona model 6620 John Deere Titan Series Combine cut his
right hand. Mark Goranson, Burke’s employer had purchased
the combine new in 1979. Burke's injury occurred when he
reached through a clean-out door in the vertical auger’s housing
to remove debris in the grain delivery system while preparing
the combine for transfer to Deere’s dealer for a design modification
of the clean-out door. Goranson had turned on the auger from the
operator's cab just before or just after Burke placed his hand in
the combine.
Attrial, the district court permitted Burke to present evidence
of otheraccidents involving the Titan series combine and admitted
evidence of post-sale and post-accident acts by Deere and its
dealers. Some of the evidence showed that Deere implemented
both a decal program and, later, a field-modification program
after receiving several reports of injuries involving the auger.
The district court submitted the issue of punitive damages to the
jury.
Deere assigns error to numerous evidentiary rulings and
instructions. Deere contends that: (1) the district court's admission
of evidence of other accidents and evidence of post-sale conduct
by Deere resulted in unfair prejudice; (2) Jury Instruction 36
erroneously instructed the jury that lowa law imposes a continuing
duty to modify or to retrofit; (3) the district court erred in
Sa.
submitting the punitive damages issue to the jury; (4) the
punitive damages award is unconstitutional; (5) the verdict form
was improper and unduly prejudicial to its case; and (6) the
district court erred by permitting argument which informed the
jury that a portion of any punitive damages award would be paid
into a civil reparations trust fund administered by the district
court.'
II. DISCUSSION
A. Overview--Theory of the Case
Before further discussing the details of this case, we find it
necessary to analyze the issues framed by the pleadings and Iowa
law applicable to the theories of recovery and defense. In his
complaint, Burke alleged that ”[a]s designed, made and sold, the
machine [combine] was defective and unreasonably dangerous
and was a trap and a snare to the user.” Appellant's appendix at
17. There were no allegations of negligent conduct on the part of
Deere.
The complaint further alleged: “Deere acted wantonly, with
gross disregard for plaintiff's safety and the safety of other users
and plaintiff is entitled to punitive damages.” Id. While that
sentence could be construed to include an allegation of “negligent”
acts by Deere, plaintiff's counsel stated at the instruction
conference that “[t]his isn’t a negligence case.” Transcript at
2331. Later plaintiffs counsel said “plaintiff generally claims
‘Under Iowa Code § 668A, when punitive damages are awarded, the court must
ask the jury whether the defendant's conduct was directed specifically at the plaintiff.
If the jury answers in the negative, seventy-five percent of the award is paid intoa civil
reparations trust fund. See infra at 17a1i.13. In this case the jury determined by special
interrogatory that Deere’s conduct was not directed specifically at Burke.
Oe
6a.
that the product is defective and unreasonably dangerous.”
Transcript at 2372. These statements, coupled with counsel's
still later statement that “we haven't amended our complaint,”
transcript at 2384, establish that the plaintiff's only substantive
theory of recovery in this case was strict liability in tort under
Restatement (Second) of Torts § 402A (1965) (Restatement).’
The Iowa Supreme Court adopted section 402A of the
Restatement in Hawkeye-Security Ins. Co. v. Ford Motor Co.,
174 N.W.2d 672, 684 (Iowa 1970). In a series of cases after
Hawkeye-Security, including, particularly, Hughes v. Magic
Chef, Inc., 288 N.W.2d 542 (Iowa 1980), and Fell v. Kewanee
Farm Equip. Co., 457 N.W.2d 911 (lowa 1990), the Iowa
Supreme Court established the elements of the strict liability
theory and applicable defenses. For purposes of this case, lowa
Civil Jury Instruction 1000.1 adequately sets forth the elements
of aclaim under astrict products liability theory.’ The requirement
*We have searched the record and find no motion to conform the pleadings to
evidence on theories of recovery other than those raised in the complaint. See Fed. R.
Civ. P. 15(b). The record is replete, however, with objections by defendant to evidence
proffered by plaintiff on matters not relevant to a strict liability cause of action.
Iowa Pattern Jury Instruction 1000.1 provides:
1000.1 Essentials for Recovery. In order to recover on the claim of strict
liability, the plaintiff must prove all of the following propostions:
1. The defendant [designed] [manufactured] [assembled] [sold] (product).
2. The defendant was engaged in the business of [designing]
[manufacturing] [assembling] [selling] (product).
3. The (product) was in a defective condition at the time it left defendant's
control in one or more of the following ways:
(Set out particulars as supported by the evidence.)
4. The defective condition was unreasonably dangerous to the plaintiff.
5. The plaintiff used the (product) in the intended manner or in a manner
reasonably foreseeable by defendant.
6. The (product) was expected to and did reach the plaintiff without
substantial change in its condition.
7. The defect was a proximate cause of plaintiff's damage.
8. The amount of damage.
7a.
that the plaintiff prove the product was dangerously defective
when it left defendant's control is particularly important in this
case. See lowa Civil Jury Instruction 1001.1(3). The combine at
issue here probably left Deere’s control at the time of sale. It had
clearly left Deere’s control at the time the decal retrofit program
was completed.
As stated, the only theory upon which the case was tried was
strict liability in tort. There were, as also stated, no allegations of
negligence-specifically, there were no allegations involving a
negligent failure to warn. Had such a claim been made, Iowa law
on that theory, including Restatement (Second) of Torts § 388,
may have been implicated.* While the negligence and strict
liability theories seem to merge in a case alleging that a product
is defective because of inadequate warning, see, e.g., Nassif v.
National Presto Indus., Inc.,731 F.Supp. 1422, 1424 (S.D. Iowa
If the plaintiff has failed to prove any of these propositions, the plaintiff
is not entitled to damages. If the plaintiff has proved all of these propositions,
the plaintiff is entitled to damages in some amount. [If an affirmative defense
is submitted, delete the second sentence and insert the following: If the plaintiff
has proved all of these propositions, then you will consider the defense of
as explained in Instruction No. J
Iowa Civil Jury Instruction 1000.1 (Iowa State Bar Ass’n 1991)
(footnote omitted).
“Section 388 of the Restatement Second of Torts provides:
One who supplies directly or through a third person a chattel for another to use
is subject to liability to those whom the supplier should expect to use the chattel with
the consent of the other or to be endangered by its probable use, for physical harm
caused by the use of the chattel in the manner for which and by a person for whose
use it is supplied, if the supplier
(a) knows or has reason to know that the chattel is or is likely to be
dangerous for the use for which it is supplied, and
(b) has no reason to believe that those for whose use the chattel is supplied
will realize its dangerous condition, and
(c) fails to exercise reasonable care to inform them of its dangerous
condition or of the facts which make it likely to be dangerous.
Restatement (Second) of Torts § 388 (1965).
8a.
1990), important distinctions remain. Liability for defective
design and manufacture relates to conditions existing at the time
the product leaves the seller's control. Restatement § 402A cmt.
g (1965); Hawkeye-Security, 174 N.W.2d at 684; see also Hale
v. Firestone Tire & Rubber Co., 756 F.2d 1322, 1336 (8th Cir.
1985) (under Missouri law evidence of post-sale knowledge of
a defect may not be the basis for punitive damages based on
inadequate warning in strict liability).
In a case alleging negligent failure to warn, on the other
hand, there may be a continuing duty to warn of dangers which
become known after the product has entered the stream of
commerce. See, e.g., lowa Code § 668.12 (the state-of-the-art
defense does not diminish duty to warn concerning subsequently
acquired knowledge of a defect). As Deere correctly notes, the
issue of inadequate warning was a “red herring” which confused
the issues, evidence and burdens of proof in this case.* This does
not mean, however, that the issue of warnings or cautions falls
out of this lawsuit.
It is undisputed that when the combine was manufactured
and sold Deere provided no specific warnings or cautions
concerning the dangers inherent in the auger clean-out system.
The combine was fitted at the time of delivery, however, with a
general warning decal that stated: “CAUTION. 1) Keep all
shields in place. 2) Disengage and shut off all engine power and/
This blurring of the two legal theories, and the concomitant misapplication and
expansion of the law regarding any continuing duties in the failure to warn area, led, we
believe, to the improper imposition of a duty to retrofit, as discussed infra. In spite of our
discussion of Restatement of Torts Section 388, a theory of negligent failure to warn
would have been very problematic under the facts of this action. Burke does not contend
that he was not warned, he admits that he saw a warning decal within a few inches of the
clean-out door. He does not contend that a further or different warning would have caused
him to avoid the auger, he was warned to keep his hand out of the housing and he knew
from previous experience that danger lurked inside. Burke's contention was that because
of the mechanical design of the combine, the machine was dangerously defective for use
by human beings whatever warnings were given.
’ % eupeesemneenemmmerenmemmmenes
9a.
or motor power before servicing or unclogging machine. 3)
Keep hands, feet, and clothing away from power driven parts.”
This decal was located at eye level on a toolbox twenty-six
inches from the auger clean-out door. Burke testified that, prior
to the accident, he had read and understood this warning,
transcript at 1517-18, and had read a similar but more extensive
warning in the operator's manual. Transcript at 1505. Between
the time cf sale and the accident, Deere began to receive reports
of injuries resulting from contact with the vertical auger. Indeed,
there were enough incidents that Deere instigated a “decal”
program whereby additional warning or caution decals were
prepared and distributed to owners of the Titan combine. The
retrofit decals were to be placed directly on the grain clean-out
housing. This warning retrofit program seems to have created
confusion on the part of the parties and the court as they
attempted to formulate jury instructions at the end of the trial.
In order to establish his strict liability claim, Burke had to
establish: 1) that the product had a defect and was unreasonably
dangerous at the time it left Deere’s hands; 2) that the dangerous
defect caused the injury; and 3) damages. See, e.g., Fell, 457
N.W.2d at 916. A plaintiff who does not prove all of these
elements is not entitled to recovery. The district court instructed
the jury that the time of sale was the focal point in the defect
inquiry. See Appellee’s Appendix at 15, Jury Instruction 10. This
may have been incorrect given the decal retrofit program.
The combine was sold, as indicated, without specific auger
clean-out cautions. After the sale but prior to the accident, it is
arguable that control of the combine was, at least constructively,
returned to Deere so that the decal warning program could be
completed.® Although these warnings did not modify the
*It was stipulated that the decal retrofit occurred in early 1981. Although
Goranson denied receiving the auger clean-out warning decal, the parties stipulated
10a.
mechanical design of the combine, they addressed or could serve
to negate the “unreasonably dangerous” element of the products
claim as outlined in Iowa Civil Jury Instruction 1000.1(4). See
Restatement § 402A cmt. j. (“In order to prevent the product
from being unreasonably dangerous, the seller may be required
to give directions or warning.”) This warning retrofit, inessence,
was intended to replace the combine in Goranson’s hands with a
modified design of the grain delivery system. In our view, this
point in time, which was several years prior to the date of the
accident, was the proper focus for the defect inquiry.
The jury was instructed that “[i]f you find a warning was
necessary and find that the caution decal over the toolbox was
inadequate, either because of its placement or its wording, or that
the danger of severe injury at the lower clean-out door was so
great that nosuch caution decal would cure the danger or that the
caution could not be followed, then you may find that the
product was defective and unreasonably dangerous.” Jury
Instruction 14. Appellee’s Appendix at 19. Contrary to Deere’s
assertion, the giving of this instruction does not mean that the
court submitted the theory of negligent failure to warn to the
jury. This instruction was, nonetheless, wrong.
This instruction permitted the jury to find that the product
was defective and unreasonably dangerous by reason of
inadequate decal warning alone. The evidence does not support
such a finding. Burke never contended or argued that a proper
warning would have prevented his accident. His theory was
adequately set forth in the second clause of Instruction 14-that
“the danger of severe injury at the lower clean-out door was so
great that no such caution decal would cure the danger or that the
that Deere mailed them, along with an accompanying letter, on April 12, 1981, toall
customers who had purchased Titan combines prior to January, 1981. This would
have included Goranson.
lla.
caution could not be followed, [if found], then you may find that
the product was defective and unreasonably dangerous.”
Under Iowa law a product must be both “in a defective
condition” and in this condition “unreasonably dangerous” to
the plaintiff. Patterson v. F.W. Woolworth Co., 786 F.2d 874,
878 (8th Cir. 1986); Iowa Civil Jury Instruction 1001.1(3) and
(4). In determining unreasonable danger, Deere was entitled to
have the jury consider all the warnings given to Burke as well as
his general knowledge and experience. Restatement § 402A
cmt. j. In addition to the written warnings on the toolbox, there
was evidence that Goranson had recently warned Burke not to
place his hand inside the auger housing. Also, Burke testified
that he had read the warnings in the operator’s manual, that he
was experienced with farm machinery and that he knew the
general dangers that exist with regard to sudden movement of
augers and the machinery parts. Instruction 14 did not give the
jury any option to consider these additional matters.’ We agree
with the district court that, subject to consideration of these
warnings and this knowledge and experience, the jury was
’The dissent, infra at 34a, cites LaCoste v. Ford Motor Co.,322 N.W.2d898, 900
(Iowa Ct. App. 1982) (per curiam), a truck transmission case, for the proposition that
an “[iJnadequate warning may in fact be the product defect under Iowa law.”
(emphasis in original). The dissent also states that Deere “misleads the court” with its
“open and obvious” danger argument, and contends, in faulting our criticism of
Instruction 14, that the propensity for misuse of the combine to create “two-person”
accidents was not open and obvious and that “it is ludicrous for Deere to have so
suggested.”
We have no dispute with the premise that an inadequate warning may be the
defect and that such defect may make the product unreasonably dangerous. This,
however, was not Burke's theory. Since the combine had the decal warning and he
otherwise had notice of the danger, his contention was that the mechanical design of
the combine made it dangerously defective, whatever warning was given. This was
not a case of a truck transmission creeping into reverse without warning when not
solidly placed in the parking mode, as in LaCoste. As we point out, there was evidence
that Burke knew the dangers of sudden movement of augers on farm machinery, that
you should never place your hand inside an auger housing, that the clean-out
operation was to ready the combine for a factory safety retrofit and that the other
, ee Se
12a.
entitled to ponder whether the combine was defective and
unreasonably dangerous at relevant times. This inquiry, of
course, would not necessarily end the case.
Proof of a plaintiff's conduct may also be used to attack the
“proximate cause” element of a strict liability claim as described
in Iowa Civil Jury Instruction 1001.1(7). Deere’s allegation of
“negligence” on the part of Burke was such an assault. In other
words, Deere claimed that it was not a defect in the machine that
caused Burke's injury but rather Burke's own negligence. Burke's
alleged negligence involved the warnings received by Burke,
from his employer, from the operator's manual and from the
decal, as well as his general knowledge of the dangers involved
in the work being done. A complete severance of the connection
between the defect and injury would bar recovery.
Assuming, however, that the jury found both a defect that
made the machine unreasonably dangerous and a causal link
between the dangerous defect and Burke's injury, the inquiry is
still not at an end. Deere alleged “assumption of risk” as an
affirmative defense. The Iowa legislature has enacted a
comparative fault statute, lowa Code § 668 (1985). The Iowa
Supreme Court eliminated “contributory negligence” as a bar to
the recovery of damages arising as a result of a defect in a
product. Hughes, 288 N.W.2d at 544. The form of contributory
negligence by the plaintiff which consists in voluntarily and
unreasonably proceeding to encounter a known danger, and
commonly passes under the name of assumption of risk, however,
person working with Burke, his employer, Goranson, had just warned him not to place
his hand inside the auger housing. It is difficult to envision a situation in which the
propensity for misuse was more open and obvious. The jury finding that Burke was
guilty of “assumption of risk”, as later defined, through the forty percent holding of
comparative fault, supra at 3a, indicates that the jurors also thought the defect was
“open and obvious”. The jury instructions cited by the dissent, numbers 12, 19, 24,
25, 26 and 27, do not attenuate the misleading focus of Instruction 14.
13a.
has been retained as a theory of comparative fault which may bar
or diminish plaintiff's recovery under section 402A. Id. See also
Coker v. Abell-Howe Co., 491 N.W.2d 143, 147 (lowa 1992)
(assumption of risk remains a defense in those actions in which
contributory negligence is not available, such as strict liability).
The elements of this defense are set forth in lowa Civil Jury
Instruction 1000.9.* This defense also involves the warning.
Establishment of this defense does not, however, totally foreclose
recovery by Burke. It requires a comparison of fault on the part
of Burke and Deere under the Comparative Fault statute. lowa
Code §§ 668. 1-668.14. Thus, the warning issue is relevant to the
existence of a dangerous defect, to causation, to Deere’s
affirmative defense of assumption of risk and to the assessment
of comparative fault.
B. Admissibility of Post-Sale Accidents and Conduct
With this background in mind, we turn to the contested
evidence adduced at trial. The district court admitted, over
*That pattern jury instruction provides:
1000.9 Assumption of Risk. The defendant claims the plaintiff voluntarily
assumed the risk by:
(Set out the particulars supported by the evidence.)
To prove this defense, the defendant must prove each of the following
propositions:
1. The plaintiff knew the [defect] [dangerous condition] was present.
2. The plaintiff understood the nature of the danger to [himself] [herself].
3. Nevertheless, the plaintiff unreasonably, freely and voluntarily used the
product.
4. The plaintiff's assumption of risk was a proximate cause of plaintiff's
damage.
If the defendant fails to prove any of these propositions, the defendant has
not proved this defense. If the defendant has proved all of these propositions,
then you wi!! include this fault in the total percentage of plaintiff's fault you find
in accordance with the special verdict submitted with these instructions.
lowa Civil Jury Instruction 1000.9 (Iowa State Bar Ass‘n 1991 ).
ee
14a.
Deere’s objection, evidence of other post-sale, post-decal
modification accidents involving the Titan series combine.”
Deere asserts that this evidence was irrelevant because it related
to events which occurred years after it relinquished control and
was not therefore related to Deere’s liability. Evidence of other
accidents is admissible if the proponent of the evidence
demonstrates that the accidents occurred under circumstances
substantially similar to those at issue in the case at bar. Hale, 756
F.2d at 1332. There is no dispute that a proper foundation for the
evidence was laid in this case. Under Fed. R. Evid. 401, evidence
of similar occurrences may be relevant to the defendant's notice
of a defect, the magnitude of the danger involved, the defendant's
ability to correct a known defect, the lack of safety for intended
uses, the standard of care, or causation. Kehm v. Procter &
Gamble Mfg. Co., 724 F.2d 613, 625 (8th Cir. 1983). Here,
several of the uses mentioned in Kehm were not at issue and
Deere was willing to stipulate to both notice of other accidents
and feasibility of subsequent design changes. Accordingly, it
was proper to admit evidence of other post-control accidents
only on the issues of defect, causation and foreseeability of use
or misuse of the product.
The evidence of other accidents was used by the plaintiff and
the district court, however, in submission of the question of
punitive damages to the jury. The court used a verdict form
which told the jury that a portion of the punitive award would go
toa trust fund. In his closing argument, Burke intimated that part
of the award would compensate victims of similar farm-
implement accidents. This use of evidence of other post-control
"Deere asserts that the testimony of other accident victims, if admitted at all,
should have been admitted only by way of deposition because live testimony by
amputees was unduly prejudicial. We rejected this argument in Lockley, and reject it
here. Lockley v. Deere & Co., 933 F.2d 1378, 1386 n.9 (8th Cir. 1991).
15a.
accidents served to enhance the award of punitive damages. This
was reversible error.
Deere next asserts that the district court erroneously admitted
evidence of subsequent remedial measures by Deere. This
evidence related to the timing and effectiveness of Deere’s field
modification program and included evidence that unmodified
Titan series combines were sold as late as 1988 and were seen on
dealer lots in 1990.'° There was also extensive evidence that
3100 of the Titan series combines, which were in the distribution
“pipeline” at the time of a factory design change in 1982, were
not modified.
It is the law of this circuit that Rute 407 of the Federal Rules
of Evidence, which prohibits the introduction of subsequent
remedial measures to demonstrate the negligence or culpable
conduct of the defendant, does not preclude the introduction of
such evidence in strict liability cases.'' Donahue v. Phillips
Petroleum Co., 866 F.2d 1008, 1013 (8th Cir. 1989). See also
Unterburger v. Snow Co., 630 F.2d 599, 603 (8th Cir. 1980);
‘Deere also contends that this evidence involves acts by dealers over which
Deere has no control and that there has been no showing of agency so as to impute
their actions to Deere. We need not reach this issue in light of our holding on the
relevance of the evidence.
''Deere urges that we abandon this minority position and join our sister circuits
who hold that such evidence is not admissible. See, e.g., Raymond v. Raymond Co.,
938 F.2d 1518, 1522-23 (1st Cir. 1991); Chase v. General Motors Corp. ,856F.2d 17,
22 (4th Cir. 1988); Gauthier v. AMF, Inc. , 788 F.2d 634, 637, amended, 805 F.2d 337
(9th Cir. 1986); Flaminio v. Honda Motor Co., 733 F.2d 463, 469 (7th Cir. 1984),
Grenada Steel Indus., Inc. v. Alabama Oxygen Co., 695 F.2d 883,888 (Sth Cir. 1983);
Hall v. American Steamship Co. , 688 F.2d 1062, 1066-67 (6th cir. 1982); Josephs v.
Harris Corp., 677 F.2d. 985, 990-91 (3d Cir. 1982); and Cann v. Ford Motor Co.,658
F.2d 54, 60 (2d Cir. 1981), cert. denied, 456 U.S. 960 (1982). A panel of this court is
without authority to modify the standard established in this circuit. United States v.
Lewellyn, 723 F.2d 615, 616 (8th Cir. 1983). Only the court en banc is empowered
to change an existing rule of law. Id. We note, however, that this case illustrates the
dangers inherent in our present approach and further note that it may indeed be wise
to revisit the issue en banc in a proper case.
16a.
Robbins v. Farmers Union Grain Terminal Ass'n, 552 F.2d 788,
793 (8th Cir. 1977). These cases hold that Rule 407 does not
apply in strict liability cases, where by definition, negligence is
not an issue. Kehm, 724 F.2d at 621. Thus, the existence and
substance of the decal program and the factory and field
modification programs are evidence of subsequent remedial
measures which are relevant to the strict liability issue. Lockley
v. Deere & Co.,933 F.2d 1378, 1386 & n.10(8th Cir. 1991). This
proof relates, however, only to the existence of a dangerous
defect in the product, and is not in any way relevant to the issue
of damages.
Here, the retrofit evidence was admitted as ostensibly relevant
to Deere’s state of mind relating to imposition of punitive
damages. Punitive damages cannot be awarded as a separate
theory of recovery. Under Iowa law, punitive damages are
merely incidental to the main cause of action and they are
derived from the underlying cause of action. Campbell v. Van
Roekel, 347 N.W.2d 406, 410 (Iowa 1984). In this case, as we
have indicated, the underlying cause of action was strict liability
in tort under section 402A of the Restatement. Accordingly,
with one exception,'? any evidence admissible on the issue of
punitive damages must also have been admissible under the
strict liability theory. Because any “bad conduct” by Deere for
which punitive damages might be assessed must have occurred
at or before the time Deere sold or attempted to retrofit the
combine with the warning decal, the evidence of post-retrofit
conduct was wholly irrelevant to the punitive damages issue.
We do not believe that the Iowa statute on punitive and
"The exception would be information on the wealth or net worth of the
defendant. This evidence is irrelevant to the issue of compensatory damages under
any theory advanced.
ee ed
17a.
exemplary damages, lowa Code § 668A. 1 (1987), changes this
analysis.'’ That statute creates a “civil reparations trust”. Seventy-
five percent of any punitive damages award is paid into this fund
if, in answer to a special interrogatory, the jury finds from the
properly admitted evidence that “the conduct of the defendant
from which the claim arose constituted willful and wanton
disregard for the rights and safety of another {other than the
claimant].” Section 668A. 1(a) (emphasis added). We find nothing
in the statute or its legislative history that provides a claimant
"'The statute, in effect at the time of this action, states:
668A.1 Punitive or exemplary damages.
1. In a trial of a claim involving the request for punitive or exemplary
damages, the court shall instruct the jury to answer special interrogatories or,
if there is no jury, shall make findings, indicating all of the following:
a. Whether the conduct of the defendant from which the claim arose
constituted willful and wanton disregard for the rights or safety of another.
b. Whether the conduct of the defendant was directed specifically at the
claimant, or at the person from which the claimant's claim is derived.
2. An award for punitive or exemplary damages shall not be made unless
the answer or finding pursuant to subsection 1, paragraph “a”, is affirmative. If
such answer or finding is affirmative, the jury, or court if there is no jury, shall
fix the amount of punitive or exemplary damages to be awarded, and such
damages shall be ordered paid as follows:
a. If the answer or finding purusant to subsection 1, paragraph “b”, is
affirmative, the full amount of the Punitive or exemplary damages awarded
shall be paid to the claimant.
b. If the answer or finding pursuant to subsection 1, paragraph “b”, is
negative, after payment of all applicable costs and fees, an amount not to exceed
twenty-five percent of the punitive or exemplary damages awarded may be
ordered paid to the claimant, with the remainder of the award to be ordered paid
into a civil reparations trust fund administered by the state court administrator.
Funds placed in the civil reparations trust shall be under the control and
supervision of the executive counsel, and shall be disbursed only for purposes
of indigent civil litigation programs or insurance assistance programs.
3. The mere allegation or assertion of a claim for punitive damages shall
not form the basis for discovery of the wealth or ability to respond in damages
on behalf of the party from whom punitive damages are claimed until such time
as the claimant has established that sufficient admissible evidence exists to
Support a prima facie case establishing the requirements of subsection l,
paragraph “a”.
lowa Code § 668A. 1 (1987).
4
a
18a.
seeking punitive damages a roving commission to offer evidence
of culpable conduct on the part of a defendant occurring
subsequent to the date of relinquishing control of the product in
a design defect case. '* Under the circumstances, we find that the
district court abused its discretion in admitting the bulk of the
evidence concerning subsequent remedial measures.'*
The dissent asserts that we have no basis for our observation
that “retrofit evidence was admitted as ostensibly relevant to
Deere’s state of mind relating to imposition of punitive damages.”
Infra at 42a. The dissent further cites the district court's statements
in rulings on post-trial motions for the proposition that all ” post-
sale and post-accident” conduct was received only for
impeachment purposes. Such contentions by the dissent are at
odds with the trial record.
Colloquy between counsel and the court concerning post-
accident injuries and post-accident retrofit activity, as related to
punitive damages, extends over more than 1,000 pages of the
record. And, as we have earlier stated, the cut-off time for such
evidence for punitive damages purposes should have been at the
time of sale or the time of the attempted decal retrofit.
On the first day of trial, Burke proposed evidence on post-
accident retrofit activities as proof of punitive damages. Transcript
at 26. On the second day of trial Burke proposed a series of post-
accident witnesses as proof of “willful and wanton conduct on
the part of Deere.” Transcript at 121. Discussion of Burke's
‘The improper admission and use of this evidence also caused undue prejudice
as it related to the erroneous imposition, as discussed infra, of liability under a theory
of negligent failure to recall.
'SOn remand, the district court may admit limited evidence of subsequent
remedial measures to show the existence of a defect. Evidence that relates to the
imposition of punitive damages--including the timing of subsequent measures,
numbers of machines retrofitted or not retrofitted, economics of field modification
program, machines in field, pipeline or not yet manufactured--should not be received.
if = :
19a.
mind” in support of punitive damages continued over almost the
entire time Burke offered evidence in his case-in-chief. Transcript
at 57,65, 73,81, 121, 122, 131, 141, 143, 148,269, 276, and 440.
Deere continuously objected to the admissibility of this evidence.
Transcript at 55, 129, 142, 144, 260, 271, 414, 440, 588, 641,
712, and 716. The district court overruled some of Deere’s
objections, Transcript at 58, 65, 81, 149, 173, and 338 and
reserved ruling on other objections, Transcript at 339, 589, 893,
and 1080, but permitted the jury to hear evidence on post-sale,
post-decal program and post-accident retrofit activities and
post-sale, post-decal program and post-accident injuries to third
parties. Transcript at 342-69, 881-82, and 916-17. On the fifth
day of trial, the district court stated:
Transcript at 1 192-93; and 1195. The district court then permitted
We then have the problem, if that is the situation of
punitive damages are going to be given, that we have to talk
about and make a ruling up or down on matters that have been,
for want of better designation, called alleged bad acts of Deere
after the day of the Burke injury which is November the 1 3th,
I believe, of 1984. ;
There's been a proffer of some things and some other
arguments about it and what it ought to be and so forth, and
the Court has been asking for and working with the lawyers
in this regard all week long, and I had my crew working on it,
and I’m persuaded now that it’s not a subsequent remedial
measure situation under 407, but it’s more like a 404(b)
question.
And as you all know, 404(b) says, in pertinent part, that
“other crimes, wrongs, or acts” -- "Evidence of other crimes,
wrongs, or acts is not admissible to prove the character of a
person in order to show that he acted in conformity therewith.
It may, however, be admissible for other purposes, such as
proof of motive, opportunity, intent, preparation, plan,
contention that this evidence was proof of Deere’s “state of
20a.
knowledge, identity, or absence or mistake or accident.
xx
Now, the situation kind of boils down to this: The critical
time in relation to Deere’s frame of mind is certainly at the
time of the accident of Burke. '* Engaging that frame of mind,
realizing it has to be in’84, the question is whether subsequent
conduct is properly admissible in helping the jury to determine
if Deere’s conduct at the time of Burke's injury was committed
with a willful or reckless disregard to the rights of another. .
. . But it's going to be the ruling of the Court, I believe,
although as I said I’m going to hear you out at 10 after 1:00,
that the matter of later bad acts of Deere after the Burke injury
will be allowed to be present. J to the jury after the jury is told
that the critical time is Deere’s frame of mind at the time of the
accident of Burke but that in order to gauge that they may
consider some subsequent conduct.
testimony on other post-sale, post-decal program and post-
accident activities and injuries. Transcript at 1218-20, 1230-36,
and 1559-70.
Thus, post-accident evidence of incidents of retrofit and
injury occurring as late as 1990, some incidents involving
combines purchased after prior use,'’ was indeed received as
substantive proof of Deere’s state of mind as it related to punitive
damages. There is no indication whatsoever in the record that
this evidence was admittted for impeachment purposes only.'*
‘This was an erroneous conclusion. As we have stated, with no duty in Iowa to
recall orto recall and retrofit, under a section 402A theory, the critical time was no later
than the Deere decal retrofit effort that occurred in early 1981.
"There are indications in the record, Transcript at 127, that one 1990 injury
offered in evidence occurred with a used combine upon which the original owner had
refused modifications.
_— a Se eee eee
Ti as
21a.
In fact, this evidence was received before Deere had the
opportunity to offer evidence of any kind. Thus, there were no
evidentiary presentations by Deere to be impeached at these
times in the trial. There was no limiting instruction that told the
jury that the “critical time [was] Deere’s frame of mind at the
time of the accident to Burke” as outlined by the court in its
ruling or that otherwise limited the use of this evidence by the
jury.
C. Jury Instruction 36--Duty to Retrofit
Because it was an issue which, in conjunction with improperly
admitted evidence and incorrect jury instructions, further
confused the issues in this case, we consider the duty, if any, in
lowa, to redesign and retrofit a product. Although such a duty
may exist in some jurisdictions, we find nothing to indicate that
an independent cause of action exists in Iowa under a duty to
redesign and/or retrofit.’
At trial Deere vehemently objected to Instruction 36, which
states:
Appellee’s Appendix at 43. Deere asserts that this instruction is
The legal basis for punitive damages is established in product
liability cases where the manufacturer is shown to have
knowledge that its product is inherently dangerous to persons
or property and that its continued use is likely to cause injury
or death, but nevertheless continues to market the product
without making timely feasible modifications to eliminate
"There was discussion at trial regarding whether impeachment might be an
alternative basis for admission of some of this evidence. Transcript at 888, 894. The
district court apparently abandoned this rationale in making the ruling quoted above.
‘In any event, no such theory of recovery was advanced by the pleadings in this
case.
22a.
the danger or make adequate disclosure and warning of such
danger.
not supported by Iowa law and that it effectively imposes a duty
to retrofit upon Deere.”
We agree that the instruction was erroneous under the
evidence in this case. As support for the instruction, Burke relies
on Fell, 457 N.W.2d at 919. We presume, for purposes of
discussion, that Instruction 36 reflects lowa law. However, the
language used in the instruction is only a portion of a larger
discussion mentioned by the lowa Supreme Court in its reference
to a definition of “willful and wanton” conduct “tailor[ed]” for
use in certain products liability cases by the Florida Appeals
Court. Jd. at 919 (citing Johns-Manville Sales Corp. v. Janssens,
463 So. 2d 242, 249 (Fla. Dist. Ct. App. 1984)).?! The fact that
the statement in Fell may be a proper reflection of Iowa law and
may be a proper instruction in the particular products case does
Burke asserts that this objection was not properly preserved for appeal. At the
instruction conference, counsel for Deere stated, “we object to 36 on the ground that
it isnot a statement of duty.” He also stated “[i]t’'s a portion of a Supreme Court opinion
dealing with other issues” and further that “it's dicta.” Transcript at 2409. We find that
this objection sufficiently preserved the issue for appeal.
2'That case, Johns-Manville Sales Corp. v. Janssens, was an asbestos case in
which the evidence established forty years of affirmative suppression of information
on the health hazards accompanying the use of asbestos. /d. This affirmative action
extended for a period of time both pre-dating and post-dating the period of asbestos
exposure alleged by Janssens. /d. at 250. The Florida appeals court said these post-
exposure acts were evidence of repetition and concealment of malicious, evil-
intentioned, reckless and wanton conduct occurring after Johns-Manville initially set
out tocover up the health hazards. /d. at256. This cover-up, as indicated, commenced
in the 1930's prior to Janssen’s exposure (and probably prior to the sale of the asbestos
in question). In Chrysler Corporation v. Wolmer,499 So. 2d 823,826 (Fla. 1986), the
Florida Supreme Court reviewed the exact language from Johns-Manville, used by
the district court in the present case in Instruction 36, and limited its use to asbestos
cases. Significantly, this resulted in the reversal of a punitive damages award against
Chrysler who was charged with having “actual knowledge” of an inherently dangerous
fuel system at the time it commenced the sale of Volare automobiles in 1976 and,
—
23a.
not establish that it should be given in every products case, or, in
this case. Fell flows against, rather than with, Burke’s punitive
damages claim. In that case, defendant Kewanee sold Fell’s
father-in-law a grain-handling elevator in which she became
entangled. Jd. at 913. The trial court granted Kewanee summary
judgment on the issue of punitive damages and the lowa Supreme
Court affirmed. Jd. at 920. While, as indicated, the lowa Supreme
Court noted the language used in Instruction 36 as part of a
definition of “willful and wanton” conduct, the Court pointed
out that there was no evidence to support the submission of a
punitive claim against Kewanee based upon such conduct. Id.
This was because there was no evidence that Kewanee knew of
any similar accidents when it sold the elevator. Jd. That is
essentially the situation here. Goranson, Burke’s employer,
purchased the Titan combine new in September of 1979.
Transcript at 1526. According toa trial stipulation, a one-person
hand-injury accident was reported to Deere in August of 1979.
Burke v. Deere & Co. 780F. Supp. at 1230-31. The Deere Safety
Committee received notice of and reviewed this accident in
September of 1979. Jd. Notice of the first two-person accident
was received by Deere on February 29, 1980. Id. Almost
immediately Deere again convened its Safety Committee and in
November of 1980, after two such two-person accidents had
been reported, Deere commenced its decal retrofit program. Id.
When accidents continued, Deere commenced the more extensive
retrofit which was being undertaken at the time of Burke's
accident. Jd. at 1233. Thus, Fell actually detracts from Burke's
specifically, of having such knowledge a month prior to the sale of the vehicle to the
plaintiff in that case. /d. The “willful and wanton” discussion in Fell, 457 N.W.2d at
19, was dictum because of the affirmance of nonsubmission of punitive damages.
Thus, we are not at all certain that the case establishes a rule of law for claims which
do not involve an ultra-hazardous product like asbestos.
24a.
contention that Instruction 36 was a proper statement of punitive
damages law applicable to this litigation under the evidence
adduced at trial. Surely a single, one-person accident occurring
a few days prior to the sale to Goranson is not sufficient evidence
of “willful and wanton conduct” toward Goranson or Burke, his
employee, to support the submission of punitive damages to the
jury. Indeed, Fell holds to the contrary.
In addition, although Instruction 36 is purportedly limited to
assessment of punitive damages, we find, in light of the evidence
and arguments made in this case, that the jury could easily have
viewed the instruction as an invitation to impose liability for
failure to retrofit or recall.” We repeat, we find no independent
duty to retrofit or recall under Iowa law, and Burke did not raise
this claim in his pleadings. Moreover, continuing duties appear
to arise in Iowa only in the context of negligent failure to warn.
Even if this were a failure to warn case, this court has stated that
a duty to recall is not generally incorporated in a duty to warn.
Smith v. Firestone Tire & Rubber Co., 755 F.2d 129, 135 (8th
Cir. 1985). Accordingly, it was error to give Instruction 36.
The dissent contends that Instruction 36 is a proper statement of lowa law for
this case and argues that a reasonable jury could not squeeze “a duty to retrofit” from
its language. You need only look to the paraphrased instruction advanced by the
dissent, infra at 39a, to refute the dissent’s contention. Although Burke sustained an
injured hand and lost no appendages, the dissent’s amended instruction would inform
the jury that if Deere obtained knowledge, after its sale to Goranson, that other two-
person accidents had resulted in a loss of arms of users, and Deere continued to sell
the Titan combine to others without making satisfactory safety changes, Burke would
be entitled to recover punitive damages. A subsequent sale of a combine to another
person unrelated to the Burke accident had no substantive relevance whatever in this
products case unless offered in support of punitive liability under a duty running in
favor of Burke to fit and retrofit later sold combines. Thus, the inference that a jury
might draw from Instruction 36 is clear. While we do not seek to debate the propriety
of a policy creating a duty to retrofit, it is presently not the law of lowa ina section 402A
case and the existence of such a duty, should it live, was not placed in issue by the
pleadings in this matter.
25a.
D. Sufficiency of Evidence to Support Punitive Damages
In reviewing the sufficiency of evidence in a diversity case,
we apply state law. See, e.g., American Home Assurance Co. v.
Major Tool & Machine, Inc., 767 F.2d 446, 447 (8th Cir. 1985).
Under Iowa law, we consider the evidence in the light most
favorable to the plaintiff. Larson v. Great West Casualty Co.,
482 N.W.2d 170, 173 (lowa App. 1992). The sufficiency of
plaintiff's evidence to generate a submissible jury issue is a
question of law. Jd. A reviewing court is not bound by the trial
court's conclusions. Jd. Neither are we to afford deference to the
district court's interpretation of a state’s law. Salve Regina
College v. Russell, 111 S. Ct. 1217, 1221 (1991).
In making this determination, we again note that there is no
separate cause of action for punitive damages under Iowa law
and, therefore, the conduct for which punitive damages are
assessed must have occurred at or prior to the time Deere
surrendered control of the combine to Goranson. See Campbell,
347 N.W.2d at 410. Only evidence which is relevant to the
conduct for which liability is imposed can support an award of
punitive damages.
This court is familiar with litigation involving the John
Deere Titan series combine. See Christopherson v. Deere & Co.,
941 F.2d 692 (8th Cir. 1991) and Lockley, 933 F.2d 1378. We
have reviewed the transcript of the Lockley trial and we are
convinced the the evidence in this case similarly does not support
submission of the issue of punitive damages to the jury.” Accord
2*The dissent, infra at 36an.4, purports to detect a “distaste for punitive damages
generally” on the part of the court. It is more likely that it detects a touch of incredulity
at a 50 million dollar punitive award to a plaintiff found guilty of forty percent
contributory fault against a defendant carrying out a second safety retrofit to remedy
an open and obvious danger admittedly recognized by the plaintiff prior to the
accident.
26a.
Lockley, 933 F.2d at 1390. See also Wheeler v. John Deere Co.,
862 F.2d 1404 (10th cir. 1988) (Wheeler I); Melton v. Deere &
Co., 887 F.2d 1241 (Sth Cir. 1989); and Wheeler v. John Deere
Co., 935 F.2d 1090 (10th Cir. 1991) (Wheeler II) (product
liability cases involving the John Deere Titan Series combine,
none of which involved an award of punitive damages).
Toaward punitive damages, a jury must find that the conduct
from which the claim arose constituted willful and wanton
disregard for the rights or safety of another. lowa Code §
668A. 1(1) (a). Conduct is willful and wanton when the actor has
intentionally done an act of an unreasonable character in disregard
of a known or obvious risk that was so great as to make it highly
probable that harm would foliow. Larson, 482 N.W.2d at 174.
An award of punitive damages is not appropriate when room
exists for reasonable disagreement over the relative risks and
utilities of the conduct at issue. Id. ; see also Kehm, 724 F.2d at
623 (applying Iowa law). An award of punitive damages is
particularly inappropriate where the risk defendant allegedly
disregarded could reasonably have been perceived as slight.
Larson, 482 N.W.2d at 175. Applying those principles to this
case, we find no evidence of any conduct so egregious as to
support an award of punitive damages. Accordingly, we find
that the district court erred in submitting the issue of punitive
damages to the jury.
In Lockley, another case involving the same model of Titan
combine, we held as a matter of law that the evidence, which is
substantially the same evidence as that presented in this case,
was “not sufficient to show Deere acted pursuant to a calculated
decision that it would likely be cheaper to be sued and pay
compensatory damages to persons injured by the Titan series
combines it manufactured than to take effective steps to remedy
ee
27a.
the problem.”* Lockley, 933 F.2d at 1390. We acknowledged
that “such a showing would have warranted a punitive damages
award.” Id.
The district court, in its order denying Deere’s motion for
judgment notwithstanding the verdict or new trial on the punitive
damages issue, relied on evidence “presented at trial [which]
raised a question for the jury as to whether or not this delay [in
modification] was motivated by a savings to Deere of
approximately $2,700,000.” and speculated on its own that “[a]
delay in selling the 3,100 pipeline machines, for the purpose of
modifying them, would surely have cost Deere a great deal of
money.”** Burke, 780 F. Supp. at 1241. The conduct on which
the district court relied to justify its submission of the punitive
damages issue to the jury occurred after the date of the decal
retrofit program, related to knowledge acquired after this date,
and is therefore irrelevant to the punitive damages issue.
Even if the evidence were relevant to the underlying claim,
this scant evidence of an incidental economic benefit or monetary
savings simply does not amount to the type of “calculated
decision-making” required to justify an award of punitive
damages. Specifically, there is noevidence that Deere considered
and rejected a more costly field modification program when it
**Much was made of the fact that this case involved evidence of “3100 of the
pipeline machines” --that is, machines in the distribution pipeline after the date of
factory design change which were sold without the modification-- which related to the
issue of punitive damages and was allegedly not presented in other Titan combine
cases. At oral argument, counsel for Deere stated, without refutation, that the pipeline
combine evidence was considered in Lockley. Moreover, at the hearing on post-trial
motions in the present case, counsel for plaintiff conceded that evidence of the 3100
pipeline machines was indeed presented in Lockley. Transcript of motion hearing at
141 (June 27, 1991).
**We note that the combine which injured Burke was not a “pipeline” machine,
so this is irrelevant.
|
&
cnn
28a.
decided to implement the decal program at a cost of $8300 two
years after the sale at issue in this case. The fact that a manufacturer
undertakes a less costly alternative to remedy a perceived
problem before moving toa more expensive recall program does
not amount to willful or wanton conduct in disregard of the
rights and safety of others. There was no showing that Deere had
any reason to believe that the decal program would not adequately
solve the problem. We find no evidence of any calculated
decision by Deere which would rise to the level of egregious
willful, wanton conduct. Punitive damages are not awarded for
conduct which is merely objectionable. Larson, 482 N.W.2d at
175. We thus find that evidence on the timeliness of Deere’s
response to accident reports is irrelevant, and even if it were
relevant, it is not sufficient to justify punitive damages under
Iowa law. Accord Lockley, 933 F.2d at 1390.
E. Verdict Form
Moreover, even if a punitive damages instruction were
warranted, the verdict form, in combination with an improper
closing argument by Burke, rendered the punitive damages
award fatally defective. The jury in this case was provided with
a verdict form which told them “if your answer to [a question
regarding whether the conduct was directed at plaintiff] is no, a
portion of the punitive damage award to be fixed by the court
“Because we find that an instruction on punitive damages cannot be supported
in this case, ve need not reach the issue of whether or not the Iowa punitive damage
statute meets the due process requirements set forth in Pacific Mut. Life Ins. Co. v.
Haslip, 111 S. Ct. 1032 (1991), except to note, in passing, that this may be the sort of
verdict that the Supreme Court had in mind when it referred to “extreme results that
jar one’s constitutional sensibilities.” Jd. at 1043. We further express concern that the
trust fund component of the Iowa statute may implicate questions of standing and
justiciability as well as constitutional issues of due process and excessive fines, but
again, we need not reach the issue.
29a.
will be paid into a civil trust fund administered by this court.””’
Deere objected to this statement as an improper indication to the
jury of the effect of their finding and as an appeal to their
charitable instincts.
Under Iowa law, it is wholly unnecessary and generally
improper for the jury to be informed of the effect of specific
findings on special interrogatories. Poyzer v. McGraw, 360
N.W.2d 748, 753 (Iowa 1985). It is also improper for counsel to
direct the jury's attention to the impact of any specific findings.
Id. In many cases, such an instruction would constitute merely
harmless error, but in this case, in light of the other errors, it does
not.
In closing argument, counsel for Burke argued that seventy-
five percent of the punitive damages award “will go into a civil
trust fund to help prevent this sort of thing ina different way” and
that “75 percent will go into a special fund, a special trust fund,
to be administered by the courts for others than Burke.” Transcript
at 2474 and 2450. Burke's counsel also mentioned the jury’s
“relatives, sons and fathers and people going out to do the work
this machine--unsuspecting, see, that are yet to be, the tragedies
that are yet to be.” Transcript at 2476. This is clearly the type of
improper “golden rule” argument which is not allowed under
Iowa law. Russell v. Chicago, R. I. & P. R Co.,86N.W.2d 843,
848 (lowa 1957). In light of the evidence admitted in this case on
other accidents, all of which involved injuries more serious than
Burke's, and the improper argument by plaintiff's counsel, we
are compelled to find that Deere was prejudiced. Also, the size
”’The statement that the district court would adminster the fund is clearly a
misstatement and is not authorized by the Iowa statute. This error is not of tremendous
import to this decision, except that it buttresses Deere’s contention that the jury likely
feit it was creating an injury fund to be administered by the district court for the benefit
of victims of other accidents involving farm implements, possibly including the
amputees the jury had seen testify in the case.
30a.
of the verdict leads us to conclude that the jury indeed sought to
create some sort of injury fund or to improperly engage in a
social reallocation of resources for the benefit of parties not
properly before the court.
Ill. CONCLUSION
For the reasons set forth above, we find that the compensatory
award cannot stand. The verdict has been tainted by the improper
admission of evidence and the submission of erroneous legal
theories to the jury. Although the dissent agrees that the punitive
award must be reversed, it would preserve the compensatory
award and remand for retrial upon only that issue. Such an
approach violates the holding in Gasoline Products Co. v.
Champlin Refining Co.,283 U.S. 494,500 (1931). Uponremand,
retrial on less than all the issues is permissible but only if the
issue remanded is “so distinct and separable from the others [in
the trial] that a [new] trial of it alone may be had without
injustice.” Jd. Thus, even if we agreed that the evidence supports
submission of the case on the question of punitive damages,
which we do not, a retrial to a new jury on that issue alone would
be improper because the issues underlying compensatory and
punitive awards are inextricably intertwined. See, e.g., Pacific
Mut. Life Ins. Co. v. Haslip, 111 S. Ct. 1032 (1991); TXO
Production Corp. v. Alliance Resources Corp., 61 U.S.L.W.
4766 (U.S. June 25, 1993). The law is also squarely against
letting a contested compensatory award stand when punitive
damages are set aside, as here. Burke offered evidence on
Deere’s net worth and wealth in its quest for a large punitive
award. Transcript at 1252-53. Such evidence is totally irrelevant
to the issue of compensatory damages. “A jury may not consider
a defendant's wealth in setting compensatory damages. It is
3 la.
“improper, irrelevant, prejudicial, and clearly beyond the legally
established boundaries.” ‘” Feld v. Merriam and Wynne, Inc.,
485 A.2d 742, 748 (Pa. 1984) (internal citations omitted); see
also Adams v. Murakami, 813 P.2d 1348, 1358 (Cal. 1991)
(stating evidence of wealth may improperly taint the jury's
decision). In lowa, evidence of a defendant's wealth is admissible
only where the evidence supports exemplary damages. Hall v.
Montgomery Ward & Co.,252 N.W.2d 421,424 (lowa 1977).A
Jarge compensatory award premised on limited evidence can, in
some cases, raise the question whether the jury was improperly
influenced on compensatory damages by the magnitude of the
wealth of the defendant. /d. at 426. It is prejudicial for a plaintiff
to improperly introduce the question of wealth into the trial of a
case involving only compensatory damages. See, e.g., Trapalis
v. Gershun, 145 N.W.2d 591, 596 (Iowa 1966). There was no
instruction at the trial that told the jury to disregard Deere’s
wealth in setting the amount, if any, of compensatory damages.
We remand Burke's claim to the district court for a new trial
on the issues of liability, causation and damages. We also reverse
the award of punitive damages with directions to the district
court to dismiss Burke's punitive damages claim.
HEANEY, Senior Circuit Judge, dissenting.
I respectfully dissent. The majority has advanced no valid
reason to justify setting aside the verdict for compensatory
damages and disclosed no sound reason for holding that this
record could not justify a properly instructed jury in awarding
punitive damages.
I agree that the punitive damage award must be reversed, but
only because plaintiff's counsel intimated in his closing argument
that other victims of the defective combine would share in the
award. This error, combined with the instruction informing the
jury that seventy-five percent of the award would be placed in a
32a.
trust fund to be administered by the district court, may well have
misled the jury, causing it to award more in punitive damages
than it otherwise would have awarded without the improper
argument and unnecessary instruction.' Thus I would remand to
the district court with instructions to retry the punitive damages
issue.”
I. Compensatory Damages
I turn first to the decision of the panel majority to set aside
the compensatory damage award of $650,000, reduced by the
district court to $390,000 to reflect the jury's verdict that the
plaintiff was forty percent at fault for his injuries. I have read and
'The district court erroneously informed the jury in Question No. 3 of the Special
Interrogatories on Punitive Damages that “a portion of the punitive damage award to
be fixed by the court will be paid into a civil trust fund administered by this court” if
the jury found the conduct of Deere not directed specifically at Burke. lowa Code §
668A. 1 provides that at least seventy-five percent of such an award “be ordered paid
into a civil reparations trust fund administered by the state court administrator.”
Although I do not find the present case an appropriate opportunity to resolve the
question whether Iowa juries should ever be informed of the destination of such funds,
I do think the erroneous information provided in the present case, along with the
argument of counsel, proved prejudicial.
?The majority argues that remand for retrial of the punitive damages issue alone
would be impermissible, citing Gasoline Products Co., Inc. v. Champlin Refining Co.,
283 U.S. 494 (1931). The Gasoline Products Court did not prohibit such a practice.
It stated specifically that the Seventh Amendment does “not require that an issue once
correctly determined, in accordance with the constitutional command, be tried a
second time, even though justice demands that another distinct issue, because
erroneously determined, must again be passed on by a jury.” Jd. at 498. The
admonition of the Supreme Court was not to resort to partial remand except in cases
in which “the issue to be retried is so distinct and separable from the others that retrial
of it alone may be had without injustice.” Id. at 500. That is precisely the situation we
have in this products liability case based on strict liability. The jury already has
properly decided - as have the juries in the other cases involving this combine - that
the Deere combine at issue was defective and unreasonably dangerous as designed,
manufactured, and sold by Deere. Whether Deere acted with willful and wanton
disregard of the rights or safety of another is distinct from the existence of the defect,
rather, it concerns Deere’s knowledge or awareness of that defect and its actions or
inactions in consideration of that knowledge. It is an issue that is entirely separable
33a.
reread the majority opinion with respect to the compensatory
damage award. The majority's only specific objection to this
award is that Jury Instruction No. 14 does not correctly reflect
Iowa law. The majority errs in this regard.
Jury Instruction No. 14 provided the following:
It is undisputed that there was no warning by the lower
cleanout door at the time of the accident. There was a caution
decal above the toolbox, which is a few feet away from the
lower cleanout door.
Where an adequate warning or direction is given, the
seller may reasonably assume that it will be read and heeded.
A product bearing a caution or direction, which is safe for use
if the caution is followed, is not in a defective condition, nor
is it unreasonably dangerous.
It is admitted that when made and sold, the combine had
no caution decal on the auger housing. If you find a warning
was necessary and find that the caution decal over the toolbox
was inadequate, either because of its placement or its wording,
or that the danger of severe injury at the lower cleanout door
was so great that no such caution decal would cure the danger
or that the caution could not be followed, then you may find
that the product was defective and unreasonably dangerous.
If you do not so find, then you may find that the product was
not defective or unreasonably dangerous.
Attrial, Deere objected to the third paragraph of this instruction,
then without the last sentence, as “surplusage” and as commenting
on evidence favorable to the plaintiff. Tr. at 2378. On appeal,
Deere repeats its trial objection and argues further that the
instruction failed to instruct on an open and obvious danger
defense and that it confuses two theories of recovery: “Because
from the question whether the product was defective and unreasonably dangerous.
Thus, retrial on the issue of punitive damages alone may easily be had in this case
without injustice.
34a.
the failure to warn claim was submitted with the defective design
theory, it is not possible to determine on which basis the jury
found Deere liable.” Appellant's Brief at 44.
Deere misses the dispositive Iowa law on this point. Under
Iowa strict liability law, “a product, although faultlessly made,
may nevertheless be deemed defective so as to subject the
manufacturer to strict liability if it is unreasonably dangerous to
place the product in the hands of a user without a suitable
warning.” LaCoste v. Ford Motor Co., 322 N.W.2d 898, 900
(lowa Ct. App. 1982) (per curiam). Inadequate warning may in
fact be the product defect under Iowa law, it need not be a
separate cause of action.
Deere further misleads the court by arguing that the instruction
should have included the defense that the danger of an auger is
open and obvious. The majority also appears to subscribe to this
position. Both miss the point: The Deere combine was not
unreasonably dangerous because it utilized an auger; it was
unreasonably dangerous because of the “alarming propensity
for misuse . .. in the absence of a proper warning.” LaCoste, 322
N.W.2d at 901. That alarming propensity for misuse in the two-
person accident that occurred here is not open and obvious, and
itis ludicrous for Deere to suggest it was: Indeed, if that alarming
propensity for misuse were open and obvious to Deere, it should
have corrected it forthwith. The score of accidents occurring on
this same combine in nearly identical circumstances proves that
unreasonably dangerous defect.’
*The majority does not dispute that inadequate warning may render a product
defective and unreasonably dangerous under Iowa law. It responds only that this “was
not Burke's theory.” Supra note 7. Burke's “theory” was strict liability in tort for the
design, manufacture, and sale of a defective and unreasonably dangerous product.
Iowa law allows him to recover for his injuries caused by that product, and Instruction
No. 14 quite correctly reflects that law.
35a.
The majority further errs when it concludes that "[t)his
instruction permitted the jury to find that the product was
defective and unreasonably dangerous by reason of inadequate
decal warning alone.” Supraat 10a. Asnoted above, an inadequate
warning may indeed render a product defective and unreasonably
dangerous, but the jury in this case first had to find that the
“warning was necessary” because of the inherent danger of the
product. Only after it found that a suitable warning was necessary
could it find Deere’s decal inadequate - and only then could it
find the combine defective.
The majority also finds that Instruction 14 did not give the
jury any option to consider additional matters such as all the
warnings given to Burke and his general knowledge and
experience. Supra at lla. The jury was, however, properly
instructed to consider assumption of risk, comparative fault,
Burke’s awareness of the danger of the product, proximate
cause, and warnings disregarded by Burke. See Jury Instructions
Nos. 12, 19, 24, 25, 26, and 27. When reviewing the charge to a
jury, “[aJll instructions must be read and construed together, not
piecemeal or in artificial isolation.” Sanders v. Ghrist, 421
N.W.2d 520 (lowa 1988); accord Grogan v. Garner, 806 F.2d
829, 836 (8th Cir. 1986). I believe that the instructions as a whole
fairly and adequately presented the substantive Iowa law in this
case and were neither misleading nor confusing. The jury's
compensatory award reflects its own apt understanding of the
case. It found Burke forty percent responsible for his injuries,
and there has been no suggestion that the award was excessive.
Ina final, conclusory effort to strengthen its argument with
respect to the reversal of the compensatory damage award, the
majority states that the compensatory verdict was “tainted by the
improper admission of evidence and the submission of erroneous
legal theories to the jury.” Supra at 30a. Itis difficult to respond
36a.
to such a generalized allegation except to point to its lack of
substance and to reiterate that there was no confusion about
evidence or legal theories in the district court during this trial.
This case was the second time that the same product, injury, and
issues have been tried before the same judge and with
representation by the same lawyers. True, the plaintiff and the
jury are different, but this jury was not naive: it had the benefit
not only of very well versed counsel and court, but even took a
trip to the field to study this combine up close and ask questions.
I would add that the majority’s opinion extends an open
invitation to Burke to amend his case on remand to include
theories of recovery under negligence, and what was once rather
a simple case on compensatory damages couid evolve into
something a good deal more complicated, but with the end result
likely being about the same as it was here.
II. Punitive Damages
The panel majority finds several reasons to set aside the
punitive damage award: It finds error in a jury instruction,
prejudice in several evidentiary rulings, impropriety in closing
argument, and insufficient evidence to support any such award
in the first place.‘ I believe all but one of the majority's findings
are without merit. As I stated above, I would remand to the
‘The majority's opinion appears to manifest a distaste for punitive damages
generally. I note for the record that such awards, firmly rooted in our common law
for well overa century, are perfectly proper in an appropriate case and offend neither
Iowa law nor the United States Constitution. See, e.g., TXO Production Corp. v.
Alliance Resources Corp., US. (1993). Recent empirical study,
moreover, has debunked the mythology of “skyrocketing awards,” “runaway
juries,” and “competitive disadvantage” too often erroneously associated with such
awards. See, e.g., Michael Rustad, In Defense of Punitive Damages in Products
Liability: Testing Tort Anecdotes with Empirical Data, 78 lowa L.R. 1 (1992).
37a.
district court for a retrial on the punitive damage award because
Ithink counsel's closing argument and the unnecessary instruction
from the district court may have prejudicially affected the
award. To deny Burke any opportunity to submit the punitive
damages issue to the jury is to ignore Iowa punitive damage law,
which is fully consistent with decisions of the United States
Supreme Court.
A. Jury Instruction No. 36
The majority's analysis unfortunately goes awry because of
considerable confusion about Jury Instruction No. 36 and the
applicable Iowa law. Instruction 36 provided that
[t]he legal basis for punitive damages is established in product
liability cases where the manufacturer is shown to have
knowledge that its product is inherently dangerous to persons
or property and that its continued use is likely to cause injury
or death, but nevertheless continues to market the product
without making timely feasible modifications to eliminate
the danger or make adequate disclosure and warning of such
danger.
With the exception of the word “timely,” this instruction is a
verbatim quote from Fell v. Kewanee Farm Equip. Co., 457
N.W.2d 911,919 (Iowa 1990) (en banc). The Fell court quoted
this language with approval as a proper definition of “willful and
wanton disregard for the rights or safety of another” in the
context of products liability cases. Jd. The majority, presumably
applying Iowa law, now concludes that the Iowa Supreme
Court, sitting en banc, should have narrowed its analysis.
Deere objected to this instruction at trial because "it is not a
statement of duty”; because “it was some dicta, quoting from
other treatises”; because there was insufficient evidence for its
38a.
submission; and because “[i]t’s argumentative and it suggests a
plaintiff's theory.” Tr. at 2409-11. Deere’s new and improved
argument on appeal is that Instruction 36 “miscomprehends and
misapplies language from Fell.” Appellant's Brief at 33. Finally,
at oral argument, the objection was further transformed to state
that Instruction 36 erroneously creates a “duty to retrofit” in
Iowa law.°
The majority, declining to choose an objection, states only
that "[w]e agree that the instruction was erroneous under the
evidence in this case.” Supra at 22a. The majority's analysis
misstates the holding from Fell to conclude that this case, like
Fell, is one in which the evidence was insufficient to present a
punitive damages question to the jury. The Fell court was
explicit about why the evidence was insufficient in that case:
This is not a case in which [the manufacturer] knew that
people were being injured by exposed gears and ignored this
knowledge for economic reasons. To the contrary, the evidence
shows that [the manufacturer] manufactured and sold
thousands of these elevators without a similar accident
occurring. Simply put, risk of injury from exposed beveled
gears on the elevators was not so great as to make it highly
probable that an injury would occur.
*The majority finds that the issue of a duty to retrofit was sufficiently preserved
for appeal. Supra at 22a n.20. The majority ignores the applicable federal rule: “No
party may assign as error the giving or the failure to give an instruction unless that
party objects thereto before the jury retires to consider its verdict, stating distinctly
the matter objected to and the grounds of the objection.” Fed. R. Civ. P. 51 (emphasis
added); accord Board of Water Works Trustees v. Alvord, Burdick & Howson, 706
F.2d 820, 824 (8th Cir. 1983). Further, “[a] party may not state one ground when
objecting to an instruction and attempt to rely on a different ground for the objection
on appeal or on a motion for a new trial.” 9 Charles A. Wright and Arthur R. Miller,
Federal Practice and Procedure § 2554 (1971); accord Siegfried v. Kansas City Star
Co.,298 F.2d 1, 7 (8th Cir.) (“It is apparent that the objection now raised is somewhat
different from that raised in the trial court, and hence the criticism of the instructions
now made is not properly before us for consideration.”), cert. denied, 369 U.S. 819
(1962).
39a.
Fell at 920. In the instant case, the risk of injury from the
combine defect was sufficiently great to make it highly probable
that injuries would occur; at least twenty-six injury-producing
accidents did occur, most of which were nearly identical to
Burke's; and there is evidence that Deere knew of the defect and
the injuries, but put off a costly retrofit program until the
accident reports became increasingly common. Therefore, I
conclude that under Iowa law, the district court did not err in
sending the question of punitive damages to the jury with
Instruction No. 36.
The majority also concludes that “although Instruction 36 is
purportedly limited to assessment of punitive damages, we find
... that the jury could easily have viewed the instruction as an
invitation to impose liability for failure to retrofit or recall.” Id.
at 24a. Although not entirely clear, this may be what the majority
refers to in its vague discussion of “erroneous legal theories”
alluded to above in my discussion of compensatory damages. I
cannot agree with the majority’s conclusion. First, the instruction
unambiguously states that it concerns the legal basis for punitive
damages. Second, the Supreme Court of Iowa does not imply a
“duty to retrofit” in the language used; nor do I see how a
reasonable jury could squeeze such a meaning from the
straightforward language. Rather, it allows a jury to find willful
and wanton disregard for the rights and safety of another if a
manufacturer continues to sell a product it knows to be dangerous
without making appropriate feasible modifications or adequate
warnings. The same instruction could have been worded
differently in this case without changing its meaning:
The legal basis for punitive damages is established in this case
if Deere is shown to have knowledge that its combine is
removing farmers’ arms and that its continued use is likely to
continue to remove farmers’ arms, but nevertheless continues
40a.
to sell the combine without making feasible changes to
eliminate the danger of limb removal or at least adequate!ly
warning farmers of the danger.
I agree with the lowa Supreme Court that such an instruction
fairly defines “willful and wanton disregard for the rights or
safety of another” in the context of products liability.° I find no
error in the instruction.
B. Sufficiency of Evidence
The majority's theory of this case concludes that the focal
point of the defective product inquiry is not the time of sale, but
after the caution decal was affixed to the combine. Deere not
only does not raise this issue, but vigorously argues that the focal
point of the defective product inquiry must be the time of sale.
Deere’s position is understandable, for by moving up the focal
point of the defect inquiry to sometime after the implementation
of the decal program, the majority also moves up the threshold
of the punitive damages analysis (under its own restrictive
theory) to a time when Deere had greater knowledge of the
danger of its product and specific notice that the product was
removing body parts from unwary farmers in the field.
*The lowa Supreme Court's approval of awarding punitive damages in cases
described by the language in Fell is not unique. The Alaska Supreme Court, as one
example on point, has held the same:
We also reject the argument that punitive damages have no place in a strict liability
case .... Where . . . plaintiff is able to plead and prove that the manufacturer knew
that its product was defectively designed and that injuries and deaths had resulted
from the design defect, but continued to market the product in reckless disregard of
the public’s safety, punitive damages may be awarded.
Sturm, Ruger & Co. Inc. v. Day, 594 P.2d 38, 46-47 (Alaska 1979) (citing numerous
cases from other jurisdictions), modified on other grounds, 615 P.2d 621 (Alaska
1980), cert. denied, 454 U.S. 894 (1981).
4la.
Thus, even if one accepts the majority's ruling that all
evidence admissible to prove willful and wanton conduct by |
Deere must have occurred at or before surrendering control of
the combine - and I do not accept that unsupported ruling - then
a submissible jury question on punitive damages still is presented
by the evidence.
Deere did not mail the caution decal at issue to prior
purchasers of the combine until April 1981. But Deere had
notice of the first accident occurring with this combine in
August 1979. It received another accident notification in February
1980, another in September 1980, and yet another in December
1980. Deere’s Product Safety Committee had suggested a caution
decal at a meeting as early as September 1979, and it
recommended that the Design Division review the combine for
possible changes in April 1980. Despite the timely suggestions
of the Product Safety Committee, Deere management dragged
its feet until accident reports became increasingly common. And
even then, a year after design modifications were first suggested,
the decision was made to mail out an inadequate and ineffective
caution decal. Evidence also was introduced that Deere held a
clinic for custom combiners in March 1981 in Wichita, Kansas,
in which it overlooked informing the clinic participants of the
danger of the combine design or of the accident reports.
A submissible jury issue for the question whether punitive
damages should be awarded under Iowa law need only raise a
material question of fact regarding whether Deere had knowledge
that its combine was causing serious injuries and that its continued
use was likely to continue to cause injuries, but nevertheless
continued to market the combine without making feasible
changes to eliminate the danger or at least adequately warning
of the danger. Accord Fell, 457 N.W.2d at 919. All the evidence
outlined above would be admissible even under the majority’s
42a.
overly restrictive theory of punitive damages under strict liability.
I believe it is sufficient evidence to send that issue to the jury in
this case. I would remand to the district court with directions to
submit that question toa jury with appropriate and unambiguous
instructions.
III. Evidentiary Issues
Concerning the admissibility of contested evidence, the
majority correctly rules that evidence of other substantially
similar accidents and evidence of subsequent remedial measures
was admissible in this case. Indeed, it will again be admissible
on retrial. Despite this concession, the majority finds the evidence
was nonetheless prejudicial because it was not used correctly:
again, the majority errs.
The majority finds an abuse of discretion in the district
court's admission of evidence of subsequent remedial measures,
because “the retrofit evidence was admitted as ostensibly relevant
to Deere’s state of mind relating to irnposition of punitive
damages.” Supra at 18a. I cannot agree. The district court's
ruling on the post-trial motions expressly states that post-sale
conduct by Deere, over and above that necessary to show the
existence of a dangerous defect, was admitted for the limited
purpose of impeaching Deere’s testimony that it had taken all
reasonable steps to rectify the dangerous situation presented by
the combine. Burke v. Deere & Co.,780F. Supp. 1225, 1245-47
(S.D. Iowa 1991). The district court even takes the trouble to
repeat itself: “As previously mentioned, the court did not allow
evidence for Deere’s post-sale and post-accident conduct to
demonstrate Deere’s state of mind.” Jd. at 1256. The majority's
contrary finding seems to challenge the integrity of the district
court in a manner I cannot accept.
= |
43a.
The majority also rutes that because Deere was willing to
stipulate to notice of other accidents and the feasibility of
subsequent design changes, the evidence of other accidents
occurring under substantially similar circumstances could not
properly be admitted to prove these issues. Supra at 14a. The
majority, however, provides no authority for the proposition
that the admissibility of evidence is diminished because the
opposing party offers to stipulate to issues for which such
evidence might be admitted. I believe the appropriate analysis
for the admission of such evidence is whether the court abused
its discretion - a finding the majority cannot make because there
was no abuse. There were twenty-two accidents that occurred
under substantially similar circumstances before Burke’s own
injury. Notwithstanding, the district court exercised sound
discretion and allowed the live testimony of only five victims of
those accidents.
The majority also states that evidence of these other accidents
was used in the submission of the punitive damages question to
the jury, and that the use of this evidence served to enhance the
award of punitive damages. As I stated above, I believe there
was error regarding counsel's closing argument intimation that
part of the award of punitive damages would serve to compensate
similarly situated victims. The error, however, was the ambiguous
and misleading statement of counsel - not the properly admitted
evidence of other similar accidents.
IV. Conclusion
Accordingly, I would reverse the award of punitive damages
and remand for a new determination of how much, if any, those
damages should be. I must, however, dissent from the holding
of the panel majority that today works an injustice by throwing
44a.
out the baby with the bath water - neediessly reversing the entire
trial below on suspect grounds, and erroneously redefining the
parameters of Iowa products liability law.
A true copy.
Attest:
CLERK, U. S. COURT OF APPEALS,
EIGHTH CIRCUIT
45a.
United States Court of Appeals
FOR THE EIGHTH CIRCUIT
No. 92-1990SICB
Clair W. Burke,
Appellee,
| Order Denying Petition for
| Rehearing and Suggestion
Deere & Company, a/k/a | for Rehearing En Banc
John Deere Company, a |
Delaware corporation,
Appellant. |
VS
The suggestion for rehearing en banc is denied. Judge
McMillian would grant the suggestion for rehearing en banc.
The petition for rehearing is also denied.
September 22, 1993
Order Entered at the Direction of the Court:
. a GC’ Av
\Ndeed ¢.Q
Clerk, U.S. Court of Appeals, Eighth Circuit
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.