Opposition Brief — Hogner v. Strenke (No. 05-1026)

a Se

(2) wriha>

No. 05-1026 MAY 18 Wits

— Term om |

3u The

Supreme Court of the Anited States

e»

vv

LEVI HOGNER,

Petitioner,

V.

LEROY M. STRENKE and

JUANITA M. S1.2ENKE,

Respondents.

&

4

On Petition For Writ Of Certiorari

To The State Of Wisconsin

Court Of Appeals

é&

a4

BRIEF IN OPPOSITION

¢

MARK S. YOUNG

Counsel of Record

HABUSH HABUSH & ROTTIER S.C.

777 East Wisconsin Avenue

Milwaukee, WI 53202

(414) 271-0900

Counsel for Respondents

COCKLE LAW BRIEF PRINTING CO. (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTION PRESENTED

Respondents object to Petitioner’s statement of the

question presented on the grounds that it is argumenta-

tive. The question presented for review, more properly

stated, is:

Whether the Wisconsin Court of Appeals properly

determined that the punitive damage award of $225,000

did not violate the protections afforded by the Due Process

Clause of the Fourteenth Amendment of the United States

Constitution.

TABLE OF CONTENTS

Page

Ee Bg, | 1

TABLE OF AUTHORITIES ...............ccssccesessssssereeeeseees iii

STATEMENT ON JURISDICTION....000... ce eceeeeeeeeeeeee 1

STATEMENT OF THE CASE.................:ccssssceseesssecessees 1

ARGUMENT FOR DENYING THE PETITION .......... 3

I. The Wisconsin Court of Appeals Did Not

Dismiss or Ignore State Farm’s Comments

About a Single-Digit Ratio.............cceececceeeeeceees 3

II. Hogner Has Waived the Right to Question the

Consideration of Potential Harm in the Puni-

Cire ROD RIOD vrcccccccrntccccevecivesibilitnnenreneens 6

III. Hogner’s Claim That the Wisconsin Court of

Appeals Misapplied This Court’s Decision in

State Farm Is Not a Basis for Granting Certio-

TOUT, accnsssovsesreseninitersansiseitanstnauinenieaiaisiinanessinadas 7

IV. Applying the Principles in State Farm, the

Wisconsin Court of Appeals Correctly Deter-

mined that the Jury’s Punitive Damages Ver-

dict Did Not Violate Hogner’s Due Process

A. Hogner’s Conduct Was Reprehensible........ 11

B. The Wisconsin Court Properly Evaluated

the Proportionality of the Punitive Dam-

ages Award, Including Considering the Po-

tential Harm or Damages...................0cee0e 12

C. Petitioner’s Financial Condition Was Prop-

erly Considered by the Jury and the Wis-

consin Court of Appeals .............:::ccccceceeeeees 19

IIS ccrvevevnseccencersvoniseprenmasieieciwnissnuimecsiinesmaian 22

ill

TABLE OF AUTHORITIES

CASES:

Beck v. Washington, 369 U.S. 541 (1962)... eee 6

BMW of North America, Inc. v. Gore, 517 U.S. 559....passim

Browning-Ferris Indus. of Vt., Inc. v. Kelco Dis-

posal, Tnc., 463 US. BET (IGGB)...ccesecoeessvecorsvesevevesereseees 13

Cardinale v. Louisiana, 394 U.S. 437 (1969).............c.cceeee 6

Godchaux Co. v. Estopinal, 251 U.S. 179 (1919) ............0... 6

Hormel v. Helvering, 312 U.S. 552 (1941)... ee eeeeeeeee 6

Lievrouw v. Roth, 157 Wis.2d 332 (Ct.App. 1990)........ 9, 10

Matthias v. Accor Economy Lodging, Inc., 347 F.3d

I ee 13, 21

Pacific Mutual Life Ins. Co. v. Haslip, 499 U.S. 1

i aa 9,13

Rice v. Sioux City Memorial Park Cemetery, 349

ct FRR REE karen een ea UE rw eae Rea oven 8

Ross v. Moffitt, 417 U.S. 600 (1974)........... cc eeesceeseceeeseeeeees 8

State Farm Mutual Automobile Insurance Co. v.

Campbell, 538 U.S. 408 (2003)...........ccscecccssssecceeeee passim

Strenke v. Hogner, 2005 WI App 194, 704 N.W.2d

SO catitciahinctcate eats ac 3, 7, 17, 21, 22

United States v. Bean, 537 U.S. 71 (2002) ...0.........eececeeeeeee 6

TXO Production Corp. v. Aliiance Resources Corp.,

I Os I a 9, 13, 14, 17

Luckt vu. King, 260 U.S. 1746 (1GBB) .......0000cscececseecessscccsvsveeee 7

iv

TABLE OF AUTHORITIES ~— Continued

Page

STATUTES, REGULATIONS AND CONSTITUTIONAL PROVISIONS:

BB WS. GERI vccscsrsrsnisrsiencietestetaneaeee 1

Sen. Ct. BAG cccniiccniandaeeee eee 7,8

MISC. RESOURCES:

Robert L. Stern Et Al., Supreme Court Practice

SE.2F CPG TE. TDI vcisisinssveininimvnspensenianemaams 8

Wis Jury Instruction — Civil 1707.1 ..0........ccecssecsceceseesseees 21

STATEMENT ON JURISDICTION

This court is without jurisdiction pursuant to 28

U.S.C. §1257 as to petitioner’s argument that the Wiscon-

sin Court of Appeals improperly considered the potential

harm that might be caused by petitioner’s conduct, be-

cause (1) petitioner’s counsel made no objection to the trial

court’s jury instruction which included that item as a

factor for the jury to consider in determining punitive

damages and (2) petitioner never contended in the Wiscon-

sin Court of Appeals that potential harm was improperly

considered.

Moreover, this court is also without jurisdiction

pursuant to 28 U.S.C. §1257, because the petitioner’s

request for Supreme Court review is based solely on the

claim that the Wisconsin Court of Appeals failed to apply

what is established law, and, hence, petitioner’s request

fails to set forth an important question of federal law.

oe

7

STATEMENT OF THE CASE

In concluding that the punitive damege award did not

violate Hogner’s due process rights, the Wisconsin Court of

Appeals, contrary to the petitioner’s statement of the case,

did not “flatly dismiss” any command of State Farm

Mutual Auto Insurance Company v. Campbell, 538 U.S.

408 (2003), that punitive damages should almost never

exceed a single-digit multiple of actual damages. In

reaching its decision that the jurys punitive damage

award was not excessive and therefore did not violate the

Due Process clause, the Wisconsin Court of Appeals

thoroughly analyzed and applied the Supreme Court’s

statements in State Farm.

Petitioner also fails to include certain material facts in

his statement of the case:

First, not only was petitioner severely intoxicated at

the time of the accident in question, but he had been

arrested and convicted for drunken driving on four occa-

sions prior to the one in question. (App., p. 2a-3a, 7a-8a)

Second, although petitioner claims before this court

that the Wisconsin Court of Appeals improperly considered

the potential harm that could be caused by his conduct,

the record shows petitioner’s counsel made no objection to

the trial court’s instruction to the jury that the factors it

was to consider in determining punitive damages under

Wisconsin law included that “potential damage which

might have been done by such acts as well as the actual

damage.” (App., p. 13a-27a) Likewise, although petitioner

did raise the issue of the constitutionality of the punitive

damage award in the Wisconsin Court of Appeals, that

challenge was never based on an improper consideration of

the potential harm that could be caused by his reprehensi-

ble conduct.

Third, the jury in this case heard all the evidence

about the defendant’s financial circumstances and the

instruction as to the factors it was tocc ider in determin-

ing punitive damages included taking into consideration

the defendant’s ability to pay. (App., 3a-7a, 27a)

>

3

ARGUMENT FOR DENYING THE PETITION

I. The Wisconsin Court of Appeals Did Not Dis-

miss or Ignore State Farm’s Comments About a

Single-Digit Ratio.

Throughout his petition, Hogner claims that the

Wisconsin Court of Appeals “ignored,” “dismissed” and

“disregarded” this Court’s decision in State Farm. Nothing

could be further from the truth. In the text of its decision

in Strenke v. Hogner, 2005 WI App 194, 704 N.W.2d 309,

the Wisconsin Court of Appeals directly addressed State

Farm, citing, quoting, analyzing and ay.»'ying this Court’s

decision. Id. At [J 14-17, 21, 23-26.

Hogner’s petition is based on the premise that State

Farm established a “single-digit rule.” (Petition, p. 6)

However, as the Wisconsin Court of Appeals correctly

determined, State Farm essentially reaffirmed the guide-

posts set forth by this Court in BMW of North America,

Inc. v. Gore, 517 U.S. 559 (1996), and neither case estab-

lished a bright-line “rule” for a single-digit ratio of puni-

tive damages to actual damages. See Strenke at {17 n. 8,

q 25.

A simple reading of this Court’s decision in State

Farm concerning ratios destroys Hogner’s claim that State

Farm established a “single-digit rule.” The Court reiter-

ated:

(W]e have been reluctant to identify concrete

constitutional limits on the ratio between harm,

or potential harm, to the plaintiff and the puni-

tive damages award. [Gore,] 517 U.S. at 582.

538 U.S. at 424.

4

(“[W]e have consistently rejected the notion that

the constitutional line is marked by a simple

mathematical formula, even one that compares

actual and potential damages to the punitive

award.”); TXO [Production Corp. v. Alliance Re-

sources Corp, 509 U.S. 443 (1993)], supra, at 458.

538 U.S. at 424-25.

We decline again to impose a bright-line ratio

which a punitive damages cannot exceed.

538 U.S. at 425.

[B]ecause there are no rigid benchmarks that a

punitive damages award may not surpass, ratios

greater than those that we have previously up-

held may comport with due process where “a par-

ticularly egregious act has resulted in only a

small amount of economic damages.” [Gore, 517

U.S. at 582]; see also, (Gore, 517 U.S. at 582]

(positing that a higher ratio might be necessary

where “the injury is hard to detect or the mone-

tary value of non-economic harm might have

been difficult to determine”).

538 U.S. at 425.

The precise award in any case, of course, must be

based upon the facts and circumstances of the de-

fendant’s conduct and the harm to the plaintiff.

538 U.S. at 425.

Thus, this Court in State Farm made it clear that it

was not establishing a “single-digit rule,” upon which

Hogner’s entire petition is based. The Wisconsin Court of

Appeals specifically stated that the majority's statement in

State Farm about a single-digit ratio is not “as the holding

makes clear, a new single-digit rule.” 2005 WI App 194,

5

417, n. 8. The Wisconsin Court of Appeals’ comment that

the majority's remark in State Farm concerning single-

digit ratios is dicta is not a basis for Supreme Court

review, because whether that remark is dicta or not, the

Wisconsin Court of Apy=als still properly considered and

applied State Farm’s principles and analytical framework

concerning proportionality for determining the constitu-

tionality of a punitive damages award.

There is also no support for Hogner’s claim that

“courts all too routinely have ignored or defied” the deci-

sion in State Farm or that there is “an increasing number

of courts that have disregarded” the holdings in State

Farm (Petition, p. 5) or that the decision here is part of a

“trend.” (Petition, p. 20) Hogner merely cites 7 examples of

appellate cases where courts have allowed awards with

ratios greater than 9:1 and 5 examples of appellate cases

where courts have limited awards to ratios below 10:1.

(Hogner petition, pp. 10-11, n. 6) There is no showing that

these represent all cases addressing State Farm’s dictates.

This does not establish anything other than the fact that

courts throughout our 50 states are going about the

process of applying this Court’s teachings about punitive

damages and due process and that, just as those teachings

explain, there may be cases in which a greater than single-

digit ratio is justified without violating the defendant’s due

process rights. Each case must be considered on its own

facts and not by simply looking at the ratio. Thus, Hogner

fails to establish some disturbing trend that requires this

Court to do more explaining of its views on proportionality

of punitive damages. Certainly this particular case does

not call for that.

II. Hogner Has Waived the Right to Question the

Consideration of Potential Harm in the Puni-

tive Damage Analysis.

Hogner claims that review is warranted because the

Wisconsin courts improperly considered the potential

harm that could be caused by his conduct. (Petition, pp.

12-17) However, Hogner waived this argument by failing,

(1) before the trial court, to object to the jury instruction

which told the jury that among the factors it was to

consider in determining punitive damages was that very

potential harm (App., pp. 13a-27a) and (2) before the

Wisconsin Court of Appeals, to contend that the potential

harm that could be caused by his conduct should not be

considered.

It is axiomatic that an appellate court, let alone the

highest appellate court in the land, will generally not

review any argument raised in the court below. United

States v. Bean, 537 U.S. 71 (2002); Hormel v. Helvering,

312 U.S. 552, 556 (1941). This Court has specifically held

that, when raising a federal question for Supreme Court

review, it is essential that the question be raised, pre-

sented, and pursued in a timely and proper manner at the

appropriate point in the state court proceedings. Beck v.

Washington, 369 U.S. 541, 550-54 (1962); Godchaux Co. v.

Estopinal, 251 U.S. 179, 181 (1919). In fact, this Court has

no jurisdiction to exercise its appellate power over state

court judgments under 28 U.S.C. §1257 unless a federal

question has been both raised and decided in the state

court below. Cardinale v. Louisiana, 394 U.S. 437 (1969).

Thus, Hogner has waived any right to raise this

argument.

7

Ill. Hogner’s Claim that the Wisconsin Court of

Appeals Misapplied This Court’s Decision in

State Farm Is Not a Basis for Granting Certio-

rari.

In State Farm, this Court reiterated the importance of

a reasoned application of the guideposts in Gore. Elaborat-

ing on these guideposts this Court highlighted several

factors for consideration by courts when engaged in a de

novo due process review of punitive damages.

As mentioned above, the Wisconsin Court of Appeals

thoroughly applied this Court’s decision in State Farm in

its decision in this case. Petitioner can cite to no language

from the Strenke decision that truly misstates or contra-

dicts any portion of this court’s holding in State Farm.

Hence, Hogner’s petition is based solely on the claim that

the Wisconsin Court of Appeals misapplied the law of State

Farm to the specific facts in this case. Respondents take

issue with Hogner’s claim that the Wisconsin Court of

Appeals misapplied State Farm. See §IV infra. However,

even if Hogner were correct in his characterization of the

Wisconsin Court of Appeals’ decision, his petition fails to

set forth a basis for Supreme Court review.

This Court has typically limited discretionary review

of decisions coming out of the state courts to only those

cases that involve important constitutional questions.

Zucht v. King, 260 U.S. 174, 176 (1922). In fact Rule 10 of

the Rules of the Supreme Court of the United States,

which sets forth the appropriate reasons for granting a

writ of certiorari, has specifically incorporated the re-

quirement that the case involve an “important federal

question.” Sup. Ct. R. 10.

8

It has been reiterated many times that the Supreme

Court is not primarily concerned with the correction of

error in lower court decisions. The Court’s role, rather, is

to determine questions of constitutional importance. It is

then the role of the lower courts to apply these principles

to the great mass of cases. The responsibility of this Court

has been characterized as too great to require it to correct

every perceived error by lower courts in the application of

accepted principles. Robert L. Stern Et Al., Supreme Court

Practice §4.17 (7th Ed. 1993). As Justice Rehnquist ob-

served in Ross v. Moffitt, 417 U.S. 600, 616 (1974). “[t]his

Court’s review ... is discretionary and depends on numer-

ous factors other than the perceived correctness of the

judgment we are asked to review.” The court’s aversion to

error correction has been codified in this Court’s Rule 10:

A petition for writ of certiorari is rarely granted

when the asserted error consists of erroneous

factual findings or the misapplication of a prop-

erly stated rule of law.

Sup. Ct. R. 10.

Hogner’s petition asks for nothing more than error

correction based on the alleged misapplication of the

established law, i.e., State Farm, by the Wisconsin Court of

Appeals. As such, Hogner’s petition does not involve a

substantial federal question but rather a question of

importance merely to the litigants in the pending action.

This Court has adopted a practice of limiting the accep-

tance of appeals to only those cases that involve the

settlement of issues that are of importance to the public,

as opposed merely to the parties. Rice v. Souix City Memo-

rial Park Cemetary, 349 U.S. 70 (1954). Hogner provides

this Court with no reason to deviate from this accepted

practice.

9

Unable to identify a substantial federal question,

Hogner suggests that granting the writ would allow this

Court to “resolve any gap in this Court’s punitive damages

jurisprudence.” (Petition, p. 4) However, no gap in juris-

prudence is demonstrated by Hogner; the only gap is

between the Wisconsin Court of Appeals’ conclusion and

Hogner’s desired conclusion.

IV. Applying the Principles in State Farm, the

Wisconsin Court of Appeals Correctly Deter-

mined that the Jury’s Punitive Damages Ver-

dict Did Not Violate Hogner’s Due Process

Rights.

A punitive damage award that is the product of a fair

process is entitled to a strong presumption of validity. TXO

Production Corp. v. Alliance Resources Corp., 509 U.S.

443, 457 (1993). Hogner points to nothing unfair about the

trial. No evidentiary rulings are challenged. The compen-

satory damages phase yielded only a modest damages

award, demonstrating that the jury gave careful consid-

eration to each side’s evidence and arguments.

A state may, consistent with the Constitution, further

its goals of punishment and deterrence through the

imposition of punitive damages. BMW, 517 U.S. at 568;

Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 19 (1991).

Wisconsin courts have recognized the important role

that punitive damages play in serving the interests of

punishing and deterring drunk driving. As the court

observed in Lievrouw v. Roth, 157 Wis.2d 332, 345, 459

N.W.2d 850 (Ct.App. 1990), “{djrunk driving is a terrible

scourge,” and “[iJntentionally driving while alcohol-

impaired is the type of outrageous conduct that punitive

10

damages should punish and deter.” Jd. Thus, Hogner

cannot argue that drunk driving is unworthy of punish-

ment and deterrence, or that recidivist drunk driving is

undeserving of added sanctions.

Due process requires that a person receive fair notice

of the conduct that will subject him to punishment and the

severity of the penalty that a state may impose. BMW, 517

U.S. at 574. Hogner cannot argue that he lacked notice

that his drunk driving could subject him to a punitive

damage award. Lievrouw made clear that drunken driving

“will support an award of punitive damages in an appro-

priate case.” 157 Wis.2d at 348. If there ever were an

appropriate case, this is one.

As for the size of the award, only when it is grossly

excessive in relation to the legitimate state interests in

punishment and deterrence does it violate due process.

BMW, 517 U.S. at 568. In BMW, 517 US. at 575, the court

described three guideposts to determine whether a defen-

dant had adequate notice of the size of the possible sanc-

tion: (1) the degree of reprehensibility of the defendant’s

conduct; (2) the disparity between the harm or potential

harm suffered and the punitive damage award; and (3) the

difference between the award and the civil penalties

authorized or imposed in comparable circumstances.

In State Farm, the court enunciated five sub-factors

for determining the degree of reprehensibility: (1) whether

“the harm caused was physical as opposed to economic”;

(2) whether “the tortious conduct evinced an indifference

to or a reckless disregard of the health or safety of others”;

(3) whether “the target of the conduct had financial vul-

nerability”; (4) whether “the conduct involved repeated

actions or was an isolated incident”, and (5) whether “the

11

harm was the result of intentional malice, trickery, or

deceit, or mere accident.” 538 U.S. at 419; BMW, 517 US.

at 576-77.

‘A consideration of these factors demonstrates that the

punitive damages award here was not excessive.

A. Hogner’s Conduct Was Reprehensible

The most important indicium of the reasonableness of

a punitive damage award is the degree of reprehensibility

of the defendant’s conduct. State Farm, 538 U.S. at 419;

BMW, 517 U\S. at 575. The reprehensibility of Hogner’s

conduct is beyond dispute. This was not a close case,

where a driver can plausibly claim that he lacked know!l-

edge that he was impaired. Hogner here drank himself

into an extremely dangerous level of inebriation and

impairment. His blood alcohol level by weight tested at

.269. As he left the tavern, he got behind the wheel of his

car intending to drive to another tavern, presumably to

drink more. He had a passenger in his car. Thus, he

deliberately endangered his own passenger, and all other

users of Wisconsin’s roadways, including Mr. Strenke.

Hogner had been convicted four times before for drunk

driving and knew the legal implications. The evidence was

sufficient and compelled a finding that Hogner had en-

gaged in a pattern of drunk driving and endangerment of

the public with whom he shared the roads.

The aggravating factors discussed in BMW, 517 US.

at 576-80, are present here. First, Hogner’s conduct

evinced an intentional disregard for the safety of the other

users of the public highways, and this led to the most

serious form of harm — personal injury. Second, Hogner’s

12

acts were affirmative acts of misconduct, not merely acts

of misfeasance. Third, Hogner’s conduct was part of a

pattern of conduct that reflected an intentional disregard

for the public’s rights to safety and bodily security. As

noted in BMW, 517 U.S. at 576-77, repeated misconduct is

more reprehensible, more deserving of severe punishment,

and more in need of deterrence than an individual in-

stance of misconduct. Given the strength of the evidence of

reprehensibility, held to be the most important of the

factors, the punitive damage award does not shock the

conscience, as the trial court ruled.

B. The Wisconsin Court Properly Evaluated

the Proportionality of the Punitive Dam-

ages Award, Including Considering the Po-

tential Harm or Damages.

Another indicium of excessiveness is the comparison

of the punitive damage award to the actual or potential

harm or damages. Although this is only one guidepost,

Hogner reads State Farm as establishing a mathematical

limitation on the size of a punitive damage award as a

matter of due process. But State Farm’s actual language

says, at 1524:

Turning to the second Gore guidepost, we

have been reluctant to identify concrete constitu-

tional limits on the ratio between harm, or po-

tential harm, to the plaintiff and the punitive

damages award. ... We decline once again to im-

pose a bright-line ratio which a punitive dam-

ages award cannot exceed. Our jurisprudence

and the principles it has now established demon-

strate, however, that, in practice, few awards ex-

ceeding a single-digit ratio between punitive and

13

compensatory damages, to a significant de-

gree, will satisfy due process.

(emphasis added)

Despite the court’s specific disavowal of any bright-

line rule, Hogner’s petition cites this passage as erecting a

“single-digit rule.” (Petition p. 6) Judge Posner, writing for

the Seventh Circuit in Mathias v. Accor Economy Lodging,

Inc., 347 F.3d 672, 676 (7th Cir. 2003), explained that

“(t]he supreme court [in State Farm] did not, however, lay

down a 4-to-1 or single-digit-ratio rule — it said merely

that ‘there is a presumption against an award that has a

125-to-1 ratio’.” In Mathias, the court upheld an award of

punitive damages that was 37.2 times the compensatory

damages awarded by the jury.

State Farm explained that “ratios greater than those

we have previously upheld may comport with due process”

where “a particularly egregious act has resulted in only a

small amount of economic damages” or where “ ‘the injury

is hard to detect or the monetary value of noneconomic

harm might have been difficult to determine.’” 538 U.S. at

425 (emphasis added). Thus, to fully understand State

Farm it is necessary to examine the ratios the Court has

“previously upheld.” Among these is TXO, 509 U.S. 443.’

TXO was the most recent opinion in which the Supreme

Court had “previously upheld” a punitive damage award,

and it included an extensive concurring opinion by Justice

Kennedy, the author of State Farm, in which he states

" See also Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 23 (1991)

(4:1 ratio between punitive and compensatory damages, and 200:1 ratio

between punitive damages and plaintiff’s “hard” out-of-pocket ex-

penses); Browning-Ferris Indus. of Vt., Inc. v. Kelco Disposal, Inc., 492

U.S. 257 (1989) (punitive to compensatory damages ratio over 100:1).

14

unequivocally that the award, which resulted in a punitive

to compensatory ratio of 526 to 1, was constitutionally

appropriate. T7XO was cited with approval in State Farm.

538 U.S. at 416, 423-25.

In TXO, a West Virginia jury determined that the

defendant TXO, a large oil company, intentionally sought

to cloud the plaintiff’s title to oil and gas rights which

TXO desired to purchase. TXO’s actions were found to be

malicious and part of a broad practice of fraud and trick-

ery. The award of $10 million punitive damages, compared

to the award of $19,000 in compensatory damages, a ratio

of 526 to 1, was specifically approved by the Supreme

Court as not constitutionally excessive.

The TXO court found that “[w]hile petitioner stresses

the shocking disparity between the punitive award and

the compensatory award, that shock dissipates when one

considers the potential loss to respondents had petitioner

succeeded in its illicit scheme.” Assuming that the poten-

tial loss could be $1 million, the court stated that “the

disparity between the punitive award and the potential

harm (i.e. 10 to 1) does not, in our view, ‘jar one’s constitu-

tional sensibilities’” TXO, 509 U.S. at 462 (citation omit-

ted)

Justice Kennedy, however, refused to rely on the 10 to

1 ratio and specifically approved the ratio of 526 to 1. In

his concurring opinion, he wrote,

The Constitution identifies no particular multi-

ple of compensatory damages as an acceptable

limit for punitive awards; it does not concern it-

self with dollar amounts, ratios, or the quirks of

juries in specific jurisdictions ... I do not agree

that [the punitive to compensatory ratio relied

15

upon by the majority] provides a constitutionally

adequate foundation for concluding that the pu-

nitive damage verdict against 7'XO was rational.

Id. at 467-68.

Justice Kennedy found the award appropriate because

TXO acted with malice as part of a pattern of practice of

fraud, trickery and deceit. Further, he specifically en-

dorsed the evidence of other instances of similar malfea-

sance, the evidence of TXO’s “vast financial resources,”

and the fact that “TXO would suffer only as a result of a

large judgment.” Jd. at 469.

The Supreme Court’s clear approval in State Farm of

its TXO opinion is significant. There was no evidence in

TXO to suggest that the court considered the defendant's

conduct to have satisfied any of the first three sub-factors

(no personal injury, no health and safety issues, and no

financial vulnerability). The harm was purely economic

harm done by one corporation to another and thus factors

(1) and (2) could not possibly have been accomplished, and

the court made no reference to the financial vulnerability

of the plaintiff.

Thus, under the Supreme Court’s own guidelines,

conduct which is not at the top of the scale for reprehensi-

ble conduct warranted a ratio of punitive to actual dam-

ages of at 526 to 1, where the potential harm was great.

Given the Court’s clear approval in State Farm of its

“previously upheld” awards, one can only conclude that

awards in excess of 10 to 1 are perfectly appropriate for

those cases where at least some, if not all, of the reprehen-

sibility sub-factors are present, and particularly where the

last two sub-factors exist. Indeed, given the Court’s con-

tinued emphasis on a defendant’s pattern and practice and

16

the need for strong medicine where recidivist behavior is

present, it is apparent that the fourth and fifth sub-factors

(4) repeated actions, and (5) malice, trickery or deceit are

the most significant in assessing the amount of a punitive

damages award.

Recognizing that the Supreme Court meant to label as

suspect only those awards that exceed a single-digit ratio

by a “significant degree” is also consistent with its oft-

stated holding, confirmed again in State Farm, that it

refuses to set a bright-line test for a punitive to compensa-

tory ratio. Instead, the Court holds, in essence, that a

punitive award should be closer to a single-digit ratio than

ratios such as 145:1 or 500:1, depending on the circum-

stances of the particular case. This is not the bright-line

test or “single-digit rule” that Hogner urges.

The U.S. Supreme Court has rejected the notion that

the constitutional line is marked by a simple mathemati-

cal formula and, instead, has favored a general inquiry

into reasonableness. BMW, 517 US. at 582-83. This is

understandable since it is not possible to capture in one

ratio all of the qualitative factors involved in determining

the appropriate level of punishment. “The precise award in

any case, of course, must be based upon the facts and

circumstances of the defendant’s conduct and the harm to

the plaintiff.” State Farm, 123 S.Ct. at 1524.

Hogner’s argument thus starts from the flawed

premise that there is a fixed constitutional ratio. Beyond

that flawec assumption, however, Hogner’s argument

ignores that the proportionality of the punitive damage

award is measured not solely in comparison to the actual

award of compensatory damages, but also in comparison to

the potential harm caused to the victim and others. This

17

Court has always recognized the potential harm which

could be caused by the defendant’s conduct as a valid

factor to be considered in looking at the constitutionality of

a punitive damages award. BMW, 517 U.S. at 575, 581-82;

TXO, 509 U.S. at 460.

In TXO the Court stated:

It is appropriate to consider the magnitude of the

potential harm that the defendant’s conduct

would have caused to its intended victim ... as

well as the possible harm to other victims that

might have resulted if similar future behavior

were not deterred.

509 U.S. at 460. The Court then explicitly considered the

potential that defendant’s conduct could have caused

$1,000,000 in compensatory damages, rather than the

$19,000 awarded by the jury, in determining how to

address the proportionality of the punitive damages. 509

U.S. at 458-62. In State Farm, this Court cited TXO with

approval on this point. 538 U.S. at 424-25. The Wisconsin

Court of Appeals recognized that “TXO is still good law,”

Strenke, 2005 WI App at 424, n. 18, and then examined

the potential harm that a recidivist drunk driver like

Hogner could cause. The court concluded that absent

Hogner’s “good luck,” his conduct could have easily re-

sulted in compensatory damages that would have put the

punitive damages award in the 1:1 or 2:1 range. 2005 WI

App at 924, n. 14. This is the same valid consideration and

analysis as that done by this Court in TXO.

Hogner’s conduct was particularly egregious and the

actual harm it caused was substantial, even though the

award was only $2,000. Even so, the jury’s compensatory

damage award is not the only figure to use in any ratio

18

because it does not reflect the potential harm attributable

to Hogner’s drunk driving. Strenke could have been hurt

much wors= or killed. There could have been other passen-

gers in the Strenke car. Hogner had a passenger who could

have likewise been injured or killed. Multiple vehicles

could have become involved if they had been in the area

when the collision occurred. It is fortuitous that the

consequences were not disastrous.

Thus the potential harm in this case is far more

significant than the modest amount of harm that resulted

through happenstance. The difficulty in measuring in

financial terms the value of personal physical injuries and

the potential for catastrophe when a drunk driver gets

behind the wheel demonstrates the need for a higher ratio,

a circumstance recognized in State Farm (“a higher ratio

might be necessary where ‘the injury is hard to detect or

the monetary value of noneconomic harm might have been

difficult to determine.’” 123 S. Ct. at 1524, quoting Gore

{emphasis in the original]).

The jury, the trial court, and the Wisconsin Court of

Appeals were entitled to consider the potential harm that

could result if similar future behavior by Hogner is not

deterred by a heavy punitive damage sanction. Hogner

will presumably have the opportunity - whether licensed

or not — to get behind the wheel again. If he were to

engage in this reprehensible conduct again, he could cause

deaths or serious injuries. This large punitive damage

award serves the deterrent purpose of making Hogner, and

others in his community, think twice before drinking and

driving. Thus, while Hogner stresses the disparity be-

tween the punitive damage award and the jury’s award of

compensatory damages, that disparity vanishes when one

considers the potential harm. Consideration of the second

19

BMW guidepost therefore does not support a conclusion

that the punitive damage award is excessive.

Thus, the consideration of potential harm or damages

is not some “vague notion” as described by Hogner. (Peti-

tion, p. 12) Hogner points to no conflict in the federal

circuits or state courts regarding the concept of consider-

ing potential harm in the punitive damage analysis that

would justify Supreme Court review. The Wisconsin Court

of Appeals did nothing more than apply well known

guidelines of the United States Supreme Court in deter-

mining that Hogner’s right to due process had not been

violated.

C. Petitioner’s Financial Condition Was Prop-

erly Considered by the Jury and the Wis-

consin Court of Appeals.

Hogner also attacks the punitive damage award

because it is beyond his current net worth. This argument

is without merit. No Supreme Court case states that the

ratio of a defendant’s net worth to the punitive damage

award is a constitutional factor or that a punitive damage

award that exceeds a defendant’s net worth is unconstitu-

tional as a matter of law. Hogner’s due process rights were

not violated because his conduct justified punishment in

excess of his worth. Also, Hogner’s argument about finan-

cial condition introduces a complexity to Hogner’s ratio

argument that has not been confronted in any prior cases.

There is no prior case where ability to pay has been

somehow engrafted into the constitutional analysis of the

proportionality of a punitive damage award. There is no

substantial federal question where the Wisconsin Court of

Appeals decision does not conflict with any prior decisions

of this court or any other court relative to the matter of

20

defendant’s wealth. Thus, this issue does not justify

Supreme Court review.

That the judgment against Hogner for punitive

damages may impose a substantial burden on him for the

foreseeable future is an appropriate deterrent message to

him and to others. It is not inappropriate that he live

under the burden of this judgment for a considerable

period, so that it might influence his future choices when

those choices potentially affect the health and safety of

others.

Also, the defendant’s lack of wealth is often within his

or her control. A defendant can choose to earn less or

spend more thereby depressing his or her net worth. If

Hogner had been unemployed, without any earnings, he

would be claiming that no award of punitive damages is

constitutionally justified, because it would exceed his

worth. Likewise, there is nothing to say that Hogner could

not, in order to pay off his punitive damages obligation in

the future, work to improve his financial position, by for

example obtaining better paying employment and saving

on expenses. To draw any kind of constitutional line for

punitive damages awards at the level of a defendant’s net

worth could wipe out the deterrent effect, in which a state

has a legitimate interest. An otherwise constitutionally

valid punitive damage award that exceeds a defendant’s

net worth no more violates due process rights than does a

compensatory damage award that exceeds the defendant’s

insurance and net worth.

It is also worth noting that “wealth” in this context

includes the comparative resources that an insured driver

can bring to bear in the defense of an accident case like

this one where only modest compensatory damages are at

21

stake. See Mathias v. Accor Economy Lodging, Inc., 347

F.3d 672, 677-78 (7th Cir. 2003). The public should not

have to await a multiple-death catastrophe or one where

the victim requires years of expensive life support, to

impose a heavy dose of punitive damages on those who feel

unconstrained to drink and drive. Punitive damages

should be available when the misconduct involved is

highly dangerous, even though only modest compensatory

damages are awarded, so as to encourage victims and their

attorneys to seek justice in the courts and thereby deter

such misconduct and save lives.

Finally, the record shows that the Wisconsin courts

did not ignore the evidence concerning Hogner’s wealth.

The jury heard the evidence of Hogner’s ability to pay,

(App., 4a-7a) consistent with Wisconsin law which makes

such a proper factor for the jury and court to consider. The

trial court instructed the jury via Wis Jury Instruction —-

Civil 1707.1 that the defendant’s ability to pay is a factor

they were to consider in awarding punitive damages.

(App., 27a) The Wisconsin Court of Appeals also consid-

ered Hogner’s “conclusory” argument that the award was

excessive because of his financial condition, noting that

this was an appropriate factor for the jury to consider and

that it could not, on constitutional grounds, say that an

award “that cannot be immediately satisfied is always, as

a matter of law, constitutionally insupportable.” Strenke,

2005 WI App at 927, n. 17.

22

CONCLUSION

Nothing in the Wisconsin Court of Appeals’ decision in

Strenke in any way contradicts this Court’s holding in

State Farm. At best, Hogner’s petition requests review

solely based on the Wisconsin Court of Appeals’ alleged

misapplication of established law. This Court is not a court

of error correction. Hogner waived the right to question

the consideration of potential harm by failing to object to

that factor in the jury instructions and by failing to argue

in the appellate court below that it should not be consid-

ered. Because Hogner has failed to present a significant

federal question requiring Supreme Court Review, his

petition should be denied.

In addition, there is no basis for Hogner’s claim that

the Wisconsin Court of Appeals misapplied the law. In

Strenke the Wisconsin Court of Appeals correctly deter-

mined that the jury’s punitive damage verdict comports

with due process pursuant to this Court’s prior decisions.

Having little chance of success on the merits, Hogner has

failed to establish a sufficient basis for Supreme Court

review.

Respectfully submitted,

MArkK S. YOUNG

Counsel of Record

HABUSH HABUSH & ROTTIER S.C.

777 East Wisconsin Avenue

Suite 2300

Milwaukee, WI 53202

(414) 271-0900

(414) 271-6854 (fax)

Counsel for Respondents

May 15, 2006

la

APPENDIX A

CIRCUIT COURT

STATE OF WISCONSIN BARRON COUNTY

LE ROY M. STRENKE and

JUANITA M. STRENKE, PARTIAL TRANSCRIPT

Plaintiffs, OF JURY TRIAL

vs. 01-CV-179

LEVI HOGNER, NAU COUNTRY

INSURANCE COMPANY,

AMERICAN FAMILY MUTUAL

INSURANCE COMPANY and BLUE CROSS

AND BLUE SHIELD UNITED OF ALABAMA,

Defendants.

Partial transcript of testimony given and proceedings

had at the jury trial held in the above-entitled matter

before HON. FREDERICK A. HENDERSON, Acting

Circuit Judge, at the Courthouse in the City of Barron,

Barron County, Wisconsin, on the 7th, 8th and 9th days of

May, 2003.

APPEARANCES:

Mr. Owen R. Williams, Attorney at Law, appearing on

behalf of the Plaintiff;

Ms. Karen Kingsley, Attorney at Law, appearing on behalf

of the defendant;

Plaintiffs, LeRoy and Juanita Strenke, present in person;

Defendant, Levi Hogner, present in person.

* * *

2a

{2} THE COURT: All right. Now we go into the

second phase of the trial so take over, Mr. Williams. Tell

the jury what this is all about. Mr. Ament is now gone.

He’s not involved. Go ahead.

MR. WILLIAMS: I believe we are going to

present this phase of the trial to the Court and the jury by

stipulation. I’m addressing this remark to the Court

because we have not discussed this, but what we are going

to present to you is a stipulation that at the time that this

accident occurred Levi Hogner was under the influence of

alcohol and it was his 5th offense and that his alcohol

content was .267 and I will then rest my case when the

Court approves that stipulation, if the Court does approve

it.

MS. KINGSLEY: I did want to briefly call Mr.

Hogner.

THE COURT: Ms. Kingsley will present her

client to testify about the operation of the vehicle at the

time and what he has to say about that. Am I correct, Ms.

Kingsley?

MS. KINGSLEY: Correct.

THE COURT: All right. Is that the stipulation

as you understand it, Ms. Kingsley?

MS. KINGSLEY: That’s fine.

THE COURT: We'll receive that stipulation into

evidence and advise the jury that you’re bound by that [3]

stipulation. Okay.

MR. WILLIAMS: I made a mistake. I think it’s

.269, not .267.

3a

THE COURT: We'll mark that as an exhibit.

.269 is the alcohol content and that’s by weight of alcohol

in the blood as opposed to the volume. Go ahead. LEVI

HOGNER, called as a witness, being first duly sworn,

testified as follows:

DIRECT EXAMINATION BY MS. KINGSLEY:

Q. Mr. Hogner, I want to ask you about the incident.

You admit that you were driving at the time of the incident

prior to the accident?

A. Yes.

Q. Can you just kind of tell me in your own words

what happened in the accident?

A. I remember coming from the bar, Dale’s Twin

Pines. We were going downtown Cumberland. and I was

driving southbound. I was going to turn east, I believe, on

23rd. I seen cars coming. I believe I seen his blinker on as

he was going to turn into the same street so I believe —

Q. Would that have been his right or —

A. His right.

Q. And what did you do?

A. Iwas believing I could turn before he did.

Q. And what happened?

[4] A. When I turned I got hit in the back.

Q. Okay.

A. Rear, right rear.

4a

Q. Okay. And as a result of that did you plead to

something?

A. Yes.

Q. And did you serve some time?

A. Yes, I did.

Q. How much time did you serve?

A. One year County Jail.

Q. Are you still on probation?

A. Yes.

Q. Okay. Part of this claim is for punitive damages

so I need to ask you a little bit about your finances, what

money you have and that type of thing, okay? Do you

work?

A. Yes.

Q. Where do you work?

A. St. Croix Casino hotel.

Q. And what do you do there?

A. I’m a black jack dealer.

Q. How long have you done that?

A. For three years now.

Q. How much money do you earn doing that? Can

you give me maybe an average month?

A. Athousand dollars a month.

5a

[5] Q. Is that how much you take home or is that

before taxes or what?

A. That’s probably what I take home.

Q. About a thousand dollars a month? Okay, And do

you have any other sources of income?

A. Per capita.

Q. Okay. Is that because you’re a member of the

Native American community?

A. Yes.

Q. And how much is that?

A. $1,500 a month before taxes.

Q. Okay. So do you know how much that is after?

A. After it’s about a thousand dollars.

Q. So your total income for the month is about

$2,000?

A. Yes.

Q. Okay. Then do you have any other souras of

income?

A. No.

Q. Do you own any land?

A. No.

Q. Do you own any boats?

A. No.

Q. Any other big items that you own?

6a

A. No.

Q. Do you own a car?

A.

Well, not yet. ’'m paying on a car.

[6] Q. How much are you paying on a car?

A. $226 a month.

Q. How much longer do you have to pay on that?

A. Four years.

Q. Let me ask you about your other living expenses.

Do you pay rent?

A. Yes.

Q. How much do you pay?

A. $139 a month.

Q. Give me on average a month how much do you

pay? How much you spend for food?

> Or O&O Fr Oo PP Oo KP

About $400 a month.

How about utilities?

$30 a month.

Do you support anyone besides yourself?

I have a son.

And do you pay child support?

Yes, I do.

How much do you pay a month for that?

$350 a month.

7a

Do you have any savings?

No.

Do you have a checking account?

Yes, I do.

> Oo P ©

Q. How much is in your checking account?

[7}A. $20.

Q. Do you have any other debts we haven't talked

about?

A. Yes.

Q. Tell me about any debts you have?

A. I have two for Cumberland Hospital in the

amount of around $3,300.

Q. Okay. Any other debts?

A. No.

Q. Okay. Did we cover all your monthly expenses

then?

A. Well, I pay the supervision fee for probation

which is $40 a month.

MS. KINGSLEY: Okay. I think that’s all I have.

Thank you.

CROSS EXAMINATION BY MR. WILLIAMS:

Q. Mr. Hogner, were you convicted of drunk driving

as a result of an occurrence on February 10th of 1989?

A. Yes, I believe so.

8a

Q. Were you convicted of a drunk driving offense on

March 4th of 1990 in Buffalo County?

A. Yes.

Q. Were you convicted of drunk driving on March 25,

1993 in Barron County?

A. Yes.

Q. Were you convicted of drunk driving on May 29,

1994 in Polk County?

[8] A. Yes.

Q. And as a result of this driving were you convicted

of drunk driving as a result of driving on October 16, 1998

in Barron County?

A. Yes.

Q@. And am I correct that you’ve been convicted five

times of drunk driving?

A. Yes.

Q. And that was a felony offense?

A. No.

Q. Now, where were you drinking before you were

involved in this collision on October 16th?

A. Dale’s Twin Pine tavern.

Q. And is that on State Trunk Highway 48?

A. Yes, it is.

Q. And how much do you weigh, or how much did

you weigh at that time, Mr. Hogner?

9a

A. Id say 400 pounds.

Q. And how much did you have to drink at that

time?

A. Four to six drinks at the bar.

Q. And four to six drinks. Do you know what you

tested that time?

A. No.

Q. Let me show you what’s been marked by the clerk

as Exhibit 38. Is that you, Levi Hogner?

[9] A. Yes.

Q. Is that your address at that time, 2595 2nd

Street?

A. Yes.

Q. And does this indicate blood was taken?

A. Yes.

Q. And does this indicate that blood was taken and

you were .269?

A. Yes.

Q@. And blood was taken at what, 1705? That’s what,

five minutes after five?

A. Yes.

Q. Were you taken to the hospital at that time?

A. Yes, I was.

10a

Q. And you say you think you had four to six drinks.

What were you drinking, sir?

A.

Beer.

Q. And were these regular twelve ounce beers or

were they tap beers?

A.

Twelve ounce beers.

Q. Now, is it your testimony that the car that struck

your car was signalling for a right turn?

A.

Q.

A.

Q.

I believe so.

What street was that turning into?

I believe it’s 23rd.

And why were you turning into 23rd Street?

[10] A. To go into Cumberland.

Q.

> O&O PF & F&F & PY

And were you heading for home?

No.

Where were you heading for?

We were heading for a bar.

Another bar?

Yes.

And who was with you in the car?

Carol Linbuhr.

MR. WILLIAMS: I have no further questions.

lla

REDIRECT EXAMINATION BY MS. KINGSLEY:

Q. You were asked about the other times that you

had a driving while intoxicated charge. Had you ever been

involved in an automobile accident before on one of those

occasions?

A. No.

Q. Ever injured anyone before when you've been

drinking?

A. No.

Q. Did you intend to injury or hurt anyone on the

date this occurred?

A. No.

Q. You were asked about the number of drinks you

had at the bar. Did you have drinks before you got to the

bar?

A. Yes, I did.

Q. ‘Tell me about how many and what kind?

A. Probably around a twelve pack before I went to

the bar.

{11) Q. And as a result when you were arrested for

this did you plead guilty to this?

A. Yes, I did.

Q. Other than serving time and probation, was there

any other part of your sentence?

A. No.

MS. KINGSLEY: That’s all I have. Thank you.

12a

THE COURT: Anything else, Mr. Williams?

MR. WILLIAMS: Just a couple questions.

RECROSS EXAMINATION BY MR. WILLIAMS:

Q. Mr. Hogner, you think you had a twelve pack of

beer before you went to Dale’s Twin Pines?

A. Yes.

Q. And at Dale’s Twin Pines you had four to six, is

that right?

A. Yes.

Q. So that would be at least 16 cans of beer and

maybe 18 cans of beer, is that right?

A. Yes.

MR. WILLIAMS: I have no further questions.

MS. KINGSLEY: Just one more.

FURTHER REDIRECT EXAMINATION

BY MS. KINGSLEY:

Q. You talked about the number of beers. Can you

tell me over what period of time that was? I mean, when

during the [12] day you started and then how long until

the accident?

A. It was probably within a five hour period.

MS. KINGSLEY: Okay. That’s all I have. Thank

you.

MR. WILLIAMS: No more cross.

13a

THE COURT: You can step down. Any other

witnesses?

MR. WILLIAMS: Call LeRoy Strenke in rebut-

tal.

LE ROY STRENKEE, called as a witness, being first duly

sworn, testified as follows:

DIRECT EXAMINATION BY MR. WILLIAMS:

Q. Mr. Strenke, were you intending to turn at 23rd

Street as your car approached that driven by Mr. Hogner?

A. No, I was not.

Q. Did you have any turn signal on?

A. No, I did not.

Q. Where were you bound for at the time of the

collision?

A. Iwas on my way to my home.

Q. And is your home east or west of 23rd Street?

A. My home is west.

Q. Can you hear me? And is your home east or west

of 23rd Street?

A. It would be west.

Q. And what is the path that you customarily follow

to [13] your home?

A. Highway 48.

Q. And how many miles at 23rd Street would you

deviate to get to your home?

l4a

Approximately nine miles.

Do you know anybody who lives on 23rd Street?

No, I don’t.

Did you have any reason to be turning on 23rd

A. No.

MR. WILLIAMS: No further questions.

THE COURT: Ms. Kingsley?

MS. KINGSLEY: No, Your Honor.

THE COURT: All right. You can step down.

MR. WILLIAMS: Rest.

THE COURT: Anything else?

MS. KINGSLEY: Rest.

THE COURT: Okay. Well, we'll figure out the

jury instructions for this section so why don’t we take

them out for a little bit. This shouldn’t be too long.

(Whereupon jury leaves courtroom).

THE COURT: The only three instructions I have

apparently there is the middle burden of proof on this?

MS. KINGSLEY: Right.

THE COURT: So I'll read the burden cf proof.

The burden of proof on Question 1 rests upon the [14]

party contending that the answer to the question should

be yes, and, of course, that question would be, “Did Levi

Hogner act maliciously toward LeRoy Strenke or in an

15a

intentional disregard of the rights of LeRoy Strenke?” Yes

or no. So the burden of proof is on the plaintiff.

MS. KINGSLEY: Your Honor, I should put in at

this point under Wisconsin Law in order for this to go to

the jury they have to prove a prima facia case and I'd like

to make a motion for a directed verdict for this portion.

THE COURT: Go ahead.

MS. KINGSLEY: Well, under Wisconsin Law

they have to show an intentional disregard for the rights

of others. As Mr. Williams pointed out in his closing

argument to the first portion of the trial, this was a

careless mistake. This was a left turn accident. This isn't a

case where youve got a drunk weaving down the road

hitting cars. It’s an accident which can occur at any time

at an intersection. He thinks he sees a turn signal.

Whether he does or not he thinks he’s got time to make it

through the intersection and he doesn’t make it through.

Certainly negligent and we stipulate to that. Certainly

careless, but I don’t think under Wisconsin case law that it

rises to the level of being an intentional disregard for

someone else’s rights.

The case law, and perhaps Mr. Williams has other

cases, [15] the case law that we looked at in this regard

indicated that Wisconsin has not yet adopted a rule that

says that if a person is drinking alcohol it definitely is a

prima facia case, and absent aggravating circumstances or

as the cases point out, absent outrageous conduct that

then there’s not sufficient evidence for it to go to the jury

and we would argue in this case there’s not sufficient

evidence.

THE COURT: Mr. Williams?

16a

MR. WILLIAMS: Judge, I have a number of

cases which I can present to you. There’s Lievrow v. Roth

which is a Court of Appeals case, 157 Wis. 2d, 332, and I’m

quoting from the head notes here. “Deliberately driving

while alcohol impaired may warrant imposition of punitive

damages in appropriate case where the outrageous con-

duct of driving while alcohol impaired has caused or

contributed to the plaintiff’s damages.”

And the other head note, “Evidence of other incidents

of drunk driving by a defendant was admissible in a civil

action seeking compensatory and punitive damages

arising out of an accident which occurred while defendant

was allegedly intoxicated in order to show that he was

aware of the danger of driving while intoxicated.”

In the case, that’s Court of Appeais, incidently, Judge,

1990. And the 1985 case, Brown v. Maxey in the Supreme

Court, it says punitive damages may be awarded if the

[16] plaintiff proves by clear, convincing evidence defen-

dant’s conduct was willful and wanton in disregard of

rights of others.

And then we go to the 1990 case, Court of Appeals,

Twist v. Lale, and quoting, “Conduct is outrageous if done

in reckless disregard of another’s rights reflecting a

flagrant indifference to public safety”. And quoting to the

body of it, “Evidence of Lale’s reckless driving provided an

adequate basis for a finding that Lale recklessly disre-

garded Twist’s rights and was flagrantly indifferent to

public safety”. And there are other unpublished opinions.

So what I wanted to call your attention to was the

presumption under 885 of amount of intoxication. As

Circuit Judge is aware, the 10th Judicial District sentenc-

ing guidelines puts this level of intoxication into the

17a

highest category both for consumption of alcohol or

amount of alcohol by test and the fact that there was an

accident which was, in effect, caused by this and the fact

then that it is a 5th offense and I'd ask you to take judicial

notice of State versus Hogner, 98-CT-134 in which Hogner

was convicted of a felony DWI on March 22, 1999, arising

out of an incident which occurred on October 16th of 1998,

this case.

So I think we’ve shown enough that this man’s con-

duct was knowing, outrageous. He consumed, it appears,

between 16 and 18 beers over a five hour period and the

test, which is [17] undisputed, was .269. Certainly what I

would consider to be a high test in my experience.

THE COURT: Anything else?

MS. KINGSLEY: No.

THE COURT: All right. I’m reading from

1707.01 which is the jury instruction for punitive dam-

ages, non-products liability for actions commenced on or

after May 17, 1995, and it says punitive damages may be

awarded in addition to compensatory damages if you find

that the defendant acted maliciously toward the plaintiff

or in an intentional disregard of the rights of the plaintiff,

and it says that a person’s actions are malicious when they

are the result of hatred, ill will, a desire for revenge or

inflicted under circumstances where insult or injury is

intended. I don’t think that portion fits this fact pattern as

I understand the evidence.

I think I can say as a matter of law there’s no evidence

that indicates that Mr. Hogner’s acts were a result of

hatred, ill will, a desire for revenge or inflicted under

circumstances where insult or injury is intended. But I

18a

think the portion that will allow this case to go to the jury

is there’s a dispute from the second sentence of the second

paragraph and that’s where it says a person acts in an

intentional disregard of the rights of the plaintiff if the

person acts with a purpose to disregard the plaintiff’s [18]

rights or is aware that his or her acts are practically

certain to result in the plaintiff’s rights being disregarded.

I think the argument of the plaintiff is that Mr.

Strenke as an operator of a motor vehicle on a public road

in Wisconsin at the time and place that’s material to this

lawsuit is a class of people who are Wisconsin motorists

and I think it’s arguable that Mr. Hogner, who admitted

from the witness chair that within a five hour period he

consumed either 16 or 18 twelve ounce containers of beer,

and that’s one fact. The other fact that’s important here is

that he was convicted of operating while intoxicated-type

offenses over a period of time. He has four convictions

prior to this. | think that it can be argued that someone

who’s had four offense drunk drivings and yet goes out on

the day in question and consumes 16 to 18 twelve ounce

containers of beer is exhibiting, and I’m assuming that we

can, that nobody was holding him down and pouring these

down his throat involuntarily, and so I think that’s an

inten’ :onal act which arguably the jury may find that this

was a disregard of the rights of the plaintiff and other

motorists on the road and, of course, the plaintiff being a

class of motorist on the road, and I think that those facts

together indicate that Mr. Hogner was aware or should

have been aware that his drinking these 16 to 18 twelve

ounce containers of beer, [19] coupled with his knowledge

of how the law in Wisconsin is on operating while intoxi-

cated since he has four convictions before, that these acts

arguably the jury could find that theyre practically

19a

certain to result in the plaintiffs rights being disregarded.

So Pll deny your motion.

Now, let’s go on and I’ve got the middle burden of

proof. Then I have 350, presumptions, conflict as to the

existence of basic facts. What is the basic fact that there’s

a conflict of evidence here? I don’t think there’s any. It’s

just what they do with that evidence. So I don’t think that

even applies.

Now, somebody else want to argue differently?

MS. KINGSLEY: That’s fine, Your Honor.

MR. WILLIAMS: No.

THE COURT: Okay. So we won't give that. So

the only two instructions that I can see we give them is

tinat we read them the verdict, we read them the burden of

proof and we read them the definition of punitive damages

and send it all back to the jury.

MS. KINGSLEY: Will we be able to make a brief

closing statement?

THE COURT: Sure. We'll do it just like we did

before. Mr. Williams goes first and then Ms. Kingsley goes

second. Okay?

MR. WILLIAMS: Id like you to see an [20]

instruction under 885, something about levels of intoxica-

tion, Judge.

THE COURT: Well, if you present it to me Ill

consider it.

MR. WILLIAMS: I'l seek that. With your

permission I will craft an instruction that parallels

20a

885.235(cd) which indicates that the presumptive level of

intoxication of .08 is presumptive that a person is under

the influence of alcohol.

MS. KINGSLEY: And, Your Honor, I would

strongly object. ’'m guessing, I haven’t seen the statute,

but I would assume this is used in criminal matters and

would not be appropriate in this action. I think the jury

instructions cover the issue for civil matters and I think

that would be very prejudicial to my client.

THE COURT: Here’s what it says. 885.235 is

entitled chemical test for intoxication and then it talks

about in (1)(cd), it says in cases involving persons who

have two or more prior convictions, suspensions or revoca-

tions as counted under 343.307, and it’s stipulated that

Mr. Hogner fits in that category, the fact that the analysis

shows that the person has an alcohol concentration of .08

or more is prima facia evidence that he was under the

influence of an intoxicant and is prima facia evidence that

he or she has an alcohol concentration of .08 or more and

that’s what you want [21] me to read to them, correct?

MR. WILLIAMS: Yes.

MS. KINGSLEY: Your Honor, I don’t think

there’s been any dispute that Mr. Hogner was intoxicated.

He admitted what his blood alcohol content was. I think

that again, that statute is written for criminal matters.

He’s already been convicted, served his jail time, his

probation for it. I don’t think it would be relevant here and

I think it would be very prejudicial to my client.

MR. WILLIAMS: As youre aware, Judge, the

standard for conviction such as Mr. Hogner’s is .02 in cases

for 5th offense and the purpose that I wanted to do that is

2la

to be able to tell the jury with a foundation behind it that

Mr. Hogner was three times in excess of the legal limit for

DWI.

MS. KINGSLEY: Your Honor, if it would expe-

dite things we would be happy to stipulate Mr. Hogner was

legally intoxicated at the time.

THE COURT: Well, I’m going to allow it. I don’t

know exactly how it’s going to be worded because I’m

certainly not going to use terms like prima facia and

things like that. I think what I'll do is just instruct them

the parties have stipulated that at the time of the accident

Mr. Hogner was legally intoxicated. The parties have also

stipulated that before the accident, before the time of the

[22] accident Mr. Hogner had been convicted of four prior

operating while intoxicated offenses, therefore setting the

standard, setting the blood alcohol standard for intoxica-

tion at .08 or more.

The parties have stipulated at the time of the accident

Mr. Hogner was legally intoxicated. The parties have also

stipulated that before the time of the accident Mr. Hogner

had been convicted of four prior OWI offenses. Therefore

the blood alcohol standard for intoxication is .08 or more.

Okay. That’s what I’m going to put in but you can make

your objections on the record.

MS. KINGSLEY: Yah, I do want to make my

objections on the record. Mr. Hogner was willing to stipu-

late that he was intoxicated at the time and I think that

by bringing this element in it’s confusing for the jury and

they're going to be looking at this and the question to

them. I think this confuses this with the criminal stan-

dards and he’s already pleaded guilty and been convicted.

He pleaded guilty and he served his time for that. I think

22a

this is going to confuse them and I think we have all that

we need in the punitive damage instruction. So Id like to

make my objection for the record.

THE COURT: Okay. Your objection is noted for

the record and it’s an argument that I understand and the

only reason I think that it’s fair game for Mr. Williams to

{23} get this in based upon my previous ruling that I think

the punitive damage instruction is appropriate in this case

based upon his level of intoxication, amount of beer that

he had in this five hour period and the fact that he knew

or should have known since he was convicted of four

offenses before that this is, I think, showing flagrant

indifference to public safety, as Mr. Williams quoted from

this one case, and because of that I think that provides a

threshhold for Mr. Williams to, if he cares to, to argue that

in this particular case Mr. Hogner was over three times

the level of intoxication legally. Well, now, this is a misno-

mer. Sometimes we call it legal intoxication which in his

case it’s .08. So three times .08 would be .24. So I think

that that’s a fair argument that Mr. Williams has told us

he wants to make to the jury and if he wants to do that I

think he has a right for the Court to instruct the jury that

he’s correct. In this case .08 is the standard for the bar

that Mr. Hogner, being convicted of two or more priors,

should not have crossed and so I think it’s okay. So that’s

what I’m going to do. But I understand your objection and

perhaps the three wise guys down in Wausau will agree.

Okay. Can we bring them in?

(Whereupon jury returns to courtroom).

THE COURT: I am now going to instruct you on

the law that’s applicable to this phase of the trial [24]

concerning punitive damages. First of all I want to tell you

23a

that punitive damages have a different burden of proof

than what you considered for these compensatory damages

on the last verdict and this verdict that you’re going to see

just has two questions on it and it says, special verdict

form as to punitive damages. It says, “We, the jury, hereby

answer the special verdict question as follows: Question 1:

Did Levi Hogner act maliciously toward LeRoy Strenke or

in an intentional disregard of the rights of LeRoy

Strenke?” And you're to answer that one either yes or no.

Then it says, “If you answered the preceding question

‘yes’, answer the following question:” In other words, if you

answer Question 1 “no”, you’re done. If you answer it yes,

then go on to Question 2. “What sum, if any, do you assess

against Levi Hogner as punitive damages?” And then

you've got your answer with a dollar sign in the blank line

like you had for compensatory and that’s it and it’s to be

dated today’s date because I assume you won’t come in

after midnight. But if you do, put in the correct date and

then the presiding juror or dissenting jurors.

Now, as to Question Number 1, this is where the

burden of proof changes from the last verdict, which only

was ordinary, so Ill read you this and I'll give this to you

to take in. The burden of proof on Question 1 rests upon

the party contending that the answer to the question

should be [25] “yes”, and, of course, that’s the plaintiff.

This burden is to convince you by evidence that is clear,

satisfactory and convincing to a reasonable certainty that

“yes” should be the answer to that question.

Clear, satisfactory and convincing evidence is evidence

which, when weighed against evidence opposed to it,

clearly has more convincing power. It is evidence which

satisfies and convinces you that “yes” should be the answer

24a

because of its greater weight and clear, convincing power.

This burden of proof is known as the “middle burden”.

The evidence required to meet this burden of proof

must be more convincing than merely the greater weight

of the credible evidence, which is what you had in the last

verdict, but less than the higher burden which is beyond a

reasonable doubt and that’s the burden that’s used in a

criminal case.

If you have to guess what the answer should be after

discussing all evidence which relates to a particular

question, or if you conclude that the evidence is less than

clear, satisfactory and convincing, then the party having

the burden of proof as to that question has not met the

required burden.

Now, this is the substantive instruction on punitive

damages. It tells you what punitive damages are. Punitive

damages may be awarded in addition to the compensatory

damages that you’ve already found if you find that the [26]

defendant acted maliciously toward the plaintiff, or in an

intentional disregard of the rights of the plaintiff. A

person’s acts are malicious when they are the result of

hatred, ill will, a desire for revenge or inflicted under

circumstances where insult or injury is intended. A person

acts in an intentional disregard of the rights of the plain-

tiff if the person acts with a purpose to disregard the

plaintiff’s rights or is aware that his or her acts are

practically certain to result in the plaintiff’s rights being

disregarded.

The purpose of punitive damages is to punish a

wrongdoer or deter the wrongdoer and others from engag-

ing in similar conduct in the future.

25a

Punitive damages are not awarded to compensate the

plaintiff for any loss he or she has sustained. A plaintiff is

not entitled to punitive damages as matter of right.

Even if you find that the defendant acted maliciously

or in an intentional disregard of the plaintiff’s rights, you

do not have to award punitive damages. Such damages

may be awarded or withheld at your discretion.

You may not, however, award punitive damages

unless you have awarded compensatory damages, which

you already have.

If you determine that punitive damages should be

awarded, you may then award such sum as will accom-

plish the purpose of punishing or deterring wrongful

conduct.

[27] Factors you should consider in answering this

question include one, the grievousness of the defendant’s

acts. Two, the degree of malicious involvement. Three, the

potential damage which might have been done by such

acts as well as the actual damage, and four, the defen-

dant’s ability to pay.

You may consider the defendant’s wealth in determin-

ing what sum of punitive damages will be enough to

punish the defendant and deter the defendant and others

from the same conduct in the future.

Okay. That’s it. So we'll start with the arguments on

this issue. Mr. Williams?

MR. WILLIAMS: Thank you, Your Honor. This

is the portion where I told you about we were going to do

this in two phases. The Judge has explained this now. The

question that you have to determine if a person who has

26a

been convicted of drunk driving four times and now jumps

into the felony level, a 5th offense drunk driving, is that -

THE COURT: Wait a minute. I forgot to give

them one other instruction.

MR. WILLIAMS: That’s on that percentage.

THE COURT: I forgot. Okay. This is my last

instruction. The parties have stipulated that at the time of |

the accident Mr. Hogner was legally intoxicated. The

parties have also stipulated that before the time of the

accident Mr. Hogner had been convicted of four prior OWI

[28] offenses. Therefore, the blood alcohol standard for

intoxication is .08 or more. Okay. I’m sorry, Mr. Williams.

MR. WILLIAMS: You can see what happens

towards the end of these trials where lawyers get tired and

start letting slip on this stuff here.

But anyhow, here you’ve got the case. It’s a philoso-

phical question. Do you wish to condemn Levi Hogner’s

conduct in driving, having had four convictions where he

goes and gets fired up and goes to three times the lawful

limit of alcohol because we stipulated that the level of

alcohol intoxication was .269.

Judge Henderson’s last instruction to you indicates

that the level, the line when you're over the line or not

over the line is .08 in this.

Now, I do a lot of defense work and I can tell you my

belief is that once you reach that 5th level when it changes

from being a misdemeanor, stops being a misdemeanor,

that people can make, and many people do make a mis-

take of multiple OWI’s for one, two, three, four at which

the law treats them fairly benignly with County Jail time

27a

and such appropriate punishment where they are not

branded with the defense of a felony conviction. Once you

get to the 5th offense, you get to a felony and I suggest to

you that I’ve got to condemn this or tell you because isn’t it

outrageous? Isn’t it in reckless disregard when somebody

gets in a car, [29] having been convicted four times, having

consumed 16 to 18 beers in a five hour period and is

driving down the road with other people on the road with

the intent to go to another bar and get more?

Now, is that worthy of condemnation or not? Is it

worthy of punitive, meaning punishment, damages to

show that society says, this doesn’t cut it? And I think that

that’s what the question you folks have to tell us. If you

say no, then your duty is done. If your answer is yes, that

that conduct steps beyond that of being a mistake and gets

into the point of being outrageous to the point of deserving

some punishment with it itself, then you have to answer

the other questions and I’ve suggested the other answer to

the question should be a sum of money sufficient to get the

notice of Mr. Hogner and the notice of the public and the

notice of the people that five offenses and causing some-

body injury is too much. And it’s not only when you cause

an injury of the magnitude which you’ve assessed to Mr.

Strenke, but it requires some kind of a message coming

from the voice of the State, that is you folks as members of

the public, saying we condemn this conduct and that

conduct alone in itself is worth punitive damages and I

suggest to you the figure of $25,000 is a reasonable sum

under these circumstances to say, enough is enough.

$25,000 worth of punishment. That may encourage Mr.

Hogner, may encourage other people to not drive [30]

again when you have consumed 16 to 18 beers or even a

28a

lesser amount that would put you at .08 blood alcohol,

three times the level in this case. That’s the argument.

THE COURT: Ms. Kingsley?

MS. KINGSLEY: I'm going to equally be brief.

Just to clarify, and the Judge already explained to you, it

is a different standard of proof. It’s clear and convincing

evidence. Please keep that in mind when you come to your

decision.

There’s no question here that what Mr. Hogner did

wasn't right. He’s a very nice man. He did a very stupid

thing. There’s no question here. Mr. Hogner has been very

up front through the entire trial about what happened.

But what you have to decide is did what he did rise to

the level of intentional disregard of Mr. Strenke’s rights?

So I do ask you to keep the distinction.

It’s one thing to say, geez, that was really stupid and

that’s true, but that’s not the question before you. That

would be an easy one to answer.

The question is, did he go out there and intentionally

disregard somebody’s rights? He testified he didn’t intend

to do it.

Yes, he had prior convictions. He was up front about

those. But did he intend it? He had never hurt anybody

before. He knew he had never been in an accident while

[31] driving before.

Should he have made the jump and known when he

went out he was going to injury somebody? Well, that’s

kind of a large leap. He’s not making any excuses.

29a

The other thing, when you talk about intentionally

disregarding somebody's rights, | think there’s two parts

here. Should he drink and drive which, no, you shouldn’t,

but does that make your actions intentional if somebody

gets hurt?

The other thing I wanted to bring up is in this case

this isn’t one of those cases where the drunk drives into

the side of a house or somebody’s weaving down the road

and hitting people. This is a left turn at an intersection.

It’s the type of case, the type of accident that happens

every single day whether or not somebody was intoxicated.

So think about that when you’re determining was this

outrageous conduct.

Also you've heard that at least Mr. Hogner thought

Mr. Strenke was going to turn. Whether or not that turn

signal was on, Mr. Hogner believes it was and he thought

that he could make the turn ahead of time. He certainly

didn’t intend to injure anybody.

I want to point you to a couple other things in the

instructions. ‘he reason I asked Mr. Hogner so much

about what do you make and what are your expenses and

everything is [32] because you do have the right to look at

the defendant’s ability to pay when you're looking at that

part of the trial and I think it was pretty clear from Mr.

Hogner’s testimony. There’s extremely limited ability to

pay. He makes about $2,000 a month. He is covering his

expenses but he is paying child support and those types of

things. Really not much left over if you do the math on the

numbers he gave you and that’s why we brought it up.

The other thing that you’re asked to look at and the

Judge did read to you, the degree of malice involved. Well,

30a

there’s been no testimony that there was any malice here

between the parties.

And the other thing he explained is this type of

damage. You can award these damages if your purpose is

to deter someone or punish someone. Mr. Hogner has

already been punished for this. He’s served time. He told

you his sentence was a year. He talked about that. He pled

guilty. He didn’t try, you know, he didn’t try to say, I didn’t

do it. He pled guilty. He served his time and I want to

point out that this was in 1998 and so if one of the pur-

poses is to deter conduct, you want to think, okay, what’s it

going to take to make this person not do this again? It’s

already happened. You heard the years of those convictions

and when he pled guilty. That hasn’t happened since. This

accident did stop it cold back in 1998. He’s taken responsi-

bility. [33] He hasn’t had this happen again. He has turned

things around and he’s come into court and said, I did it. It

was stupid but I did it. That’s basically the effect of what

he’s saying.

And the last thing I want to say is in Mr. Williams

closing argument on the first part of his case he said, I

think three times that I heard, it was a moment of care-

lessness and that’s what this was. It was a stupid mistake.

It was a moment of carelessness. That doesn’t mean that it

was a moment of intentionally going out and disregarding

somebody else’s rights.

Because he served his time, because he owned up to

this, we believe he has been punished. He certainly shows

that he has been deterred and we don’t feel that in addi-

tion to what he’s already gone through that an award of

punitive damages would be justified. Thank you.

3la

MR. WILLIAMS: Just a couple comments. Ms.

Kingsley says he went and pled guilty. He didn’t. He pled

no contest, saying he didn’t admit doing wrong. And under

the argument Ms. Kingsley made they're saying that it

has to be intentionally directed to LeRoy Strenke. He

didn’t know LeRoy Strenke. But under Ms. Kingsley’s

argument if you remember that famous case down in

Kentucky where a fellow got drunk and went down the

wrong way on the interstate and killed a bunch of kids in a

school bus?, Well, he didn’t [34] intend to do that and

therefore no punitive damages.

The intentional] act is getting in the car and driving a

car in reckless disregard of the rights of the public. When I

go home tonight to Amery, when you folks go home or

when anybody goes home they have a right to expect that

the cars that are opposing them that are on the highway

are not driven by a person who's under the influence and

in this case he’s been punished. He was punished on the

first offense. He was punished on second offense. He was

punished on third offense. He was punished on fourth

offense. She’s saying he shouldn’t be punished here. If

‘that’s the case, the more cases he gets of drunk driving

and that, the more likely it is he shouldn’t be punished

because he’s been punished five times, six times, seven

times before. You know, that doesn’t scour to the sub-

stance.

My suggestion to you is that this is an appropriate

case for the award of punitive damages and you folks have

the discretion to condemn this and say, this is wrong and

we will punish. Tell the world that this is wrong by giving

an award of punitive damages. That’s all I have. Thank

you.

32a

THE COURT: Well, here’s the verdict and the

jury instructions.

(Whereupon jury leaves courtroom at 2:01 P.M.)

(Whereupon jury returns to courtroom at 2:33 P.M.)

THE COURT: The jury hereby answers the [35]

special verdict questions as follows: “Question 1. Did Levi

Hogner act maliciously towards LeRoy Strenke or in an

intentional disregard for the rights of LeRoy Strenke?

Answer ‘Yes’.”

“Question 2, what sum, if any, do you assess against

Levi Hogner for punitive damages? Answer $225,000.”

There are no dissents. It’s signed by the foreperson.

Is that your verdict?

JURY: Yes.

THE COURT: Ms. Kingsley, do you want to poll

the jury?

MS. KINGSLEY: That’s okay, Your Honor.

THE COURT: Okay. My final instruction to you

is you do not have to answer questions about this case by

anyone other than by me, and your service in this case is

completed, and this includes the parties, lawyers, the

media or anyone else. It is in the public interest that there

be the utmost freedom of debate in the jury room and that

jurors be permitted 4 express their views without fear of

incurring the ange? ef any litigants or criticisms of any

persons.

While nothing prohibits you from disclosing what

happened in the jury room, you do not have to discuss the

33a

case with anyone or answer any questions about it. You

may confer with me before answering any questions asked

by anyone.

[36] So there we have it.

(Whereupon jury leaves courtroom).

THE COURT: Anything else you want to do

today?

MR. WILLIAMS: Nothing today, Judge, for the

plaintiff.

THE COURT: Okay. Thank you.

(END OF RECORD)

[37] State of Wisconsin )

County of Barron )

I, Kevin Babbitt, hereby certify that I have compared

the foregoing transcript with the shorthand notes taken by

me at the hearing held in the above-entitled matter and

find the same to be a true and complete transcript of said

notes and containing all the proceedings had on said

hearing.

/s/ Kevin Babbitt

Circuit Court Reporter