Petition for Writ of Certiorari — Elmo Greer & Sons Construction Co. v. Goff

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Supreme Court, U.S.

No ———g-921 JAN 28 2010

OFFICE OF THE CLERK

3n The _

Supreme Court of the Anited States

ELMO GREER & SONS

CONSTRUCTION COMPANY, INC.,

Petitioner,

¥.

DAVID GOFF, JOYCE GOFF and AGNES GOFF,

Respondents.

On Petition For A Writ Of Certiorari

To The Tennessee Supreme Court

PETITION FOR WRIT OF CERTIORARI

LINDA J. HAMILTON MOWLES, ESQ.

Tennessee BPR No. 010464

LEWIS, KING, KRIEG & WALDROP, P.C.

620 Market Street, Fifth Floor

P. O. Box 2425

Knoxville, Tennessee 37901

(865) 546-4646

Attorneys for Petitioner

COCKLE LAW BRIEF PRINTING CO (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED

Is a judgment that bears a triple-digit ratio of

punitive to compensatory damages a violation of

Petitioner’s due process rights under the Fourteenth

Amendment to the Constitution?

May a state Supreme Court constitutionally im-

pose a punitive damage award that bears « multiplier

ratio, punitive to compensatory, of 151 to 1 when this

award is in complete disregard of the United States

Supreme Court’s holding that punitive damages in

excess of a single-digit multiplier approach being an

excessive fine that is a violation of the Petitioner’s

constitutional due process rights?

LIST PURSUANT TO RULE 29.6

Petitioner Elmo Greer & Sons Construction Com-

pany, Inc. is a privately held corporation organized

and existing under the laws of the State of Kentucky.

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ...........................2.060 i

LIST PURSUANT TO RULE 29.6....................... li

ae SF APE ET piss kee steed caxinntchaneniecaseanens ill

pV SIR Be oF tty 8 ley | >. Fenner vil

Ce MUNROE os ae citcusscsaccnsviteesvacespeatweeesseoen 1

Pee Mov tnscncinsussyucccencscu ease eee 2

RULES INVOLVED IN THIS CASE ................... 3

STATEMENT OF THE CASE........................22000 4

REASONS FOR GRANTING THE WRIT ........... 16

I. THE DECISION OF THE TENNESSEE

SUPREME COURT ESTABLISHING THE

PUNITIVE DAMAGE AWARD WITH A

MULTIPLIER OF 151 TO 1 IS IN SHARP

CONFLICT WITH THE PRECEDENT OF

THIS COURT AND FAR EXCEEDS THE

CONSTITUTIONAL DUE PROCESS LIM-

ITS ON PUNITIVE DAMAGES.................. 16

A. FOR MORE THAN A DECADE, THE

UNITED STATES SUPREME COURT

HAS HELD THAT, AT MOST, A MOD-

EST DOUBLE-DIGIT MULTIPLIER

WOULD PASS CONSTITUTIONAL

MUSTER WHEN APPLIED TO THE

RELATIONSHIP BETWEEN PUNI-

TIVE AND COMPENSATORY DAM-

AGES AWARDED BY A JURY UNDER

ESPECIALLY EGREGIOUS CIRCUM-

SF ERAN D Gs sheenes cuibeknnigaeacion capresso 18

TABLE OF CONTENTS — Continued

Page

B. THE STATE SUPREME COURT CAN-

NOT IGNORE CONSTITUTIONAL

LIMITATIONS ON DAMAGES _IM-

POSED BY THE UNITED STATES

ELSE PARES SAFEIECE cevnesccsvectcestvessencctsees 22

Il. THE TENNESSEE SUPREME COURT

HAS SEIZED AUTHORITY FOR ITSELF

THAT IS SPECIFICALLY RESERVED

eR Se ETE ck capadevivensavnoadvessctperoians 28

A. THE STATE CANNOT CONCLUDE

THAT WHAT IS DECLARED UNCON-

STITUTIONAL BY THE UNITED

STATES SUPREME COURT IS, NONE-

THELESS, ALLOWABLE UNDER THE

STATE CONSTITUTION, AS ANY

STATE ANALYSIS OF A CONSTITU-

TIONAL ISSUE IS SUBSERVIENT

TO THE UNITED STATES CONSTI-

TUTION AND ITS INTERPRETATION

BO BT bakin tekssdeiesinanccsvineneoee 29

B. THE UNILATERAL DETERMINATION

THAT, IN TENNESSEE, PUNITIVE

DAMAGES CAN BE AWARDED IN

AN AMOUNT THAT IS IN EXCESS

OF 150 TIMES THE COMPENSA-

TORY DAMAGE AWARD RESULTS

IN THE STATE SUPREME COURT

USURPING THIS COURTS PREROGA-

TIVE TO INTERPRET AND ESTABLISH

CONSTITUTIONAL DUE PROCESS

CR UII 65 stv ciciwnculnececestinnionsecsonvecs 30

TABLE OF CONTENTS — Continued

Page

Ill. THE ISSUE IS IMPORTANT AND HAS

NATIONWIDE IMPACT....................2cceeees 35

Sirs iaisvucheucetashapsentssaniniiaucaretoneesiceriek 37

APPENDIX INDEX

November 3, 2009 decision of Tennessee

Supreme Court, David Goff et al. v. Elmo

Greer & Sons Construction Co., Inc., No.

M2006-02660-SC-RIT-CV ooo... occ cee cone ee App. 1

November 3, 2009 Judgment of Tennessee

Supreme Court, David Goff et al. v. Elmo

Greer & Sons Construction Co., Inc., No.

M2006-02660-SC-RII-CV .....0. oo. ee cee eee eee eeee ee App. 52

May 16, 2008 decision of Tennessee Court of

Appeals for the Middle District of Tennessee,

David Goff et al. v. Elmo Greer & Sons

Construction Co., Inc., No. M2006-02660-

SII sissincch nob icnsdcdoinscesegaassdunacupsinad terse App. 54

November 9, 2006 Order of Circuit Court for

White County, Tennessee, Honorable John A.

Turnbull, Presiding, David Goff et al. v. Elmo

Greer & Sons Construction Co., Inc., No.

November 9, 2006 Punitive Damages: Findings

of Fact and Conclusions of Law filed in

Circuit Court for White County, Tennessee,

Honorable John A. Turnbull, Presiding,

David Goff et al. v. Elmo Greer & Sons

Construction Co., Inc., No. CC-320 ............... App. 87

TABLE OF CONTENTS — Continued

Page

July 14, 2006 Judgment on Jury Verdict filed

in Circuit Court for White County,

Tennessee, Honorable John A. Turnbull,

Presiding, David Goff et al. v. Elmo Greer &

Sons Construction Co., Inc., No. CC-320 ....App. 105

TABLE OF AUTHORITIES

Page

CASES:

Bennett v. Mueller, 322 F.3d 573 (9th Cir. 2003)..... an

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

I a ae passim

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

Disposal, Inc., 492 U.S. 257 (1989) ...........0...... eee. 24

Chandler v. Florida, 449 U.S. 560 (1981)............ 22, 37

Colautti v. Franklin, 439 U.S. 379 (1979).........0........ 23

Connally v. General Constr. Co., 269 U.S. 385

ERED chcaconmetecn sdabaiecenbuedcaanunicngiareienicaemmedttcousion 20

Cooper Industries, Inc. v. Leatherman Tool

Group, Inc., 582 U.S. 424 (ZOOL) ......-c.crcccresserss 20, 23

Exxon Shipping Company v. Baker, 128 5S. Ct.

ME I aks oi cuaiehusacsck cCesistaedeincetaiicckasaisinds 15, 21, 27

Goff v. Elmo Greer & Sons Construction Co.,

Inc., 2008 Tenn. App. LEXIS 296 (Tenn. Ct.

App. May 16, 2008)........ sualbsuuememekdouervausbudas denice 12,13

Honda Motor Co. v. Oberg, 512 U.S. 415 (1994) ....20, 30

Hopkins v. Bonvicino, 2009 U.S. App. LEXIS

pi Bi. | _) ne ee ee |

Minnesota v. Nat’l Tea Co., 309 U.S. 551 (1940)....... 31

Pacific Mutual Life Insurance Co. v. Haslip,

Ie Oe I i vasscs cee cna accceceecivatcenecsceeens 14,18

Vill

TABLE OF AUTHORITIES — Continued

Page

Philip Morris USA v. Williams, 549 U.S. 346

Ie ee a le 19, 20, 23

State Farm Mutual Automobile Insurance Co.

v. Campbeil, 538 U.S. 408 (2003) ............... .... Dassim

TXO Production Corp. v. Alliance Resources

Corp., 509 U.S. 443 (1993)................ datlauaecacauine 14, 20

United States ex rel. Lawrence v. Woods, 1970

U.S. App. LEXIS 6870 (7th Cir. Tl. 1970).. 35

STATUTES, CONSTITUTION AND RULES:

28 U.S.C. § 1257(a)..... FRC OSE RE MERA eRe Fy

Ly. COORBCIEUIEIOR 000. cccccces. ee 3. 35

U.S. Const., amend. XIV 3, 22

(Jnited States Supreme Court Rules,

RRO Ce ot a ae |

PE'TITION FOR A WRIT OF CERTIORARI

Petitioner prays that a writ of certiorari issue to

review the opinion and resulting judgment of the

Tennessee Supreme Court entered in this case on

November 3, 2009, said judgment imposing an un

constitutionally excessive punitive damage award of

$500,000 where the jury awarded compensatory

damages of $3,305. In other words, the Tennessee

Supreme Court approved a punitive to compensatory

damage ratio of 151 to 1. No case considered by this

Court has sanctioned a three-digit ratio as being con-

stitutionally valid and not in violation of the Peti-

tioner’s due process rights; yet, this is the award

rendered by the Tennessee Supreme Court in its

November 3, 2009 decision. Petitioner prays that this

due process violation will be reviewed and corrected

by this Court.

OPINIONS BELOW

The opinion of the Tennessee Supreme Court

rendered November 3, 2009, is reported at 2009 Tenn.

LEXIS 701 and is reprinted in the Appendix (“App.”)

at App. 1. The Judgment of the Tennessee Supreme

Court is found at App. 52. The unpublished opinion

and judgment of the Tennessee Court of Appeals,

rendered May 16, 2008, is reported at 2008 Tenn.

App. LEXIS 296 and is reprinted at App. 54. The

Tennessee Circuit Court’s unpublished judgment on

the jury verdict, rendered July 14, 2006, is reprinted

at App. 105. The Tennessee Circuit Court’s unpub

lished order on post-trial motions, filed November 9,

2006, is reprinted at App. 83. The Tennessee Circuit

Court’s unpublished “punitive damages: findings of

fact and conclusions of law”, filed November 9, 2006.

is reprinted at App. 87

JURISDICTION

The jury tral for this case commenced in the

Circuit Court for White County, Tennessee on June

28, 2006. The verdict was rendered against Petitioner

finding compensatory damages of $3,305 and punitive

damages of $2,000,000, and judgment was entered by

the trial court on July 14, 2006. App. 105. On No-

vember 9, 2006, the trial court entered its order on

post-trial motions, App. 83, reducing the punitive

award to $1,000,000, as this was the amount sued for

by the Respondents. [T.R. Vol. I, pp. 82-84]

The Tennessee Court of Appeals heard Peti-

tioner’s timely appeal and rendered its decision on

May 16, 2008, reversing and remanding the punitive

damage award to the trial. court for further con-

sideration. App. 54.

The Respondents filed for discretionary review by

the Tennessee Supreme Court and on November 3,

2009, the state supreme court rendered its

unanimous opinion, reducing/modifying the punitive

damage award to $500,000. App. 1.

— rom

ll, ~— — ee " =

This’ Petition is due to be filed on or before

Kebruary 1, 2010

The jurisdiction of thi Court is invoked pul suant

to 28 U.S.C. § 1257(a

RULES INVOLVED IN THIS CASE

United States Supreme Court Rules, Rule 10(c)

A state court or a United States court of

appeals has decided an important question of

federal law that has not been, but should be,

settled by this Court, or has decided an

important federal question in a way that

conflicts with relevant decisions of this

Court

United States Constitution. Fourteenth Amendment.

Section lL:

Section 1. All persons born or naturalized in

the United States, and subject to the juris-

diction thereof, are citizens of the United

States and of the State wherein they reside.

No State shall make or enforce any law

which shall abridge the privileges or immu

nities of citizens of the United States; nor

shall any State deprive any person of life,

liberty, or property, without due process of

law; nor deny to any person within its

jurisdiction the equal protection of the laws.

28 U.S.C. § 1257(a)

a) Final judgments or decrees rendered by

the highest court of a State in which a

decision could be had, may be reviewed by

the Supreme Court by wnt of certioran

where the validity of a treaty or statute of

the United States is drawn in question or

where the validity of a statute of any State is

drawn in question on the ground of its being

repugnant to the Constitution, treaties, or

laws of the United States, or where any title,

right, privilege, or immunity 1s specially set

up or claimed under the Constitution or the

treaties or statutes of, or any commission

held or authority exercised under, the United

States

STATEMENT OF THE CASE

Petitioner Elmo Greer & Sons Construction

Company, Inc. (hereinafter Elmo Greer or Petitioner)

contracted with the State of Tennessee to build a

portion of Highway 111 in Sparta, Tennessee. Respon

dents David Goff, his wife Joyce Goff, and his mother

Agnes Goff (hereinafter jointly referenced as Goffs or

Respondents) own a residence and 400 acres of real

property along Highway 111. The lawsuit instituted

by Respondents relates to damages claimed to have

occurred during the construction of a portion of

Highway 111 that ran through their property, close to

the residence

Respondents’ relationship with Petitioner began

when David Sumner, Petitioner’s project manager on

this construction project, [T.R. Vol. IV, p. 765] asked

to meet with the Respondents about whether they

would consider allowing Petitioner to put rock and

dirt on the lot across the street from their home.

Petitioner was required, under the design received

for the road from the Tennessee Department of

Transportation (TDOT), to widen the cut in the Goff

property area [T.R. Vol. IV, pp. 761-762] and there

would be excess rock and dirt that they needed to

place somewhere. Petitioner did the grading for a

portion of the new highway, while the bridges and

paving were subcontracted out to other companies.

[T.R. Vol. IV, pp. 760-761]

Respondents and Petitioner agreed on using the

east side of the property for a staging area and for the

waste rock and dirt fill from the project. [T.R. Vol. II,

p. 244; T.R. Vol. IV, p. 764] Mr. Lee Anderson, chief

engineer for Petitioner [T.R. Vol. II, p. 189], drafted

the contract between the parties. He also designed

the waste area and: submitted the design together

with the parties’ contract [T.R. Vol. II, p. 243], signed

January 7, 1994, to the State. [T.R. Vol. IV, pp. 770-

771]

The parties’ contract stated that the contractor

has the rmght to place dirt, rock and other excess

material from job site on which it presently performs

a construction contract with TDOT together with

right of ingress and egress over and on the Respon-

dents’ lot of approximately five to seven acres. [T.R.

Vol. II, p. 251] Additionally, the contractor agreed to

fill the area and to leave the jot in a neat and graded

condition. [T.R. Vol. II, p. 246] This was particularly

agreeable to Mr. Goff because he wanted to have the

fill area be a level surface so it would be buildable.

[T.R. Vol. II, p. 243; p.247] The site was also

approved by TDOT as an excess fill, from the road

job, site.

Highway construction began and the Respon-

dents felt the first blast in March 1994. The blasting

was close to the Respondents’ residence. Respondents

testified that rocks would hit the house, windows,

roof, and porch. [T.R. Vol. II, p. 77] The Respondents

also believed that Petitioner had buried tires and

other construction debris on the property.

Respondents filed suit alleging damages from the

blasting and from burying waste debris on the prop-

erty, including large waste tires, seeking damages in

the amount of $1,000,000. The Respondents’ com-

plaint alleged a cause of action in nuisance and in

violation of the Solid Waste Disposal Act by the

creation of an environmental hazard at the site. [T.R.

Vol. I, p. 1]

Testimony at trial, even from Respondents’ own

witness, Douglas Smith, was that the residence had

been inspected after road construction was completed

and that the damage was purely cosmetic, not

structural. [T.R. Vol. III, p. 567]

Lee Anderson, Petitioner’s chief engineer, testified

that he was present at the Goff property during this

road construction project and that the Goff property

was used as a waste area for excess, surplus material,

including tires. [T.R. Vol. I, p. 195] However, as the

tires became flat or unusable, they would stack them

up on the waste area and then haul them back to

Kentucky because they have value attached to them.

[T.R. Vol. II, pp. 195-198; T.R. Vol. IV, pp. 641, 646-

647, 773] Mr. Anderson stated that it is not part of

Petitioner’s practice to just dump rock, dirt, and fill

on top of refuse tires. [T.R. Vol. IT, p. 197]

Mr. Anderson further testified that if he had seen

an Elmo Greer employee burying tires on the Goff

property, the employee would have been fired on

the spot for violating company policy. [T.R. Vol. IV,

pp. 774-775]

The Respondents suspected that all sorts of

materials had been buried on the property; therefore

they called David Lloyd Shores of Shores Trucking

and Excavating asking that he bring a track hoe to do

some digging for them around three years prior to

trial. [T.R. Vol. II, pp. 173-174] As a result of digging

in the project staging area, Mr. Shores found two tires

eight to nine feet down in the earth. One may have

come off a rock truck and the other was more like a

regular big truck tire. [T.R. Vol. II, p. 176; T.R. Vol.

Il], p. 374] Mr. Shores dug on the property at

Respondents’ request a second time shortly before

trial, and he found four more tires [T.R. Vol. II,

p. 180] buried eight to ten feet below the surface.

Respondents’ professional geologist expert wit-

ness, Ken Johnson, testified as to whether the

property was contaminated or hazardous to anyone’s

health. He testified that, based on his experience

[T.R. Vol. II, p. 383], it would cost a minimum of

$318,000 to go through the fill dirt to certify that the

property was clean. However, he also specifically tes-

tified that tires are non-hazardous waste, that they

do not create either an environmental hazard [T-R.

Vol. If, p. 405] or a health hazard [T.R. Vol. IU,

p. 407], and that finding six tires on a three to five

acre parcel of land did not constitute hazardous waste

contamination. [T.R. Vol. III, p. 412]

Petitioner provided testimony of expert witness

Ray Corn who testified regarding whether the prop-

erty was hazardous subsequent to the construction

project. Mr. Corn did core sampling of the Goff

property to determine the existence of contamination

or hazardous substances. [T.R. Vol. III, p. 580] Mr.

Corn analyzed the samples for hazardous waste

constituents and for petroleum products. [T.R. Vol.

Ill, pp. 587-590]

The analysis confirmed that no contaminants

were detected. [T.R. Vol. IIT, pp. 590-591] The site was

clean and there was no hazardous material or haz-

ardous waste on the site. [T.R. Vol. IV, p. 631] Mr.

Corn testified that even though 6 tires and 2 pipes

were found on this property, the site would not be

considered hazardous or contaminated. [T.R. Vol. III,

p. 593; T.R. Vol. IV, p. 650]

When asked if the presence of tires on Respon-

dents’ property was a violation of the Tennessee Solid

Waste Disposal Act, Mr. Corn stated that the Act was

not applicable to this property site. [T.R. Vol. III,

p. 595] Mr. Corn further testified that the presence of

some tires and pieces of pipe on real property is not a

violation of the Solid Waste Disposal Act. ['T.R. Vol. IV,

p. 629] Tires are not solid waste pollution under Ten-

nessee statutes. Six tires, even of large size, would be

insufficient for the State of Tennessee to consider the

property a waste site subject to regulation. [T.R. Vol.

IV, pp. 670-671] Mr. Corn further testified that there

was no indication of intentional hiding of the old tires

[T.R. Vol. IV, p. 659] and there was no hazardous

contamination on the site. [T.R. Vol. IV, p. 650]

Ms. Vicky Steed, an environmental engineer with

the Tennessee Division of Water Pollution [T.R. Vol.

IV, pp. 672-673], testified that she was on site when

Mr. Goff was digging the holes looking for tires. [T.R.

Vol. IV, pp. 674-675] Although there was a large and

small tire discovered [T.R. Vol. IV, p. 677], Ms. Steed

stated that she found nothing that was out of the or-

dinary upon inspection; she smelled no contaminants

and saw nothing that would cause alarm. [T.R. Vol.

IV, p. 680]

Mr. Christopher Green testified that he is a pro-

fessional Hydrogeologist with the State of Tennessee

and is also a certified hazardous waste operator. [T.R.

Vol. IV, pp. 684-688] He saw two pieces of pipe and

four tires on the property two weeks before trial. [T.R.

Vol. IV, p. 705] He stated that the laboratory report

from those samples found nothing above acceptable

standards, even on the test of the seep soil. [T.R. Vol.

IV, pp. 701-702}. He also found no evidence of inten-

tional burying of tires or other waste materials [T.R.

Vol. IV, pp. 738-739], and no reason that the site

would not be considered suitable for home or business

construction. [T.R. Vol. IV, p. 731]

Mr. John Michael Apple, Director of Division of

Solid Waste Management for the Tennessee Depart-

ment of Environment and Conservation testified that

after inspection and after soil sampling of the Goff

property, he also did not see anything that was un-

usual or that required further investigation. [T.R. Vol.

IV, p. 802] Regarding fines, he testified that if the

State had found the site to be in violation of any regu-

lations, significant fines could be assessed and civil

penalties could be incurred up to $5,000 per day. [T.R.

Vol. IV, p. 810] However, no fines or penalties were

imposed as to the Goff property because nothing was

unusual and no further investigation was necessary.

[T.R. Vol. IV, p. 803]

Based on this testimony, the matter was sub-

mitted to the jury and a verdict was returned finding,

as relevant to the issue subject of this Petition for

Certiorari, as follows:

e finding liability on Respondents’ nui-

sance claim;

* awarding $3,305 in compensatory dam-

ages;

e finding no liability for any environ-

mental hazard; and

e finding liability for punitive damages.

The second phase of the bifurcated trial then was

conducted before the same jury and additional evi-

dence was submitted to the jury for purposes of

considering the amount of punitive damages, the jury

ultimately returning a punitive damage award of

$2,000,000.

The trial court reviewed the testimony in its role

as thirteenth juror and affirmed the compensatory

damage award of $3,305. App. 83, 105. Regarding the

punitive award, the trial court rendered findings of

fact and conclusions of law, affirming the punitive

award by exclusively referencing the Solid Waste Dis-

posal Act (the environmental hazard claim the jury

had rejected). App. 87. The tral court also reduced

the punitive award to $1,000,000 because, under Ten-

nessee procedure and precedent, Respondents cannot

obtain more relief than asked for in the complaint.

App. 83, 105.

Petitioner appealed the verdict and judgment to

the Tennessee Court of Appeals, primarily asking for

reversal of the punitive damage award. The Court of

Appeals consolidated the issues as follows:

1. Whether the record supports the award

of punitive damages.

2. Whether the award of punitive damages

is so excessive that it is in violation of

Tennessee and federal constitutional due

process.

3. Whether the trial court issued an im-

proper jury instruction concerning puni-

tive damages.

4. Whether the trial court erred by denying

Petitioner’s motion for mistrial when the

Respondents introduced evidence of in-

surance and settlement negotiations.

Goff v. Elmo Greer & Sons Construction Co., Inc.,

2008 Tenn. App. LEXIS 296, *18-19 (Tenn. Ct. App.

May 16, 2008) at App. 69. The Court of Appeals re-

versed the award of punitive damages and remanded

that issue to the trial court. App. 77-78, 82. Speci-

fically, the Court of Appeals held:

.... Construction Company argues that the

trial court incorrectly relied on the environ-

mental tort in approving the jury’s award of

punitive damages, because the jury rejected

that cause of action and declined to award

compensatory damages on that basis. We

agree.

Ibid. App. 74. The Court of Appeals further wrote:

In this case, the only claim upon which

punitive damages could be based upon is

the nuisance claim, as the jury found

Construction Company not liable for the

environmental tort. Here, the Goffs focus on

the expert testimony that the cost to clean

the fill area would be $318,000, and that the

award of damages based on the nuisance

claim “did not encompass the full harm

the Respondents sustained. The harm to the

Respondents goes beyond their legally recov-

erable damages.” The Goffs sought in their

complaint recovery of “the costs and ex-

penses of excavating, removing, and disposal

of the waste materials buried upon the

property.” The jury, however, declined to

make such an award. The trial court stated

in its findings of fact that “the jury’s com-

pensatory damages award was very modest.

The evidence would have supported a verdict

of over $100,000.” Whatever the jury’s rea-

soning for the “modest” award, punitive

damages cannot be used to make up for a low

compensatory award.

The trial court’s findings of fact and con-

clusions of law are insufficient in that they

rely heavily on the environmental tort claim,

a theory which the jury rejected. We there-

fore reverse the award of punitive damages

and remand the case to the trial court....

Because of our holding, we need not address

Construction Company’s constitutional argu-

ment regarding the excessiveness of the

award.

Ibid. App. 76-78. Then the Court of Appeals affirmed

the trial court on the remaining issues and remanded

the case for consideration of the punitive damages

under the nuisance theory. /bid. App. 32. While

the Petitioner had argued the unconstitutionality of

the jury’s award as a violation of Petitioner’s due

process rights, even as reduced by the trial court, the

intermediate appellate court did not address that

argument before remanding the case back to the trial

court.

The Tennessee Supreme Court, however, accepted

the Respondents’ petition for discretionary appellate

review and found that the trial court did not in-

appropriately base its decision on the existence of an

environmental tort. Rather, the state supreme court

held that the same facts that supported Petitioner’s

alleged violation of the Solid Waste Disposal Act

would also support the existence and liability for a

nuisance. App. 21.

The Tennessee Supreme Court then considered

the issue that was pretermitted by the intermediate

appellate court: that is, whether the punitive damage

award violated the Fourteenth Amendment due proc-

ess rights of the Petitioner because of its excessive-

ness.

The Tennessee Court expressly noted the deci-

sions of this Honorable Court, from 7'XO Production

Corp. v. Alliance Resources Corp., 509 U.S. 443 (1993)

App. 39-40 and Pacific Mutual Life Insurance Co. v.

Haslip, 499 U.S. 1 (1991), to BMW of North America,

Inc. v. Gore, 517 U.S. 559 (1996) and State Farm

Mutual Automobile Insurance Co. v. Campbell, 538

U.S. 408 (2003). App. 29. However, the court did not

address subsequent decisions which have continued

defining constitutional parameters supporting a

single-digit multiplier when considering the punitive

to compensatory damage ratio.

—

Indeed, this Court’s decision in Exxon Shipping

Company v. Baker, 128 S. Ct. 2605 (2008) was re

duced to a mere footnote reference. App. 38.’

The state court then stated that the trial court’s

$1,000,000 punitive award was unconstitutionally

excessive when compared to the $3,305 compensatory

award, it bearing a 302 to 1 ratio. App. 39. Although

the court considered the possible civil penalties and

fines for the allegedly objectionable behavior of the

Petitioner, the third prong of the BMW analysis, the

court recognized that Mr. Apple testified that no fines

had been, or would be, assessed against the

Petitioner based on the property at issue, and no

further investigation of the property was necessary.

Ultimately, the state court decided to modify the

punitive damage award to $500,000, saying that this

amount is “more rationally connected” to the non-

physical harm that the Respondents suffered.” App.

44. The state supreme court, therefore, completely

ignored the fundamental question of whether a triple

digit multiplier is constitutionally authorized in the

first place, the very issue that was pretermitted and,

1 wre 7 . . . .

[The Exxon decision stated that a 1 to 1 ratio was a fair

“upper limit” under maritime law for the situation involved in

that case.

* The state court failed to acknowledge at this point that

the jury heard of these “non-physical” harms and returned a

compensatory award of only $3,305, clearly electing not to in

clude this alleged damage in their award

hence, not addressed by the decision of the inter-

mediate appellate court. In short, the supreme court

failed to explain how this “modified” award is consti-

tutionally appropriate given that it bears a punitive

to compensatory ratio of 151 to 1.

—E = ) ————

REASONS FOR GRANTING THE WRIT

THE DECISION OF THE TENNESSEE

SUPREME COURT ESTABLISHING THE

PUNITIVE DAMAGE AWARD WITH A

MULTIPLIER OF 151 TO 11S IN SHARP

CONFLICT WITH THE PRECEDENT OF

THIS COURT AND FAR EXCEEDS THE

CONSTITUTIONAL DUE PROCESS LIM-

ITS ON PUNITIVE DAMAGES.

Rule 10 of this Court’s Rules identifies the char-

acter of reasons that will be considered in a petition

for writ of certiorari. At Subpart (c) the Rule states:

A state court or a United States court of

appeals has decided an important question of

federal law that has not been, but should be,

settled by this Court, or has decided an

important federal question in a way

that conflicts with relevant decisions of

this Court. (Emphasis added)

The case under consideration in this Petition for

Certiorari claims a solid position in Rule 10(c). Here,

the highest court in the State of Tennessee has de-

(

‘ided that an award of $500,000 punitive damages

not constitutionally prohibited as an excessive

‘

fine when based on compensatory damages of $3,305.

However, this 151 to 1 ratio is in direct opposition to

the decisions of this court since the 1996 decision in

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

(1996).

This court granted certiorari in BMW to “illumi-

nate the character of the standard that will identify

unconstitutionally excessive awards of punitive dam

ages.” 517 U.S. at 568. Since that decision, this Court

has considered the due process limitations on puni-

tive damages and has failed to authorize triple-digit

multipliers as constitutionally acceptable. Rather, the

cases have held that a 1 to 1 ratio is always con

stitutionally appropriate; a single-digit multiplier of

compensatory damages is also constitutionally ap

propriate; and a double-digit multiplier may be

constitutionally appropriate if there are especially

egregious circumstances. Since BMW, no case has

found a triple-digit multiplier to be constitutionally

acceptable

Rule 10(c) mandates that this case be accepted

for certiorari review

A. FOR MORE THAN A DECADE, THE

UNITED STATES SUPREME COURT

HAS HELD THAT, AT MOST, A MODEST

DOUBLE-DIGIT MULTIPLIER WOULD

PASS CONSTITUTIONAL MUSTER

WHEN APPLIED TO THE RELATION-

SHIP BETWEEN PUNITIVE AND COM-

PENSATORY DAMAGES AWARDED BY

A JURY UNDER ESPECIALLY EGRE-

GIOUS CIRCUMSTANCES.

A review of the decisions rendered by this

Court in the past decade reveals that the Court has

never approved, as consistent with due process

considerations or as constitutionally valid, a triple-

digit multiplier for the outer range of exemplary

damages. Rather, the Court has stated that even

modest double-digit multipliers may push the con-

stitutional bounds beyond legitimate due process

constraints.

The reasonableness of a punitive award is tested

by its relationship to the harm suffered by the plain-

tiff. See BMW of North America, Inc. v. Gore, supra;

Pacific Mutual Life Insurance Co. v. Haslip, supra.

In this Petition for a Writ of Certiorari, the compen-

satory damages assessed by the jury on the Re-

spondents’ nuisance claim were $3,305. Clearly, the

verdict’s punitive award of $2,000,000 reflects a puni-

tive to compensatory ratio of 604 to 1; the award

reduced to $1,000,000, the amount sued for, reflects a

ratio of 302 to 1; and the award as “modified” by the

Tennessee Supreme Court to $500,000 reflects a ratio

of 151 to 1. None of these awards have any relation-

ship to the compensatory damages the jury awarded,

and all are arbitrary and unconstitutionally excessive

under the Fourteenth Amendment to the Federal

Constitution.

This Honorable Court stated in State Farm

Mutual Automobile Insurance Co. v. Campbell, 538

U.S. 408 (2003):

While states possess discretion over the

imposition of punitive damages, it is well

established that there are procedural and

substantive constitutional limitations on

these awards. The Due Process Clause of

the Fourteenth Amendment prohibits

the imposition of grossly excessive or

arbitrary punishments on a tortfeasor.

Id. at 416 (Emphasis added)

In Philip Morris USA v. Williams, 549 U.S. 346

(2007), this Court again reviewed the procedural

limitations on punitive damage awards. The Philip

Morris jury returned a verdict of $79,500,000 in puni-

tive damages after awarding $821,000 in compensa-

tory damages. Thus the ratio was almost 100 to 1.

Although the viability of a 100 to 1 punitive award

was pretermitted due to the Court’s remand on other

issues, the Court reaffirmed its previous decisions

as to the purposes and limits of punitive damage

awards, clearly again establishing BMW and State

Farm as the guides for validity under the U.S.

Constitution.

For these and similar reasons, this Court has

found that the Constitution imposes certain

limits, in respect both to procedures for

awarding punitive damages and to amounts

forbidden as “grossly excessive”. See Honda

Motor Co. v. Oberg, 512 U.S. 415, 432 (1994)

(requiring judicial review of the size of puni-

tive awards); Cooper Industries, Inc. v.

Leatherman Tool Group, Inc., 532 U.S. 424,

443 (2001) (review must be de novo); BMW,

supra at 574-585 (excessiveness decision de-

pends upon the reprehensibility of the Peti-

tioner’s conduct, whether the award bears a

reasonable relationship to the actual and

potential harm caused by the Petitioner to

the plaintiff, and the difference between the

award and sanctions “authorized or imposed

in comparable cases”); State Farm, supra, at

425 (excessiveness more likely where ratio

exceeds single-digits).

549 U.S. at 352-353.

Respondents and the state supreme court rely on

the 1993 decision in TXO Production Corp. v. Alliance

Resources Corp., 509 U.S. 443 (1993), where the TXO

Court was faced with a judgment against the

Petitioner for $10,000,000 in punitive damages and

$19,000 in compensatory damages, reflecting a ratio

of 526 to 1. Petitioner submits the TXO decision is no

longer the decisive statement from this Court as to

the relationship between punitive and compensatory

damages. The TXO decision was rendered well prior

to the BMW decision (1996), the Campbell decision

(2003), the Philip Morris USA decision (2007) or

the Exxon Shipping Company decision (2008). Each of

these decisions have stressed the importance of the 1

to 1 or single-digit ratio, while also noting that, in

truly egregious circumstances, a modest double-digit

multiplier might pass constitutional scrutiny. No-

where, since the 1993 7’'XO decision, has this Court

authorized a triple-digit multiplier as constitutionally

permissible under the Fourteenth Amendment.

The 151 to 1 ratio applied by the state Court in

this case is an unconstitutional violation of the Peti-

tioner’s due process rights to be free from excessive

fines and penalties. This is particularly true where

the testimony of several witnesses, including the

director of the state regulatory agency, was clear and

uncontradicted:

¢ no fines or penalties were appropriate

for the property in question;

e no fines or penalties had been imposed;

¢ no fines or penalties would be imposed

in the future;

¢ the Solid Waste Disposal Act was not

applicable to the property site; and, the

Petitioner did not violate said Act.

[T.R. Vol. II, p. 595; IV, pp. 629, 670-671, 799 and

802]

Petitioner requests that this Court accept this

Petition for Writ of Certiorari so as to declare that a

triple-digit multiplier is an unconstitutional violation

of a party’s due process rights where there has been

no fine or penalty imposed on the Petitioner’s actions

at this site by any state or regulatory agency.

B. THE STATE SUPREME COURT CAN-

NOT IGNORE CONSTITUTIONAL LIMI-

TATIONS ON DAMAGES IMPOSED

BY THE UNITED STATES SUPREME

COURT.

This Court has held that it has no supervisory

jurisdiction over state courts other than to evaluate

the judgment in relation to the Federal Constitution.

See Chandler v. Florida, 449 U.S. 560, 570 (1981).

The words “other than” are crucial: this Court must

evaluate the Tennessee Supreme Court’s judgment

modifying the punitive damage award to an amount

bearing a ratio of 151 to 1 in light of the U.S. Con-

stitution and the Fourteenth Amendment’s due proc-

ess protection. Petitioner suggests that this ts the

very foundation of this Petition for Writ of Certiorari.

Indeed, the Fourteenth Amendment’s Due Process

Clause states: “nor shall any State deprive any

person of life, liberty, or property, without due process

of law.” This clause of the Fourteenth Amendment to

the U.S. Constitution has been construed sv as to

impose substantive limits on punitive damage

awards.

This Court has stated that due process precludes

the imposition of punishment whenever the defendant

reasonably could have concluded that its conduct was

lawful. See generally Colautti v. Franklin, 439 U.S.

379 (1979) (statute that predicated criminal responsi-

bility on a “complex medical judgment about which

experts can — and do — disagree” was unconstitu-

tionally vague); Connally v. General Constr. Co., 269

U.S. 385, 392 (1926) (law imposing criminal penalties

“should not admit of such a double meaning that the

citizen may act upon the one conception of its

requirements and the courts upon another”).

Further, these same principles apply to punish-

ment meted out in a civil proceeding, especially as it

relates to punitive damages, as recognized by this

Court when characterizing punitive damages as

“quasi-criminal.” Cooper Indus., Inc. v. Leatherman

Tool Group, Inc., 532 U.S. 424, 432 (2001). This

underscores the need for due process protection

against their arbitrary and standardless imposition.

Id. at 433.

This Court has long made clear that “[p]uni-

tive damages may properly be imposed to

further a State’s legitimate interests in pun-

ishing unlawful conduct and deterring its

repetition.” (internal citations omitted) At

the same time, we have emphasized the need

to avoid an arbitrary determination of an

award’s amount.

Philip Morris USA v. Williams, 549 U.S. at 352.

In the case subject of this Petition, the Tennessee

Supreme Court made an arbitrary determination of

the amount of punitive damages to be awarded.

Indeed, the evidence was uncontradicted that the

Petitioner did not violate any regulation or statute

and that none of its actions were illegal or subject to

fine or penalty. Clearly, if due process precludes im-

position of punishment when the defendant reasona-

bly could have concluded that its conduct was lawful,

the imposition of a punitive damage award when the

actions of the Petitioner were, in fact, lawful is a

violation of the Petitioner’s due process rights and

begs for this Court’s scrutiny.

After considering the BMW _ guideposts for

evaluation of punitive damages, the state court

stated:

In this case, the ratio of $1 million punitive

damages to compensatory damages as ap-

proved by the trial judge is over 302 to 1.

This ratio is excessive in light of the

circumstances presented. As set forth

above, Elmo Greer buried tires which, while

constituting a nuisance, do not constitute

an environmental hazard or threaten

the health or safety of any individual.

(Emphasis added) App. 41-42.

This Honorable Supreme Court has instructed

state and federal courts that in determining whether

the award is excessive, courts should give “substan-

tial deference” to legislative judgments concerning

appropriate sanctions for the conduct at issue. See

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

Inc., 492 U.S. 257, 301 (1989) (O'Connor, J.,

concurring in part and dissenting in part) In the case

at bar, the state Court noted, but failed to give any

merit to, the testimony of the Director of the enforce-

ment agency that fines were not and would not be

imposed by the State of Tennessee on the Petitioner

in this case because, as noted previously, the Act does

not apply to this site. Rather, the state court’s deci-

sion describes the high statutory penalties of the

Solid Waste Disposal Act of Tennessee, acknowledges

that the “statutory” guidepost neither supports nor

undermines the punitive damage award, but then

doubles back to imply that the statutory penalties

support the high punitive award rendered by the jury

and approved by the trial court.

Thus, the $1 million punitive award imposed

upon Elmo Greer is within the civil fine

range authorized by the legislature. How-

ever, Johnny Michael Apple, Director of Solid

Waste Management for the Tennessee De-

partment of Environment and Conservation.

testified that no fines had been or would be

imposed on Elmo Greer for this violation and

that no further investigation of this property

was needed. Given the apparent disparity

between the sanctions authorized by the

legislature and the sanctions that would,

in practice, be imposed, we cannot conclude

that this guidepost either supports or under-

mines the punitive damages awarded.

In short, we have carefully considered the

application of the three guideposts to the

punitive damages awarded in this case. After

doing so we are constrained to acknowledge

that the punitive award approved by the

trial court is too large given the circum-

stances and does violate Elmo Greer’s

due process rights. We conclude that the

award must be modified to $500,000.

This award sends a strong message about

the serious nature of Elmo Greer’s miscon-

duct. At the same time, however, it is more

rationally related to the non-physical harm

suffered in this case. App. 43-44.

Notwithstanding the language used by the state

court, Petitioner submits that this decision is an

arbitrary award unsupported by the evidence, is

grossly excessive, and is in violation of the due proc-

ess rights of the Petitioner. The state supreme court

noted the “disparity between the sanctions authorized

by the legislature and the sanctions that would, in

practice, be imposed”, however the court failed to

account for the fact that, as distinguished from “in

practice”, the reality in this case was that no sanc-

tions were authorized or levied against the Petitioner.

In short, this state court decision reflects an excessive

fine levied by a court against a company 1) that was

not guilty of any violation of the law, as evidenced by

the uncontradicted testimony of numerous witnesses

including the very state agency charged to enforce the

law, 2) where the jury had rejected the environmental

claim, and 3) where minimal compensatory damages

awarded on the nuisance claim only.

In the course of this Court’s analysis in Exxon,

the Court stated:

The Court’s response to outlier punitive

damages awards has thus far been confined

by claims at the constitutional level, and our

cases have announced due process standards

that every award must pass. See, e.g., State

Farm Mut. Automobile Ins. Co. v. Campbell,

538 U.S. 408, 425, 123 S.Ct. 1513, 155

L. Ed. 2d 585 (2003); Gore, 517 U.S., at 574-

575, 116 S.Ct. 1589, 134 L. Ed. 2d 809.

Although “we have consistently rejected the

notion that the constitutional line is marked

by a simple mathematical formula,” id., at

582, 116 S. Ct. 1589, 134 L. Ed. 2d 809, we

have determined that “few awards exceeding

a single-digit ratio between punitive and

compensatory damages, to a significant de-

gree, will satisfy due process,” State Farm,

538 U.S., at 425, 123 S.Ct. 1513, 155

L. Ed. 2d 585; “[wlhen compensatory dam-

ages are substantial, then a lesser ratio,

perhaps only equal to compensatory dam-

ages, can reach the outermost limit of the

due process guarantee,” 1bid.

Exxon, 128 S. Ct. at 2626.

The punitive damage award will not likely pass

constitutional scrutiny if there is more than a single-

digit ratio between the punitive and compensatory

damage award, certainly not a ratio of 604 or 302 or

even 151 to 1 as imposed in this case.

Clearly, the state supreme court decision flies in

the face of the punitive damage jurisprudence from

this Honorable Court. This Court has stated the due

process standards that every punitive damage award

must meet, and it is clear that in the instant case,

this standard simply is not met. This Honorable

Court is authorized, and indeed is compelled, to apply

the protections guaranteed by the Constitution to

cases where lower courts have misapplied and abused

the due process rights of the Petitioner. In this case,

the punitive damage award of $500,000 based on a

compensatory award of $3,305 (a ratio of 151 to 1)

presents an opportunity to address the constitutional

limitation on triple-digit multipliers applied to puni-

tive damage awards.

ll. THE TENNESSEE SUPREME COURT HAS

SEIZED AUTHORITY FOR ITSELF THAT

IS SPECIFICALLY RESERVED FOR THIS

COURT.

As previously noted, Petitioner submits that this

Petition for Writ of Certiorari is appropriate under

Supreme Court Rule 10(c) where the state supreme

court has decided an important federal question in a

way that conflicts with relevant decisions of this

Court. Here, the “important federal question” is

whether constitutional due process rights have been

violated by the imposition of an excessive punitive

damage award that is in direct conflict with the

numerous decisions of this Court.

A. THE STATE CANNOT CONCLUDE THAT

WHAT IS DECLARED UNCONSTITU-

TIONAL BY THE UNITED STATES

SUPREME COURT IS, NONETHELESS,

ALLOWABLE UNDER THE STATE CON-

STITUTION, AS ANY STATE ANALYSIS

OF A CONSTITUTIONAL ISSUE IS SUB-

SERVIENT TO THE UNITED STATES

CONSTITUTION AND ITS INTERPRE-

TATION BY THIS COURT.

In the 2003 decision in State Farm, supra, this

Court pointed to traditional remedies of “double,

treble, or quadruple damages” and stated that

“they demonstrate what should be obvious: [slingle-

digit multipliers are more likely to comport with due

process, while still achieving the State’s goals of de-

terrence and retribution, than awards with ratios in

range of 500 to 1 or, in this case, of 145 to 1.” 538 U.S.

at 425. In the case at bar, the Tennessee Supreme

Court “modified” the trial court’s award of punitive

damages from $1,000,000 based on the $3,305

compensatory damage award, a 302 to 1 ratio, to

$500,000, bearing a 151 to 1 ratio.

In short, the unanimous Tennessee Supreme

Court shunned the guidance from this Court, took

matters in its own hands and unilaterally determined

that a ratio of 151 to 1 was appropriate under the

U.S. Constitution, in clear contradiction to this

Court’s declaration in State Farm that a ratio such

as “145 to 1” did not comport with due process

constraints.

The Due Process Clause “prohibits the imposition

of grossly excessive or arbitrary punishments.” State

Farm, supra, 538 U.S. at 416. Further, this Court has

found that the U.S. Constitution imposes certain

limits, in respect both to procedures for awarding

punitive damages and to amounts forbidden as

“grossly excessive.” See Honda Motor Co. v. Oberg,

supra. Clearly, state courts cannot ignore what this

Court holds as the parameters for a constitutionally

acceptable limit on punitive damages. Where the

state supreme court has imposed a punitive damage

award in derogation of this Court’s pronouncements,

the refusal to follow this Court’s guidance can

result in nothing other than a “grossly excessive |and|

arbitrary punishment” that is in violation of the Peti-

tioner’s due process rights.

B. THE UNILATERAL DETERMINATION

THAT, IN TENNESSEE, PUNITIVE

DAMAGES CAN BE AWARDED IN AN

AMOUNT THAT IS IN EXCESS OF 150

TIMES THE COMPENSATORY DAM-

AGE AWARD RESULTS IN THE STATE

SUPREME COURT USURPING THIS

COURT’S PREROGATIVE TO INTER-

PRET AND ESTABLISH CONSTITU-

TIONAL DUE PROCESS GUIDELINES.

This Court granted certiorari in BMW to

“illuminate the character of the standard that will

identify unconstitutionally excessive awards of puni-

tive damages.” 517 U.S. at 568. The identification of

constitutionally excessive awards of punitive damages

is an issue that is squarely within the scope of the

Supreme Court’s jurisdiction.

[It is the federal courts that are the final

arbiters of federal constitutional rights, not

the state courts. See, e.g., Bennett v. Mueller,

322 F.3d 573, 582 (9th Cir. 2003) (“[S]tate

courts will not be the final arbiters of impor-

tant issues under the federal constitution.”

(quoting Minnesota v. Nat'l Tea Co., 309 U.S.

551, 557, 60 S.Ct. 676, 84 L. Ed. 920

(1940))).

Hopkins v. Bonvicino, 2009 U.S. App. LEXIS 15689

(9th Cir. Cal. 2009).

This was illustrated so clearly when this Su-

preme Court accepted the BMW case for review and

decision. The BMW decision provided lower courts

three “guidelines” that were to be used in evaluating

whether a punitive damage award was unconstitu-

tionally excessive and in violation of due process

rights of the defendant. Specifically, the Court stated

in BMW, supra, 517 U.S. at 574-585 that the ex-

cessiveness of the award depends upon 1) the repre-

hensibility of the defendant’s conduct, 2) whether the

award bears a reasonable relationship to the actual

and potential harm caused by the defendant to the

plaintiff, and 3) the difference between the award and

sanctions authorized or imposed in comparable cases.

In the case at bar, the Tennessee Supreme Court

quoted these guideposts and appeared to apply them

to the evidence, but then the court ignored the clear

result of that analysis and arbitrarily decided the

punitive damage amount in disregard of this Court’s

directives. Regarding the first guidepost, reprehensi

bility of the Petitioner’s conduct, the state court held

that burying tires on the Respondents’ property was

reprehensible conduct.’ But, the court then also

recognized that the jury found no “environmental

hazard” was created by the Petitioner and also that

the state found no violation of any statute or regu-

lation. The state court then held:

Thus, although Elmo Greer’s conduct was

sufficiently reprehensible for this guidepost

to point toward a substantial punitive dam-

ages award, it did not rise to the highest

level of reprehensibility. App. 37.

Regarding the second guidepost, whether the

award bears a reasonable relationship to the actual

and potential harm caused by the Petitioner to the

Respondents, the state court noted that there was no

hazard or threat by stating:

As set forth above, Elmo Greer buried tires

which, while constituting a nuisance, do not

constitute an environmental hazard or

* While the Petitioner disagrees with the award of punitive

damages in any amount, for purpose of this Petition, Petitioner

acknowledges but does not concede this finding of the lower

courts

threaten the health or safety of any

individual. App. 42.

Regarding the third guidepost, the difference be-

tween the award and sanctions authorized or imposed

in comparable cases, the state court detailed the

various penalties and fines that were possible under

the relevant statutes and regulations. However, as

referenced hereinabove, the court then noted that

representatives from the State of Tennessee testified

that no penalties or fines were appropriate and none

had been, or would be, issued against the Petitioner.

Surely, the potentiality of fines and penalties cannot

satisfy this guidepost if there is affirmative testimony

that the site has been inspected and that no fines

would be imposed under the relevant circumstances.

As to this guidepost, the state supreme court stated:

Given the apparent disparity between the

sanctions authorized by the legislature and

the sanctions that would, in practice, be

imposed, we cannot conclude that this

guidepost either supports or undermines the

punitive damages awarded. App. 44.

Notwithstanding the clear fact that none of the

three guideposts pointed to a significant punitive

damage award, the state court then continued to

state:

In short, we have carefully considered the

application of the three guideposts to the

punitive damages awarded in this case. After

doing so we are constrained to acknowlec ge

that the punitive award approved by the

trial court is too large given the circum-

stances and does violate Elmo Greer’s due

process rights. We conclude that the award

must be modified to $500,000. This award

sends a strong message about the serious

nature of Elmo Greer’s misconduct. At the

same time, however, it is more rationally

related to the non-physical harm suffered in

this case. App. 44.

Petitioner submits that the three BMW guide-

posts do not support a finding of extreme, repre-

hensible conduct sufficient to take this case out of the

single-digit multiplier category of cases. This is

evidenced by the supreme court’s statement that the

Petitioner’s actions were not the “highest level of

reprehensibility,” App. 37, that Petitioner’s actions “do

not constitute an environmental hazard or threaten

the health or safety of any individual,” App. 41-42,

and that the third guidepost neither “supports [nlor

undermines the punitive damages awarded.” App 44.

After making these statements, irrespective of the

state court’s conclusion as to each of the separate

BMW guideposts, the state court arbitrarily decided

to award $500,000 punitive damages on a $3,305 com-

pensatory award, a mathematical ratio of 151 to 1.

The Supreme Court of the United States has

appellate jurisdiction over federal questions

arising either in state or federal proceedings,

and by reason of the supremacy clause the

decisions of that court on national law have

binding effect on all lower courts whether

state or federal.

United States ex rel. Lawrence v. Woods, 1970 U.S.

App. LEXIS 6870, 8-9 (7th Cir. Il. 1970).

Petitioner submits that this Court has jurisdic-

tion to consider whether triple-digit multipliers are

constitutionally appropriate in the first instance, and,

if appropriate, whether such ratio is applicable where

the evidence does not find reprehensibility in the

extreme. Petitioner asserts that these questions have

been answered by this Court’s decisions since the

BMW decision established the guideposts. Specifi-

cally, as stated in State Farm, supra, rare is the case

where the one to one ratio is insufficient for a puni-

tive damage award, and, in that exceptional case, the

U.S. Constitution may allow a minimal double-digit

multiplier. The Tennessee Supreme Court erred when

it authorized a punitive damage award bearing a 151

to 1 ratio to the compensatory damage jury award.

This error has constitutional ramifications as it

renders the decision an unconstitutional violation of

the Petitioner’s due process rights.

Il. THE ISSUE IS IMPORTANT AND HAS

NATIONWIDE IMPACT.

At the outset, it could appear that this is one

renegade decision from the Tennessee Supreme Court

and that it affects only this Petitioner and none else.

The reality is, however, that this unanimous decision

is from the highest court in Tennessee and its deci-

sions are binding on all courts in the State of Tennes-

see. Furthermore, there is no guidance to Tennessee

trial or appellate courts expressing why the 301 to 1

ratio is unconstitutional while the 151 to 1 ratio is

not. This decision is in blatant disagreement. with

other precedents of this Court and it is for this reason

that this Court’s Rule 10(c) authorizes appellate

review in this situation.

Tennessee trial and appellate courts are bound

by the pronouncement of the Tennessee Supreme

Court and, if this decision is left as published, will be

guided by an unconstitutional standard for future

case applications. The citizens of Tennessee should

not be subject to arbitrary awards which are unpre-

dictable, which are unsupported by prououncement of

this Court, and which are unconstitutional.

Moreover, the effect of this decision is to place

Tennessee federal district courts, applying Tennessee

law in diversity situations, in the untenable position

of having a state supreme court decision *hat con-

flicts with decision of the United States Supreme

Court, the Court under whose control the federal

district and circuit courts abide. Where the state has

a standard different than the federal court for ac-

ceptable constitutional punitive damage awards,

forum shopping will be rampant. Further, although

somewhat speculative, it is entirely likely that the

eight (8) states surrounding Tennessee will be urged

to adopt the same punitive standards that are

available to litigants in their neighbor state, whether

or not that standard complies with this Court’s

pronouncement on the issue.

Petitioner recognizes that, generally, the United

States Supreme Court has no supervisory jurisdiction

over state courts; but, this Court does have juris-

diction over state court actions with respect to deci-

sions regarding the U.S. Constitution. This Court has

the ability, the obligation and the power to evaluate

the state court judgment in relation to the precepts

found in the U.S. Constitution. See Chandler v.

Florida, 449 U.S. at 570. The issue brought to this

Court in this Petition for Writ of Certiorari is im-

portant, although narrow. The Tennessee Supreme

Court and ail the trial and appellate courts beneath

its jurisdiction are now in a position where the rela-

tionship of punitive to compensatory damages is un-

settled, to be sure. What is the reasonable ratio, and

how much can the punitive damage be before it

becomes an excessive, arbitrary and unconstitutional

award? Absent guidance from this Court, the citizens

of Tennessee are subject to unconstitutional, over-

reaching, arbitrary punitive damage awards, to the

detriment of this Petitioner and others similarly

situated.

CONCLUSION

The case at issue in this Petition for Writ of

Certiorari presents a compelling need for this Court

to address the constitutionality of triple-digit multi-

pliers when applied to the punitive damages awarded

in civil litigation. Petitioner urges this Court to

accept this Petition for Writ of Certiorari so as to

direct the Tennessee Supreme Court to apply this

Court’s analysis to the case at bar and to reduce the

punitive damage award so that it is subject to a

single-digit multiplier or, alternatively, to remand the

case for determination of a constitutionally appro-

priate punitive damage award.

For the reasons stated, this Petition for Writ of

Certiorari should be granted.

Respectfully submitted,

LINDA J. HAMILTON MOWLES, Esq.

Tennessee BPR No. 010464

LEwis, KING, KRIEG & WALDROP, P.C.

620 Market Street, Fifth Floor

P. O. Box 2425

Knoxville, Tennessee 37901

(865) 546-4646

Attorneys for Petitioner

App. 1

IN THE SUPREME COURT OF TENNESSEE

AT NASHVILLE

June 2, 2009 Session

DAVID GOFF et al. v.

ELMO GREER & SONS

CONSTRUCTION CO., INC.

Appeal by permission from the Court of Appeals,

Middle Section

Circuit Court for White County

No. CCC-320 John A. Turnbull, Judge

No. M2006-02660-SC-R11-CV —

Filed November 3, 2009

The owners of real property filed suit against a

construction company hired by the State of Tennessee

to widen a highway adjacent to their property. The

property owners had a contract with the construction

company that allowed it to place equipment and

construction materials on their land in exchange for

compensation. Following the completion of the road

project, the property owners filed suit claiming that

the construction company failed to pay the amount

due under the contract and caused blasting damage

to their house and vehicles. They also claimed that

the construction company illegally buried debris on

their property. At trial, the parties stipulated that the

construction company was liable for breach of con-

tract in the amount of $5,355.50. A jury then deter-

mined that the construction company was strictly

App. 2

liable for harm caused by its blasting activities in the

amount of $9,510, and that burying debris on the

plaintiffs’ property constituted a nuisance for which

the company was liable for $3,305. The jury also

returned an award of $2 million in punitive damages

which the trial court modified to $1 million to

conform to the amount requested in the pleadings.

The Court of Appeals affirmed the trial court’s

judgment as to liability, but reversed the award of

punitive damages based on a finding that the trial

court improperly considered Tennessee’s environ-

mental laws in approving the award. After careful

review, we conclude that the evidence supports the

jury’s award of punitive damages and that the trial

court properly considered Tennessee’s environmental

statutes in approving that award. We further

conclude that the amount of the punitive damages

award does violate the construction company’s due

process rights and must be modified to $500,000.

Finally, we find no error in the trial court’s in-

structions to the jury regarding punitive damages or

its denial of a motion for mistrial based on a mention

of insurance during the trial. Accordingly, the decision

of the Court of Appeals is reversed and the judgment

of the trial court is reinstated as modified.

App. 3

Tenn. R. App. P. 11 Appeal by Permission;

Judgment of the Court of Appeals

Reversed; Judgment of the Trial Court

Reinstated as Modified

CORNELIA A. CLARK, J., delivered the opinion of the

court, in which JANICE M. HOLDER, C.J., and Gary R.

WADE, WILLIAM C. Kocu, JR., and SHARON G. LEE, JJ.,

joined.

John C. Knowles, Sparta, Tennessee, Jon E. Jones,

Cookeville, Tennessee, and John P. Pryor, Smithville,

Tennessee, for the appellants, David Goff, Joyce Goff,

and Agnes Goff.

Linda J. Hamilton Mowles, Knoxville, Tennessee, for

appellee, Elmo Greer & Sons Construction Co., Inc.

OPINION

Factual & Procedural History

David Goff and his mother, Agnes Goff, own 400

acres of pasture and timber land adjacent to Highway

111 in Sparta, Tennessee. Mr. Goff and his wife, Joyce

Goff, reside in a house they built on the property in

1978. As a result of highway development projects,

including the project at issue in this case, the Goffs’

home is encircled by four lanes of Highway 111 to the

front of their house and four lanes to the rear of their

house.

In 1993, the State of Tennessee contracted with

Elmo Greer & Sons Construction Company, Inc.

(“Elmo Greer”) to widen from two to four lanes the

App. 4

portion of Highway 111 adjacent to the Goffs’

property. Realizing that extensive blasting would be

required and that the project would produce excess

dirt and rock, Elmo Greer, on January 7, 1994,

contracted with the Goffs to place the excess material

on a portion of their land consisting of five to seven

acres (“fill area”). Elmo Greer agreed to pay the Goffs

ten cents per cubic yard of fill material placed on

their property. Elmo Greer further agreed that the fill

area would be left in a “neat and graded condition,” a

point of particular concern to the Goffs because they

hoped to have a suitable building site when con-

struction on the highway was completed.

Construction on Highway 111 lasted approxi-

mately three years. Starting in 1994, Elmo Greer

blasted extensively the area around Highway 111,

sometimes within 150 feet of the Goffs’ home, and

placed excess dirt and rock on their property. Rock

from the blasting damaged the Goffs’ vehicles and the

roof of their house and nearly hit one of their

children. During the construction process, Mr. Goff

periodically visited the fill area of his property and

became concerned with Elmo Greer’s business

practices. Mr. Goff noticed large motor oil deposits in

Elmo Greer, which is based in Kentucky, is described in

the record as a “heavy highway construction company” that

builds highways, dams, and bridges. At the time ef trial, Elmo

Greer had at least twenty major projects going on in ten dif-

ferent states, including projects in Tennessee. The State of

Tennessee paid the company approximately $13 million for its

work on Highway 111.

App. 5

the area where Elmo Greer staged its equipment. He

described “large areas” of the ground that were

“black” with oil and grease where Elmo Greer re-

paired and changed the oil on its equipment and

vehicles. He also noticed that the fill area was being

used to store tires, batteries, other vehicle parts, fifty-

five gallon oil drums, and other items. When Mr. Goff

questioned Elmo Greer’s onsite personnel about the

condition of the fill area he was repeatedly told “not

to worry about it” and “we'll clean it up.”

Unsatisfied with these reassurances, Mr. Goff

began taking pictures of the fill area, focusing on

several large tires buried beneath large rocks.

According to Mr. Goff, there were four or five “huge”

tires that had “big rocks” on them. He testified that

“in seeing that, you know, you wouldn't think they’d

dump [big rocks] on [the tires] and then take [the big

rocks] off and haul the tires off. So, I — I got my

camera and I made pictures.” Mr. Goff also focused

his attention on boxes, pipes, oily rags, oil drums

piled in the fill area, and other discarded waste.

Upon completing the construction project in

1997, Elmo Greer removed its equipment from the

Goffs’ property and compacted, graded, and seeded

the fill area. Elmo Greer did not, however, compen-

sate the Goffs for the fill material placed on their

land as provided for in their agreement, prompting

the Goffs to file suit for breach of contract. The Goffs

also claimed in their suit that Elmo Greer was

strictly liable for blasting damage to their house and

App. 6

vehicles, and further that Elmo Greer had unlawfully

buried discarded waste on their property.

Convinced that Elmo Greer had buried tires and

other materials on his land, Mr. Goff paid Lloyd

Shores Trucking and Excavating (“Lloyd Shores”)

$3,305 to twice dig up a small portion of the fill area.

During the first dig, Lloyd Shores unearthed one

large tire, eight feet tall and weighing at least one

ton, and a smaller tire described as a regular truck

tire. These tires were buried eight to nine feet deep

under a layer of compacted rocks, some of which were

the size of a pick-up truck. During the second dig,

Lloyd Shores unearthed some steel pipes and four

more tires of various sizes. It is undisputed that these

items were in the fill area of the Goffs’ property.

After discovering buried solid waste on their

land, the Goffs amended their complaint by alleging

that Elmo Greer

did willfully, unlawfully, intentionally, and

fraudulently deposit, bury, hide and conceal

upon [the Goffs’] real property ... waste

materials, used oil, petroleum, truck tires,

huge earth-moving tires and other waste

materials that are prohibited to be disposed

of in such manner by the laws of the State of

Tennessee ... all without proper and lawful

permitting and all without the consent or

approval of the [Goffs].

The amended complaint sought $250,000 in compen-

satory damages and $1 miliion in punitive damages.

The Goffs subsequently amended their complaint a

App. 7

second time, adding a nuisance cause of action claim-

ing that Elmo Greer

commit|ted] acts of nuisance ... by spilling

upon the property oil and _ petroleum

products and by burying and concealing

trash, garbage, waste products, rubber tires,

oil filters, used and discarded machinery

parts, all without permission or authoriza-

tion of the [Goffs] and did thereby create an

unauthorized, unlicensed, and _ prohibited

landfill.

This second amended complaint sought $500,000 in

compensatory damages and $1 million in punitive

damages.

The Goffs’ discovery of buried solid waste in the

fill area of their land prompted Elmo Greer to conduct

its own investigation by hiring AquAeTer, Inc. to

conduct an environmental site assessment. AquAeTer,

Inc. took soil samples from the fill area and analyzed

the samples “for hazardous materials, hazardous

constituents, [and] any chemicals that may have been

involved with any operations that were held on the

site.” The test results revealed “no hazardous ma-

terials or hazardous waste” in the fill area.

A three-day jury trial commenced on June 28,

2006. Mr. Goff testified about the pictures he had

taken of the fill area and the debris unearthed from

his land. He testified about seeing the oil spills,

batteries, vehicle parts, fifty-five gallon oil drums,

and other items stored on his property. He also

App. 8

related how he had repeatedly questioned Elmo Greer

about the condition of the fill area and how he sought

assurances that nothing but rock and dirt would be

buried on his land. He specifically told Elmo Greer

not to bury the “huge tires” he had seen. Elmo Greer’s

personnel repeatedly told him “not to worry about it”

and “we'll clean it up.” Mr. Goff nonetheless remained

concerned that the waste materials he had seen

would be buried.

Ken Johnson, a geologist, testified that the only

way to certify that the fill area was free of solid or

hazardous waste would be to excavate the entire

53,555 cubic yards of fill area at an estimated cost of

$318,000. Mr. Johnson testified that because six tires

were unearthed in the fill area, he would only certify

the property as clean after the entire area was ex-

cavated. With regard to hazardous waste, Mr. John-

son stated that excavation would not be necessary for

him to certify the property because the soil samples

taken from the fill area did not reveal the presence of

any such waste. Mr. Johnson also testified that, given

their size, the buried tires could not have been

accidentally covered up, noting that it had to be a

conscious and intentional act to bury them. He did

not recommend excavating the property to remove the

tires because tires do not cause a health concern and

do not deteriorate to the point of contaminating the

soil. Mr. Johnson testified that while tires are not

considered a hazardous waste, tires do cause an en-

vironmental concern, noting that “there are guide-

lines against improperly dumping [tires].”

App. 9

William Parrish, a real estate appraiser, testified

that the fill area was worth $10,000 an acre assuming

it was free from any buried solid waste. If the

property did have solid waste on it, Mr. Parrish

testified that it would be worth zero because latent

defects, such as buried solid waste, would have to be

disclosed to a potential buyer. Based on the size of the

fill area and the cost per cubic yard to excavate, Mr.

Parrish testified that it would cost approximately

$375,000 to “cure” the fill area of any latent defects.

Michael Corn, an environmental engineer with

AquAeTer, Inc., testified that there were “no

hazardous materials or hazardous waste” in the fill

area. He stated that “tires are not hazardous waste or

hazardous materials.” Mr. Corn also testified that

with soil sampling, solid waste — such as a tire —

would only be discovered if the probe inserted into the

ground happened to make direct contact with the

solid waste. He noted that the soil assessment

conducted on the Goffs’ property was only “looking for

hazardous waste and hazardous materials.” Based on

the results of that assessment, Mr. Corn believed that

it was umnecessary to excavate the fill area or

conduct more testing. He also stated his view that a

few tires and pipes buried on private property would

not create a “problem with the Solid Waste Disposal

Act.” Mr. Corn agreed, however, that pursuant to the

Solid Waste Disposal Act, waste tires should not be

buried in landfills but, instead, should be stored until

they can be “transported to an appropriate facility to

be used for an improved beneficial end use.” He also

App. 10

agreed that the Goffs’ property was not a designated

landfill which could store tires.

Terry Evans, a real estate appraiser hired by

Elmo Greer, testified about the value of the Goffs’

property at the time of trial. Mr. Evans explained

that, after reviewing the soil assessment report, the

photos of the fill area, and the unearthed tires and

pipes, he saw nothing to indicate that the fill area

was contaminated. He stated, however, that a

potential buyer “might use this information to

leverage a little better deal and might ask that the

sale price be lower maybe 3, 5 percent, maybe a little

bit lower.”

Lee Anderson, Elmo Greer’s chief engineer and

project manager, testified that he visited the con-

struction site once or twice a month. When asked

about the use of the fill area during the construction

process, Mr. Anderson testified that the area was

used to change the oil on Elmo Greer’s equipment.

According to Mr. Anderson, company policy required

that used oil be placed in fifty-five gallon drums and

sent to Elmo Greer’s headquarters in Kentucky

where it is recycled and used to heat their offices. As

to tires, Mr. Anderson conceded that tires were

stacked in the fill area during construction, but ex-

plained that once enough tires were stacked they

were taken to Elmo Greer’s headquarters to deter-

mine whether they could be retreaded. If not, the

tires were shredded and sent to a landfill. Mr.

Anderson testified that there is a financial cost asso-

ciated with disposing of tires in a landfill.

App. 11

After Elmo Greer- completed its work, Mr.

Anderson inspected the Goffs’ property and observed

tires lying on the fill area. He “called the shop and

told them to come pick up the equipment, tires, and

other surplus equipment.” When asked about the six

tires found buried in the fill area, Mr. Anderson

testified, “I have no idea. .. . It makes sense that [the

tires found] were ours but I don’t know that. They

could be [Mr. Goff’s tires].” He did admit, however,

that Elmo Greer used tires like those unearthed from

the fill area. He also testified that the company went

through “hundreds” of tires over the course of the

project because “limestone rock punches holes in

them and wears them out.” When asked why Elmo

Greer had policies regarding what to do with used oil

and tires, Mr. Anderson responded that it was “good

business to meet the regulations and requirements.

There’s no question as to what we’re supposed to do

and how we're supposed to do it.” He acknowledged

that Elmo Greer is obligated to follow “state and

federal regulations.”

Johnny Michael Apple, Director of the Division of

Solid Waste Management for the Tennessee Depart-

ment of Environment and Conservation, testified

that, other than some tires needing “to be properly

disposed of,” there was nothing unusual “that would

indicate [the need for] further investigation.” He

agreed, however, that discarded whole tires are solid

waste and that solid waste is not permitted to be

buried outside of an approved landfill and that doing

so violates state law. Mr. Apple explained that

App. 12

lawfully disposing of a tire requires shredding it. He

also acknowledged that one who improperly disposes

of solid waste is subject to a civil penalty of up to

$5,000 per day for each violation. See Tenn. Code

Ann. § 68-211-117(aX1) (2006). Finally, when pre-

sented with a hypothetical scenario that tires were

discovered eight to ten feet below ground buried

underneath heavy limestone rock and asked whether

these facts demonstrated an intent to bury tires, Mr.

Johnson agreed that those facts “would show that

someone was trying to hide those [tires].”

Following the close of the proof, the trial court

instructed the jury on the claims of “environmental

tort,” nuisance, and strict lia_ility for blasting. On a

special verdict form, however, the jury was asked to

determine whether Elmo Greer had caused an

“environmental hazard” to the Goffs’ property. The

phrase “environmental hazard” was not defined in

the charge. Elmo Greer stipulated that it was liable

for breach of contract in the amount of $5,355.50,

thus resolving the Goffs’ contract claim.” Regarding

the Goffs’ strict liability claim, the jury found that

Elmo Greer was strictly lable for the blasting

damage to their residence and vehicles and awarded

$9,510 in damages.* The jury also found that while

Elmo Greer had not caused an “environmental haz-

ard” on the Goffs’ land, it determined that Elmo

* This portion of the judgment is not at issue on appeal.

No issue has been raised on appeal regarding this award.

App. 13

Greer had created a nuisance and awarded $3,305 in

compensatory damages. The jury also determined

that the Goffs were entitled to punitive damages.

During the second phase of the trial to consider

the amount of punitive damages, Mr. Anderson, Elmo

Greer’s chief engineer and manager of the Highway

111 project, was the only witness to testify. He

testified that Elmo Greer had a net worth of over $46

million for the year 2000; $50 million for the year

2001; $51 million for the year 2002; and $54.3 million

for the year 2003. He also reiterated that Elmo

Greer’s policy “is to return ... tires to [the home

office] because you have to put [the tires] on a

machine to see if [they] can be sectioned or recapped.

You can’t tell on a job.” Mr. Anderson also testified

that Elmo Greer would have been subject to penalties

under its contract with the State, including losing the

right to continue with the project or not receiving

payment for the project, had Elmo Greer been caught

burying tires.

Following Mr. Anderson’s testimony and further

instructions from the court, the jury awarded $2

million in punitive damages. Elmo Greer subse-

quently moved for a mistrial based on a mention of

insurance during the trial. The trial court denied the

motion. Elmo Greer also filed a motion to alter or

amend the judgment or for a remittitur of the

punitive damages award. The trial court modified the

award of punitive damages to $1 million to conform to

App. 14

the amount the Goffs sought in their complaint,’ but

otherwise denied Elmo Greer’s motion to alter or

amend. The trial court approved the punitive award

after analyzing the factors the jury was instructed to

consider under Hodges v. S.C. Toof & Co., 833 S.W.2d

896, 901-02 (Tenn. 1992).

The Court of Appeals reversed the award of

punitive damages, concluding that the trial court

erroneously relied on Tennessee’s environmental

statutes in affirming the award given the jury’s

finding that Elmo Greer had not committed an

environmental hazard. The Court of Appeals thus

remanded the case to the trial court to reconsider the

award of punitive damages based on the nuisance

theory alone. The intermediate court did not address

whether the award violated Elmo Greer’s due process

rights.

The Goffs have appealed to this Court, asserting

that the Court of Appeals erred in remanding the case

to the trial court to re-evaluate the punitive damages

award considering only the nuisance claim to the

exclusion of Tennessee’s environmental laws. The

Goffs assert that the same facts support both the

environmental tort and nuisance claims and, there-

fore, the trial court properly considered Tennessee’s

environmental statutes in upholding the punitive

award. Elmo Greer responds that the Court of

* See Coffey v. Fayette Tubular Prods., 929 S.W.2d 326, 328-

29 (Tenn. 1996).

App. 15

Appeals correctly determined that the trial court

erred in considering Tennessee’s environmental laws

in affirming the punitive award and, in any event, no

material evidence exists to support an award of

punitive damages. Further, Elmo Greer maintains

that the trial court gave incorrect jury instructions

regarding punitive damages and that the amount of

the award is excessive. Finally, Elmo Greer argues

that the trial court erred by denying its motion for a

mistrial based on the trial court’s mention of in-

surance during the trial.

Analysis

I. “Environmental Tort” & “Environmental

Hazard”

As a threshold matter, we are compelled to

address a source of significant confusion in this case

stemming from the use of the term “environmental

tort” in the jury instructions. The Goffs’ original com-

plaint did not refer to or allege any “environmental

tort.” Instead, it alleged that Elmo Greer, “in violation

of environmental laws,” buried refuse and other

objects on the Goffs’ property without their permis-

sion. The Goffs’ first amended complaint alleged that

Elmo Greer intentionally buried and concealed waste

prohibited by state and federal law, but it likewise did

not explicitly state a cause of action for “environ-

mental tort.” In their second amended complaint, the

Goffs added a nuisance claim alleging that the

spilling of oil and petroleum products and the burying

App. 16

and concealment of trash and tires constituted a

nuisance. This complaint, like the other complaints,

did not allege an “environmental tort.”

The first mention of “environmental tort” in the

record comes not from the pleadings filed by the

Goffs, but from Elmo Greer’s trial brief which stated

that the Goffs sought to recover for an “environ-

mental tort and nuisance caused by environmental

tort.” A special verdict form proposed by Elmo Greer

requested that the jury decide four causes of action —

breach of contract, strict lability, “environmental

hazard,” and nuisance. There was no request by Elmo

Greer to charge the jury on a cause of action for

“environmental tort,” yet that is precisely what

happened.° Compounding the confusion, the jury was

* The record does not reflect what jury instructions were

requested by the Goffs.

° The trial court’s instruction on “environmental tort”

provided in part:

Environmental Tort

It is unlawful to dispose of solid waste in violation

of the Solid Waste Disposal Act of the State of Ten-

nessee. No solid waste processing facility or disposal

facility or site in any political subdivision of this state

shall be operated or maintained by any person unless

such person has registered with the Commissioncr in

the name of such person for the specified facility or

site.

Whole waste tires, lead acid batteries, and used

oil must be disposed of in a State approved site.

It is unlawful to construct, alter or operate a solid

waste processing or disposal faclity or site in

(Continued on following page)

App. 17

provided a verdict form containing the four causes of

action proposed by Elmo Greer, including the ques-

tion, “do you find that [Elmo Greer] caused an enut-

ronmental hazard to the Goff property?”’ (Emphasis

added). The phrase “environmental hazard” was not

defined in the jury instructions. Instead, there was

the instruction on “environmental tort.” This in-

struction was then followed by a separate instruction

on nuisance, along with a description of the damages

that could be awarded for “a nuisance ... by virtue of

violation of the rules and regulations or orders of the

Commissioner or in such a manner as to create a

public nuisance; or to dispose of solid waste in land

not designated and approved as a solid waste site.

" Although the proposed special verdict form submitted by

Elmo Greer was made part of the record, the actual verdict form

submitted to the jury is not part of the record. However, we have

derived its language and the responses of the jury from’ the

actions of the trial judge in reading the questions aloud after the

jury returned its verdict.

* As to nuisance, the jury was instructed as follows:

A nuisance is an unreasonable or unlawful use of

property that results in material or substantial

annoyance, inconvenience, discomfort, harm, or injury

to the [Goffs], or the [Goffs’] free use, possession, or

occupation of the [Goffs’] own property. .. . A nuisance

extends to everything that endangers health or life,

offends the senses, or obstructs the reasonable and

comfortable use of property. The standard for deter-

mining whether a particular use of property is a

nuisance is it’s [sic] effect upon persons of ordinary

health and sensibilities, and not upon those who are

unusually sensitive or peculiarly susceptible to the

thing complained of.

App. 18

an environmental tort.” The jury determined that

Elmo Greer did not commit an “environmental

hazard” which, again, was never defined.

Against this unusual and confusing backdrop, we

note that Tennessee, recognizing the dangers inher-

ent in hazardous waste, has adopted several statu-

tory schemes addressing that topic. For example, the

Tennessee Hazardous Waste Management Act of

1977, Tenn. Code Ann. §§ 68-212-101-121 (2006 &

Supp. 2009), defines hazardous waste as that which

may “(A) [cJause, or significantly contribute to an

increase in mortality or an increase in serious ir-

reversible illness or incapacitating reversible illness;

or (B) [plose a substantial present or potential hazard

to human health or the environment when im-

properly treated, stored, transported, disposed of, or

otherwise managed.” Id. § 68-212-104(8).” The Act,

which regulates the storage, transportation, treat-

ment, and disposal of hazardous waste, see id. § 68-

212-102(1), provides that criminal and civil penalties

may be imposed upon one who violates its provisions,

see id. § 68-212-114(a), (b), (c). The Act does not,

however, specifically provide for the filing of an action

by a private individual who alleges harm based on

another’s violation of the Act. Rather, the Act

provides that “[alny person qualified by law” may

intervene in an action brought by regulatory officials

* Effective June 25, 2009, subsection (8) became subsection

(9). See 2009 Tenn. Pub. Acts ch. 531, §§ 7, 63.

App. 19

charged with enforcing the Act, see id. § 68-212-

114(d), and it allows an individual to file a complaint

with regulatory officials against an alleged violator,

id. § 68-212-117(a). Further, “any citizen” has the

right to intervene on the ground that the penalties or

remedies imposed by regulatory officials are inade-

quate or are based on erroneous findings of fact. Id.

§ 68-212-114(eX(3)(B).

Tennessee also has the Hazardous Waste Man-

agement Act of 1983, Tenn. Code Ann. §§ 68-212-201-

227 (2006 & Supp. 2009), which likewise imposes civil

and criminal penalties for violating its provisions, id.

§ 68-212-213. This Act gives regulatory officials su-

pervision over enforcement and gives citizens rights

to intervene similar to those granted under the 1977

Act. See id. § 68-212-215.

There is also the Tennessee Hazardous Waste

Reduction Act of 1990, Tenn. Code Ann. §§ 68-212-

301-312 (2006 & Supp. 2009), which creates addi-

tional rules and regulations and imposes an addi-

tional civil penalty of up to $10,000 for each day a

violation of the Act continues. Jd. § 68-212-309. No

specific right of individuals to intervene is provided

for in the Hazardous Waste Reduction Act of 1990.

In addition to the various hazardous waste acts,

the legislature adopted in 1969 the Tennessee Solid

Waste Disposal Act, Tenn. Code Ann. §§ 68-211-101-

124 (2006 & Supp. 2009), which defines “solid waste”

as including

App. 20

garbage, trash, refuse, abandoned material,

spent material, byproducts, scrap, ash,

sludge, and all discarded material including

solid, liquid, semisolid, or contained gaseous

material resulting from industrial, commer-

cial, and agricultural operations, and from

community activities. Solid waste includes,

without limitation, recyclable material when

it is discarded or when it is used in a manner

constituting disposal.

Id. § 68-211-103(8). The Solid Waste Disposal Act, like

the statutes dealing with hazard waste, provides for

criminal and civil penalties for a violation of its

provisions. See id. §§ 68-211-114 & -117. Although the

Solid Waste Disposal Act would apply to circum-

stances like the burial of tires on private property,

our courts have recognized that it does not provide a

private right of action for persons harmed by a

violation of its provisions. See Wayne County v. Tenn.

Solid Waste Disposal Control Bd., 756 S.W.2d 274,

283 (Tenn. Ct. App. 1988). Instead, such persons may

seek redress under other legal theories, such as

nuisance. /d. Furthermore, in appropriate cases, a

cause of action for trespass, negligence, or strict lia-

bility could be brought.

Given the language of these various environ-

mental laws, along with prior cases addressing the

Solid Waste Disposal Act itself, it is unclear to this

Court why the jury was instructed on “environmental

tort.” Arguably, the Goffs lacked standing to bring

any such claim. However, since the jury did not find

the existence of any environmental tort and the issue

App. 21

has not been raised by either side on appeal, it is

unnecessary for us to decide at this time whether a

private right of action exists for a claimed violation of

the state’s environmental statutes. We merely

observe at this point that the same facts supporting a

violation of the Solid Waste Disposal Act can

constitute a nuisance, as found by the jury in this

case.

Il. The Punitive Damages Award

As indicated above, after finding that Elmo Greer

created a nuisance, the jury awarded $2 million in

punitive damages. The trial court modified the award

to $1 million to conform to the amount the Goffs

sought in their complaint. Elmo Greer attacks the

modified punitive damage award on four grounds.

First, Elmo Greer asserts that the evidence is in-

sufficient to support any award of punitive damages.

Second, Elmo Greer argues that the trial court erred

in considering Tennessee’s environmental statutes in

affirming the punitive damage award. Third, Elmo

Greer argues that the amount of the punitive award

is excessive to the point that it violates due process

under standards adopted by the United States

Supreme Court in BMW of N. Am., Inc. v. Gore, 517

U.S. 559 (1996), and its progeny. And fourth, Elmo

Greer contends that, because the Goffs pled only

intentional and fraudulent conduct, the trial court

erred when it instructed the jury that intentional or

reckless conduct can form the basis for punitive

damages and further erred in failing to instruct the

App. 22

jury that punitive damages are proper only in

egregious circumstances. We address each of these

arguments in turn.

A. Sufficiency of the Evidence Supporting

Punitive Damages

Compensatory and punitive damage awards

serve vastly different purposes. Compensatory dam-

ages are intended to compensate an injured plaintiff

for personal injury or property damage and thereby

make the plaintiff whole again. Hodges, 833 S.W.2d

at 902. In contrast, punitive damages are intended to

“punish a defendant, to deter him from committing

acts of a similar nature, and to make a _ public

example of him.” Huckeby v. Spangler, 563 S.W.2d

555, 558-59 (Tenn. 1978). Punitive damages are thus

appropriate only in the most egregious cases and,

consequently, a verdict imposing such damages must

be supported by clear and convincing evidence that

the defendant acted intentionally, fraudulently, ma-

liciously, or recklessly. Hodges, 833 S.W.2d at 901.

Evidence is clear and convincing when it leaves “no

serious or substantial doubt about the correctness of

the conclusions drawn.” Jd. at 901 n.3. In other

words, the evidence must be such that the truth of

the facts asserted be “highly probable.” Teter v.

Republic Parking Sys., Inc., 181 S.W.3d 330, 341

(Tenn. 2005).

In this case, the jury found that the Goffs had

proven by clear and convincing evidence that Elmo

App. 23

Greer was “guilty of egregious, intentional or reckless

acts” and thus punitive damages were warranted.

Elmo Greer asserts that the record does not support

the jury’s conclusion and therefore the punitive

damage award should be reversed in its entirety. We

thus review the record to determine whether there is

material evidence to support the jury’s finding that

there is no serious or substantial doubt that Elmo

Greer acted intentionally” or recklessly." Flax uv.

DaimlerChrysler Corp., 272 S.W.3d 521, 532 (Tenn.

2008).

The jury had evidence before it that the tires

discovered on the Goffs’ property were buried eight to

nine feet deep una: © a layer of compacted rocks, some

of which were the size of a pick-up truck. One of these

tires was eight feet tall and weighed at least one ton.

It is undisputed that the tires, along with the steel

pipes, were unearthed in the fill area of the Goffs’

property. Ken Johnson, the geologist who testified for

the Goffs, stated that given their size the buried tires

could not have been accidentally covered up, noting

that it had to be a conscious and intentional act to

'° A person acts intentionally when “it is the person’s

conscious objective or desire to engage in the conduct or cause

the result.” Hodges, 833 S.W.2d at 901.

'' A person acts recklessly when the person “is aware of, but

consciously disregards, a substantial and unjustifiable risk of

such a nature that its disregard constitutes a gross deviation

from the standard of care that an ordinary person would

exercise under all the circumstances.” Hodges, 833 S.W.2d at

901.

App. 24

bury them. One of Elmo Greer’s witnesses, Johnny

Michael Apple, likewise testified that “someone was

trying to hide those [tires].” Accordingly, the jury

heard witnesses proffered by both parties asserting

that the only way to bury large tires eight or nine feet

underground would be to do so intentionally. Further,

the jury had before it the testimony of Mr. Goff that

he repeatedly questioned Elmo Greer’s employees

about the condition of the fill area and how he sought

assurances that nothing but rock and dirt would be

buried on his land. He specifically told Elmo Greer

not to bury the tires he had seen. Elmo Greer’s

personnel repeatedly told him “not to worry about it”

and “we'll clean it up.” The tires were nonetheless

buried. Although Elmo Greer’s chief engineer, Mr.

Anderson, refused to acknowledge that the unearthed

tires belonged to Elmo Greer or that Elmo Greer

buried the tires, we are persuaded that the jury

reasonably concluded that Elmo Greer acted in-

tentionally, or at least recklessly, in burying the tires.

Additionally, the evidence demonstrated that

there are strong public policy reasons against burying

waste tires and that Elmo Greer was aware of these

policies. Mr. Anderson testified that Elmo Greer was

obligated to follow “state and federal regulations” and

that the company would have been subject to

penalties under its contract with the State had Elmo

Greer been caught burying tires. Elmo Greer none-

theless buried the tires and subsequently showed no

remorse for doing so. In fact, Elmo Greer proffered

testimony from several witnesses that downplayed

App. 25

the significance of burying the tires. The public policy

of this State, however, suggests that inappropriately

burying even one waste tire is one too many,

subjecting the violator to potentially significant

financial penalties, i.e., up to $5,000 per day. See

Tenn. Code Ann. § 68-211-117(aX1). The record also

indicates that properly disposing of the waste tires

would have cost Elmo Greer money. The jury could

have reasonably concluded that Elmo Greer

intentionally buried the tires to avoid this expense.

Viewing these circumstances as a whole, we have no

difficulty finding that the record contains material

evidence supporting the jury’s finding by clear and

convincing evidence that Elmo Greer acted

intentionally or recklessly.

B. Consideration of the State’s Environ*iental

Laws

Once a jury awards punitive damages, the trial

court must review the award to ensure that the

wrongdoer’s conduct rose to the level where punitive

damages are appropriate. Hedges, 833 S.W.2d at 902.

The trial court thus reviews the evidence to consider

whether the jury’s findings are supported by clear

and convincing evidence and whether the punitive

award effectively punishes ana deters the defendant

from committing the same acts in the future. To guide

trial courts in this review, we have identified a

number of relevant factors:

(1) The defendant’s financial affairs, finan-

cial condition, and net worth;

App. 26

(2) The nature and reprehensibility of

defendant’s wrongdoing, for example

(A) the impact of defendant’s conduct

on the plaintiff, or

(B) The relationship of defendant to

plaintiff;

(3) The defendant’s awareness of the amount

of harm being caused and defendant’s moti-

vation in causing the harm;

(4) The duration of defendant’s misconduct

and whether defendant attempted to conceal

the conduct;

(5) The expense plaintiff has borne in the

attempt to recover the losses;

(6) Whether defendant profited from the

activity, and if defendant did profit, whet] er

the punitive award should be in excess of the

profit in order to deter similar future

behavior;

(7) Whether, and the extent to which, de-

fendant has been subjected to previous

punitive damages awards based upon the

same wrongful act;

(8) Whether, once the misconduct became

known to defendant, defendant took reme-

dial action or attempted to make amends by

offering a prompt and fair settlement for

actual harm caused; and

App. 27

(9) Any other circumstances shown by the

evidence that bear on determining the proper

amount of the punitive award.

Hodges, 833 S.W.2d at 901-02.

Analyzing these factors in great detail, the trial

court concluded that clear and convincing evidence

demonstrated that Elmo Greer intentionally buried

the tires unearthed from the Goffs’ land and that

such behavior warranted a $1 million punitive

damage award. In support of this co-:clusion, the trial

court noted that the burying of tires was against the

State’s policy “to avoid pollution and the creation of

unpermitted landfills,” that the “State of Tennessee

has a strong and legitimate interest in preventing

construction companies ... from dumping or

polluting property located within the state,” and that

“[blurying solid waste tires is a violation of [the]

Tennessee Solid Waste Disposal Act.” The Court of

Appeals determined that because the jury found that

Elmo Greer had not committed an environmental

tort, the trial court should not have relied on the

State’s environmental statutes and policies in

affirming the award of punitive damages. Based on

this finding, the Court of Appeals reversed the award

of punitive damages and remanded the case to the

trial court to reconsider the award based on the

nuisance theory alone.

The Goffs assert that the trial court correctly

considered the State’s pollution statutes in affirming

the punitive award because these laws and the

App. 28

policies they reflect are relevant in determining the

reprehensibility of Elmo Greer’s actions. The Goffs

further assert that the trial court did not consider the

environmental tort claim itself in reviewing the

punitive award, but the facts supporting the nuisance

claim. Elmo Greer responds that the trial court

improperly based the punitive award upon an

environmental tort theory that the jury rejected.

Accordingly, Elmo Greer argues that the Court of

Appeals properly corrected the trial court’s error by

remanding the case for reconsideration of the

punitive award without regard to the State’s

environmental laws. We are persuaded that the Goffs

have the better argument.

The evidence supporting the nuisance claim was

the proof regarding buried whole waste tires. In order

to determine the reprehensibility of burying whole

waste tires, the trial court considered the State’s

policy regarding such action. To this end, the trial

court correctly noted that the State has enacted

legislation against burying whole waste tires, recited

the public policy behind that legislation, ack-

nowledged that Elmo Greer was aware of the State’s

policy against burying waste tires, and observed that

high civil penalties are permissible for burying waste

tires. In our view, the fact that the legislature has

determined it necessary to prevent the improper

burial of tires “to protect the public health, safety and

welfare” is important in the discussion of the

reprehensibility of Elmo Greer’s actions. See Tenn.

Code Ann. § 68-211-102(a). Accordingly, we do not find

App. 29

that these assertions by the trial court impiied that

the jury found Elmo Greer liable for violating any of

the state’s Hazardous Waste Disposal Acts or that the

trial court relied upon the environmental tort cause of

action itself in reviewing the punitive award. Instead,

we find that the trial court referenced the State’s

solid waste disposal laws to explain why the creation

of a nuisance by burying whole waste tires was

egregious enough to warrant punitive damages.

Moreover, as noted above, the same facts supporting a

violation of the Solid Waste Disposal Act can con-

stitute a nuisance, as found by the jury in this case.

See Wayne County, 756 S.W.2d at 283. We thus

conclude that the trial court’s consideration of stat-

utes and policies against pollution and unauthorized

landfills was legally permissible and factually

appropriate.

C. Excessiveness of the Award/Due Process

Having determined that the record contains

evidence sufficient to award punitive damages and

that the trial court did not err in referencing the

State’s environmental laws in reviewing the punitive

award, we now must decide whether the size of the

award viclates Elmo Greer’s due process rights under

the Fourteenth Amendment to the United States

Constitution. See State Farm Mut. Auto. Ins. Co. uv.

Campbeli, 538 U.S. 408, 412 (2003); Gore, 517 U.S.

at 562-63; Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S.

1, 7-8 (1991). When deciding whether a punitive

damages award is excessive to the point that it

App. 30

transgresses constitutional due process standards,

our review is de novo to ensure that the award is

based on an application of the law rather than the

jury’s caprice. Campbell, 538 U.S. at 418.

The United States Supreme Court squarely

addressed for the first time whether a punitive

damages award offended the Fourteenth Amendment

in Haslip, 499 U.S. at 18. In Haslip, the jury found

the defendant liable for fraud and awarded com-

pensatory damages in the amount of $200,000

together with punitive damages in the amount of

$840,000. The Court began its analysis by reviewing

the long-standing history of punitive awards, noting

first that “_plunitive damages have long been a part

of traditional state tort law,” id. at 15 (quoting

Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 255

(1984)), and concluding that it “cannot say that the

common-law method for assessing punitive damages

is so inherently unfair as to deny due process and be

per se unconstitutional,” id. at 17. The Court also

acknowledged, however, that “[o]ne must concede that

unlimited jury discretion — or unlimited judicial

discretion for that matter — in the fixing of punitive

damages may invite extreme resulis that jar one’s

constitutional sensibilities.” Jd. at 18. Recognizing the

difficulty in attempting to “draw a mathematical

bright line between the constitutionally acceptable

and the constitutionally unacceptable,” the Court in

Haslip emphasized that “general concerns of rea-

sonableness and adequate guidance from the court

when the case is tried to a jury properly enter into

App. 31

the constitutional calculus.” Jd. The Court then

upheld the punitive award before it, holding as

follows:

We are aware that the punitive damages

award in this case is more than 4 times the

amount of compensatory damages, is more

than 200 times the out-of-pocket expenses of

respondent Haslip, and, of course, is much in

excess of the fine that could be imposed for

insurance fraud under {Alabama law]. Im-

prisonment, however, could also be required

of an individual in the criminal context.

While the monetary comparisons are wide

and, indeed, may be close to the line, the

award here did not lack objective criteria. We

conclude, after careful consideration, that in

this case it does not cross the line into the

area of constitutional impropriety.

Id. at 23-24 (citations omitted).

Several years later, again considering a due

process challenge to punitive damages, the Court

made clear that “notions of fairness enshrined in our

constitutional jurisprudence dictate that a person

receive fair notice not only of the conduct that will

subject him to punishment, but also of the severity of

the penalty that a State may impose.” Gore, 517 U.S.

at 574. And, although the Court has emphasized that

punitive damages are “aimed at deterrence and

retribution,” Campbell, 538 U.S. at 416, and that a

jury’s “imposition of punitive damages is an ex-

pression of its moral condemnation,” Cooper Indus.,

Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424,

App. 32

432 (2001), it has also warned that “|t]o the extent an

award [of punitive damages] is grossly excessive, it

furthers no legitimate purpose and constitutes an

arbitrary deprivation of property.” Campbell, 538 U.S.

at 417. To assist courts in determining whether a

punitive award is grossly excessive and violates due

process, the Court has identified three guideposts: (1)

the degree of reprehensibility of the defendant’s

conduct; (2) the disparity between the actual or

potential harm suffered by the plaintiff and the

punitive damages award; and (3) the difference

between the punitive damages awarded and the civil

penalties authorized or imposed in comparable cases.

Gore, 517 U.S. at 574-75. We will consider the

application of each of these guideposts to the punitive

damages awarded in this case.

(1) Reprehensibility of the Conduct

The first of the three guideposts is “[plerhaps the

most important indicium of the reasonableness of a

punitive damages award.” Gore, 517 U.S. at 575.

Citing factors similar to those set forth in Hodges, the

Supreme Court has explained that “some wrongs

are more blameworthy than others,” id., including

“trickery and deceit,” zd. at 576 (quoting 7’XO Prod.

Corp. v. Alliance Res. Corp., 509 U.S. 443, 462

(1993)). And while the Court has indicated that

purely economic harm may be less reprehensible than

harm involving health and safety, it has also

indicated that “infliction of economic injury, especially

when done intentionally through affirmative acts of

App. 33

misconduct, or when the target is financially vul-

nerable, can warrant a substantial penalty.” /d. at

576 (citation omitted). The Supreme Court has also

observed that, when addressing the reprehensible

nature of a defendant’s conduct, courts should

consider whether

the harm caused was physical as opposed to

economic; the tortious conduct evinced an

indifference to or a reckless disregard of the

health or safety of others; the target of the

conduct had financial vulnerability; the

conduct involved repeated actions or was an

isolated incident; and the harm was the

result of intentional malice, trickery, or

deceit, or mere accident.

Campbell, 538 U.S. at 419.

Applying these factors to the instant case, we

find Elmo Greer’s actions objectionable in several

significant ways. First, Elmo Greer intentionally

buried tires on the Goffs’ property. Elmo Greer en-

gaged in this deliberate conduct despite its repeated

assurances to Mr. Goff “not to worry about it” and

“we'll clean it up,” and despite Mr. Goff’s specific

request that the tires not be buried. Second, this

intentional conduct included an effort by Elmo Greer

to hide its deliberate misdeeds because Elmo Greer

buried the tires under large, heavy limestone rocks

some as large as a pick-up truck — eight or nine feet

underground. The Goffs were helpless to discover the

tires without hiring excavation experts at their own

expense. Third, because Mr. Anderson testified that

App. 34

there is a cost associated with properly disposing of

tires, it appears that Elmo Greer buried them to

avoid having to pay these expenses.” Fourth, Elmo

Greer knew that its conduct was not only in violation

of its contract with the Goffs, but was illegal as well,

for Mr. Anderson admitted to being aware of State

law regarding the disposal of tires. He also knew that

Elmo Greer would have faced heavy penalties had the

company been caught burying tires. Fifth, Elmo

Greer’s conduct violated clearly expressed public

policies regarding pollution and unauthorized land-

fills. The legislature has clearly set forth the public

policy behind the State’s solid waste disposal laws:

In order to protect the public health, safety

and welfare, prevent the spread of disease

and creation of nuisances, conserve our

natural resources, enhance the beauty and

quality of our environment and provide a

coordinated statewide solid waste disposal

program, it is declared to be the public policy

of the state of Tennessee to regulate solid

waste disposal to:

(1) Provide for safe and sanitary processing

and disposal of solid wastes;

“ The trial court observed that E}mo Greer “knew how

large tires were required to be cut up and shredded and then

disposed of in an approved site. It is difficult to determine the

defendant’s motivation. Was it convenience? Was it laziness?

Was it ‘we won't get caught’? Was it to save money and increase

profit? Whatever the motivation, it was not admirable.”

App. 35

(2) Develop long-range plans for adequate

solid waste disposal systems to meet future

demands; [and]

(3) Provide a coordinated statewide pro-

gram of control of solid waste processing and

disposal in cooperation with federal, state,

and local agencies responsible for the pre-

vention, control, or abatement of air, water,

and land pollution.

Tenn. Code Ann. § 68-211-102(a)."" The legislature has

also noted the important state interest of “educat[ing]

and encouragling] generators and handlers of solid

waste to reduce and minimize to the greatest extent

possible the amount of solid waste which requires

collection, treatment, incineration or disposal through

source reduction, reuse, composting, recycling and

other methods.” /d. § 68-211-803(b). Despite being

aware of these policies, Elmo Greer elected to ignore

them.

Elmo Greer’s conduct was exacerbated by its

refusal to accept responsibility for its actions. Mr.

Anderson conditioned the company’s apology by

stating that “/i/f Elmo Greer had something to do

with [the tires], [it was] sorry.” (Emphasis added).

Elmo Greer’s witnesses downplayed the significance

Like the trial court, we reference relevant portions of the

Solid Waste Disposal Act to explain why burying tires con-

stitutes reprehensible conduct, though we realize that the jury

did not find Elmo Greer liable for creating an “environmental

hazard.”

App. 36

of the concealed tires. This testimony, in our opinion,

does not demonstrate much accountability or remorse

— important factors in evaluating the likelihood that a

tortfeasor will repeat its tortious conduct. Instead, it

suggests that Elmo Greer operates with the mind-set

that burying tires in violation of the law and in

breach of contractual obligations is simply “no big

deal.”

These multiple aspects of Elmo Greer’s conduct

are indicative of bad faith. See Gore, 517 U.S. at 579

(invalidating a punitive damage award in part

because the record disclosed “no deliberate false

statements, acts of affirmative misconduct, or con-

cealment of evidence of improper motive”). Moreover,

they indicate that Elmo Greer was willing to de-

liberately harm not only the Goffs, but willing to

place others potentially at risk by essentially creating

an unauthorized landfill. Elmo Greer’s disregard for

the public interest is all the more troubling in light of

the fact that it was acting as a contractor for the

State of Tennessee. Elmo Greer did nothing to

alleviate the situation its indifference had created,

but rather chose to hide and trivialize it.

At the same time, consistent with the testimony

presented, the jury found that Elmo Greer did not

create an environmental hazard to the Goff property.

The expert testimony was clear that there is little

likelihood that environmentally dangerous or other

hazardous chemicals have been spilled onto the land

or into the water supply. The Tennessee Department

of Environment and Conservation was made aware of

App. 37

the situation but declined to assess any penalties

because it did not find any long term health or safety

risks to exist on this property.

Thus, although Elmo Greer’s conduct was

sufficiently reprehensible for this guidepost to point

toward a substantial punitive damages award, it did

not rise to the highest level of reprehensibility.

(2) Disparity Between the Harm and the

Award

The second guidepost is the “disparity between

the harm or potential harm suffered” and the

punitive damages awarded. Gore, 517 U.S. at 575.

This guidepost reflects the general concern that

punitive damages bear a “reasonable relationship” to

compensatory damages. /d. at 580. According to the

Supreme Court, “the proper inquiry is whether there

is a reasonable relationship between the punitive

damages award and the harm likely to result from the

defendant’s conduct as well as the harm that actually

has occurred.” /d. at 581 (internal quotation marks

and citation omitted). Although the Court has re-

peatedly refused to “impose a bright-line ratio which

a punitive damages award cannot exceed,” the Court

has also stated that “few awards exceeding a single-

digit ratio between punitive and compensatory dam-

ages ... will satisfy due process.” Campbell, 538 U.S.

at 42. See also Gore, 517 U.S. at 582-83 (“Of course,

we have consistently rejected the notion that the con-

stitutional line is marked by a simple mathematical

App. 38

formula....”). Moreover, the Supreme Court has

made clear that “[t]he precise award in any case, of

course, must be based upon the facts and circum-

stances of the defendant’s conduct and the harm to

the plaintiff,” and that “there are no mgid bench-

marks that a punitive damages award may not

surpass.” Campbell, 538 U.S. at 425." We agree.

The Supreme Court has acknowledged that “low

awards of compensatory damages may properly

support a higher ratio than high compensatory

awards, if, for example, a particularly egregious act

has resulted in only a small amount of economic

damages.” Gore, 517 U.S. at 5829. “A higher ratio

may also be justified in cases in which the injury is

hard to detect or the monetary value of noneconomic

harm might have been difficult to determine.” Jd.”

‘* Although the Supreme Court has not adopted a bright-

line rule to be applied, it did impose a specific 1-te-1 ratio of

punitive damages to compensatory damages in Exxon Shipping

Co. v. Baker, 128 S. Ct. 2605 (2008). In that case, following the

wreck of the Exxon Valdez and the resulting oil spill in Alaska,

compensatory damages were assessed against Exxon in the

amount of $507.5 million, plus punitive damages of $5 billion.

After noting that the case “differs from due process review

because the case arises under federal maritime jurisdiction, and

we are reviewing a jury award for conformity with maritime law,

rather than the outer limit allowed by due process,” the Court

determined that a 1-to-1 ratio of punitive damages to compen-

satory damages “is a fair upper limit in such maritime cases.”

Id. at 2626, 2633. The Court therefore remitted the punitive

damages award to $507.5 million.

‘* We note that some federal courts have suggested that in

cases where nominal damages are awarded, the ratio inquiry

(Continued on following page)

App. 39

However, the Court has described as “breathtaking” a

500-to-1 ratio between punitive and compensatory

awards. Id. at 583.

In this case, Elmo Greer asserts that a $1 million

punitive damage award is excessive because it

exceeds the compensatory award by a ratio of 302 to

1. Thus we must analyze the Supreme Court’s cases

dealing with punitive damages in greater detail to

determine whether focusing only on the ratio, and

insisting that only single-digit ratios are constitu-

tional, reflects an overly restrictive view that does not

comport with the Supreme Court’s jurisprudence on

the subject. :

In TXO Production Corp., 509 U.S. at 453 the

Supreme Court affirmed a punitive damage award

that was 526 times as great as the compensatory

damages. In that case, TXO contracted to purchase

the oul and gas rights on a tract of land owned by

Alliance. TXO subsequently manufactured a claim

that title to the property was defective and attempted

to renegotiate its deal with Alliance. When the nego-

tiations were unsuccessful, TXO sought a declaratory

judgment to remove the purported defect. Alliance

counterclaimed for slander of title and was awarded

can be largely disregarded. See, e.g., Abner v. Kansas City S.

R.R., 513 F.3d 154, 165 (5th Cir. 2008); Saunders v. Branch

Banking & Trust Co., 526 F.3d 142, 15455 (4th Cir. 2008).

Although the compensatory award of $3,305 in this case is not

nominal, it is low enough that we consider the ratio guidepost

with caution.

App. 40

$19,000 in actual damages and $10 million in

punitive damages. In affirming the award, the

Supreme Court observed that it “is appropriate to

consider the magnitude of the potential harm that the

defendant’s conduct would have caused to its

intended victim if the wrongful plan had succeeded,

as well as the possible harm to other victims that

might have resulted if similar future behavior were

not deterred.” Jd. at 4601. The Court then held that it

did

not consider the dramatic disparity between

the actual damages and the punitive award

controlling in a case of this character. On

this record, the jury may reasonably have

determined that petitioner set out on a

malicious and fraudulent course to win back,

either in whole or in part, the lucrative

stream of royalties that it had ceded to

Alliance. The punitive damages award in

this case is certainly large, but in light of the

amount of money potentially at stake, the

bad faith of petitioner, the fact that the

scheme employed in this case was part of a

larger pattern of fraud, trickery and deceit,

and petitioner’s wealth, we are not per-

suaded that the award was so “grossly

excessive” as to be beyond the power of the

State to allow.

Id. at 462 (footnote omitted).

Other courts have been willing to affirm ratios

exceeding single digits when the compensatory

damages were relatively low but the actions of the

App. 41

wrongdoer were egregious. For example, in Saunders

v. Branch Banking & Trust Co. of Virginia, 526 F.3d

142, 154-55 (4th Cir. 2008), the Fourth Circuit

affirmed an 80-to-1 ratio in a case involving violations

of the Fair Credit Reporting Act. In Abner v. Kansas

City Southern Railroad, 513 F.3d 154, 165 (5th Cir.

2008), the Fifth Circuit affirmed a 125,000-to-1 ratio

in a case involving a race-based hostile work en-

vironment. In Kemp v. American Telephone &

Telegraph Co., 393 F.3d 1354, 1365 (11th Cir. 2004),

the Eleventh Circuit imposed a punitive award of

$250,000 accompanying compensatory damages of

only $115.05, a ratio of 2,173 to 1. In Mathias v. Accor

Economy Lodging, Inc., 347 F.3d 672, 678 (7th Cir.

2003), the Seventh Circuit upheld a 37.2-to-1 ratio in

a case involving bedbugs at a motel. In Lynn v. TNT

Logistics North America Inc., 275 S.W.3d 304, 312

(Mo. Ct. App. 2008), the court imposed in a sexual

harassment case a punitive award equivalent to a 75-

to-1 ratio. In Jones v. Rent-A-Center, Inc., 281

F. Supp. 2d 1277, 1290 (D. Kan. 2003), the court

upheld a 29-to-1 ratio in a sexual harassment case.

These cases reflect the principle that “there are no

rigid benchmarks that a punitive damages award

may not surpass,” but instead “[t]he 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.” Campbell, 538 U.S. at 425.

In this case, the ratio of $1 million punitive

damages to compensatory damages as approved by

the trial judge is over 302 to 1. This ratio is excessive

App. 42

in ight of the circumstances presented. As set forth

above, Elmo Greer buried tires which, while consti-

tuting a nuisance, do not constitute an environmental

hazard or threaten the health or safety of any

individual.

Before leaving this point, however, we note that

the jury heard proof that the cost to plaintiffs to clean

up the entire property, to ensure that no other

impermissible waste materials are buried on their

property, would be $318,000. Although the jury

rejected the notion that this amount was the required

measure of damages, it highlights the problem that

the monetary value of noneconomic harm is some-

times difficult to determine, thus justifying a higher

ratio. Gore, 517 U.S. at 583.

(3) Difference between Punitive Damages

and Other Penalties

The third and final guidepost requires courts to

compare the punitive damage award to civil or

criminal penalties authorized or imposed in com-

parable cases. Gore, 517 U.S. at 583. The Supreme

Court has instructed that in determining whether the

award is excessive, courts should give “‘“substantial

deference” ‘to legislative judgments concerning appro-

priate sanctions for the conduct at issue.” Jd. at 583

(quoting Browning-Ferris Indus. of Vt., Inc. v. Kelco

Disposal, Inc., 492 U.S. 257, 301 (1989) (O’Connor, J.,

concurring in part and dissenting in part)). Penalties

that could be imposed for similar conduct “are

App. 43

relevant because they provide defendants with notice

of the severity of the penalty that may be imposed

upon them.” Flax, 272 S.W.3d at 537. We also note

that at least one court has observed that “when the

punitive damages are compared to the civil or crim-

inal penalties that could be imposed for comparable

conduct, the ratio of punitive damages to compensa-

tory damages becomes less significant.” Bronakowski

v. Lindhurst, ___ S.W.3d __, 2009 WL 1816165, at

* (Ark. Ct. App. June 24, 2009).

In this case, we are readily able to determine the

amount of civil penalties that may be assessed for the

improper disposal of waste tires. Tennessee Code

Annotated section 68-211-117(aX1) provides for “a

civil penalty of not less than one hundred dollars

($100) nor more than five thousand dollars ($5,000)

per day for each day of violation [of the Solid Waste

Disposal Act].” The tires Elmo Greer buried on the

Goffs’ property remained there for approximately

seven years, or roughly 2,500 days. Accordingly, Elmo

Greer could have faced civil penalties ranging from

$250,000 to $12.5 million.” Thus, the $1 million

punitive award imposed upon Elmo Greer is within

the civil fine range authorized by the legislature.”

'* Persons violating the Solid Waste Disposal Act may also

be found guilty of a Class B misdemeanor for each day of

violation. See Tenn. Code Ann. § 68-211-114.

’ The Goffs point out that the award is also less than 2% of

Elmo Greer’s net worth for 2003, though they recognize that a

defendant’s wealth “cannot justify an otherwise unconstitutional

punitive damages award.” Campbell, 538 U.S. at 427.

App. 44

However, Johnny Michael Apple, Director of Solid

Waste Management for the Tennessee Department of

Environment and Conservation, testified that no

fines had been or would be imposed on Elmo Greer for

this violation and that no further investigation of this

property was needed. Given the apparent disparity

between the sanctions authorized by the legislature

and the sanctions that would, in practice, be imposed,

we cannot conclude that this guidepost either sup-

ports or undermines the punitive damages awarded.

In short, we have carefully considered the

application of the three guideposts to the punitive

damages awarded in this case. After doing so we are

constrained to acknowledge that the punitive award

approved by the trial court is too large given the

circumstances and does violate Elmo Greer’s due

process rights. We conclude that the award must be

modified to $500,000. This award sends a strong

message about the serious nature of Elmo Greer’s

misconduct. At the same time, however, it is more

rationally related to the non-physical harm suffered

in this case.

D. Punitive Damages Jury Instructions

Elmo Greer asserts that the trial court erred by

instructing the jury that intentional or reckless

conduct can form the basis for punitive damages be-

cause the Goffs pled only intentional and fraudulent

misconduct. Elmo Greer further claims that the trial

court erred in failing to instruct the jury that punitive

App. 45

damages are proper only in egregious circumstances.

See Hodges, 833 S.W.2d at 901 (“We agree with those

States that have refined their laws to restrict the

awarding of punitive damages to cases involving only

the most egregious of wrongs.”). In considering this

issue, we note that Tennessee law is clear that a jury

charge should be reviewed in its entirety and

considered as a whole when determining whether the

trial court committed prejudicial error. Otis uv.

Cambridge Mut. Fire Ins. Co., 850 S.W.2d 439, 446

(Tenn. 1992). “The charge will not be invalidated as

long as it fairly defines the legal issues involved in

the case and does not mislead the jury.” /d.

Regarding the trial court’s failure to include the

word “egregious” in the charge, we find no error.

While it is true that this precise word was not

included in the charge, it is also true that Tennessee

Pattern Instruction — Civil 14.55, which covers the

subject of punitive damages, was incorporated in its

entirety into the charge. In our view, the charge as

given complied with the essentials of Hodges.

Although juries must be made aware that punitive

damages are reserved for cases involving more than

mere negligence, specifically those cases involving

intentional, fraudulent, reckless, or malicious con-

duct, Hodges, 833 S.W.2d at 901, we find that the

trial court fairly defined the legal principles of

punitive damages and in no way misled the jury.

Further, as requested by Elmo Greer, the question

App. 46

posed on the verdict form did contain the word

“egregious.” We hasten to add, however, that in the

interest of clarity trial courts would do well to

explicitly charge that punitive damages are reserved

for egregious conduct as a way of crystalizing the

point that punitive damages do indeed represent

“strong medicine.” Gore, 517 U.S. at 577. We do not

believe, however, that the lack of such specificity in

this particular case amounts to reversible error.

Regarding the trial court’s inclusion of the word

“reckless” in the charge, we also find no error. Placing

substance over form, Tennessee law recognizes that

“[wlhen issues not raised by the pleadings are tried

by express or implied consent of the parties, they

shall be treated in all respects as if they had been

raised in the pleadings.” Tenn. R. Civ. P. 15.02.

Determining whether an issue was tried by implied

consent rests with the discretion of the trial judge

whose determination will be reversed only upon a

finding of abuse. Zack Cheek Builders, Inc. v. McLeod,

597 S.W.2d 888, 891 (Tenn. 1980).

The question submitted by Elmo Greer in its proposed

special verdict form was, “Have the plaintiffs proved by clear

and convincing evidence that Greer and Sons Construction

Company is guilty of such egregious and intentional, and/or

fraudulent acts that an award of punitive damages should be

assessed against the defendant as punishment for these

actions?” The question as posed by the trial court was identical,

except that “or reckless” was substituted for “and/or fraudulent.”

See footnote 11, supra.

App. 47

Here, the trial court instructed that punitive

damages “may be considered if, and only if, the

plaintiff has shown by clear and convincing evidence

that a defendant has acted either intentionally or

recklessly.” Elmo Greer asserts that because the Goffs

did not plead “reckless,” it should not have been

included in the instruction. We disagree. At trial,

Elmo Greer’s attorney stated to the jury that “Elmo

Greer is being sued for lots of money to punish us for

punitive damages because the Goff’s [sic] claim that

we intentionally or deliberately or recklessly caused

contamination on their property.” (Emphasis added).

Further, at the conclusion of the Goffs’ proof, Elmo

Greer moved to dismiss, stating that the evidence

“just doesn’t show the kind of malicious, reckless kind

of conduct that Hodges requires.” (Emphasis added).

During closing arguments, Elmo Greer’s attorney

stated that (1) “i]t is not a charge to be taken lightly

because they are saying we purposefully or recklessly

put items into the fill [area],” (2) “Lylou can’t stay in

business if you are in the business of going out and

doing intentional or reckless acts,” and (3) Elmo Greer

“didn’t act recklessly.” (Emphasis added). In light of

these circumstances, we conclude that the trial court

was within its discretion to determine that the

parties impliedly consented to try assertions that

Elmo Greer’s reckless actions warranted punitive

damages and, further, that the evidence supported

the inclusion of instructions to the jury on reckless

behavior.

App. 48

Ill. Motion for Mistrial

During his testimony, Mr. Goff began to speak

about his preparation for Elmo Greer of an estimate

of the damages he had sustained. His attorney

handed to him a document, which was a letter he sent

to Elmo Greer’s insurance adjusting company de-

tailing the damage to his house and vehicles caused

by Elmo Greer’s blasting activities. Prior to Mr. Goff

identifying or reading the letter, Elmo Greer’s counsel

said to the court, “We need to have a discussion about

that.” Counsel then approached the bench and,

outside the hearing of the jury and not contained in

the record, had a conversation about the letter. At the

conclusion of the conference, Mr. Goff’s counsel

resumed questioning his client with the instruction

not to identify the recipient of the letter. After a few

more questions, counsel for Elmo Greer again asked

for a bench conference, the contents of which are not

in the record. Thereafter, the trial judge and counsel

continued their conversation in the jury’s presence,

discussing the need for additional redactions before

the document could be admitted as an exhibit. No

party, witness, or attorney ever mentioned “in-

surance.” Suddenly, and sua sponte, the trial judge

said to the jury:

Well, you jurors are ... wondering what

in the world is this judge trying to keep

from us. Well, I might as well just tell you.

It’s improper and inappropriate for a jury

to even consider or discuss or even think

about the fact that somebody might have

App. 49

insurance. So, it would be improper for

you, at any time during this trial or during

your deliberations, to discuss or consider or

think about or anything else with regard to

whether somebody did have or didn’t have

insurance. So, don’t you worry about that

and it would be a violation of your oath as a

juror to discuss that or let that influence you

in any way, one way or the other. The

damages are what the damages are. If

there’s liability, there’s liability. If there’s not,

then insurance hasn’t got a thing in the

world to do with it, okay? You follow that

instruction.

Mr. Goff then read the approved portions of the letter

to the jury. Elmo Greer later moved for a mistrial,

asserting that the trial court’s instruction to the jury

not to consider insurance was the equivalent of

instructing the jury that insurance was involved and

that the parties had tried to settle the case. The trial

court denied the motion. Elmo Greer asserts that the

trial court’s mention of insurance during the trial

prejudiced the company as evidenced by the jury

awarding minimal compensatory damages but sub

stantial punitive damages.

Evidence concerning the existence of insurance is

generally inadmissible at trial. Tenn. R. Evid. 411

(“Evidence that a person was or was not insured

against liability is not admissible upon issues of

negligence or other wrongful conduct.”). The injection

of insurance during trial, however, does not neces-

sarily warrant a mistrial, Seals v. Sharp, 212 S.W.2d

App. 50

620, 623 (Tenn. Ct. App. 1948), but may when the

reference to insurance was made willfully for the

purpose of influencing the jury, see Terry v. Plateau

Elec. Co-op., 825 S.W.2d 418, 422-23 (Tenn. Ct. App.

1991). In the absence of such willful injection, a

curative instruction to the jury not to consider

insurance will suffice because juries are presumed to

follow the court’s instructions. See CSX Transp., Inc.

v. Hensley, 129 S.Ct. 2139, 2141 (2009) (“as in all

cases, juries are presumed to follow the court's

instructions”).

In this case, there is nothing in the record to

suggest that any of the participants in the trial

willfully (or at all) referred to insurance in an

attempt to influence the jury. See McClard v. Reid,

229 S.W.2d 505, 506 (Tenn. 1950) (“[I]t is more or less

a question for the trial court, to exercise his dis-

cretion on, as to whether or not the plaintiff has

deliberately injected the insurance question to the

prejudice of the defendant.”). It was the trial judge

himself who sua sponte mentioned insurance.

Moreover, the trial court then specifically informed

the jury that insurance was not to be considered at

any point during the trial or deliberations. Accord-

ingly, while we caution trial judges against raising

matters that cannot be introduced by the parties, we

do not find that the trial court abused its discretion in

denying Elmo Greer’s motion for a mistrial. See

Hunter v. Ura, 163 S.W.3d 686, 699 (Tenn. 2005)

(“Whether to grant a mistrial is a decision left to the

discretion of the trial court.”).

App. 51

Conclusion

For the foregoing reasons, we conclude that the

evidence supports the award of punitive damages and

that the trial court did not err in considering the

State’s environmental laws in approving the punitive

award. We further conclude that the amount of the

punitive damages award is excessive and does violate

Elmo Greer’s due process rights. We therefore modify

the amount of punitive damages awarded to the Goffs

to $500,000. We also find no error in the trial court’s

instructions to the jury regarding punitive damages.

Finally, we hold that the trial court did not abuse its

discretion in denying Elmo Greer’s motion for a

mistrial based on the mention of insurance at trial.

Accordingly, the decision of the Court of Appeals is

reversed and the judgment of the trial court is

reinstated as modified. The costs of this appeal are

taxed to Elmo Greer & Sons Construction Company

and its surety, for which execution may issue if

necessary.

CORNELIA A. CLARK, JUSTICE

App. 52

IN THE SUPREME COURT OF TENNESSEE

AT NASHVILLE

June 2, 2009 Session

DAVID GOFF ET AL. v. ELMO GREER

& SONS CONSTRUCTION CO., INC.

Circuit Court for White County

No. CC-320

No. M2006-02660-SC-R11-CV

JUDGMENT

(Filed Nov. 3, 2009)

This case was heard upon the record on appeal

from the Court of Appeals, application for permission

to appeal having heretofore been granted, briefs and

argument of counsel; and upon consideration thereof,

this Court is of the opinion that the Court of Appeals

erred when it reversed the $1 million award of puni-

tive damages. The evidence supports the award of

punitive damages. However, the $1 million punitive

award violates the defendant’s due process rights and

must therefore be modified to $500,000.

In accordance with the opinion filed herein, it is,

therefore, ordered and adjudged that the $1 million

punitive damages award is modified to $500,000 and

the trial court’s judgment is reinstated as modified.

App. 53

The costs of this cause are taxed to defendant

Elmo Greer & Sons Construction Company, Inc., and

its surety, for which execution may issue if necessary.

App. 54

IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

NOVEMBER 27, 2007 Session

DAVID GOFF ET UX, ET AL. v. ELMO GREER

& SONS CONSTRUCTION CO., INC.

Direct Appeal from the

Circuit Court for White County

No. CC-320 JohnA. Turnbull, Judge

No. M2006-02660-COA-R3-CV - Filed May 16, 2008

This appeal involves a jury’ award of punitive

damages. The construction company entered into a

contract with the State of Tennessee to widen a

portion of a highway. The homeowners entered into a

contract with the construction company allowing the

construction company to place excess materials gen-

erated from the highway project on the homeowners’

property. In exchange, the homeowners would receive

compensation based on the cubic fill area, and the

company would fill and grade that portion of the

homeowners’ property. The project required that the

construction company conduct extensive blasting near

the homeowners’ house and vehicles. One of the

homeowners became concerned when he witnessed

the construction company placing various garbage

items and tires on his property near the fill area.

After three years, the construction company finished

the project. The homeowners brought suit, alleging

that the company failed to pay the amount due under

App. 55

the contract and caused damage to their house due to

the blasting. The complaint also alleged that the

company buried certain items, including tires, on the

property which constituted an environmental tort.

The homeowners’ amended complaint stated a cause

of action in nuisance and also sought an award of

punitive damages in the amount of $1 million dollars.

The jury returned a verdict in favor of the home-

owners for the nuisance claim in the amount of

$3,305.00 and found that punitive damages should be

imposed on the construction company. The jury found

in favor of the construction company for the environ-

mental tort claim. After the second phase of the trial,

the jury returned an award of $2 million in punitive

damages. The trial court remitted the award to $1

million, the amount of the homeowners’ ad damnum.

The construction company appeals, and we reverse

and remand in part and affirm in part.

Tenn. R. App. P. 3; Appeal as of Right;

Judgment of the Circuit Court Reversed and

Remanded in Part and Affirmed in Part

ALAN E. HIGHERS, PJ., W.S., delivered the opinion of

the court, in which DAvID R. FARMER, J., and HOLLY

M. Kirsy, J., joined.

Linda J. Hamilton Mowles, Knoxville, TN, for appellant

John C. Knowles, Sparta, TN; John P. Pryor, Smith-

ville, TN; Jon E. Jones, Cookeville, TN, for Appellees

App. 56

OPINION

I. Facts & PROCEDURAL HISTORY

David Goff and his wife, Joyce Goff, along with

David’s mother, Agnes Goff (collectively the “Goffs” or

“Appellees”) own approximately 400 acres on both the

east and west sides of Highway 111 in Sparta,

Tennessee. The highway runs directly in front and

directly behind David and Joyce Goff’s house located

on a portion of this 400 acre tract. The State of

Tennessee planned to widen Highway 111, and Elmo

Greer & Sons Construction Company, Inc. (“Construc-

tion Company” or “Appellant”) received the contract

with the State to build six miles of the Highway 111

four-lane road.’ The State’s plan required that Con-

struction Company widen the “cut” directly in front of

the Goffs’ home, which required extensive blasting.

Construction Company sought to place the excess

material that this process would generate on the

Goffs’ property. Construction Company and the Goffs

entered into a contract whereby Construction Com-

pany could temporarily place the excess rock and dirt

on the east side of the Goffs’ property. The Goffs were

to receive ten cents per cubic yard in exchange

for Construction Company receiving the right to

place “dirt, rock, and other excess material from the

jobsite” on the Goffs’ property. The agreement also

' More specifically, Construction Company was the general

contractor and subcontracted out the bridge work and paving. It

performed the grading work.

App. 57

provided that “the area’ in which said material is

to be deposited will be left in a neat and graded

condition.” Construction Company drafted the afore-

mentioned contract.

Construction Company began the project in March

of 1994, and finished in 1997. The Goffs brought suit

on June 30, 1998, alleging breach of contract due to

Construction Company’s failure to pay the ten cents

per cubic yard for the use of the property. The Goffs

also sought damages caused by Construction Com-

pany’s blasting, claiming that rocks and debris flew

onto their property, damaging their vehicles and

house. The Goffs also alleged damages caused by

Construction Company’s burying of waste on the

property:

The defendants ... have unlawfully and

in violation of environmental laws buried

refuse and other objects such as automotive

parts, large earth moving rubber tires and

other impermissible materials on the prop-

erty of the plaintiffs[] ... when disposition

of such objects should have been made in

compliance of environmental standards and

which will likely result in damages to the

real estate of these plaintiffs. . . .

* The contract describes the area as follows: “Right of +/-

Station 375.00 S.R. 111.” The Goffs contended at trial that the

area was around five to seven acres. Construction Company

contended at trial the area was around three to five acres. In

any event, the exact size of the fill area is not determinative of

the issues on appeal.

App. 58

Thereafter, the Goffs moved to amend their com-

plaint, and the trial court granted leave to amend.

The Goffs’ amended complaint added the following

claim of nuisance:

[T]he defendant, its servants, agents and

employees did commit acts of nuisance upon

the land of the plaintiffs by spilling upon the

property oil and petroleum products and by

burying and concealing trash, garbage, waste

products, rubber tires, oil filters, used and

discarded machinery parts, all without the

permission or authorization of the plaintiffs

and did thereby create an unauthorized,

unlicensed and prohibited landfill.... As a

result of the actions on the part of the

defendant in creating and inflicting injury

upon the plaintiffs, the defendant is liable to

the plaintiffs for the costs and expenses of

excavating, removing, and disposal of the

waste materials buried upon the property of

the plaintiffs in order to remediate and

reclaim the real estate to the condition that

the property was in prior to the commission

of the acts of nuisance. The defendant shall

also be liable to the plaintiffs for a fair rental

value during the time that the defendant has

used the property for the unauthorized land-

fill until the defendant has paid the cost of

reclamation in order to restore the plaintiffs’

property to its undamaged condition.

The Goffs’ amended complaint also sought an award

of $1 million in punitive damages: “Plaintiffs do fur-

ther amend their complaint to demand compensatory

App. 59

damages of the defendant in the amount of Five

Hundred Thousand ($500,000.00) Dollars, and an

additional sum of One Million ($1,000,000.00) Dollars

in punitive damages.”

Trial commenced on June 28 and concluded on

June 30, 2006. The parties stipulated that Construc-

tion Company was liable for breach of contract in the

amount of $5,355.50, which represented 53,555 cubic

yards of fill material that went onto the Goffs’ prop-

erty during construction, at 10 cents a cubic yard.

Both Mr. and Mrs. Goff testified as to the damage to

their home and vehicles caused by Construction Com-

pany’s blasting. Mr. Goff testified that Construction

Company conducted blasting as close as 100 feet from

their home, and oftentimes did not warn the Goffs

prior to commencing blasting.”

As to the claim that Construction Company

buried certain items on the Goffs’ property, Mr. Goff

testified as follows:

([T]hey were staging equipment there [near

the fill area] and doing oil changes and, you

know, the ground is black.... They also

repaired their equipment there, so when

they took the thing apart, lots of oil and

grease got on the ground.

* We need not get into great detail of the testimony con-

cerning the property damage caused by blasting, as neither

party appeals that issue. Nor is the strict liability claim relevant

to the issue of punitive damages.

App. 60

I [ became concerned. Well, they were

spilling a lot of stuff there.

[Als they were filling [|] they were just

putting anything out there in the fill and

when I[ would approach them, [they said

that] we'll take care of that. We'll take care

of that.

More specifically, Mr. Goff testified that he saw the

following items in the fill area: “hydraulic lines, parts

that say CAT on them, boxes that say CAT, Rotella

containers. ... That’s a motor oil, I think... . Plastic,

gallon, sort of like antifreeze comes in... .[RJods and

all, you know, just things that would come off big

equipment.” Mr. Goff also testified that he saw 55-

gallon barrels and tires stacked in the area. This

concerned him, so he asked the workers “‘Guys,

you're not going to bury anything on me except rock

and dirt, right? That’s our agreement[,|]’ to which the

workers responded, ‘Don’t worry about it. We will

clean it up. We’re going to slope [the fill area] down to

the road, and youre going to be real pleased with

what we do.’”

Mr. Goff testified that he was especially concerned

that Construction Company was burying tires on his

property: “There was four or five tires ... and it had

big rocks on it... . Well, in seeing that, you know, you

wouldn’t think they’d dump them on there and then

take them off and haul the tires off. So, I — I got my

App. 61

camera and I made pictures. I also... went and told

them, I said, it looks like you’re fixing to bury some

tires. Don’t do that.” None of the Goffs actually

witnessed any of Construction Company's employees

burying tires or any other improper materials.

The deposition of Construction Company’s chief

engineer, Lee Anderson, was read to the jury, and Mr.

Anderson also testified at trial. Mr. Anderson super

vised the Highway 111 project. As to the company

policy concerning tires, he testified that “we use a lot

of tires. Limestone rock punches holes in them and

wears them out. As they become flat or unusable, we

stack them up and then we haul them back (to

Construction Company’s home office] and we turn

them back in. They have some value to them.” Mr.

Anderson testified that the tires are stacked, “then

once we get them — get a full load, we send a truck to

pick them up.... We inventory them and then they

dispose of them. They are recapped. We reuse them

on other equipment.” Mr. Anderson testified that

some tires are unsuitable for reuse, however, and that

there is a financial cost associated with disposing of

these tires.

Mr. Anderson conducted the final inspection of

the fill site upon completion of the project: “I reviewed

the project to see how much equipment, how much

materials were left and ... what kind of trucks the

shop should send to pick up what we had left over.”

Mr. Anderson observed tires lying on the completed

fill area, so he “called the shop and told them to come

App. 62

pick up the equipment, and the tires, and any other

surplus equipment. ... ”

As to the policy concerning oil disposal, Mr.

Anderson testified as follows: “We change the oil

every so many hours depending on the size of the

machine. And we take the used oil, put it into drums,

send it back to [the home office]. And |] we use it to

heat our shop, we recycle the oil.”

Mr. Goff did admit that after completion of the

fill work, he saw one of Construction Company’s

trucks hauling off tires. Convinced that Construction

Company nevertheless buried tires and other items

under the fill material, Mr. Goff testified that he

hired Lloyd Shores Trucking and Excavation and

asked them to dig in that area of the property. This

first dig produced one “big” tire, which Mr. Goff de-

scribed as being 8 feet tall by 24 inches wide. The

excavation company dug a total of five holes that day

and found another smaller, truck tire. The second dig

occurred on June 17, 2006, and uncovered four addi-

tional truck tires of various sizes. Mr. Goff testified

that the second dig focused on an area of about a half

acre of the fill area. They also uncovered two steel

pipes.

When asked why six tires were found on the

Goffs’ property, Mr. Anderson testified that “I have no

idea,” nor could he say for sure where the tires came

from: “it makes sense that they were ours but I don't

know that. They could be [Mr. Goff’s tires].” He did

admit that Construction Company used tires like the

App. 63

ones buried on the property, but that he did not

personally observe any of Construction Company’s

employees burying anything other than fill material.

He admitted on cross examination that he was not on

the site for the entire project, as he supervised

various other projects during that time.

This discovery of tires prompted Construction

Company to perform its own investigation. Michael

Corn, an engineer with AquAeTer, Inc., conducted

core sampling of the fill area. He testified as to the

process of “boring,” which he described as “pushing a

probe down in the soil and taking soil samples.” From

these samples, he concluded that there were no haz-

ardous materials or hazardous waste at the site. Mr.

Corn testified that tires were not considered haz

ardous material. He testified that to his knowledge, a

few tires and pipes buried on private property would

not create a “problem with the Solid Waste Disposal

Act.”

Ken Johnson, a geologist employed by First

Response, Incorporated, testified that upon the Goffs’

request, he performed an initial evaluation of the

property in the fall of 2003. Mr. Johnson testified that

he saw on top of the ground a large oil filter from

some type of large earth-moving equipment on the

property, along with two tires. As to the core sam-

pling, he testified that it is a “very limited scope of

exploration,” and that the only way buried tires

would be discovered using this method would be if the

core barrel or the drill made contact with the buried

tires. Mr. Johnson testified that the only way he

App. 64

would certify that there was not any solid waste left

on the Goffs’ property would be to excavate the entire

fill area.“ He estimated that this would cost six

dollars a cubic yard, or $318,000. This estimated cost,

however, depended on what, if any, types of materials

would be uncovered.

On cross examination, Mr. Johnson testified that

he did not observe any oil sheens on the property, nor

did he have pictures of the oil filter or the tires that

he observed on the property. He also testified that he

did not make a recommendation that the Goffs dig up

the entire fill area, but rather gave an estimate of

what that procedure would cost. He admitted that

tires are considered a nonhazardous waste.

William Parrish, a real estate appraiser, valued

the fill area property at $50,000 upon the Goffs’

request, assuming the property was free from any

buried solid waste. Based on Mr. Johnson’s afore-

mentioned estimate, Mr. Parrish estimated the cost to

cure the property at $375,000. Mr. Parrish testified

that if the property has solid waste buried on it, then

the value of the property would be zero, “|blecause

under Tennessee law you have to disclose any latent

defects of the property. ... And as I see now, it isn’t a

really good fill for construction, large items in it,

* When asked about this, Mr. Corn testified that he believed

it was unnecessary “to dig up all this fill material that had been

placed there[,} ... [because] we haven’t found anything that

would require that level of effort to dig up a site.”

App. 65

including large boulders as well as tires. It doesn’t

seem to be very stable as far as a building site.”

Construction Company called Johnny Apple, the

director of the division of solid waste management for

the Tennessee Department of Environment and Con-

servation, as a witness. Mr. Apple testified that his

department “didn’t see anything unusual that would

indicate [the need for] further investigation.”

The jury returned a special verdict in favor of the

Goffs as follows:

1. For breach of contract, the defendant, - . -

shall pay unto the plaintiffs []the sum of

$5,355.50, as agreed by the parties. (The

Court does reserve the calculation of pre-

judgment interest).

3. The jury did find that the damages suf-

fered by the plaintiffs [| as a result of the

blasting damage caused by the activities of

the defendant was $9,510.00.

6. The jury awarded damages in favor of

the plaintiffs [] against the defendant for

creating a nuisance upon the plaintiffs’

property in the amount of $3,305.00.

The jury found for Construction Company as follows:

“The jury found that the defendant had not caused

App. 66

any environmental hazard to the Goff property.”

As to punitive damages, the jury found “that the

* The special verdict form and the final judgment refers to

this claim as an environmental “hazard”; the jury instruction

reads:

Environmental Tort

It is unlawful to dispose of solid waste in vio-

lation of the Solid Waste Disposal Act of the State

of Tennessee. No solid waste processing facility or

disposal facility or site in any political subdivision of

this state shall be operated or maintained by any

person unless such person has registered with the

Commissioner... .

Whole waste tires, lead acid batteries, and used

oil must be disposed of in a State approved site.

It is a violation of law for any person to know-

ingly cause damage to or the destruction of any real or

personal property of another, knowing that the person

does not have the owner’s effective consent.

“Damage” includes but is not limited to:

[A] Destroying, polluting or contaminating property;

or [B] Tampering with property and causing pecu-

niary loss or substantial inconvenience to the owner

or third person; and

“Polluting” is the contamination by man-made or

man-induced alteration of the chemical, physical, bio-

logical or radiological integrity of the atmosphere,

water, or soil to the material injury of the right of

another. Pollutants include solid waste, wrecked or

discarded equipment, and industrial waste.

Plaintiff has the burden of proving by a prepon-

derance of the evidence an environmental tort.

Although Construction Company did not raise this issue at trial

or on appeal, we would point out that:

(Continued on following page)

App. 67

plaintiffs had proved by clear and convincing evidence

that the defendant was guilty of such egregious, in-

tentional or reckless acts that an award of punitive

damages should be assessed against the defendant as

punishment for its actions.”

The second phase of the trial commenced on July

1, 2006. Mr. Anderson, Construction Company’s chief

engineer, was the only witness to testify during this

phase. Construction Company’s financial statements

indicated that the company had a net worth of over

$46 million for the year 2000; $50 million for the year

2001; $51.1. million for the year 2002; and $54.3

million for the year 2003. Mr. Anderson testified that

during the project in question, Construction Company

went through hundreds of tires. He reiterated that

company policy “is to return those tires to [the home

office] because you have to put [the tires] on a

When violations occur, the [Tennessee Solid Waste

Disposal] Act gives the regulators broad authority to

stop the violation and to order steps to remedy or

mitigate its effects. The Act does not explicitly provide

a private right of action for persons who have been

damaged as a result of a violation.... Our inter-

pretation of the scope of remedies available under the

Act will not leave without recourse those who have

sustained a special or peculiar injury from a violation

of the Act. The same facts may support claims of both

public and private nuisances[.] . . .

Wayne County v. Tennessee Solid Waste Disposal Control

Bd., 756 S.W.2d 274, 283 (Tenn. Ct. App. 1988) (emphasis added).

Although we need not answer, we question whether such a cause

of action labeled “environmental tort” is appropriate.

App. 68

machine to see if [they] can be sectioned or recapped.

You can’t tell on a job.” He also testified that because

the project was with the State of Tennessee, if state

inspectors witnessed Construction Company burying

tires, which they did not, they would have penalized

them or withheld payment for the project. He testi-

fied that the State of Tennessee did not cite or give

any warnings to Construction Company for any im-

proper conduct relating to the fill area.

The jury returned an award of $2 million in puni-

tive damages against Construction Company: “We,

the Jury, unanimously answer the questions sub-

mitted by the Court as follows: We find the defendant

should be required to pay punitive damages in the

amount of $2 million[.]”

On August 10, 2006, Construction Company filed

a motion for a new trial and a motion to alter or

amend the judgment, or in the alternative, remittitur.

The Goffs filed a response in which they acknowl-

edged that the judgment exceeded the ad damnum in

their complaint, and thus did not oppose a $1 million

reduction of the punitive damages award. The court

granted Construction Company’s request for remit-

titur, reducing the punitive award to $1 million “to

conform to the amount the plaintiffs sued for in their

ad damnum|.]” The court denied Construction Com-

pany’s motion for a new trial, setting forth findings of

fact and conclusions of law. The court went through

the analysis set forth in Hodges v. S.C. Toof & Co.,

833 S.W.2d 896, 901-02 (Tenn. 1992), and approved

the $1 million punitive award.

App. 69

Il. ISSUES PRESENTED

Appellant presents several issues for our review,

the majority of which deal with the award of punitive

damages. We slightly reorder and consolidate the is-

sues as follows:

1. Whether the record supports the award of puni-

tive damages.

Whether the award of punitive damages is so

excessive that it is in violation of Tennessee and

federal constitutional due process.

Whether the trial court issued an improper jury

instruction concerning punitive damages.

Whether the trial court erred by denying Con-

struction Company’s motion for a mistrial when

the Goffs introduced evidence of insurance and

settlement negotiations.

Ill. STANDARD OF REVIEW

In this case, the trial court reduced the punitive

damages award to conf

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