Johansen v. Combustion Eng'g, Inc.
Citation: 29 ELR 21219
No. No. 97-8726, 170 F.3d 1320/48 ERC 1703/(11th Cir., 04/01/1999)
The court holds that a district court properly reduced a $ 15 million punitive damage award to $ 4.35 million in a nuisance and trespass case against a mining company that contaminated neighboring property owners' streams. The court first holds that the district court did not err in reducing the award without the property owners' consent. The $ 15 million punitive damage award was unconstitutionally excessive under BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996). The court also holds that the district court did not err in finding that the punished conduct occurred in a single state that has a strong interest in deterring environmental pollution. The court then holds, however, that the company's conduct was not highly reprehensible. The company effected a state environmental agency-approved land reclamation plan and cooperated with the state agency.
The court next holds that the $ 15 million punitive damage award did not represent a reasonable relationship to the actual damages. The punitive award is 320 times the actual damages found by the jury and approached the 500-to-1 ratio found to be excessive in the BMW case. Moreover, the $ 15 million award was 1,500 times the amount of the state-imposed fine and did not comport with the fair notice requirements of the U.S. Constitution. The court then holds that even though the 100-to-1 ratio of the district court's reduced award to actual damages is at the upper constitutional limit, it is justified by the need to deter large companies from a "pollute and pay" environmental policy, and it is not so disproportional as to offend elementary notions of fairness.
In addition, the court holds that post-judgment interest on the punitive damages accrues from the date the initial damages were ascertained. Last, the court holds that the company has no right to offset amounts it paid in settlements with other property owners.
Counsel for Plaintiffs
John Lewis IV
Huguenin, Annis & Lewis
4024 Washington Rd., Martinez GA 30917
Counsel for Defendant
Andrew L. Frey
Mayer, Brown & Platt
1675 Broadway, New York NY 10019
Before Anderson and Barkett, JJ.