A family whose young daughter found a used syringe in a Target parking lot should keep some, but not all, of a jury’s $4.5 million punitive damages award, a divided South Carolina Court of Appeals has ruled. The jury’s verdict had raised multiple questions of first impression about whether such a large punitive damages award should be permitted under state law.
Denise Garrison and her eight-year-old daughter were in the parking lot of the Target store in Anderson in 2014 when the daughter picked up a syringe with a needle in it that she had found lying on the asphalt. Garrison instinctively swatted the syringe out of her daughter’s hand, and the needle punctured her palm, drawing blood.
Garrison sued, seeking to have Target to pay for the cost of the medical procedures she underwent to protect her against any infectious diseases, which she said had caused a number of serious side effects. Target rejected a $12,000 offer of judgment, and in September 2016 a jury returned a verdict for Garrison that included $100,000 in compensatory damages and $4.5 million in punitive damages. Anderson County Circuit Court Judge R. Keith Kelly granted Target a judgment notwithstanding the verdict as to the punitive damages, but not on the issue of liability, and both sides appealed.
In a Jan. 15 opinion, the Court of Appeals unanimously held that that the evidence in the case supported an award for punitive damages, but that the size of the jury’s award was excessive, although for different reasons than Kelly had cited in his ruling. But the court split over whether Target had waived the protection of the state’s cap on punitive damages by failing to raise it as an affirmative defense, with the majority finding that the defense had been waived.
Reprehensibility in moderation
Before tackling all that, the court agreed that there’d been enough evidence to send the case to a jury in the first place. Both sides’ witnesses testified that the syringe looked weathered and dirty on inspection, and Judge John D. Geathers, writing for the court, said that permitted an inference that it’d been in the parking lot long enough that Target’s employees should have found it before a child did. Target argued that the syringe might have looked that way before it was discarded, but Geathers said that the similar condition of other trash nearby suggested it’d been there for some time.
Turning to the whopping punitive damages award, Geathers said that Kelly had correctly denied Target’s motion for a directed verdict on the issue of punitive damages—since the Garrisons offered evidence that Target should have known that a dangerous condition existed, and failed to act to mitigate it—and its request for a JNOV was simply a continuation of that earlier motion. The appeals court agreed with the Garrisons that in granting the JNOV, the trial judge had conflated the questions of sufficiency and excessiveness “after being confronted with the enormity of the jury’s punitive damages award.”
In granting Target’s motion, Kelly said that the 45-to-1 ratio of punitive damages to actual damages was clearly excessive. But the Court of Appeals said that the better denominator to use for such a calculation is not the plaintiff’s actual harm, but the potential harm that she could have suffered as a result of the defendant’s conduct. In this case, the potential harm to Garrison was quite significant, as she could have contracted HIV or even died from her wound, so the ratio of punitive damages to potential harm was much less than 45 to 1.
Nevertheless, after considering all the factors for deciding if a punitive damages award is excessive, the court remanded the case with instructions to trim the award against Target to an amount consistent with the circumstances of the case. Geathers wrote that “although the evidence supports moderate reprehensibility on Target’s part,” its conduct was considerably less reprehensible than that of defendants in other cases where such disproportionate punitive damages awards had been deemed appropriate.
Waived goodbye
Under South Carolina law, punitive damage awards can’t be more than three times the amount of compensatory damages, or $500,000, whichever is higher. If a jury returns a higher punitive damages award, it must be reduced unless the trial judge determines that certain exceptions exist that would allow the cap to be increased, or removed entirely. One such exception kicks in if the defendant was motivated primarily by unreasonable financial gain.
The Garrisons argued that Target had waived the benefit of the cap by failing to raise it as an affirmative defense, and that they would have presented more evidence about Target prioritizing profits over safety had they known Target was going to invoke the cap. Geathers, writing for the court’s majority, agreed, saying that Target needed to raise the defense at least before discovery had been concluded, so that the Garrisons would know what sorts of evidence they needed to present at trial.
“Constraints of time and money may compel the plaintiff to seek out only the information that is relevant to what she knows will be an issue at trial or during post-trial motions,” Geathers wrote. “The extra expense for ‘gunfire’ often cannot be justified if lesser means will do. Implicitly recognizing that a plaintiff does not know what she does not know, courts enforcing the pleading requirement quite reasonably treat the defendant’s failure to invoke a statutory liability limit in a timely manner as inherently prejudicial.”
South Carolina courts had never considered the issue before, but Geathers noted that the state’s Rules of Civil Procedure require all defenses to be affirmatively pleaded to prevent unfair surprises. The analogous federal rule is essentially identical, and federal courts have cited it to hold that a statutory limit on damages is waived if not affirmatively pleaded. Geathers also cited a 1998 South Carolina Supreme Court decision which found that a charity had waived the benefit of a cap on recoveries from charitable organizations, because its failure to raise the defense affected the type of evidence the plaintiff would need to present at trial.
Judge D. Garrison Hill dissented from that portion of the court’s ruling. Hill would have held that the cap is not an affirmative defense that must be pleaded, and remanded the case to the trial court to consider the Garrisons’ argument that the cap itself is unconstitutional.
Question of great interest
As if all that weren’t enough, the judges then had to consider another novel legal question. With the punitive damages award reinstated, the Garrisons argued that the trial court should have awarded them pre-judgment interest on the jury’s full verdict, rather than just the compensatory damages, starting from when Target rejected the offer of judgment.
Geathers rejected that argument, citing decisions from courts in other states with similar laws regarding offers of judgment. Those courts held that whereas a plaintiff is entitled to compensatory damages from the moment they suffer an injury, no one is entitled to punitive damages, which are awarded solely at a jury’s discretion. Punitive damages reflect the penalty that the jury thinks a defendant should pay, and piling pre-judgment interest on top of it would give plaintiffs a double recovery, Geathers wrote.
The court also rejected Target’s request to scrap the whole trial and start over, finding that, given the facts, the large punitive damages award didn’t suggest that jury was unduly prejudiced.
Josh Hawkins and Helena Jedziniak of Greenville and Todd Butler of Phelps Dunbar LLP in Jackson, Mississippi, represented the Garrisons.
Lewis Powell and Trey Sibley of Hunton Andrews Kurth in Richmond, Virginia, and Knox Haynsworth of Brown, Massey, Evans, McLeod & Haynsworth in Greenville represented Target.
Neither side’s attorneys could be reached for comment about the court’s ruling.
The 48-page decision is Garrison v. Target Corp. (Lawyers Weekly No. 011-007-20). The full text of the opinion is available online at sclawyersweekly.com.
Follow David Donovan on Twitter @SCLWDonovan