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Baker v. National State Bank6/21/2002
Argued: June 5, 2002
In this employment discrimination action, on appeal for the second time before this court, defendant National State Bank (the Bank) (subsequently merged with CoreStates and then acquired by First Union National Bank) appeals from the trial court's remittitur of a punitive damages award. The trial court reduced the award of $4 million to $1.8 million. The Bank argues that the court erred in: (1) finding that the remitted award was not a violation of the Bank's constitutional, due process rights; (2) concluding that the unremitted award was not the result of passion, prejudice or mistake; and (3) awarding postjudgment interest on the punitive damages, accruing from the date of the jury verdict. Plaintiffs Ann Baker and Barbara Hausleiter cross-appeal the trial court's remittitur of the punitive damages award, contending that the $4 million award was not excessive. We now affirm both on the direct and cross-appeal.
We need not repeat the facts of this case which are set forth in our earlier opinion in Baker v. Nat'l State Bank, 312 N.J. Super. 268 (App. Div. 1998). Our opinion was affirmed by the Supreme Court, except for a remand on the issue of punitive damages, remanding to the trial court to consider whether the punitive damages award violated due process, in light of the standards enumerated by the United States Supreme Court in BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 116 S. Ct. 1589, 134 L. Ed. 2d 809 (1996). 161 N.J. 220, 231 (1999).
I.
We first address the standard of review to be applied by this court. In Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 121 S. Ct. 1678, 149 L. Ed. 2d 674 (2001), the Supreme Court addressed this very issue. The Court held that a trial court's consideration of the three criteria outlined in BMW would be subject to de novo review because an award of punitive damages was not really a "fact tried by the jury." 532 U.S. at 437, 121 S. Ct. at 1686, 149 L. Ed. 2d at 687 (internal quotations omitted). In a footnote, the Court added that it "of course remains true that Court of Appeals should defer to the District Court's findings of fact unless they are clearly erroneous." 532 U.S. at 440 n.14, 121 S. Ct. at 1688, 149 L. Ed. 2d at 689-90. See also Lockley v. Turner, 344 N.J. Super. 1, 27 (App. Div. 2001) (noting recent decision of Cooper and its holding that de novo standard of review applies), certif. granted, ___ N.J. ___ (2002).
In Cooper, the Supreme Court reasoned that independent review was required because punitive damages are designed to exact punishment and therefore should be subject to the same analysis as criminal penalties. 532 U.S. at 432, 121 S. Ct. at 1683, 149 L. Ed. 2d at 684-86. The Court looked to a number of criminal cases involving whether the criminal sentence imposed (death penalty, life imprisonment, punitive forfeiture) was grossly disproportionate to the gravity of the offense, and noted that in each of those cases, the Court engaged in an "independent examination of the relevant criteria." Id. at 434, 121 S. Ct. at 1684, 149 L. Ed. 2d at 686.
The Court also rejected the argument that a trial court possessed any advantage in reviewing a punitive damage award. Id. at 440, 121 S. Ct. at 1687-88, 149 L. Ed. 2d at 689-90. Pointing to the three factors outlined in BMW, the Court maintained that a trial court only had a slight advantage over an appellate court in determining reprehensibility, that a trial and appellate court were equally capable of evaluating the ratio, and that an appellate court was more suited to analyzing the third factor, civil penalties imposed in comparable cases, because that "calls for broad legal comparison." Ibid.
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