The 'raised eyebrow' test produces further head-scratching: punitive damages in Ondrisek v. Hoffman.

Author:Shands, Valerie
 
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698 F.3d 1020 (8th Cir. 2012)

  1. INTRODUCTION

    Since the 1980s the federal courts have struggled with how to address the perceived increase in the amount and frequency of punitive damages awards. (1) The Supreme Court of the United States finally created a judicial test to determine when an award was so excessive that it violated due process, (2) yet it remains ambiguous and difficult for lower courts to apply. (3) The test involves weighing the reprehensibility of the defendant's actions, the ratio of punitive damages to compensatory damages, and the comparable criminal and civil punishments typically imposed upon a similar bad actor. (4) The most weight is to be given to the reprehensibility prong. (5) The ratio of punitive to compensatory damages is supposed to be close to 4:1, or if the case involves substantial compensatory damages, 1:1, but at all times certainly less than 10:1. (6)

    The Eighth Circuit has used the test for the past eight years to varying effect. (7) The circumstances of the instant case, Ondrisek v. Hoffman, lent themselves well to the possible re-evaluation of how the Eighth Circuit applies the Supreme Court's test. Ondrisek is unique in that the Defendant's actions are the most reprehensible reviewed by the Eighth Circuit since the test was revised in 2003. (8) This case, therefore, gave the Eighth Circuit an opportunity to clarify the application of the test and set forth clear standards by using Ondrisek as a high-water mark against which future cases could have been be measured. Unfortunately, the Eighth Circuit did not seize this opportunity and kept a previous, less reprehensible case as its high-water mark.

    Although the Eighth Circuit declined to make any changes, Ondrisek remains an excellent opportunity to review the court's punitive damages jurisprudence and detect trends in its application. When compared to other Eighth Circuit cases since the Supreme Court laid out the punitive damages test, Ondrisek reveals that the Eighth Circuit tends to consider cases with "substantial" compensatory damages to be $500,000 and over, (9) whereas the Supreme Court tends to consider "substantial" to be $1 million and over. (10) While the Eighth Circuit has a lower threshold for what constitutes "substantial" compensatory damages, it will more frequently apply a ratio higher than 1:1, despite the Supreme Court's contrary recommendation. (11) Furthermore, the Eighth Circuit tends to emphasize the ratio prong of the test, not the reprehensibility prong, as the most important factor. (12) The Eighth Circuit also de-emphasizes the third prong of the test, comparable criminal and civil punishments, to such an extent that it is sometimes completely omitted. (13)

    Ondrisek reveals that although the Eighth Circuit uses the same test as the Supreme Court, it certainly applies it differently. (14) When comparing Ondrisek and other Eighth Circuit cases, one sees a subtle pattern that diverges from the Supreme Court's jurisprudence. However, these differences are not yet distinct enough for the Supreme Court to have granted certiorari to resolve the inconsistencies. (15)

  2. FACTS AND HOLDING

    1. Background

      In Ondrisek v. Hoffman, two eighteen-year old escapees from a religious cult sued the group's leader for battery, outrage, and conspiracy. (16) Spencer Ondrisek and Seth Calagna, Plaintiffs, were both raised in Tony Alamo Christian Ministries (TACM), (17) an obscure religious sect led by Tony Alamo, (18) a self-professed "spiritual leader" and "prophet" of God. (19) Alamo and TACM espouse a variety of "unorthodox religious beliefs," (20) such as polygamy, child brides, public beatings, compulsory fasting for children, and government conspiracy. (21) Alamo also taught that those who leave TACM become homosexuals and go to hell. (22) Alamo had complete control of members' finances (23) and instituted a variety of rules that resulted in near-complete isolation from the outside world. (24) At age eight, the Plaintiffs were made to work several hours per day without pay, (25) which allegedly grew to forty hours per week by age fifteen, and seventy hours per week by age eighteen." (26)

      Both boys endured considerable physical and verbal abuse." (27) The Plaintiffs alleged that they had to listen daily to "rebuke tapes," wherein Alamo told TACM members that they would never amount to anything and would go to hell. (28) Alamo himself told Ondrisek as a child that if he disobeyed, he would be enlisted in the military and shot. (29) Moreover, Alamo even admitted to having the Plaintiffs "hit in the face, with open handed slaps" fifteen to twenty times, then "hit with a wooden paddle" by an adult twenty to forty times. (30) This happened on multiple occasions when the Plaintiffs were as young as twelve. (31) The bases for these punishments were minor offenses, such as horseplay or talking about Harry Potter. (32) These serious beatings, carried out at Alamo's direction by his enforcer, John Kolbeck, resulted in bruising, blood, and swelling that did not abate for days or weeks, and even resulted in permanent damage. (33) These beatings were so severe on one occasion that Ondrisek passed out and Calagna vomited on himself. (34) The beatings were not exclusive to the Plaintiffs; at age fourteen, Calagna was forced to watch as his elderly father was beaten until he was crying and could not stand or crawl. (35) Both Plaintiffs contemplated suicide, "unable to imagine that death would be worse" than what they had to suffer through on a daily basis. (36) The boys escaped separately from the compound at age eighteen, but remain plagued by nightmares, flashbacks, and other psychological issues. (37)

      Ondrisek v. Hoffman was not the first lawsuit brought in connection with TACM and Alamo. Plaintiffs also sued the enforcer who actually hit the boys, Kolbeck, in a separate suit, resulting in a damages award of $500,000 in compensatory damages and $1 million dollars in punitive damages for the Plaintiffs. (38) In an earlier case, Miller v. Tony & Susan Alamo Foundation, Alamo was sued for battery and the emotional distress of two other boys. (39) An adult hit the boys with a paddle 10 times and 140 times respectively, in very much the same circumstances as the Plaintiffs were abused in Ondrisek. (40) The first boy received $1,000 in compensatory damages and $5,000 in punitive damages, and the second received $50,000 in compensatory damages and $500,000 in punitive damages (a 5:1 and 10:1 ratio respectively). (41) The district court characterized Alamo's conduct as "monstrous" and "cold blooded." (42) Throughout the years, the Secretary of Labor has repeatedly sued TACM for not paying its workers, improper recordkeeping, and other labor law violations. (43) More recently, Alamo was convicted and received a 175-year sentence and $250,000 in fines (44) on "10 counts of transporting minors across state lines for illicit sex." (45) These minors were known in the media as "child brides" who had been "spiritually wed" to Alamo when they were allegedly as young as eight. (46)

    2. At Trial

      The Plaintiffs sued Alamo in Federal Court, alleging battery, outrage, and conspiracy. (47) At trial, the jury returned a verdict in favor of the Plaintiffs, awarding $3 million each in compensatory damages and $30 million each in punitive damages, which the district court declined to remit. (48)

      Alamo raised four points of error on appeal: first, that he should be found not liable under the First Amendment freedom of religion clause; second, the district court erred in refusing to instruct the jury in his proposed instruction on battery, which included a statement about corporal punishment being a complete defense to battery; third, that there was insufficient evidence for a finding of outrage; and fourth, that the compensatory and punitive damages were excessive. (49)

      On appeal, the Eighth Circuit Court of Appeals affirmed in part and reversed in part. (50) It summarily dismissed Alamo's first three claims. (51) As to his First Amendment freedom of religion claim, the court merely noted that freedom of religious belief was not absolute and does not extend to permitting "injuries to the 'equal rights of others.'" (52) It also held that any error on the part of the district judge in not instructing the jury about corporal punishment as a complete defense to battery was harmless and did not affect the amount of compensatory damages. (53) With regard to Alamo's claim that his conduct did not rise to the level of outrage, the court held that they did not have the power to review this point because it was not preserved for appeal. (54)

      Next, the court turned to the issue of the compensatory damages. (55) It determined that "[t]he jury properly weighed the evidence, finding that Alamo continually verbally and physically abused Ondrisek and Calagna" and that Alamo's part in orchestrating and supervising the beatings "justified] the compensatory damages awarded against him." (56) Finally, the court weighed the jury's 10:1 punitive damages ratio. (57) Under the Gore factors for punitive damages, (58) the court determined that this case was one of "extreme reprehensibility" and "justified] significant punitive damages," but found the $30 million in punitive damages to be excessive due to the high punitive-to-compensatory damages ratio. (59) It remitted that amount to $ 12 million each (a 4:1 ratio). (60) In remitting the punitive damages award, the Eighth Circuit held that no matter how reprehensible the defendant's actions, a ratio of 10:1 cannot be sustained, and Eden Electrical remains the high water mark. (61)

  3. LEGAL BACKGROUND

    1. Supreme Court Jurisprudence

      Pacific Mutual Life Insurance Co. v. Haslip was the first case in which the Supreme Court held that the Due Process Clause may require limitations on the size of punitive damage awards. (62) The Haslips had purchased bundled health and life insurance through Pacific Mutual, under which...

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