Photo of Bexis

The Pope came to Philadelphia this past weekend.  That’s not the first time this has happened (JPII stopped by in 1979), but the level of paranoia this time around led to four days of street shutdowns, parking prohibitions, and all-around dystopian security that closed roads all the way from Conshohocken to City Line Avenue to the Ben Franklin Bridge.  Commercial strangulation by the unprecedented security caused Bexis’ firm shut down its Philly office for two days.

Bexis, not being a Catholic, decided that the better part of valor was simply to get out of Dodge.  So he went to New York where instead he could follow the Devil’s Path instead.  It was good, very good – some parts considerably more perpendicular than horizontal.  The Devil’s Path and nearby areas beat the literal “hell” out of anything in Pennsylvania.  The only downside is the New York State Thruway, which in its southerly direction is prone to traffic jams for no discernable reason (of course, so is the Schuylkill Expressway in Philly, except when closed entirely for Papal visits).

While walking the Devil’s Path has its benefits, so does walking the path of compliance.  In an early blogpost on the subject of punitive damages, we collected all of the caselaw we could find where compliance with government regulatory standards precluded punitive damages.  Of all the cases we found, only a couple were from state supreme courts.  Now we have another one.  While the Pope was visiting Washington, DC, the Kentucky Supreme Court reversed a multi-million dollar punitive damages award in Nissan Motor Co., Ltd v. Maddox, ___ S.W.3d ___, 2015 WL 5626432 (Ky. Sept. 24, 2015), holding that the defendant’s undisputed compliance with (and in some ways exceeding) federal regulatory standards for automobiles precluded a finding of “gross negligence” or “reckless disregard,” which is the Kentucky standard, id. at *2, to support punitive damages.  That compliance precluded punitive damages as a matter of law even under a “slight care”/gross negligence standard is particularly notable, since many states set the bar higher for punitive damages than merely gross negligence.

As we’ve already indicated, Maddox involves cars rather than prescription medical products, but the court drew from compliance cases generally:

Successful completion of regulatory product testing weighs against a finding of gross negligence.  Accordingly, exceeding mandatory requirements by successfully completing more rigorous testing strongly weighs against such a finding.  The logic is clear.  Meeting and then exceeding base safety requirements is, at the very least, facial evidence of exercising slight care. . . .  This approach has also been adopted by several of our sister states.

The undisputed evidence demonstrates that [defendant] designed [the vehicle] to withstand the most rigorous frontal crash testing offered by the Federal government at that time.  While those tests may have been performed using body weight metrics that no longer reflect our increasingly portly population, [defendant] nevertheless satisfied and exceeded the regulatory duty imposed upon it.

Maddox, 2015 WL 5626432, at *5 (citations omitted).  Thus, “there is typically no breach under the common law for failure to exercise slight care where the undisputed evidence indicates that relevant regulatory duties have been satisfied.”  Id. (emphasis original) (citation omitted).

As the quoted passage indicates, Maddox involved a rather portly plaintiff, to put it mildly – her weight exceeding that of the so-called “95 percentile male dummy” that was the largest crash dummy available – so heavy its use was not required by federal crash testing.  Id. at *2.  Maybe, with all inferences going to the plaintiff,  it was negligence not to do more, but it could not be the kind of “grossly negligent” conduct necessary for punitive damages in Kentucky.  Id.
at *5-6.

Even so, compliance “does not automatically foreclose a punitive damages jury instruction” in all factual contexts.  Id. at *5.  The court discussed some cases that could tip the balance the other way:  (1) a “complete” lack of documented testing, id. at *6; (2) failure to investigate prior incidents, id.; actual “awareness” of a potentially fatal design deficiency, id.; and (4) “kn[owing] that the regulatory testing was invalid.”  Id.  However, there was no such evidence in Maddox.  Plaintiff “failed to introduce any evidence that should have put [defendant] on notice that either its seatbelt or seat system was unsound, or that the requisite regulatory testing was irrelevant or invalid.”  Id.

Of even greater interest to our side, the Kentucky Supreme Court also discussed what kinds of evidence were unable as a matter of law to overcome the “weight” accorded to compliance evidence.  First, evidence that other manufacturers had arguably safer designs does not establish “that an inferior design was recklessly or wantonly dangerous.”  Maddox, 2015 WL 5626432, at *7.  Second, evidence that the defendant could have done more or better testing can’t establish a right to punitive damages where the defendant performed the governmentally required tests.  Those tests “demonstrate[] that there was at least some effort to test the safety of [the product].  Id.  “Based on this additional sled testing, no reasonable juror could determine that [defendant’s] conduct demonstrated a reckless or wanton disregard for occupants weighing at or near the 95th percentile.”  Id.  Third, destruction of documents in accordance with corporate record retention practices doesn’t get a plaintiff to punitive damages.  “The mere absence of these documents does not permit a reasonable inference that [defendant] intentionally disregarded relevant materials, or that those materials demonstrated that the seatbelt system was deficient.”  Id.

Thus, while not an absolute bar (such bans are usually statutory) to punitive damages, compliance with relevant government safety regulations “typically” precludes punitive damages, even under Kentucky’s relatively generous “gross negligence” standard for punitive damages.  We would argue that, a fortiori, regulatory compliance should preclude punitive damages in states (like Pennsylvania) that follow the tougher scienter requirements of Restatement (Second) of Torts §500 (1965), which rule out punitive damages based on any form of negligence, however “gross.”  See, e.g., Hutchison v. Luddy, 870 A.2d 766, 771-72 (Pa. 2005); Takes v. Metropolitan Edison Co., 695 A.2d 397, 399 n.4 (Pa. 1997).