Opinion
Case Nos. 1:00-CV-225; 1:00-CV-226; 1:00-CV-228
September 26, 2001
OPINION
This Court has previously determined that the Defendant in these consolidated actions is liable to Plaintiffs as a matter of law for intentional violation of the Fair Credit Reporting Act and more particularly 15 U.S.C. § 1681b(f) and 1681n, which proscribe the wrongful use of credit reporting information. In determining the previous summary judgment motion, this Court also determined as a matter of law that Defendant Berger Chevrolet, Inc. was responsible for the wrongful acts of employee Robert Gordon, of which he was convicted in a separate criminal proceeding, on agency theories of respondeat superior and apparent authority. As such, the parties are now prepared for a jury trial reserved to the issues of actual and punitive damages for Defendant's wrongful conduct. In this context, the Court must determine Defendant Berger Chevrolet, Inc.'s Motion In Limine concerning allowable proofs at trial.
Defendant, by its Motion, seeks to exclude from evidence the following as irrelevant:
(1) Any testimony or exhibit, including but not limited to, Robert Gordon's personnel file relating to his criminal history, his wearing of a tether or the results of a pre-employment background investigation completed by AM Investigations.
(2) Any and all documents, including the deal jackets, file folders, civil actions, settlement amounts, involving the following person[s]:
a. Michael Lambeth
b. Mario Calanche
c. David Thompson
d. Lorna Page
e. Tashara Hudnell
(3) Testimony from Tashara Hudnell, Michael Lambeth, Mario Calanche and Lorna Page regarding their "victimization" by Berger Chevrolet.
(4) Any evidence relating to the Defendant's 1998 document storage policies and procedures, computer security measures, or the procedures associated with the processing or a credit application and the access of a credit report.
(Defendant's Motion In Limine, at 2.)
Of course, it is the province of the district court under Federal Rule of Evidence 401 to exercise its discretion in determining the relevancy and admissibility of evidence. See United States v. Seago, 930 F.2d 482, 494 (6th Cir. 1991). Under Rule 401, the term "relevant evidence" is defined broadly to include any "evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." Fed.R.Evid. 401. As the commentators to the Rule point out, a witness's testimony need only establish "a brick" as opposed to a "wall" and not every "witness can make a home run." Fed.R.Evid. 401, 1972 advisory committee notes.
Under Federal Rule of Evidence 402, irrelevant evidence is inadmissible and relevant evidence is admissible except as otherwise provided by the Rules and other pertinent law. Under Federal Rule of Evidence 403, relevant evidence may be excluded "if its probative value is substantially outweighed by danger of unfair prejudice . . . ." Fed.R.Evid. 403.
In this case, since liability has already been determined, the question is whether the evidence would assist the trier of fact in determining punitive damages. In considering this question, the Court must consider both the purposes of "punitive damages" under Federal law generally and the purposes of "punitive damages" as applied to the Fair Credit Reporting Act.
In Pacific Mutual Life Insurance Co. v. Haslip, 499 U.S. 1, 19 (1999), the United States Supreme Court held that an award ofpunitive damages in a civil case did not violate the Due Process Clause of the United States Constitution where the purpose of the punitive damages was adequately explained to the jury ( i.e., the purpose was not to compensate, but to punish, and to protect the public by deterring the defendant and others in the future), and where it was explained that the imposition of those damages was not compulsory. The decision in Haslip also upheld the use of factors applied by the State of Alabama in assessing punitive damages. Those factors included:
(a) whether there is a reasonable relationship between the punitive damages award and the harm likely to result from the defendant's conduct as well as the harm that actually has occurred; (b) the degree of reprehensibility of the defendant's conduct, the duration of that conduct, the defendant's awareness, any concealment, and the existence and frequency of similar past conduct; (c) the profitability to the defendant of the wrongful conduct and the desirability of removing that profit and of having the defendant also sustain a loss; (d) the "financial position" of the defendant; (e) all the costs of litigation; (f) the imposition of criminal sanctions on the defendant for its conduct, these to be taken in mitigation; and (g) the existence of other civil awards against the defendant for the same conduct, these also to be taken in mitigation.Haslip, 499 U.S. at 421-22. See also Eighth Circuit Pattern Civil Jury Instruction § 4.53 and commentary (citing Haslip factors and listing similar factors as appropriate for jury consideration in appropriate federal cases).
Of the many federal cases discussing punitive damages, many emphasize that the reprehensibleness of the defendant's conduct, the likelihood that the conduct will be repeated unless punished, and the extent to which the conduct occurred as part of a pattern of misconduct are all relevant to determining punitive damage awards. For example, in TXO Production v. Alliance Resources, Inc., 509 U.S. 443, 462 n. 28 (1993), the Supreme Court indicated that the defendant's financial status and its commission of similar misconduct through the country were very pertinent to assessing punitive damages. In BMW of North America v. Gore, 517 U.S. 559, 575 (1996), the Supreme Court said: "Perhaps the most important indicium of reasonableness of a punitive damage award is the degree of reprehensibility of the defendant's conduct." Furthermore, in agreeing that systemic misconduct was more reprehensible, the Supreme Court said:
Certainly, evidence that a defendant has repeatedly engaged in prohibited conduct while knowing or suspecting that it was unlawful would provide relevant support for an argument that strong medicine is required to cure the defendant's disrespect for the law. . . . Our holdings that a recidivist may be punished more severely than a first offender recognize that repeated misconduct is more reprehensible than an individual instance of malfeasance.Id. at 576-77 (citations omitted). See also Zimmerman v. Direct Federal Credit Union, ___ F.3d ___, 2001 W. L. 991486 (1st Cir. Sept. 4, 2001); Davis v. Rennie, ___ F.3d ___, 2001 W. L. 1002632 (1st Cir. Sept. 5, 2001).
As for punitive damages under the Fair Credit Reporting Act, the text of the Act makes explicit that a finding of a wilful violation under 15 U.S.C. § 1681n, authorizes the jury, without additional finding of wrongful conduct, to award punitive damages. See 15 U.S.C. § 1681 n(a); Bryant v. TRW, Inc., 689 F.2d 72, 74 (6th Cir. 1982) (stating that "willful noncompliance, in addition, gives rise to liability for punitive damages"); Pinner v. Schmidt, 805 F.2d 1258, 1263 (5" Cir. 1986); Millstone v. O'Hanlon Reports, Inc., 528 F.2d 829 (8th Cir. 1976). Furthermore, as this Sixth Circuit Court of Appeals has instructed, since the Fair Credit Reporting Act is intended to protect consumers, it is to be liberally construed in support of that purpose. Jones v. Federated Financial Reserve Corp., 144 F.3d 961, 964 (6th Cir. 1998).
In this case, the Court determines that all of the evidence which Defendant seeks to exclude is relevant to the issue of punitive damages. The evidence of Robert Gordon's personnel file, which includes evidence that the company was on notice that he was a convicted felon and that he was wearing a tether while on supervision at the time of the misconduct, goes directly to the issue of how to regard the Defendant in relation to its employee, Robert Gordon. While this Court has held, as a matter of law, that the Defendant is liable for Gordon's acts on the basis of respondeat superior and apparent authority, it is nevertheless important for the jury to understand how the corporate structure hired, supervised and facilitated Gordon to have a full appreciation of the degree to which the corporation acted reprehensibly. Without this information, the jury would have an incomplete picture of how the corporation acted and whether punishment is needed.
Defendant has also argued that evidence of misappropriation of credit reporting information by Gordon as to Tashara Hudnell, Michael Lambeth, Mario Calanche and Lorna Page (including the file records and other reliable papers showing misconduct) should not be introduced. This evidence, as noted above, is highly relevant to the issue of punitive damages in that it relates directly to the extent of the wrongful conduct and to whether the Defendant had engaged in a pattern of wrongful conduct. As such, this objection is denied.
Defendant has also objected to testimony concerning inadequate security measures by the dealership, including testimony that credit reports and applications were received by Robert Gordon and stored in unsecured locations, including a cardboard box. This evidence, like the other evidence referenced above, is important to allow the jury to fully assess the blameworthiness of the whole of Defendant's relevant corporate conduct.
Defendant says in part that the use of the box was irrelevant because the information was stolen immediately after the credit applications were completed. However, this objection misses the point in that this information is still relevant to the overall care that the Defendant exercised, including oversight by the Defendant over Gordon, and is thus pertinent to whether Defendant's overall conduct was reprehensible.
Finally, the Court agrees with the Plaintiffs' assessment that the introduction of the above evidence is unlikely to prejudice the jury. The evidence is pertinent and, since liability has already been determined and the jury will be appropriately instructed on these issues, there is little, if any, danger of jury prejudice or confusion.
Therefore, an Order shall enter denying Defendant's Motion In Limine.