Aleo v. SLB Toys USA, Inc.,
October 2013
In Aleo v. SLB Toys USA, Inc., the plaintiff brought claims against Toys R Us and others alleging, inter alia, wrongful death, negligence, and breach of warranty in the death of his 29-year-old wife. The decedent was attempting to slide head first down an inflatable in-ground swimming pool slide imported and sold by Toys R Us when it collapsed and caused her to strike her head on the concrete deck of the pool. The decedent fractured two cervical vertebrae and suffered a severed spinal cord. She died the following day after she was removed from life support. The jury found Toys R Us liable for wrongful death, negligence, and breach of warranty and awarded the plaintiff $2.6 million in compensatory damages. The jury also found Toys R Us grossly negligent and awarded $18 million in punitive damages. Toys R Us appealed, claiming error in certain pretrial rulings, the sufficiency of the evidence, and the constitutionality of the $18 million punitive damages award.
With respect to the gross negligence finding, Toys R Us argued that there was insufficient evidence to prove gross negligence. The court disagreed, relying on the long-standing definition of gross negligence set forth in Altman v. Aronson, 231 Mass. 588 (1919). The court concluded that there was enough evidence at trial for the jury to have found that Toys R Us was indifferent to the safety of its customers, it had no financial incentive to ensure that the slide was safe, and exercised “a manifestly smaller amount of watchfulness and circumspection than the circumstances require of a person of ordinary prudence,” id. at 592, sufficient to support the jury’s finding of gross negligence.
In upholding the jury’s punitive damages award of $18 million, the court applied the analysis established in BMW of N. America, Inc. v. Gore, 517 U.S. 559 (1996) to determine whether the punitive damages award was within constitutional bounds. The court assessed three factors set forth in BMW to determine whether a punitive damages award is excessive: 1. the degree of reprehensibility of the defendant’s conduct; 2. the ratio of the punitive award to the actual harm inflicted; and 3. a comparison of the punitive damages award and the civil or criminal penalties that could be imposed for comparable misconduct.
In examining the degree of reprehensibility, the court considered whether the harm caused was physical as opposed to economic; whether the tortious conduct demonstrated an indifference to or a reckless disregard of the health or safety of others; and whether the conduct involved repeated actions or was an isolated incident. With respect to the ratio of punitive damages to actual harm inflicted, the court recognized that 1. while no standard has been set by the U.S. Supreme Court, single-digit multipliers are more likely to comport with due process and still achieve the goals of deterrence and retribution; and 2. a higher ratio may be appropriate where the monetary value of the noneconomic harm might be difficult to determine.
When the court applied the third factor and compared the punitive damages award to the civil penalties that could be imposed for Toys R Us’s misconduct, it noted that the ratio was high, but that strict equivalence between punitive awards and possible civil penalties was not necessary to meet constitutional requirements. After applying the three factors, the SJC held that the award of punitive damages was not grossly excessive as to exceed constitutional bounds and affirmed the jury’s findings and award.
