The opinion of the court was delivered by: WEINSTEIN
Jack B. Weinstein, Senior District Judge:
Both defendant and plaintiffs seek post-verdict relief. In this memorandum, only the punitive damage issue is addressed. Over the course of almost four weeks, a jury heard evidence and arguments in a case involving three plaintiffs who had allegedly suffered from repetitive stress injuries as a result of using defendant's computer equipment. Defective design and failure to warn were the bases for the suit. Their spouses filed independent loss of consortium claims.
The case was divided into two independent phases, before the same jury, one for compensatory damages and one for punitive damages.
The jury returned substantial compensatory verdicts for plaintiffs on the failure to warn and loss of consortium claims. The second phase began at once with brief evidence presented on defendant's value and business losses. A short argument and charge followed.
Recent developments in the law of damages and a lack of clarity as to the appropriate standard of proof in New York for punitive damages required a modification of the New York punitive damage charge, New York Pattern Jury Instruction 2:275. See Appendix for the punitive damage charge used.
II. BMW OF NORTH AMERICA V. GORE
Interpreting federal constitutional limitations on state punitive damage awards, the Supreme Court in BMW of North America v. Gore, 134 L. Ed. 2d 809, 116 S. Ct. 1589 (1996), set out three factors for determining whether a punitive damage award violates "elementary notions of fairness enshrined our in our constitutional jurisprudence," Gore, supra, 116 S. Ct. 1589, 1598:
Three guideposts . . . [are used to determine whether a punitive damage award] is grossly excessive: the degree of reprehensibility of the nondisclosure; the disparity between the harm or potential harm suffered by [the plaintiff] and his punitive damages award; and the difference between this remedy and the civil penalties authorized or imposed in comparable cases.
Gore, supra, 116 S. Ct. 1589, 1598. These three Gore factors--reprehensibility, disparity between harm and the punitive damage award, and civil and criminal remedies available for similar actions--are now the touchstone in evaluating a punitive damage award under the Constitution.
An additional independent limitation on punitive damage awards flows from a principle of our federal system that state legislation, state policy, and judicial development of state law can only be directed at activity within the state. A "State may not impose economic sanctions on violators of its laws with the intent of changing the tortfeasers' lawful conduct in other states." Gore, supra, 116 S. Ct. 1589, 1596-97 (citations omitted). Thus punitive damage can not be awarded to punish or deter acts in other states which do not affect the forum state.
In developing a charge a primary question is whether to present the Gore factors to jurors to guide them, or to use Gore only to review a jury punitive damage award, if any, after the fact. In Lee v. Edwards, 101 F.3d 805 (2nd Cir. 1996), the Second Circuit, relying both on Gore, and Gasperini v. Center for Humanities, Inc., 135 L. Ed. 2d 659, 116 S. Ct. 2211 (1996), implied that whether or not a punitive damage award is excessive is a question of law for the courts. Quoting Gasperini, the Second Circuit noted that,
'Surely there must be an upper limit [to punitive damage awards], and whether that has been surpassed is not a question of fact with respect to which reasonable men may differ, but a question of law.'
Lee, supra, 101 F.3d 805, 808-09 (quoting Gasperini v. Center for Humanities, Inc., 135 L. Ed. 2d 659, 116 S. Ct. 2211, 2223-24 (1996), quoting Dagnello v. Long Island R.R. Co., 289 F.2d 797, 806 (2d Cir. 1961)) (emphasis added). The Second Circuit went on to explain that the "three [Gore] guideposts . . . should assist us in application of our standard by which we deem excessive a punitive damage award . . . 'shocks our judicial conscience.'" Lee, supra, 101 F.3d 805, 808-09 (citations omitted).
The Second Circuit's approach to the Gore factors, as well as its reliance on the Gasperini insistence that whether a punitive damage award is excessive is "a question of law," does not require district courts to ignore the Gore factors in charging the jury. If the jury is to accomplish its ...