Michael ALEO 1 v. SLB TOYS USA, INC.,2& others.3
In 2006, while visiting relatives in Andover, twenty-nine year old Robin Aleo4 attempted to use an inflatable swimming pool slide that had been imported and sold by Toys “R” Us, Inc., and Toysrus.com, LLC (collectively, Toys R Us).5 She slid down head first; when she reached the bottom of the slide, it collapsed, and her head struck the concrete deck of the swimming pool through the fabric of the slide. Robin's upper two cervical vertebrae fractured, resulting in quadriplegia. She died the following day, after her family, in accordance with her wishes, decided to withdraw life support.
In 2008, Michael Aleo, Robin's widower, filed an action in the Superior Court, both individually and as administrator of Robin's estate, against SLB Toys USA, Inc., and Amazon.com, Inc., alleging negligence, breach of the implied warranty of merchantability, wrongful death, and violation of G.L. c. 93A.6 Subsequently, Toys R Us and Amazon.com Kids, Inc., were added as additional defendants.7 A Superior Court jury found Toys R Us liable for negligence, breach of warranty, and wrongful death, awarding compensatory damages in the amount of $2,640,000.8 The jury also found Toys R Us grossly negligent and awarded punitive damages in the amount of $18 million. See G.L. c. 229, § 2 (punitive damages available for gross negligence in wrongful death action).9 The judge denied Toys R Us's posttrial motions for a new trial on all issues, judgment notwithstanding the verdict, and a new trial on damages subject to remittitur, and Toys R Us appealed. We allowed both parties' applications for direct appellate review.
Toys R Us challenges certain pretrial rulings, the sufficiency of the evidence, and the constitutionality of the $18 million award of punitive damages. We discern no error in the judge's evidentiary rulings or in his ruling permitting the plaintiff to argue that the slide was “illegal,” and we conclude that there was sufficient evidence to support the jury's findings of negligence, breach of warranty, and gross negligence. We conclude as well that the jury's award of punitive damages does not exceed constitutional limits.
1. Background. We recite the facts the jury could have found, reserving some facts for later discussion. In 2005, Toys R Us decided to purchase a product called Banzai Falls In–Ground Pool Slide from a vendor in China and import it into the United States for sale. The Banzai Falls In–Ground Pool Slide is made of a tent-like fabric with a rubber-coated sliding surface and is sold with an electric fan used to inflate it. The slide is intended to be installed adjacent to an in-ground swimming pool, so that a person using the slide may descend the slide ramp into the pool.
Before the slide was imported into the United States, Bureau Veritas, an independent testing laboratory, was retained by Toys R Us to evaluate it. Bureau Veritas conducted various tests that were requested by either Toys R Us or the Chinese vendor. Bureau Veritas produced certificates indicating that the slide had been tested for compliance with United States Federal regulations and toy industry standards regarding lead content, flammability, electronically operated toys, soluble heavy metals content, mechanical hazards, electric fans, labeling, and sharp points and edges. There was no indication that Toys R Us or the vendor in China requested that the slide be tested, or that the slide was tested, for compliance with 16 C.F.R. § 1207 (1978) (§ 1207), a Federal safety standard applicable to all swimming pool slides “regardless of the materials of manufacture or structural characteristics of the slides.” 16 C.F.R. § 1207.1(b)(2) (1978).10 The certificates of compliance produced by Bureau Veritas were sent to an employee in Toys R Us's safety assurance department who received approximately 4,000 certificates of this kind per month. Ultimately, Toys R Us imported approximately 4,000 Banzai Falls In–Ground Pool Slides into the United States for sale.
In 2006, Sarah Letsky purchased a Banzai Falls In–Ground Pool Slide from Toys R Us using the Internet. She and her husband William Letsky, who is Michael's uncle, installed the slide beside the swimming pool at their home in Andover. That summer, Robin and Michael, along with their fifteen month old daughter, visited the Letskys. On July 29, a number of people, including the Aleos and the Letskys, as well as additional family and friends, were gathered around the Letskys' pool. Robin, who weighed approximately one hundred forty-five pounds, climbed to the top of the slide, paused on the platform there, spoke a few words to a friend, and descended head first. The bottom part of the slide was underinflated and collapsed under her weight. As a result, Robin's head struck the pool ledge through the fabric of the slide. She slid into the water and came up motionless.
Michael, along with his uncle and another man, removed Robin from the pool, and Michael administered cardiopulmonary resuscitation. Robin was taken by helicopter to Brigham and Women's Hospital in Boston, where she was placed on a ventilator and diagnosed with a severed spinal cord. Doctors advised her family that she would never breathe or move on her own again. At the hospital, Robin awoke for approximately three seconds and told Michael, “I can't feel anything.” The next day, Michael, along with Robin's parents, decided to remove life support, as Robin previously had stated that she would not want to be kept alive under such conditions.
2. Discussion. Toys R Us argues that (1) certain evidence of misuse of the slide was improperly excluded at trial, (2) the judge erred in permitting the plaintiff to refer to the slide as “illegal” before the jury, (3) there was insufficient evidence to establish negligence or breach of warranty, (4) there was insufficient evidence to establish gross negligence, and (5) the award of punitive damages was so excessive as to violate due process.11
a. Evidence of misuse. At trial, Toys R Us sought to establish that Robin misused the slide by jumping or diving, rather than sliding, from the platform at the top of the slide. It contends that the judge improperly excluded three types of evidence indicating misuse: hearsay statements in a police report, hearsay statements in medical records, and the opinion of one of Toys R Us's expert witnesses. We address each category of evidence in turn.12
i. Statements in police report. The judge allowed the plaintiff's motion to exclude statements regarding the accident that were included in a police report. An Andover police detective stated in his report, “According to family [members, Robin] was standing on top of a [six-foot] inflatable slide and attempted to dive off into the pool, but the slide gave way and she struck her head on the side of the pool․” Toys R Us maintains that the statements should have been admitted as spontaneous utterances. See Commonwealth v. Santiago, 437 Mass. 620, 623, 774 N.E.2d 143 (2002).
“Generally, determinations as to the admissibility of evidence lie ‘within the sound discretion of the [trial] judge.’ ” Commonwealth v. Jones, 464 Mass. 16, 19–20, 979 N.E.2d 1088 (2012), quoting Commonwealth v. Dunn, 407 Mass. 798, 807, 556 N.E.2d 30 (1990). A spontaneous utterance may not be introduced in evidence unless there is evidence sufficient to support a finding that the declarant had personal knowledge of the matter in question. See Commonwealth v. Harbin, 435 Mass. 654, 657, 760 N.E.2d 1216 (2002).
Here, the police report does not indicate which family members the detective spoke to, or whether the declarants had witnessed the accident. In his deposition, the detective stated that he could not identify the individuals who provided the information. Similarly, an Andover police sergeant, who was also at the scene, stated in his deposition, “I believe [Robin] went to jump off the slide and it deflated”; he indicated, however, that this information was provided to him by another police officer, and not by anyone with personal knowledge of the accident. Given that there was no evidence that the unknown declarants had personal knowledge of Robin's manner of descent, the judge did not abuse his discretion in excluding the statements.
ii. Statements in medical records. The judge also excluded statements regarding the accident that appeared in Robin's medical records. Specifically, medical records from the Andover fire-rescue department, Boston Med Flight, and Brigham and Women's Hospital make several references to Robin diving or jumping from the slide.
Statements in medical records are admissible, even though hearsay, where they are made “in the regular course of the institution's operation from the personal knowledge of the recorder or from a compilation of the personal knowledge of those who have an obligation in the course of their employment to transmit that medical information to the recorder.” Bouchie v. Murray, 376 Mass. 524, 528, 381 N.E.2d 1295 (1978). Such statements “may be admitted by the court, in its discretion.” G.L. c. 233, § 79. See Commonwealth v. Jones, supra.
Here, the recorders were medical responders and professionals who treated Robin after the accident but did not have personal knowledge of the circumstances of the accident. The statements in the medical records describing Robin's means of descent, therefore, were not made from the personal knowledge of the recorders, nor were they made from the personal knowledge of those who had an obligation in the course of their employment to transmit that medical information to the recorders. See Bouchie v. Murray, supra. Further, as with the statements in the police report, there is no evidence that the statements in the medical records were based on the personal knowledge of anyone who witnessed the accident. See Commonwealth v. Harbin, supra. The judge did not abuse his discretion in excluding the statements.
iii. Expert opinion. The plaintiff moved in limine to exclude evidence of experiments and calculations conducted by Mari Truman, one of Toys R Us's expert witnesses. Truman's experiments involved sliding a mannequin down a Banzai Falls In–Ground Pool Slide and dropping the mannequin onto the bottom of the slide, to determine whether the slide would be more likely to collapse when a user was sliding or diving.13 The plaintiff argued that evidence of the experiments should be excluded, because Truman “testified that her experiments do not accurately reflect the occurrence of the accident.”
The judge agreed that the tests did not sufficiently replicate the conditions of the accident. Nonetheless, he denied the plaintiff's motion, allowing the admission of evidence of the tests for its “limited utility” in demonstrating to the jury the physical properties of the slide. However, because the tests did not sufficiently replicate the conditions of the accident, the judge ruled that Truman could not offer her opinion, based on the tests, that Robin could not have been injured by sliding down the slide. Toys R Us maintains that the judge erred in precluding Truman from offering this opinion.
“The decision to exclude ‘expert testimony rests in the broad discretion of the judge and will not be disturbed unless the exercise of that discretion constitutes an abuse of discretion or other error of law.’ ” Palandjian v. Foster, 446 Mass. 100, 104, 842 N.E.2d 916 (2006), citing Commonwealth v. Pike, 430 Mass. 317, 324, 718 N.E.2d 855 (1999). Expert opinion testimony may be excluded “where it amounts to no more than mere speculation or a guess from subordinate facts that do not give adequate support to the conclusion reached.” Sevigny's Case, 337 Mass. 747, 751, 151 N.E.2d 258 (1958), and cases cited. Here, there were substantial differences between the conditions of Truman's experiments and the conditions of the accident: The mannequin was seven or eight inches taller than Robin, had a rigid neck and rigid arms, was pushed down the slide without its arms outstretched, and took approximately twice as long to reach the bottom of the slide as two witnesses testified it would have taken Robin to do. Given these differences, we discern no error in the judge's determination that the proffered opinion testimony was not “based upon sufficient facts or data.” Mass. G. Evid. § 702(a) (2011). Accordingly, there was no abuse of discretion in his decision to limit Truman's testimony.
b. Ruling permitting plaintiff to refer to slide as illegal. Toys R Us claims that the judge erred in allowing the plaintiff to argue at trial that the slide was “illegal.” To the extent that the issue was preserved for appellate review,14 we discern no error of law or abuse of discretion in the judge's ruling. See Fialkow v. DeVoe Motors, Inc., 359 Mass. 569, 572, 270 N.E.2d 798 (1971), and cases cited (where party objects to argument by opposing counsel, judge “has discretion to decide whether any action is required․ This court will not intervene in such a case where no abuse of discretion is shown”); Posell v. Herscovitz, 237 Mass. 513, 515, 130 N.E. 69 (1921) (judge has discretion in deciding whether to restrict content of opening statement). A copy of § 1207 was entered in evidence; the regulation applies to all swimming pool slides “regardless of the materials of manufacturer or structural characteristics of the slides,” 16 C.F.R. § 1207.1(b)(2); and the jury was instructed, without objection, that it was “deemed ․ admitted that the [Banzai Falls In–Ground Pool Slide] was not tested or certified under [§ 1207].” On this evidence, it was reasonable for the plaintiff to argue the inference that the slide was an “illegal” product. See Back v. Wickes Corp., 375 Mass. 633, 644, 378 N.E.2d 964 (1978) (counsel may argue fair inferences from the evidence).15 Further, the judge instructed the jury that opening statements and closing arguments are not evidence, and Toys R Us did not request any additional instructions on this point. See Fialkow v. DeVoe Motors, Inc., supra.
c. Evidence of negligence and breach of warranty. Toys R Us argues that there was insufficient evidence at trial to support the jury's findings that Toys R Us was negligent and breached the implied warranty of merchantability.
“A violation of a statute, ordinance, or regulation, although not conclusive, is evidence of negligence on the part of a violator as to all consequences that the statute, ordinance, or regulation was intended to prevent.” Guinan v. Famous Players–Lasky Corp., 267 Mass. 501, 516, 167 N.E. 235 (1929), and cases cited. Here, a copy of § 1207 was entered in evidence. By its express terms, § 1207 applies to all swimming pool slides “regardless of the materials of manufacture or structural characteristics of the slides.” 16 C.F.R. § 1207.1(b)(2). The regulation states that it was promulgated to “reduce or eliminate the unreasonable risks of death or injury associated with swimming pool slides,” 16 C.F.R. § 1207.1(a) (1978), including “quadriplegia and paraplegia resulting from users (primarily adults using the swimming pool slide for the first time) sliding down the slide in a head first position and striking the bottom of the pool.” 16 C.F.R. § 1207.1(b)(1) (1978).16
The regulation requires that all pool slides be capable of supporting three hundred fifty pounds, and that they be tested for head-first sliding. 16 C.F.R. § 1207.5(f)(9)(i), (5)(ii) (1978). The instruction manual included with the Banzai Falls In–Ground Pool Slide, as well as a warning label affixed to the slide, both of which were entered in evidence, states that the slide can support only two hundred pounds, and that head-first sliding may result in serious injury or death.17 One of the plaintiff's expert witnesses testified that the slide failed to comply with the Federal standard and that this failure caused Robin's death, while another testified that the slide was defective because it did not comply with “the requirements of the standards.” Finally, the judge instructed the jury, without objection, that it was “deemed ․ admitted that the slide was not tested or certified under [§ 1207] prior to being imported and sold.” This evidence was sufficient to support a finding that Toys R Us violated § 1207 and, thus, was sufficient to support a finding of negligence.
Toys R Us maintains that the evidence was insufficient to establish negligence because there also was evidence that the vendor warranted to Toys R Us that the slide would be free from defects and would conform with all laws, and because Toys R Us engaged Bureau Veritas to confirm that the slide met all applicable regulatory requirements. Essentially, Toys R Us argues that such evidence negates the other evidence of negligence by demonstrating that Toys R Us exercised reasonable care in importing the slide. The jury, however, were not required to credit the evidence of reasonable care by Toys R Us.
As an initial matter, Toys R Us failed to introduce a signed copy of its agreement with the Chinese vendor. The jury thus reasonably could have inferred that there was no signed and executed agreement containing a vendor warranty, and that the vendor therefore did not warrant to Toys R Us that the slide would be free from defects and would conform with all applicable laws. Further, the evidence of Toys R Us's arrangement with Bureau Veritas was equivocal. Documents entered in evidence indicated that, in testing the slide, Bureau Veritas performed only those tests that either Toys R Us or the vendor asked it to conduct.18 Further, although a former Toys R Us employee testified that Toys R Us gave “standing instructions” to Bureau Veritas to determine which standards and regulations applied to the products it tested, he also testified that these instructions were not in writing, and that Toys R Us entered into a written agreement with Bureau Veritas to this effect only after Toys R Us began importing the slide. Accordingly, the jury could have found that Bureau Veritas had not been engaged to confirm that the slide met all applicable regulatory requirements.
As to the finding of breach of warranty, “[a] defendant in a products liability case in this Commonwealth may be found to have breached its warranty of merchantability without having been negligent, but the reverse is not true.” Hayes v. Ariens Co., 391 Mass. 407, 410, 462 N.E.2d 273 (1984), overruled on another ground by Vassallo v. Baxter Healthcare Corp., 428 Mass. 1, 19–23, 696 N.E.2d 909 (1998). Thus, in a products liability case, as here, a finding of negligence necessarily encompasses a breach of warranty. Id. Because the evidence here was sufficient to support a finding of negligence, it follows that the evidence was also sufficient to support a finding of breach of warranty.
d. Evidence of gross negligence. Toys R Us argues as well that there was insufficient evidence of gross negligence. This issue was not preserved for appeal, as Toys R Us neither raised it below in its motions for a directed verdict, nor objected in any respect to the jury instruction given on gross negligence. Nonetheless, “[w]e choose in our discretion to discuss the issue,” Clark v. Rowe, 428 Mass. 339, 341, 701 N.E.2d 624 (1998), as the jury's award of punitive damages, discussed infra, rests on its finding of gross negligence. See G.L. c. 229, § 2.
The long-standing definition of gross negligence in Massachusetts was set forth in Altman v. Aronson, 231 Mass. 588, 591–592, 121 N.E. 505 (1919):
“Gross negligence is substantially and appreciably higher in magnitude than ordinary negligence. It is materially more want of care than constitutes simple inadvertence. It is an act or omission respecting legal duty of an aggravated character as distinguished from a mere failure to exercise ordinary care. It is very great negligence, or the absence of slight diligence, or the want of even scant care. It amounts to indifference to present legal duty and to utter forgetfulness of legal obligations so far as other persons may be affected. It is a heedless and palpable violation of legal duty respecting the rights of others. The element of culpability which characterizes all negligence is in gross negligence magnified to a high degree as compared with that present in ordinary negligence. Gross negligence is a manifestly smaller amount of watchfulness and circumspection than the circumstances require of a person of ordinary prudence.”
Here, as stated, § 1207 was entered in evidence. The regulation requires that all pool slides be capable of supporting three hundred fifty pounds, 16 C.F.R. § 1207.5(f)(9)(i), and be tested for head-first sliding, 16 C.F.R. § 1207.5(f)(5)(ii). The instruction manual included with the slide, as well as the warning label affixed to the slide, states that it can support only two hundred pounds, and that head-first sliding is dangerous. The judge instructed the jury that it was “deemed ․ admitted that the slide was not tested or certified under [§ 1207].”
Further, the jury could have found that the vendor did not warrant to Toys R Us that the slide complied with all applicable standards and regulations; that Bureau Veritas had not been engaged to determine which standards and regulations applied to the slide, but rather was instructed simply to perform certain specified tests; and that Toys R Us retained but one employee in its safety assurance department to review approximately 4,000 certificates of compliance per month. Finally, there was testimony that an indemnity provision in Toys R Us's purported vendor agreement meant that, if Toys R Us lost money due to a product defect, it could try to recover the money from the Chinese vendor. Based on this testimony, the plaintiff permissibly argued, and the jury could have found, that Toys R Us was indifferent to the safety of the slide, because it believed it would not be financially liable for any defects.
On this evidence, the jury could have determined that Toys R Us's conduct evinced “want of even scant care” as to the safety of its customers. Altman v. Aronson, supra. The jury could have found that Toys R Us was indifferent to the safety of its customers, 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[d] of a person of ordinary prudence.” Id. Accordingly, the evidence was sufficient to support the jury's finding of gross negligence.
e. Punitive damages. Toys R Us maintains that the award of $18 million in punitive damages is grossly excessive and violates due process.
Compensatory damages and punitive damages, although generally awarded at the same time and by the same fact finder, serve different purposes. Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 432, 121 S.Ct. 1678, 149 L.Ed.2d 674 (2001). Compensatory damages “are intended to redress the concrete loss that the plaintiff has suffered by reason of the defendant's wrongful conduct.” Id. “By contrast, punitive damages serve a broader function; they are aimed at deterrence and retribution.” State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 416, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003) (State Farm ), citing Cooper Indus., Inc. v. Leatherman Tool Group, Inc., supra.
Under Massachusetts law, punitive damages may be awarded only where authorized by statute. International Fid. Ins. Co. v. Wilson, 387 Mass. 841, 856 n. 20, 443 N.E.2d 1308 (1983), citing Boott Mills v. Boston & Me. R.R., 218 Mass. 582, 589, 106 N.E. 680 (1914). The Massachusetts wrongful death statute permits an award of punitive damages where the decedent's death was caused by the “malicious, willful, wanton or reckless conduct of the defendant or by the gross negligence of the defendant.”19 G.L. c. 229, § 2. The statute sets a minimum award of $5,000, but does not set a maximum award. Id. We have stated that the purposes of punitive damages include “condemnation and deterrence,” Dartt v. Browning–Ferris Indus., Inc. (Mass.), 427 Mass. 1, 17, 691 N.E.2d 526 (1998), quoting Bain v. Springfield, 424 Mass. 758, 767, 678 N.E.2d 155 (1997), and that a “proper punitive damage award” is one that is “sufficient ․ to send a clear message to the [defendant] of condemnation for its reprehensible behavior․” Clifton v. Massachusetts Bay Transp. Auth., 445 Mass. 611, 624, 839 N.E.2d 314 (2005). See Zabin & Connolly, The New Wrongful Death Act in Massachusetts Steps into the Twentieth Century, 58 Mass. L.Q. 345, 369 (1973–1974) (“punitive damages ․ are awarded ․ to punish the defendant and make an example of him”).
The due process clause of the Fourteenth Amendment to the United States Constitution, however, prohibits the imposition of a “ ‘grossly excessive’ punishment” on a tortfeasor. BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 562, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996) (BMW ), quoting TXO Prod. Corp. v. Alliance Resources Corp., 509 U.S. 443, 454, 113 S.Ct. 2711, 125 L.Ed.2d 366 (1993), and cases cited. “Elementary notions of fairness enshrined in our constitutional jurisprudence dictate that a person receive fair notice not only of the conduct that will subject him to punishment, but also of the severity of the penalty that a State may impose.” BMW, supra at 574. “To the extent an award is grossly excessive, it furthers no legitimate purpose and constitutes an arbitrary deprivation of property.” State Farm, supra at 417, citing Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 42, 111 S.Ct. 1032, 113 L.Ed.2d 1 (1991) (O'Connor, J., dissenting). See Rhodes v. AIG Dom. Claims, Inc., 461 Mass. 486, 503, 961 N.E.2d 1067 (2012), quoting State Farm, supra at 417.
Thus, “[c]ommon law and constitutional principles mandate that courts review the [amount of a punitive award] to ensure that it is reasonable and not simply a criminal penalty.” Labonte v. Hutchins & Wheeler, 424 Mass. 813, 826, 678 N.E.2d 853 (1997), citing Pacific Mut. Life Ins. Co. v. Haslip, supra at 15, and Honda Motor Co. v. Oberg, 512 U.S. 415, 420–426, 114 S.Ct. 2331, 129 L.Ed.2d 336 (1994). Because “the award of punitive damages cannot be left to the unguided discretion of the jury,” Bain v. Springfield, supra at 769, 678 N.E.2d 155, “[w]here, as here, there is no cap on punitive damages, a judge or an appellate court must scrutinize the relationship between actual damages and the award of punitive damages.” Labonte v. Hutchins & Wheeler, supra at 827, 678 N.E.2d 853, citing Browning–Ferris Indus. of Vt., Inc. v. Kelco Disposal, Inc., 492 U.S. 257, 281, 109 S.Ct. 2909, 106 L.Ed.2d 219 (1989) (Brennan, J., concurring). See Pacific Mut. Life Ins. Co. v. Haslip, supra at 18 (“unlimited jury discretion ․ in the fixing of punitive damages may invite extreme results that jar one's constitutional sensibilities”).
At the same time, “we do not substitute our judgment for that of the jury.” Dartt v. Browning–Ferris Indus., Inc (Mass.), supra at 17, 691 N.E.2d 526a. “[I]t is the jury's function to make the difficult and uniquely human judgments that defy codification and that ‘buil[d] discretion, equity, and flexibility into a legal system.’ ” McCleskey v. Kemp, 481 U.S. 279, 311, 107 S.Ct. 1756, 95 L.Ed.2d 262 (1987), quoting H. Kalven & H. Zeisel, The American Jury 498 (1966). See Cooper Indus., Inc. v. Leatherman Tool Group, Inc., supra (“A jury's assessment ․ of punitive damages is an expression of its moral condemnation”). Our role, therefore, is not to review the wisdom of the jury's award of punitive damages. It is instead only to determine whether the award exceeds constitutional bounds. See BMW, supra at 568 (“Only when an award can fairly be categorized as ‘grossly excessive’ in relation to [the state's interests in punishment and deterrence] does it enter the zone of arbitrariness that violates the [d]ue [p]rocess [c]lause of the Fourteenth Amendment”).
In BMW, supra at 575–576, 580–581, 583, the United States Supreme Court set forth three factors to consider in determining 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.” See Labonte v. Hutchins & Wheeler, supra at 826–827, 678 N.E.2d 853 (adopting BMW factors). We consider each of these factors in turn.
i. Degree of reprehensibility. “Perhaps the most important indicium of the reasonableness of a punitive damages award is the degree of reprehensibility of the defendant's conduct.” BMW, supra at 575. “[E]xemplary damages imposed on a defendant should reflect ‘the enormity of his offen[s]e.’ ” Id., quoting Day v. Woodworth, 54 U.S. (13 How.) 363, 371, 14 L.Ed. 181 (1852).
The United States Supreme Court has “instructed courts to determine the reprehensibility of a defendant by considering whether: the harm caused was physical as opposed to economic; the tortious conduct evinced an indifference to or a reckless disregard of the health or safety of others; the target of the conduct had financial vulnerability; the conduct involved repeated actions or was an isolated incident; and the harm was the result of intentional malice, trickery, or deceit, or mere accident.” State Farm, supra at 419, citing BMW, supra at 576–577.
In this case, the harm caused was physical, and was so severe as to result in Robin's death.20 As to the next factor, Toys R Us neglected to ensure that the slide conformed with applicable safety regulations before it sold the slide to customers, even when it knew or should have known, based on the instructions included with the slide and the warning label affixed thereon, that head-first use could result in serious if not catastrophic injury or death. Such conduct evinces an indifference to the safety of persons using products sold by Toys R Us. The third aggravating factor, whether the victim had financial vulnerability, is relevant where the defendant's conduct resulted in economic harm to the victim, see BMW, supra at 576; as the harm here was primarily noneconomic, we do not consider this factor in our analysis. As to the fourth factor, Toys R Us's conduct involved repeated actions, since it imported thousands of Banzai Falls In–Ground Pool Slides into the United States for sale. As to the fifth factor, per the jury's verdict, the harm was not the result of intentional malice, trickery, or deceit, but only of gross negligence. See Exxon Shipping Co. v. Baker, 554 U.S. 471, 512, 128 S.Ct. 2605, 171 L.Ed.2d 570 (2008) (gross negligence is “the least blameworthy conduct triggering punitive liability”).
In assessing these factors, we conclude that the circumstances of this case exhibit a substantial degree of reprehensibility. Although only grossly negligent, rather than malicious or willful, Toys R Us's conduct nonetheless caused grievous physical harm, evinced an indifference to the safety of others, and involved repeated actions.
ii. Ratio of punitive award to actual harm inflicted. “The second and perhaps most commonly cited indicium of an unreasonable or excessive punitive damages award is its ratio to the actual harm inflicted on the plaintiff.” BMW, supra at 580, citing TXO Prod. Corp. v. Alliance Resources Corp., supra at 459, and Pacific Mut. Life Ins. Co. v. Haslip, supra at 23. Notwithstanding its reliance on this factor, the United States Supreme Court has declined repeatedly to impose a constitutionally permissible ratio that punitive damages awards may not exceed. State Farm, supra at 425. See Pacific Mut. Life Ins. Co. v. Haslip, supra at 18 (“We need not, and indeed we cannot, draw a mathematical bright line between the constitutionally acceptable and the constitutionally unacceptable that would fit every case”).21 However, the Court has provided some guidance, stating that “few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process.” State Farm, supra. “Single-digit multipliers are more likely to comport with due process, while still achieving the State's goals of deterrence and retribution, than awards with ratios in range of 500 to 1 or ․ 145 to 1” (citation omitted). Id.
Additionally, the Court has indicated to some extent when a lesser or greater ratio may be warranted. Where compensatory damages are “substantial,” “a lesser ratio, perhaps only equal to compensatory damages,” may reach the constitutional limit. Id. On the other hand, a higher ratio may be appropriate where, as here, “the monetary value of noneconomic harm might have been difficult to determine.” BMW, supra at 582.
In Pacific Mut. Life Ins. Co. v. Haslip, supra at 6, where the harm to the plaintiff was purely economic, the Court noted that a ratio of punitive to compensatory damages of more than four to one “may be close to the line” but, in that case, did not “cross the line into the area of constitutional impropriety.” Id. at 23–24. In State Farm, supra at 426, where the harm was primarily noneconomic (intentional infliction of emotional distress accompanied by “minor economic injuries”), the Court concluded that a ratio of one hundred forty-five to one was excessive, and remanded the case to the Utah Supreme Court for reconsideration. Id. at 426, 429. The Utah Supreme Court reduced the award of punitive damages so that the ratio of punitive to compensatory damages was nine to one, see Campbell v. State Farm Mut. Auto. Ins. Co., 98 P.3d 409, 420 (Utah 2004), and the defendant's subsequent petition for certiorari was denied. See State Farm Mut. Auto. Ins. Co. v. Campbell, 543 U.S. 874, 125 S.Ct. 114, 160 L.Ed.2d 123 (2004). Courts in other jurisdictions, reviewing awards in personal injury or wrongful death actions, have entered or upheld punitive awards representing comparable single-digit or low double-digit ratios of punitive to compensatory damages. See, e.g., Union Pac. R.R. Co. v. Barber, 356 Ark. 268, 303, 149 S.W.3d 325, cert. denied, 543 U.S. 940, 125 S.Ct. 320, 160 L.Ed.2d 249 (2004) (personal injury case; $25 million in punitive damages and $5.1 million in compensatory damages; ratio of five to one); Boeken v. Philip Morris Inc., 127 Cal.App.4th 1640, 1649, 1696, 1703, 26 Cal.Rptr.3d 638 (2005), cert. denied, 547 U.S. 1018 (2006) (personal injury and products liability case; $50 million in punitive damages and $5,539,127 in compensatory damages; ratio of nine to one); CSX Transp., Inc. v. Palank, 743 So.2d 556, 558 (Fla.App.Ct.1999), cert. denied, 531 U.S. 822, 121 S.Ct. 65, 148 L.Ed.2d 30 (2000) (wrongful death case; $50 million in punitive damages and $6.14 million in compensatory damages; ratio of eight to one); Grassie v. Roswell Hosp. Corp., 150 N.M. 283, 258 P.3d 1075, 1089 (N.M.Ct.App.2010) (wrongful death case; $10 million in punitive damages and $993,465 in compensatory damages; ratio of just over ten to one); Flax v. DaimlerChrysler Corp., 272 S.W.3d 521, 538–539 (Tenn.2008) (wrongful death and products liability case; $13,367,345 in punitive damages and $2.5 million in compensatory damages; ratio of 5.35 to one).
Here, the jury awarded $18 million in punitive damages and $2,640,000 in compensatory damages, a ratio of slightly less than seven to one. Because the award is within the single digit range, and the harm is primarily noneconomic, the award does not, on its face, appear grossly excessive in light of the accompanying compensatory damages. Compare Flax v. DaimlerChrysler Corp., supra, and Boeken v. Philip Morris Inc., supra, with State Farm, supra at 426 (ratio of one hundred forty-five to one), and BMW, supra at 583, quoting TXO Prod. Corp. v. Alliance Resources Corp., supra at 481 (O'Connor, J., dissenting) (“In most cases, the ratio will be within a constitutionally acceptable range, and remittitur will not be justified on this basis. When the ratio is a breathtaking [five hundred to one], however, the award must surely ‘raise a suspicious judicial eyebrow’ ”).
Toys R Us argues that a lesser ratio is appropriate in this case because the award of compensatory damages is substantial. See State Farm, supra at 425. While $2,640,000 may be a substantial sum of money by many measures, its significance pales when viewed not as compensation for economic loss or emotional distress but for the loss of a young woman's life. Compare Flax v. DaimlerChrysler Corp., supra at 539 (in wrongful death action, “we do not believe that an award of $2,500,000 is so large as to require a ratio of [one] to [one]”), with State Farm, supra at 426 (compensatory award substantial where plaintiffs “were awarded $1 million for a year and a half of emotional distress”). Further, even if we were to agree with Toys R Us that the ratio of punitive to compensatory damages is high, the monetary value of the injury in a wrongful death action is undoubtedly “difficult to determine.” See BMW, supra at 582. Accordingly, the amount of compensatory damages awarded should not be the sole consideration in assessing the ratio of punitive damages to the “actual harm” inflicted, and a higher ratio of punitive to compensatory damages is justifiable on this basis. See id. Contrast Pacific Mut. Life Ins. Co. v. Haslip, supra.
iii. Comparison of punitive award to civil penalties. “Comparing the punitive damages award and the civil or criminal penalties that could be imposed for comparable misconduct provides a third indicium of excessiveness.” BMW, supra at 583. “[A] reviewing court engaged in determining whether an award of punitive damages is excessive should ‘accord “substantial deference” to legislative judgments concerning appropriate sanctions for the conduct at issue.’ ” Id., quoting Browning–Ferris Indus. of Vt., Inc. v. Kelco Disposal, Inc., 492 U.S. 257, 301, 109 S.Ct. 2909, 106 L.Ed.2d 219 (1989) (O'Connor, J., concurring in part and dissenting in part).
Evidence before the jury would have permitted a finding, had the question been before them, that Toys R Us imported and distributed the Banzai Falls In–Ground Pool Slide in violation of the requirements of § 1207. As such, the jury could have concluded that Toys R Us engaged in acts prohibited by 15 U.S.C. § 2068(a)(1).22 ,23 Such conduct, when done “knowingly,” triggers civil penalties under 15 U.S.C. § 2069(a)(1). “Knowingly” is defined as including “the presumed having of knowledge deemed to be possessed by a reasonable man who acts in the circumstances, including knowledge obtainable upon the exercise of due care to ascertain the truth of representations.” 15 U.S.C. § 2069(d).
There was no evidence before the jury indicating that Toys R Us had actual knowledge, at the relevant time, that the slide was subject to the requirements of § 1207. However, given the admission in evidence of a Federal regulation governing consumer pool slides, the jury would have been warranted in concluding that a reasonable retailer of consumer pool slides would have possessed such knowledge, and that such knowledge was obtainable upon the exercise of due care. See Altman v. Aronson, 231 Mass. 588, 591, 121 N.E. 505 (1919) (negligence is “the failure of a responsible person ․ to exercise that degree of care, vigilance and forethought which, in the discharge of the duty then resting on him, the person of ordinary caution and prudence ought to exercise under the particular circumstances”). Accordingly, Toys R Us's conduct in importing a slide that was not in compliance with Federal safety regulations qualifies as “knowing[ ]” for purposes of 15 U.S.C. § 2069(a)(1), and could have warranted civil penalties under that statute. See Aimone v. Walgreen's Co., 601 F.Supp. 507, 513 (N.D.Ill.1985) (“knowingly,” as used in 15 U.S.C. § 2069(d), includes “disregard[ing] reasonable safeguards ․ or act[ing] without knowledge ascertainable upon the exercise of due care”).24
During the period when Toys R Us imported the Banzai Falls In–Ground Pool Slide, penalties under 15 U.S.C. § 2069(a)(1), were limited to $5,000 per violation, with a $1,250,000 maximum total penalty for any related series of violations. 15 U.S.C. § 2069(a)(1). Since evidence at trial indicated that Toys R Us imported approximately 4,000 Banzai Falls In–Ground Pool Slides, each one of which could have constituted a violation of § 1207, Toys R Us potentially could have been subject to $1,250,000 in civil fines for the importation of the slide. In that event, the ratio of punitive damages to possible civil penalties would be $18 million to $1,250,000, or approximately fourteen to one.
This ratio may appear high. However, the United States Supreme Court has indicated that strict equivalence between punitive awards and possible civil penalties is not necessary in order for an award to meet constitutional requirements. See Pacific Mut. Life Ins. Co. v. Haslip, supra at 23 (approving punitive award “much in excess of the fine that could be imposed”). Courts from other jurisdictions, in applying the BMW analysis, have approved awards with higher ratios of punitive damages to possible civil penalties than the one present here. See Leatherman Tool Group, Inc. v. Cooper Indus., Inc., 285 F.3d 1146, 1148–1149 (9th Cir.2002), quoting Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 442–443, 121 S.Ct. 1678, 149 L.Ed.2d 674 (2001) ($500,000 award; $25,000 maximum civil penalty; ratio of twenty to one); BMW of N. Am., Inc. v. Gore, 701 So.2d 507, 514, 515 (Ala.1997) ($50,000 punitive award permissible; $2,000 maximum civil penalty; ratio of twenty-five to one). Thus, while the award in this case may be high, it is not grossly excessive.25
In sum, Toys R Us's conduct, as found by the jury, evinced a substantial degree of reprehensibility. The ratio of punitive damages awarded to actual harm is within the single-digit range that generally accords with due process, see State Farm, supra, and a comparison of punitive damages to possible civil penalties suggests that the amount of the punitive damage award is not so excessive as to exceed constitutional bounds. The jury's award of punitive damages in this case, while perhaps higher than many such awards, cannot “fairly be categorized as ‘grossly excessive’ ” in relation to the Commonwealth's legitimate interests in condemnation and deterrence. See BMW, supra at 568; Dartt v. Browning–Ferris Indus., Inc. (Mass.), 427 Mass. 1, 17, 691 N.E.2d 526 (1998), quoting Bain v. Springfield, 424 Mass. 758, 767, 678 N.E.2d 155 (1997). Therefore, the award does not enter the “zone of arbitrariness that violates the [d]ue [p]rocess [c]lause of the Fourteenth Amendment”. See BMW, supra.