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IBEW Local 1547 v. Alaska Utility Construction Inc. (3/26/99), 976 P 2d 852
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Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
INTERNATIONAL BROTHERHOOD OF )
ELECTRICAL WORKERS, LOCAL ) Supreme Court No. S-8207/8247
1547, )
) Superior Court No.
Appellant and ) 3AN-86-07289 CI
Cross-Appellee, )
)
v. )
)
ALASKA UTILITY CONSTRUCTION, ) O P I N I O N
INC., )
)
Appellee and ) [No. 5100 - March 26, 1999]
Cross-Appellant. )
______________________________)
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
Brian C. Shortell, Judge.
Appearances: Susan Orlansky, Jeffrey M.
Feldman, Young & Feldman, Anchorage, for Appellant and Cross-
Appellee. Thomas P. Owens, Jr., Scott J. Nordstrand, Owens &
Turner, P.C., Anchorage, for Appellee and Cross-Appellant.
Before: Matthews, Chief Justice, Compton,
Eastaugh, Fabe, and Bryner, Justices.
MATTHEWS, Chief Justice.
I. INTRODUCTION
This case arises from the picketing of Alaska Utility
Contractors (AUC), a non-union contractor, by the International
Brotherhood of Electrical Workers, Local 1547 (IBEW or Local 1547).
The jury found that IBEW acted outrageously and awarded $425,000 in
punitive damages to AUC. The trial court denied IBEW's motion for
a new trial on punitive damages on the condition that AUC accept a
remittitur of punitive damages to $212,500. AUC accepted the
remittitur.
IBEW appeals the trial court's order denying a new trial
on liability for punitive damages, and, in the alternative,
contends that the remitted punitive damages award is excessive.
AUC cross-appeals, arguing that the trial court erred in remitting
the original punitive damages award. We affirm.
II. FACTUAL AND PROCEDURAL BACKGROUND
A. Facts [Fn. 1]
Aaron Downing formed Alaska Utility Contractors, Inc., in
1986. AUC installed electric power poles and wiring for various
utilities in Alaska. AUC's shareholders and employees were
Downing's family members and close friends. Although Downing was
a former member of the International Brotherhood of Electrical
Workers and had previously been a union contractor, Downing chose
to keep AUC non-union because he believed that he could bid
projects more competitively.
When AUC was awarded several contracts to perform
electric utility work in southcentral Alaska in the spring and
summer of 1986, IBEW linemen were upset that the work had gone to
Downing's non-unionized company. Employees of Local 1547 met with
Downing twice in the spring of 1986 to attempt to persuade Downing
to hire union labor. Steve Shemel, the business representative for
Local 1547's outside linemen, first met with Downing in April 1986.
When Downing declined to sign an agreement with IBEW, Shemel
intimated that Downing might have some problems at his impending
project in Glennallen. As the Glennallen job got underway, Shemel
and Jack Hull, the business manager for Local 1547, met with
Downing once again to try to convince him to sign a union contract.
Downing indicated that he would not sign an agreement unless the
union gave him economic concessions. Shemel again suggested that
Downing could have problems on his jobs.
AUC's first project began near Glennallen in late April
or early May 1986. The contract required AUC to replace approxi-
mately two dozen power poles along the Richardson Highway. Toward
the end of the three-week project, picketers appeared at the job
site for two or three days. The picketers carried signs
identifying themselves as IBEW members, and the picketing was
sanctioned by Local 1547 and approved by its business manager Jack
Hull. Shemel was present at the picketing and crossed the road to
speak with AUC employees.
Although much of the picketing involved maintaining a
presence and shouting epithets at the non-union employees,
picketers also shouted obscene death threats along the lines of "we
ought to kill all you mother-_____s"and "we have to kill you all."
Downing contacted Shemel and Hull about the picketing and threats.
Shemel told Downing that he should sign an agreement because things
could get worse. Downing called Hull to inform him that the
picketers were scaring his crew. After the Glennallen job was
completed, Downing called Hull a second time. Hull told Downing
that there were only supposed to be a few picketers and they were
not supposed to say anything.
In early June 1986, AUC began its next job installing
underground telephone and electrical line at the Granite Heights
subdivision near Palmer. IBEW picketers were present three to five
days during the roughly week-long job. The picketers' behavior was
more aggressive at Granite Heights than at Glennallen. The
picketers physically leaned on AUC's equipment and blocked the
roadway with their cars, interfering with AUC work. AUC employees
recounted that Shemel incited the picketers on several occasions.
Shemel threw a rock at AUC employees working in a ditch beneath
him, and challenged an employee to come out of the ditch and fight
him. Another picketer kicked a stone in the direction of the same
AUC worker in the ditch beneath him, and asked whether the worker
had made out his will yet. In addition to the stone throwing and
taunts to fight, picketers spat on a worker in the ditch beneath
them. Picketers also made threats to kill AUC employees and they
told Downing they would rape his daughter.
Downing again spoke with Shemel and Hull about the
threats and violence at Granite Heights. Hull repeated that there
were only supposed to be a handful of picketers at the site and
that they were instructed to stand back and to not say anything.
Shemel, however, told Downing that he should sign an agreement to
make the problem go away.
On June 14, 1986, AUC began installing about a mile of
electrical transmission line and poles along Eklutna Lake Road.
IBEW picketers first arrived at the job on June 17, 1986. Shemel
acted as the leader once again. The threats to kill AUC employees
and to rape their daughters continued. In some instances, the
death threats were made by picketers displaying and sharpening
large knives.
The picketers also resorted to methods other than
threats. Picketers again parked their cars and stationed
themselves so as to interfere with AUC work and equipment. On one
occasion, a picketer hit an AUC worker in the neck with a rock. On
another occasion, a group of twelve to fifteen picketers surrounded
a truck driven by the AUC foreman, bouncing the truck and spitting
on the windshield. AUC equipment was also vandalized: a hydraulic
hose on a backhoe was cut, a cab had bullet holes in it, and a
truck radiator was punctured. AUC was forced to hire night
watchmen to guard its equipment.
Due to the problems, Downing contacted the Anchorage
Police Department for assistance. The police maintained a presence
at the scene during much of the time that AUC worked. Although AUC
could generally get its work done when the police were present, AUC
could only work on the project four days a week rather than seven,
as intended, due to limited police resources.
AUC applied for a temporary restraining order against
Local 1547 on June 19, 1986. The TRO was issued on June 20 and
prohibited picketers from approaching within 200 feet of AUC
workers, from interfering with AUC work, and from threatening or
assaulting AUC workers. Local 1547 leaders informed its members of
the TRO terms on June 20. On June 21, Hull recommended to Local
1547's executive board that the Local withdraw its sanction of the
picketing, and the executive board agreed.
Despite issuance of the TRO and Local 1547's revocation
of its sanction, the picketing activities continued much as they
had before. Picketers continued to shout threats and to stand so
close that they sometimes interfered with AUC's work. A day after
the sanction was withdrawn, AUC workers discovered that a power
pole had been sawed halfway through and that the anchor rods
holding its guide wires had been loosened. AUC also discovered
other acts of vandalism in which anchor rods were loosened and
small pieces of equipment were removed.
Although Local 1547 withdrew its sanction on June 21,
some evidence indicated that it may have continued to support the
Eklutna picketing. In the minutes of a July 1 meeting, IBEW's
assistant business manager reported, "Pressure on Downing to
continue." Also, the minutes of a linemen meeting on July 17
state, "Need some new faces to picket at Eklutna." Finally, the
coordinator of the IBEW's picket program gave credit to picketers
for any time reported at Eklutna, apparently before and after the
sanction was withdrawn.
AUC ultimately finished the Eklutna project later than
planned and at greater expense than originally estimated. Although
the job was completed behind schedule, the Matanuska Electric
Association did not assess the $500 per day in liquidated damages
authorized under the contract.
B. Procedural Background
AUC's original complaint against IBEW was filed on
June 19, 1986. A jury trial was held where AUC presented claims of
negligence, intentional interference with contractual relations,
and intentional interference with property. AUC sought both
compensatory damages and punitive damages.
The jury returned a verdict for AUC on all its claims,
awarding $11,622.05 in compensatory damages. The jury also
concluded that punitive damages were warranted. In a second trial
phase, the same jury awarded $425,000 in punitive damages.
Local 1547 moved for a new trial on the issue of punitive
damages or, alternatively, for a remittitur of punitive damages.
Judge Shortell denied the motion for a new trial on punitive
damages on the condition that AUC accept a remittitur of the
punitive damages award. The remittitur reduced the punitive
damages by half, from $425,000 to $212,500. AUC accepted the
remittitur. The amended final judgment totaled $291,226.57, and
included $26,767.18 in attorney's fees, $21,787.64 in costs, and
$18,549.70 in prejudgment interest.
Local 1547 appeals the denial of its motion for a new
trial on the issue of punitive damages, and alternatively, the
excessiveness of the remitted punitive damages award. AUC cross-
appeals the trial court's reduction of the jury's punitive damages
award.
III. DISCUSSION
A. Did the Trial Court Abuse Its Discretion in Denying a New
Trial on the Issue of Punitive Damages?
The decision to order a new trial or a remittitur rests
within the sound discretion of the trial court. See Teamsters
Local 959 v. Wells, 749 P.2d 349, 36 (Alaska 1988). We review the
trial court's decision to deny a new trial for an abuse of
discretion. See Exxon Corp. v. Alvey, 690 P.2d 733, 741 (Alaska
1984). We must affirm the denial of a new trial if, viewing the
evidence in the light most favorable to the non-moving party, an
evidentiary basis exists for the jury's decision. See Richey v.
Oen, 824 P.2d 1371, 1375 (Alaska 1992) (citations omitted). The
decision to deny a new trial will be reversed only when the
evidence supporting the verdict was so completely lacking or slight
and unconvincing as to make the verdict plainly unreasonable and
unjust. See id.
The trial court denied IBEW's motion for a new trial on
liability for punitive damages, concluding that IBEW's motion did
little more than reiterate the factual arguments rejected by the
jury. That observation continues to apply on appeal.
Punitive damages may be awarded only when a defendant's
conduct is outrageous. See Chizmar v. Mackie, 896 P.2d 196, 210
(Alaska 1995). The standard of proof applicable to a claim for
punitive damages is the clear and convincing standard. SeeAS 09.17.020. In the statement of facts portion of this opinion we
have set forth the evidence in some detail, viewed most favorably
to AUC. That evidence is ample to support a jury determination of
outrageous conduct and it is sufficiently definite -- a reasonable
fact finder could conclude that the clear and convincing standard
had been satisfied.
IBEW contends that when legally protected picket line
behavior is excluded from consideration the outcome must be
different. Peaceful picketing is a protected form of speech. See,
e.g., Thornhill v. Alabama, 310 U.S. 88, 101-02 (1940); American
Federation of Labor v. Swing, 312 U.S. 321, 325 (1941). But
threats of bodily harm, personal assaults, and property destruction
are not constitutionally protected forms of speech. Cf. Youngdahl
v. Rainfair, Inc., 355 U.S. 131, 135 (1957) ("the state court was
within its discretion in enjoining future acts of violence,
intimidation, and threats of violence by the strikers and the
union"). Again, there is ample evidence of conduct which crossed
the line that separates protected from unprotected activity to
justify a punitive damage award.
IBEW also argues that in considering whether the evidence
was sufficient to justify an award of punitive damages we should
disregard testimony concerning Local 1547's conduct that only
caused distress to individual AUC employees. Citing American
National Watermattress Corp. v. Manville, 642 P.2d 1330, 1335
(Alaska 1982), IBEW contends that since only AUC was the plaintiff,
only conduct of an outrageous nature directed at AUC should have
been considered. In Manville we observed that for a plaintiff to
recover punitive damages it was not enough to show a pattern of
outrageous conduct toward the rights of others; she had to show
that the pattern extended to her. Id. That requirement was
satisfied in the present case as the conduct in question,
threatening and assaulting AUC's employees, can reasonably be
viewed as having been directed toward AUC.
IBEW also argues that evidence of wrongful conduct not
tied to Local 1547 officers, employees, and agents must be excluded
in considering whether a new trial should have been granted. The
parties agreed on the instruction that the trial court gave
concerning the standards for determining under what circumstances
IBEW could be found responsible for the conduct of its officers,
employees, and agents. [Fn. 2] Under this instruction the jury
could have reasonably found that IBEW was responsible for virtually
all the wrongful conduct in question. Thus we are not required to
limit the evidence that we consider.
B. Did the Trial Court Abuse Its Discretion in Granting
Remittitur?
1. Standard of review
We review the trial court's grant of a remittitur for an
abuse of discretion. See International Brotherhood of Teamsters,
Local 959 v. King, 572 P.2d 1168, 1178 (Alaska 1977); Hash v.
Hogan, 453 P.2d 468, 472 (Alaska 1969). In order to reverse a
grant of remittitur, we must be left with the definite and firm
conviction that the judge made a mistake in granting the remittitur
or ordering a new trial. See King, 572 P.2d at 1178.
2. Did the trial court err in concluding that the
punitive damage award was excessive and in reducing the award from
$425,000 to $212,500?
The jury awarded AUC punitive damages in the amount of
$425,000. The trial court denied IBEW's motion for a new trial on
punitive damages on the condition that AUC accept a remittitur
reducing the punitive damages by half. AUC accepted the remittitur
and was awarded $212,500 in punitive damages. Despite its
acceptance of this reduced award, AUC argues in its cross-appeal
that the jury's award of $425,000 in punitive damages was not
excessive and that the trial court abused its discretion in
requiring a remittitur.
IBEW argues that AUC has "no right to appeal"this issue
because AUC accepted the trial court's remittitur. IBEW argues
that this court should adopt the federal rule barring plaintiffs
from challenging on appeal the amount of a remitted award when they
accept the trial court's remittitur. See Donovan v. Penn Shipping
Co., 429 U.S. 648 (1977) (per curiam). We have not previously
addressed this issue. See Exxon Corp. v. Alvey, 690 P.2d 733, 745
n.20 (Alaska 1984).
We agree with the Donovan rule with one modification. If
the defendant appeals the amount of the remitted award, then the
plaintiff should be free to cross-appeal the remittitur,
notwithstanding the fact that he has previously accepted the
reduced amount. See, e.g., Burns v. McGraw-Hill Broad. Co., 659
P.2d 1351, 1355 (Colo. 1983). The reasons underlying this
modification of the Donovan rule were well-explained by the
Wisconsin Supreme Court in Plesko v. City of Milwaukee, 120 N.W.2d
130 (1963).
The reasons motivating the majority to adopt
the [Donovan] rule are these: The objective underlying the
recommended procedure for granting an option to accept judgment for
a reduced amount of damages in lieu of having a new trial, where
the damages awarded by the jury are determined by the trial court
to be excessive, is to avoid the delay and expense of an appeal or
a new trial. In most situations, it is likely that the party will
accept judgment for such reduced damages rather than undergo the
expense, delay, and uncertainty of result of an appeal or new
trial. Nevertheless, if a party found liable to pay damages
appeals the judgment resulting from the other party's accepting
such reduced damages, this objective had been negatived. When
plaintiff is forced to undergo an appeal by the action of the
opposing party, after plaintiff has accepted judgment for such
reduced damages, it seems unfair to prevent his having a review of
the trial court's determination leading to the reduction in
damages, especially if plaintiff has accepted same only to avoid
the delay and expense attending an appeal. Furthermore, [this
modified Donovan] rule herein announced may to some extent
discourage appeals by the party held liable because of the
possibility that the party who has accepted judgment for the
reduced damages may prevail on his motion for review and have the
jury's verdict reinstated.
Id. at 135.
Because IBEW appealed the amount of the remitted $212,500
award, we will consider AUC's cross-appeal of the remittitur from
the $425,000 jury award.
In Sturm, Ruger & Co. v. Day, 594 P.2d 38 (Alaska 1979),
modified 615 P.2d 621 (1980), modified 627 P.2d 204 (1981), cert.
denied 454 U.S. 894 (1981), overruled on other grounds, Dura Corp.
v. Harned, 703 P.2d 396, 405 n.5 (Alaska 1985), we articulated four
factors that should be considered when reviewing punitive damages
for excessiveness: (1) the magnitude and flagrancy of the offense,
(2) the importance of the policy violated, (3) the ratio of
punitive damages to compensatory damages, and (4) the wealth of the
defendant. Id. at 48; see also Clary Insurance Agency v. Doyle,
620 P.2d 194, 205 (Alaska 1980). The trial court carefully
evaluated these factors in concluding that a remittitur was
necessary.
Some of the Sturm, Ruger factors favored a large punitive
damages award. IBEW's conduct in this case consisted of ongoing
acts of intimidation, violence, destruction of property, and
disregard for a court's temporary restraining order. Such conduct
violates a strong policy interest in ensuring that labor disputes
are resolved peacefully and lawfully. However, other Sturm, Ruger
factors favored a reduction in the punitive damages award. For
example, the ratio of punitive damages to compensatory damages was
36 to 1, and Local 1547's net worth was estimated to be only about
four times greater than the punitive damages award of $425,000.
Given these competing factors, we cannot conclude that the trial
court abused its discretion by reducing the punitive damages award
from $425,000 to $212,500.
C. Was the Reduced Punitive Damages Award of $212,500 Still
Excessive?
IBEW argues that despite the remittitur, the punitive
damages award of $212,500 was still excessive and that the trial
court abused its discretion by not reducing the award further. A
punitive damage award is excessive if it is manifestly
unreasonable. See Pluid v. B.K., 948 P.2d 981, 984 (Alaska 1997).
We also look to the factors articulated in Sturm, Ruger to
determine if an award is excessive.
IBEW first argues that the 18-to-1 ratio of the $212,500
punitive damages to compensatory damages is still too high. This
ratio, however, only serves as a rough working comparison; no
definite ratio is required. See Ben Lomond, Inc. v. Campbell, 691
P.2d 1042, 1048 (Alaska 1984). Instead, the other Sturm, Ruger
factors -- the flagrancy of the offense, the policy violated by the
offense, and the wealth of the defendant -- are of greater
significance. See Ben Lomond, 691 P.2d at 1048.
IBEW next argues that the $212,500 punitive damages award
constitutes twelve percent of Local 1547's total assets, and almost
eighty percent of its liquid assets. However, the Local's
liability insurer paid the Local $220,000 to settle its liability
on AUC's claims. This undercuts IBEW's argument that the award
will seriously impair its ability to perform its functions.
Local 1547 also contends that competing policy interests
are at stake. While acknowledging the policy of discouraging
threats and violence, the Local argues that the policy of
encouraging free expression through picketing is chilled by large
punitive damages awards. This argument is not persuasive. The
conduct in this case does not fall near the margins of protected
speech. Instead it consisted of unprotected threats, and
assaultive and destructive behavior. Therefore, although it is to
be hoped that the punitive damages award in this case will
discourage such unlawful practices in the future, it does not
follow that constitutionally protected speech will be chilled.
Finally, Local 1547 argues that sparse evidence ties it
to the outrageous conduct. However, viewing the evidence in the
light most favorable to AUC, as we must, the jury was presented
with ample evidence to conclude that IBEW was responsible for the
conduct under the standards established in the applicable
instruction. [Fn. 3]
We conclude that the punitive damages award of $212,500
was not manifestly unreasonable.
IV. CONCLUSION
The judgment is AFFIRMED.
FOOTNOTES
Footnote 1:
The statement of facts reflects our standard of review. Since
AUC prevailed below and is not the party moving for a new trial, we
view the evidence in the light most favorable to AUC. We recount
the facts accordingly. See Richey v. Oen, 824 P.2d 1371, 1375
(Alaska 1992).
Footnote 2:
Instruction No. 21 provided:
I will now tell you how to decide whether
Local 1547 is legally responsible for the acts or omissions of its
officers, employees and/or agents. Local 1547 is legally
responsible if you decide that it is more likely than not true that
1) the officer, employee and/or agent
of Local 1547 agreed to do something for Local 1547; and
2) under the agreement, Local 1547 had
the right to control the actions of the officer, employee and/or
agent, whether or not Local 1547 used its control; and
3) the officer, employee and/or agent's
acts or omissions were within the reasonable scope of what he
reasonably believed he was asked to do and agreed to do.
I do not think that you will have
difficulty understanding how to decide whether particular officers,
employees and/or agents agreed to do something for Local 1547,
although you should understand that there is no requirement that
the agreement be in any particular form. The other questions you
must decide might be more difficult. I will offer some additional
explanation to help you.
If you decide there was an agreement in
which one or more of the officers, employees and/or agents agreed
to do something for Local 1547, you must then decide whether, under
the agreement, Local 1547 had the right to control their actions.
Local 1547 had the right to control the actions of its officer,
employee and/or agent if it kept for itself the authority to make
final decisions on how the officer, employee and/or agent was to
carry out the activity he or she agreed to do, whether or not it
used its control. On the other hand, Local 1547 did not have the
right to control the actions of the officer, employee and/or agent,
if the officer, employee and/or agent had the authority to make
final decisions on how he or she was to carry out the agreed
activity, and could ignore Local 1547's ideas or recommendations,
even if Local 1547 received reports from the officer, employee
and/or agent.
If you decide that Local 1547 had the
right to control the officer, employee and/or agent's actions, then
you must decide whether those actions were within the reasonable
scope of what the officer, employee and/or agent reasonably
believed he or she was asked to do and agreed to do. In doing so,
you might want to consider some factors that I will give you. If
you find that they apply in this case, this may suggest that the
acts were within the scope that I have described. If you find they
do not apply, this may suggest that the acts were outside the
scope. These are the factors:
a) the acts or omissions of the
officer, employee and/or agent were the kind or similar to the kind
requested by Local 1547;
b) the acts or omissions of the
officer, employee and/or agent occurred substantially when they
were requested;
c) the purpose of the officer,
employee and/or agent's acts was to serve Local 1547, not his own
benefit;
d) the acts or omissions of the
officer, employee and/or agent did, in fact, serve the interests of
Local 1547;
e) the acts or omissions of the
officer, employee and/or agent were similar to acts done by Local
1547 itself or by other persons working for Local 1547;
f) the acts or omissions of the
officer, employee and/or agent reasonably would have been expected
by Local 1547;
g) the acts or omissions of the
officer, employee and/or agent were done with equipment provided by
Local 1547;
h) the officer, employee and/or
agent did things usually required by Local 1547 of people working
for it;
i) the acts or omissions of the
officer, employee and/or agent were similar to other acts
authorized by Local 1547 or reasonably related to other acts
authorized by it;
j) the acts or omissions of the
officer, employee and/or agent were reasonably necessary to
accomplish something that Local 1547 had requested or required;
k) the acts or omissions of the
officer, employee and/or agent usually are done in connection with
the acts requested by Local 1547;
l) the acts or omissions of the
officer, employee and/or agent were limited by instructions from
Local 1547;
m) the acts or omissions of the
officer, employee and/or agent were closely related to those
actually requested or authorized by Local 1547;
n) the acts or omissions of the
officer, employee and/or agent were those which are commonly done
by people seeking to accomplish similar goals.
You may, of course, also use any other
factors that help you decide.
If you decide that it is more likely than
not that there was an agreement by one or more officers, employees
and/or agents to do something for Local 1547, that under the
agreement Local 1547 had the right to control the actions of the
officer, employee and/or agent, and that the acts described to you
were within the reasonable scope of what the officer, employee
and/or agent reasonably believed he or she was asked to do and
agreed to do, then Local 1547 is legally responsible for the
actions of that person or persons. Unless you find all of these
things to be more likely than not true, Local 1547 is not legally
responsible for the actions or omissions of its officers, employees
and/or agents.
Footnote 3:
See supra pp. 2-7 and note 2.
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