In a case important for both its ruling on a nuclear verdict awarding nearly $200 million in noneconomic damages and application of statutory forum non conveniens, the Houston [1st] Court of Appeals reversed a $200 million award of noneconomic damages before dismissing the case under § 71.051, CPRC, the forum non conveniens statute.
Team Industrial Services, Inc. v. Kelli Most, Individually and as Personal Representative of the Estate of Jesse Henson (No. 01-22-0313; May 16, 2024) arose from a terrible worksite accident at a coal-fired power plant in Kansas. An employee of the owner of the plant, Westar Energy, a Kansas utility company, suffered severe and ultimately fatal burns over most of his body when a steam release valve failed. The valve had recently been serviced by Team, an industrial services provider retained out of its Broken Arrow, Oklahoma office. Plaintiff, decedent’s spouse, brought wrongful death and survival actions, alleging negligence, negligence per se, and gross negligence, in Fort Bend County. Among other things, Team moved to dismiss based on forum non conveniens, arguing that the suit should have been brought in Kansas, where the accident occurred and both the decedent and Plaintiff resided. Team further pleaded that the Kansas law limiting noneconomic damages, as well as that state’s comparative negligence law, should be applied. The trial court denied both the forum conveniens and choice-of-law motions. The case went to a jury, which awarded decedent’s estate $27 million in damages for physical pain and $30 million for mental anguish. As to Plaintiff’s survival claim, the jury awarded $35 million for past loss of companionship and society, $40 million for future loss of companionship and society, $45 million for past mental anguish, and $45 million for future mental anguish, for a grand total of $222 million. The trial court denied Team’s motion for new trial. Team appealed.
In a lengthy opinion by Justice Countiss, the court of appeals reversed and dismissed the case. In an interesting “order of issues” threshold ruling, the court took up Team’s challenge to the trial court’s choice-of-law ruling and to the factual sufficiency of the evidence supporting the jury’s noneconomic damages award before Team’s forum non conveniens issue. The court determined that deciding these issues first were “integral to the factors that the Court must balance in a forum non conveniens analysis, so we consider them first” (citations omitted).
First, the court walked through a choice-of-law analysis. It found that Kansas law conflicted with Texas law in three ways: (1) Kansas law explicitly recognizes derivative negligence theories against the employer even when the employer has stipulated respondeat superior, whereas Texas law is unsettled; (2) Kansas has a pure comparative negligence scheme, whereas Texas imposes joint and several liability on a defendant more than 50% negligent; and (3) Kansas law imposes statutory limits on noneconomic wrongful death damages ($250,000 cap) and noneconomic personal injury damages ($300,000). As to the first conflict, the court held that “[b]ecause Texas does not have a clear rule prohibiting a plaintiff from pursuing other theories of derivative negligence when the defendant stipulated to respondeat superior, the trial court acted within its discretion in choosing not to take notice of Kansas law on that issue” (citations omitted). It wasn’t so easy on the joint and several issue, which would have come into play here because the jury found Team 90% responsible, but the trial court, applying Texas law, held Team liable for 100% of the damages. On the cap issue, the court reviewed the Kansas Supreme Court’s decision in Hilburn v. Enerpipe Ltd., 442 P.3d 509 (Kan. 2019), which held Kansas’s general statutory cap on noneconomic damages to be facially unconstitutional. There is no similar ruling, however, for the cap on noneconomic damages in a survival action. The court therefore held that there was not an ”actual conflict” between Kansas and Texas law, which does not cap noneconomic damages in non-medical liability cases, but that there could be with respect to Kansas’s cap in survival actions.
Should the trial court have applied Texas law in the two conflict situations? To answer this question, the court turned to the Restatement (Second) of Conflict of Laws, § 6, which sets out a seven-part test for determining which state “has the most significant relationship to the occurrence and the parties . . .” Since the accident occurred in Kansas, the court started from a presumption that Kansas comparative negligence law applied. The court had no trouble in finding that it did apply, since there were hardly any Texas contacts to the case at all (other than that Team had a Texas office). It further found that “Kansas has a strong interest in holding out-of-state businesses that provide services in Kansas responsible when their negligent conduct causes injuries to a Kansas citizen in Kansas,” as well as in “ensuring that its utility companies are held responsible when their own negligence contributes to the injuries of a Kansas citizen.” As to the statutory cap on noneconomic damages in survival actions, the court likewise ruled that the trial court erred in not applying the cap to the jury’s wrongful death damages award to Plaintiff, which would have reduced the award from around $200 million to $250,000.
The court next took up Team’s legal sufficiency issue. This part of the opinion if very well worth reading for its review and discussion of the appropriate standards for an award of noneconomic damages. Observing that the jury awarded Plaintiff (for her survival claim alone) $165 million, the court noted that this amount was “more than ten times the $15,065,000 noneconomic damages award reversed by the Texas Supreme Court in Gregory [v. Chohan, 670 S.W.3d 546, Tex. 2023].” Here, the court noted, the actual direct evidence in support of the award was limited to Plaintiff’s own testimony. But the real story was that “[Plaintiff’s] counsel’s arguments for noneconomic damages were ‘based on standards that depart[ed] from the evidence’” (citing Justice Bland’s concurrence in Gregory). “As the Texas Supreme Court has observed,” the court went on, “it is improper for a plaintiff to argue for damages based on ‘unsubstantiated anchoring,’ such as ‘the cost of a fighter jet’ or ‘the auction price of a coveted painting’” (citations omitted).
This is exactly what Plaintiff’s counsel did in this case when in his opening argument he stated: “You may see a headline, painting sells for $350 million, right. . . . I don’t think there is a person would say that a painting is more valuable than a human life.” During trial, Plaintiff’s counsel doubled down on exemplary damages and the need to punish the company, “even after [Plaintiff] abandoned her claim for exemplary damages at the jury charge conference, after close of the evidence” (that was a nice trick, getting the evidence in to inflame the jury before pulling the plug on a theory not likely to succeed on the facts). Then, during closing, counsel “continued to raise themes that had no relevance apart from a claim for exemplary damages,” emphasizing the size of the company and urging “the jury to ‘let Team know’ by its verdict that such ‘behavior [was] not acceptable.’” He further argued “that life [was] not cheap, the value of life [was] not on sale,’ and that it was ‘not to be discounted,’ disrespected,’ or ‘diminished.’” If the jury didn’t send a message, “then Team just gets away with it.’”
Obviously, when this case was tried, SCOTX had not yet opined in Gregory that the very tactics Plaintiff’s counsel employed here would get that big jury verdict reversed because they “left the jury with no sound guidance for deciding the amount of compensation to award [Plaintiff] for mental anguish and loss of companionship. . . . For this reason, we cannot say that the damages award is not the result of passion or prejudice” (citations omitted). But as we’ve pointed out elsewhere, one can’t blame counsel too much for this approach because there is no way to prove these types of damages with any degree of objectivity and reasonableness. Here Plaintiff testified, as any bereaved partner would do, that missed her husband and the life they had together. There is no question of the existence of pain and suffering associated with grief, but, just as Plaintiff’s counsel in this case argued, nobody would say that a painting is more valuable than a human life. How could they? And this a constant theme in these cases. Neither juries nor appellate courts have anything to on, so in case after case we see them struggling with entirely subjective testimony and plaintiffs’ efforts to try to frame the issue in terms of popular fear and loathing of heartless corporate defendants.
Having reversed the trial court’s judgment on the “legally infirm” judgment, the court stated that ordinarily it would remand for new trial. But in this case, remand was not necessary because the trial court erred in denying Defendant’s motion to dismiss for forum non conveniens. Plaintiff conceded that three of the six statutory factors were satisfied here: Kansas was an alternate forum where her claims could be tried; Kansas provided an adequate remedy; and Kansas could exercise jurisdiction over all the properly joined defendants. Of the other three factors, the court was particularly perturbed because “holding the trial in Texas meant that Team could not subpoena fact witnesses in Kansas, such as [decedent’s] adult children . . . and Westar employees,” as well as Kansas regulators. Consequently, Team had to rely almost entirely on deposition testimony to defend itself, “which placed it at an unnecessary disadvantage.” It didn’t help that in Plaintiff’s response to Defendant’s forum non conveniens motion at trial, Plaintiff represented that nearly all the witnesses and evidence were in Texas. As the trial proved, this wasn’t the case. In fact, the case was tried on evidence from Kansas and Oklahoma, where Team contracted for the work.
Finally, the court determined that the balance of the private interests of the parties and the public interest of the state of Kansas weighed in favor of dismissing the case. Again, the fact that Team couldn’t subpoena any Kansas witnesses was determinative, and “the record contain[ed] no evidence about any specific acts or omissions in Texas that caused the accident.” Consequently, it was a waste of time and resources to try the case in Texas to begin with, and now that it had to be tried again, the court determined that Kansas had a far larger stake in the litigation than Texas. Further, the dismissal “would not result in unreasonable duplication or proliferation of litigation” because in a new trial the court would have to apply Kansas law anyway. Let a Kansas court do that.
Again, this is a significant and instructive opinion on a lot of issues we care about. We applaud the court of appeals for its scholarly analysis and the undoubted justice of the result. But until we, as a matter of public policy, get hold of noneconomic damages, we’ll continue to see massive verdicts with little to no hard evidentiary support. We are pleased, nevertheless, to see SCOTX’s opinion(s) in Gregory featured so prominently here. The court of appeals took two things from that case and applied them to overturn a nuclear verdict: unsubstantiated anchoring and the utter lack of “direct” evidence.” That’s a big win.
