$179 Million Damages Against ConAgra Upheld

     EAST ST. LOUIS, Ill. (CN) – ConAgra will have to pay most of a $179 million judgment to three men who were burned in a grain elevator explosion in 2010, a federal judge ruled.
     The men claimed ConAgra’s grain elevator, near the Mississippi River in Chester, Ill., had not been cleaned properly in 17 years and that proper safety cautions were not taken when the temperature of the grain rose and a strange odor emanated before the April 27, 2010 explosion.
     The verdicts included $101 million in punitive damages.
     John W. Jentz, of St. Peter, Minn., who suffered burns over 70 to 75 percent of his body, was awarded $75.5 million, including $34.3 million in punitive damages.
     Justin Becker received $66.9 million and his wife, Amanda Becker, was awarded $237,500.
     Robert Schmidt, of Hutchinson, Minn. was awarded $36.2 million, including $33.3 million in punitive damages.
     ConAgra asked for the damages to be slashed. The packaged food giant asked the court to reduce Jentz’s award to $12 million in compensatory and $0 in punitive damages; to reduce Becker’s award to $8 million in compensatory and $0 in punitive damages; and to cut Schmidt’s award to $750,000 in compensatory damages and $0 in punitive damages.
     All three men worked for West Side Salvage, which was hired to service the grain elevator. ConAgra claimed unsuccessfully that the compensatory awards should be reduced because it had no duty to protect people hired to remediate dangerous conditions, and that even if it breached such a duty, the breach was not the cause of the plaintiffs’ injuries.
     However, “Plaintiffs had no special training in firefighting or in dealing with hot bins,” U.S. District Judge Michael J. Reagan wrote. “They were simply laborers hired to remove and salvage the pellets from Bin C-15. Plaintiffs Jentz and Schmidt were hired to remedy the condition in the bin only to the extent that they operated a bin whip. The jury could have believed that they had no knowledge of the risk of explosion encountered on this job, particularly since people who had authority over the condition of the bin and who were responsible for safety on the ConAgra site, e.g, Godfrey Friedt, ConAgra’s director of elevator operations, and Anthony Yount, ConAgra’s director in charge of environment, health and safety measures, did not shut the site down, call for an evacuation or place a timely 911 call to the fire department before the explosion.
     “For these reasons, a jury could reasonably conclude that ConAgra knew for weeks before plaintiffs arrived at the site that the bin was dangerous and could explode but did not warn its subcontractor West Side or plaintiffs of that danger. The jury could reasonably conclude that ConAgra, as landowner and as creator of the danger, did nothing to protect plaintiffs from the danger, and, consequently, failed in its duty of care.”
     ConAgra fought the $101 million in punitive damages by claiming that evidence presented at trial was insufficient to award any punitive damages. ConAgra claimed it made a good-faith effort to seal the bin and that any delay in not immediately hiring West Side did not warrant punitive damages.
     But Reagan upheld most of the punitive damages.
     “A Judge reasonable jury could conclude, based on the evidence presented at trial, that ConAgra created the danger in the bin, delayed remediating the problem, failed to inform West Side and A&J of the seriousness of the bin’s condition, and delayed calling the fire department and evacuating the area,” Reagan wrote. “The jury could have also reasonably concluded that ConAgra was motivated to place money above safety where it searched for a cheaper salvage company, required plaintiffs to use the tunnel to remove the pellets rather than creating a hole in the bin and shutting down access to the site, delayed calling the fire department so that pellets could be salvaged rather than soaked, and continued to dump grain at the facility even though using the dust collector increased airflow to the fire. A reasonable jury could – and did – find this conduct to be either grossly negligent or indicative of a wanton disregard for the rights of others, or both, such that the imposition of punitive damages was justified.”
     The only reduction Reagan allowed involved Schmidt’s award. Reagan reduced Schmidt’s punitive damages by more than $7 million, from $33.3 million to $26.235 million. He based this on precedent set by State Farm Mut. Auto Ins. Co. v. Campbell, in which the U.S. Supreme Court set three guideposts for courts in reviewing punitive damages: the degree of reprehensibility of the defendant’s misconduct; the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases.
     “For Schmidt, the ratio is 11 to 1 ($2,915,000.00 in compensatory damages to $33,333,333.34 in punitive damages),” Reagan wrote. “This award takes into account that Schmidt was harmed and was exposed to the same potential harm as Jentz and Becker, as well as to the same degree of reprehensibility of ConAgra’s conduct. Schmidt experienced the same 1,700 degree fireball as the other plaintiffs, as he was trapped in an open one-man elevator lift on the side of the bin. Only his quick action in covering as much of himself as he could with his jacket prevented his sustaining more devastating injuries. But the disparity between the actual harm suffered by Schmidt and the punitive damages award, which is the second prong of the State Farm review of punitive damages, leads the court to conclude that they are excessive as to Schmidt, and a remittitur is appropriate.
     “Schmidt’s injuries, while severe, do not approach those of Jentz and Becker. While State Farm held that there is no bright-line rule for considering the ratio between punitive and compensatory damages, 538 U.S. at 421-425, single digit multipliers are more likely to comport with due process. Consequently, the court remits Schmidt’s punitive damages award from $33,333,333.34 to $26,235,000.00, thereby achieving a 9:1 ration, which comports with due process.”

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