Wiley Y. Daniel

ORDER

THIS MATTER is before the Court on Defendants' Motion to Alter or Amend Final Judgment Pursuant to Fed. R. Civ. P. 59 and 60 (ECF No. 815) and Plaintiffs' Motion to Alter or Amend the Court's September 26, 2012 Judgment for Purposes of Increasing the Punitive Damages Ratio Under CRS § 13-12-102 or, in the Alternative, Trebling Damages Under CRS § 6-1-113 (ECF No. 817).

I. INTRODUCTION

Plaintiffs, Wayne and Mary Watson, filed this case against the Defendants, Dillon Companies, Inc., Gilster-Mary Lee Corporation, Inter-American Products, Inc., and The Kroger Company (hereinafter "Gilster-Mary Lee"), because of Plaintiff Wayne Watson's respiratory disorders, which he contends are the result of inhaling a butter flavoring compound known as diacetyl contained in microwave popcorn manufactured and distributed by the Defendants.

After lengthy pretrial motions practice, settlement discussions, expert witness challenges, discovery and other legal wrangling and delays by the parties, this case finally went to trial on September 4, 2012. The jury reached its verdict on September 19, 2012, awarding the Plaintiffs more than seven million dollars in damages. Specifically, the jury awarded Plaintiff Wayne Watson $667,961 in damages for economic losses excluding any damages for physical impairment; $1,000,000 in damages for non-economic losses or injuries excluding damages for physical impairment; and $450,000 in damages for physical impairment. The jury apportioned fault as follows: 5% charged to Defendant Dillon Companies; 15% charged to Defendant The Kroger Co.; and 80% charged to Defendant Gilster-Mary Lee Corp. The jury also awarded Plaintiff Wayne Watson $5,000,000 in punitive damages. The jury further awarded Plaintiff Mary Watson $100,000 in damages for her loss of consortium claim.

On September 26, 2012, Judgment was entered against the Defendant Dillon Companies in the amount of $33,398.05 (.05 x $667,961.00) for Plaintiff Wayne Watons's economic losses, in the amount of $50,000.00 (.05 x $1,000,000.00) for Plaintiff Wayne Watson's non-economic losses, in the amount of $22,500.00 (.05 x $450,000.00) for Plaintiff Wayne Watson's physical impairment, and in the amount of $5,000.00 (.05 x $100,000.00) for Plaintiff Mary Watson's loss of consortium claim.

Judgment was also entered against Defendant The Kroger Co. in the amount of $100,194.15 (.15 x $667,961.00) for Plaintiff's economic losses, in the amount of $150,000.00 (.15 x $1,000,000.00) for Plaintiff's non-economic losses, in the amount of $67,500.00 (.15 x $450,000.00) for Plaintiff's physical impairment, and in the amount of $15,000.00 (.15 x $100,000.00) for Plaintiff Mary Watson's loss of consortium claim.

Judgment was entered against Defendant Gilster-Mary Lee Corporation in the amount of $534,368.80 (.80 x $667,961.00) for Plaintiff's economic losses, in the amount of $800,000.00 (.80 x $1,000,000.00) for Plaintiff's non-economic losses, in the amount of $360,000.00 (.80 x $450,000.00) for Plaintiff's physical impairment, in the amount of $5,000,000 for punitive damages, and in the amount of $80,000.00 (.80 x $100,000.00) for Plaintiff Mary Watson's loss of consortium claim.

After the entry of judgment, the parties collectively filed five post-trial motions to alter or amend the Judgment, for a new trial, or for judgment as a matter of law. Additionally, Plaintiffs filed a motion for attorney fees and costs. After reviewing all of the relevant pleadings, I issued a written order denying the motions for judgment as a matter of law. See ECF No. 871. I heard argument on the remaining post-trial motions on August 8, 2013. After considering the arguments from both parties at the hearing on August 8, 2013, and applying the appropriate legal standards, for the reasons stated on the record and set forth below, I find that the remaining post-trial motions should be granted in part and denied in part.

II. MOTIONS TO AMEND/ALTER JUDGMENT

Both sides request that I alter or amend the Final Judgment (ECF No. 812). Defendants request that I reduce the amount awarded for Plaintiff Wayne Watson's non-economic damages apportioned to Defendant Gilster-Mary Lee pursuant to the statutory cap on non-economic damages set forth in Colo. Rev. Stat. §§ 13-21-102.5(3) and 13-21-102. Accordingly, Defendants further request that I reduce Plaintiff Wayne Watson's punitive damage award against Defendant Gilster-Mary Lee to its apportioned and adjusted amount of actual compensatory damages. Plaintiffs, on the other hand, request that I increase the punitive damage award pursuant to Colo. Rev. Stat. § 13-12-102, or in the alternative, treble the actual damages pursuant to Colo. Rev. Stat. § 6-1-113.

A. Standard of Review

A litigant subject to an adverse judgment, who seeks reconsideration by the district court of that adverse judgment, may file either a motion to alter or amend the judgment pursuant to Fed. R. Civ. P. 59(e) or a motion seeking relief from the judgment pursuant to Fed. R. Civ. P. 60(b). Under Rule 59(e), a motion to alter or amend a judgment must be filed no later than 28 days after the entry of the judgment. Fed. R. Civ. P. 59(e). In this case, the final judgment (ECF No. 812) entered on September 26, 2012, and the parties filed their motions to alter or amend the judgment (ECF Nos. 815 and 817) on October 10, 2012 and October 19, 2012. The motions were filed within twenty-eight days after judgment entered and are therefore timely.

In order for a party to succeed on a Rule 59 motion, the party must show either "(1) an intervening change in the controlling law, (2) new evidence previously unavailable, [or] (3) the need to correct clear error or prevent manifest injustice." Servants of the Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000). However, a Rule 59(e) motion is not an opportunity to rehash arguments previously addressed or to advance new arguments that could have been raised previously. Id. Finally, the decision to grant a Rule 59(e) motion is within the discretion of the district court. Brown v. Presbyterian Healthcare Serv., 101 F.3d 1324, 1332 (10th Cir. 1996) ("[I]n determining whether to grant or deny a Rule 59(e) motion to alter or amend judgment, the district court is vested with considerable discretion.").

B. Analysis

1. Defendants Dillon Companies' Motion to Alter or Amend Final

Judgment Pursuant to Fed. R. Civ. P. 59 and 60 (ECF No. 815)

Defendants ask me to amend the final judgment to reduce Plaintiff Wayne Watson's non-economic damage award against Gilster-Mary Lee from $800,000 to the statutory cap of $366,250. Relying on their assertion that Plaintiff Wayne Watson's claims for relief accrued before January 1, 2008 and after January 1, 1998, Defendants cite Colo. Rev. Stat. § 13-21-102.5(3)(a) and § 13-21-102.5(3) to support the argument that these statutory provisions limit claims for relief to the cap of $366,250. These statutes read in relevant part:

(3)(a) In any civil action other than medical malpractice actions in which damages for non-economic loss or injury may be awarded, the total of such damages shall not exceed the sum of two hundred fifty thousand dollars, unless the court finds justification by clear and convincing evidence therefor. In no case shall the amount of non-economic loss or injury damages exceed five hundred thousand dollars.

(c)(I) The limitations on damages set forth in paragraphs (a) and (b) of this subsection (3) shall be adjusted for inflation as of January 1, 1998, and January 1, 2008. ...

(A) The adjusted limitation on damages shall be the limitation applicable to all claims for relief that accrue on or after January 1, 1998, and before January 1, 2008 ...

In accordance with Colo. Rev. Stat. § 13-21-102.5(3)(c)(III), on October 18, 2011, the Colorado Secretary of State certified that

the adjusted limitations for damages, utilizing the 'consumer price index for Denver-Boulder, all items, all urban consumers', are as follows:
For all claims for relief that accrue on or after January 1, 1998, and before January 1, 2008:

FOR C.R.S. 13-21-102.5(3)(a) the adjusted limited is $366,250, which may be increased by the court upon clear and convincing evidence to a maximum of $732,500.

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For all claims for relief that accrue on or after January 1, 2008:

FOR C.R.S. 13-21-102.5(3)(a) the adjusted limited is $468,010, which may be increased by the court upon clear and convincing evidence to a maximum of $936,030.

In response, Plaintiffs contend that Wayne Watson's cause of action accrued after January 1, 2008, making the cap on the amount of non-economic damage not less than $468,010.

Thus, I first turn to the issue of when Plaintiff Wayne Watson's cause of action accrued. Under Colo. Rev. Stat. § 13-80-108,

(1) Except as provided in subsection (12) of this section, a cause of action for injury to person, property, reputation, possession, relationship, or status shall be considered to accrue on the date both the injury and its cause are known or should have been known by the exercise of reasonable diligence.
***
(8) A cause of action for losses or damages not otherwise enumerated in this article shall be deemed to accrue when the injury, loss, damage, or conduct giving rise to the cause of action is discovered or should have been discovered by

the exercise of reasonable diligence.

In support of their argument that Plaintiff Wayne Watson's lung injury accrued prior to January 1, 2008, Defendants highlight a volume of evidence including trial testimony and exhibits from Dr. Cecile Rose, Plaintiff Wayne Watson's treating physician.

At trial, Dr. Rose testified that her colleague, Dr. Ronald Balkissoon began treating Wayne Watson for complaints of pulmonary dysfunction as early as May 2006. (Trial Tr. 578:4-7, Sept. 7, 2012). Dr. Rose also testified that on or about August 2006, a biopsy confirmed that Wayne Watson had a lung disease called hypersensitivity pneumonitis and showed "features of bronchiolitis." (Trial Tr. 578:11-15). Dr. Bakissoon referred Wayne Watson to Dr. Rose because his lung functioning was declining, he was not "responding to treatment, and [Wayne Watson] was worried that if his lung function continued to decline that he would ultimately come to the point where he would maybe need a lung transplant." (Trial Tr. 579:3-12).

Prior to her initial visit with Wayne Watson on February 8, 2007, Dr. Rose testified that she was getting a clinical picture regarding his diagnosis "from all of the tests from the CT scan, from the pulmonary function test and from the biopsy." (Trial Tr. at 593:18-594:1). On February 8, 2007, in her Progress Notes, Dr. Rose stated that she "[s[uggested [Plaintiff] discontinue exp[osure] to microwave butter popcorn pending further assessment" and that Plaintiff "eats large amounts of buttered popcorn every day." (Trial Ex. 236 at 55, 58). Following the initial February 8, 2007 visit, Dr. Rose personally reviewed Wayne Watson's surgical lung biopsy, in addition to reviewing them with the head of pulmonary pathology at National Jewish Health, and interpreted the slides as showing bronchiolitis obliterans. (Trial Tr. at 594:15-595:7). During one of her visits with Wayne Watson, Dr. Rose "told Mr. Watson that [she] was concerned that he had developed bronchiolitis from his frequent eating of extra-butter-flavored microwave popcorn." (Trial Tr. at 595:12-14). On February 20, 2007, Dr. Rose sent a letter to Dr. Balkissoon stating "[o]ne possibility that I am investigating further is his daily use of microwave popcorn . . . ." (Trial Ex. 236 at 82).

On July 18, 2007, Dr. Rose sent letters to several government agencies stating, "We have recently identified a patient [Wayne Watson] with significant lung disease whose clinical findings are similar to those described in affected workers, but whose only inhalational exposure is as a heavy, daily consumer use of butter flavored microwave popcorn." (Trial Ex. A-84 at 1-8). Moreover, when examined about her July 18, 2007 government agency letters, Dr. Rose testified that Plaintiff Wayne Watson had contracted "constricted bronchiolitis or bronchiolitis obliterans syndrome" based on her experience working in the flavoring industry and her study of "the medical literature . . . published about flavoring-related and popcorn-related lung disease." (Trial Tr. 593:2-8, Sep. 7, 2012).

Based on my review of the transcripts, exhibits and my recollection of the trial testimony and for the reasons stated on the record at the August 8, 2013 hearing, I agree with the Defendants that the evidence shows that Plaintiff Wayne Watson discovered (or should have discovered) his lung injury and its cause before January 1, 2008. Thus, pursuant to Colo. Rev. Stat. § 13-21-102.5(3)(a), Wayne Watson's non- economic damages are capped at $366,250 from each individual Defendant. However, if I find by clear and convincing evidence that there is justification, the statute permits non-economic damages to be increased, up to double the statutory cap, or $732,500. § 13-21-102.5(3)(a) & n.1; see also General Electric Co. v. Niemet, 866 P.2d 1361, 1364-66 (Colo. 1994) (detailing legislative history of the statute).

Despite the urging of the Plaintiffs, I do not find that this case presents the type of exceptional circumstances warranting non-economic damages beyond the statutory cap. In Hoffman v. Ford Motor Co., 690 F. Supp. 2d 1179 (D. Colo. March 4, 2010), this Court found that exceptional circumstances warranted non-economic damages that exceeded the statutory cap because the Hoffman plaintiff

suffered incredibly grievous and profound injuries as a result of the rollover accident that forms the basis of her claims against defendant. Only a teenager when she was rendered a tetraplegic, Erica will never be able to live or care for herself independently. The personal difficulties and indignities attendant on having to have her most basic and intimate needs attended to by someone else were recounted in excruciating detail during the trial. In addition, the ambit of her world has shrunken to the parameters of her parents home, where the majority of her time is spent watching television or on the computer. Her plans for college and dreams of some day having a family of her own have evanesced, and her life expectancy has been appreciably truncated by her injuries.

2. Plaintiffs' Motion to Alter or Amend the Court's September 26, 2012

Judgment for Purposes of Increasing the Punitive Damages Ratio

Under CRS § 13-12-102, or in the Alternative, Trebling Damages

Under CRS § 6-1-113 (ECF No. 817)

Plaintiffs first request that I treble the $5,000,000 punitive damage award against Defendant Gilster-Mary Lee under the Colorado exemplary damages statute. Colo. Rev. Stat. § 13-21-102(1)(a) states that a jury may award reasonable exemplary damages not to exceed an amount which is equal to the amount of the actual damages awarded to the injured party. The Colorado Supreme Court has interpreted the statute to mean that it "places a maximum on a plaintiff's exemplary damages award recovery which is measured by the amount of compensatory damages after reduction for comparative negligence and pro rata liability." Lira v. Davis, 832 P.2d 240, 246 (Colo. 1992).

However, the statute goes on to permit the court to

increase any award of exemplary damages, to a sum not to exceed three time the amount of actual damages, if it is shown that:
(a) The defendant has continued the behavior or repeated the action which is the subject of the claim against the defendant in a willful and wanton manner, either against the plaintiff or another person or persons, during the pendency of the case; or
(b) The defendant has acted in a willful and wanton manner during the pendency of the action in a manner which has further aggravated the damages of the plaintiff when the defendant knew or should have known such action would produce aggravation.

In support of increasing the punitive damage award, Plaintiffs contend that the Defendants have wilfully and wantonly continued the behaviors and repeated the actions which were the subject of the failure to warn claim asserted against them. Specifically, Plaintiffs argue that Defendants "continue to refuse to provide any warnings on [butter-flavored microwave popcorn products], despite knowledge that this behavior has resulted in at least one case of severe lung damage." (Mot. at 5). Plaintiffs also highlight a public statement issued by the Defendants after the jury verdict "arguing that they had done nothing wrong and refusing to take any responsibility or action to protect their millions of existing microwave popcorn customers." (Mot at 6).

In response, Defendants state that it is undisputed that the behavior at issue, the use of diacetyl in butter-flavored microwave popcorn, did not continue during the pendency of the case. "[S]uch behavior ceased nearly a year before this action was even commenced." (Resp. at 2). I agree. Plaintiffs' cause of action concerned the sale of microwave popcorn that contained the butter-flavoring chemical, diacetyl. The bulk of the evidence concerned whether diacetyl proximately caused Wayne Watson's lung injury. In fact, the Court held extensive pretrial hearings on this very issue. Dr. Egilman, Plaintiffs' expert witness, opined that diacetyl was the proximate cause of Wayne Watson's lung injury. See Hr'g Tr. 79:1-7, September 5, 2012. Moreover, Tom Welge testified that the Defendants started the process of eliminating diacetyl in their products in 2006. Both Tom Welge and Kathy Jordan testified that Defendants completed the process of eliminating diacetyl from their products in the Spring of 2008. See Jordan Video Dep. 23:3-13, 23:25-24:6, Nov. 19, 2009, at Tr. 880, Sep. 11, 2012; see also T. Welge Dep. 75:19-76:19, Nov. 17, 2009, at Tr. 734, Sep. 10, 2012.

Contrary to the Plaintiffs' assertions and citations to their closing argument at trial, I find that there is no credible evidence that the Defendants continued their use of the chemical diacetyl in their butter-flavored microwave popcorn products during the pendency of the case as required by Colo. Rev. Stat. § 13-21-102(3). Thus, after reviewing the testimony presented during the trial, hearing argument at the August 8, 2013 hearing and applying the law set forth above, I find that the jury's awards against the Defendants are sufficient. Plaintiffs were appropriately compensated, and an increase in punitive damages is not warranted.

Accordingly, pursuant to the language of Colo. Rev. Stat. § 13-21-102(1)(a), I must reduce the jury's award of $5,000,000 in punitive damages against Defendant Gilster-Mary Lee to "no greater than the amount of actual damages [it] owes." Lira, 832 P.2d at 246. Defendant Gilster-Mary Lee's actual damages are $534,368.80 (0.80 x $667,961.00) for economic losses; $366,250.00 for non-economic losses as reduced above; and $360,000.00 (0.80 x $450,000.00) for physical impairment for a total of $1,260,618.80. Based on the statutory limitation, punitive damages for the Plaintiffs are reduced from $5,000,000 to $1,260,618.80 under Colo. Rev. Stat. § 13-21-102(1)(a).

Plaintiffs next seek treble damages under Colo. Rev. Stat. § 6-1-113, arguing that "Defendants' intentional refusal to provide any warning to the millions of consumers who use their butter-flavored microwave popcorn is bad faith." (Mot. at 9). The Colorado Supreme Court has held that in general, "a plaintiff may not recover both treble damages and punitive damages premised on the same facts because such damage awards serve similar purposes." Lexton-Ancira Real Estate Fund v. Heller, 826 P.2d 819, 822 (Colo. 1992). Both treble damages and punitive damages serve to punish." Id. In this case, the jury returned a verdict on Plaintiffs' claims for strict liability, negligence, violation of the CCPA, and Plaintiffs' claim for exemplary damages against Defendant Gilster-Mary Lee. These claims all arose out of the Defendants' conduct in selling microwave popcorn containing diacetyl and the failure to warn consumers about the health effects of diacetyl. Under these circumstances and for the reasons noted on the record at the August 8, 2013 hearing, I find that the Plaintiffs may not recover both treble damages and punitive damages as they are duplicative under Colorado law. Plaintiffs' motion is denied.

III. CONCLUSION

In conclusion, based on the foregoing, it is

ORDERED that Defendants Dillon Companies' Motion to Alter or Amend Final Judgment Pursuant to Fed. R. Civ. P. 59 and 60 (ECF No. 815) is GRANTED. Applying the statutory cap for non-economic damages, which applies to the liability share of each Defendant in this case, I reduce the award of damages for non-economic loss in the judgment against Defendant Gilster-Mary Lee Corporation to $366,250. The judgments for non-economic loss against Defendant the Dillon Companies ($50,000) and Defendant The Kroger Company ($150,000) remain unchanged by this Order. It is

FURTHER ORDERED that Plaintiffs' Motion to Alter or Amend the Court's September 26, 2012 Judgment for Purposes of Increasing the Punitive Damages Ratio Under CRS § 13-12-102, or in the Alternative, Trebling Damages Under CRS § 6-1-113 (ECF No. 817) is DENIED.

In accordance therewith, the Clerk of the Court shall amend the Judgment is as follows: 1. Total Economic Damages awarded by Jury: $667,961

Apportionment of fault:

Dillon Companies - 5% (.05 x $667,961.00) = $ 33,398.05
Kroger - 15% (.15 x $667,961.00) = $100,194.15
Gilster - 80% (.80 x $667,961.00) = $534,368.80

Apportionment of fault:

Dillon Companies - 5% (.05 x $1,000,000) = $ 50,000.00
Kroger - 15% (.15 x $1,000,000) = $150,000.00
Gilster - (as reduced from $800,000) = $366,250.00

Apportionment of fault:

Dillon Companies - 5% (.05 x $450,000.00) = $ 22,500.00
Kroger - 15% (.15 x $450,000.00) = $ 67,500.00
Gilster - 80% (.80 x $450,000.00) = $360,000.00

Gilster - 100%

Economic Damages = $534,368.80
Non-Economic Damages (as reduced) = $366,250.00
Physical Impairment = $360,000.00
Total = $1,260,618.80

Apportionment of fault:

Dillon Companies -5% (.05 x $100,000.00) = $ 5,000.00
Kroger - 15% (.15 x $100,000.00) = $ 15,000.00
Gilster - 80% (.80 x $100,000.00) = $ 80,000.00

BY THE COURT:

________________________

Wiley Y. Daniel

Senior United States District Judge