The Retail Litigation Center (RLC) filed an amicus curiae brief to the Supreme Judicial Court in Massachusetts urging the Court to condemn in no uncertain terms a lower court’s award of punitive damages against a retailer who took prudent, responsible measures to establish the safety of a product that it sold in Aleo v Toys “R” Us, Inc.
According to the brief:
“The lower court’s decision affirming the punitive award rests on the perverse conclusion that retailers should be subject to massive punitive liability because they have taken positive, proactive steps to enhance safety by retaining third-part experts and contracting with manufacturers to certify the safety of their products. That the defendant in this case engaged in those common, widely accepted practices should have served as powerful evidence precluding any award of punitive damages.”
The retailer in the case retained a highly-regarded third party expert to evaluate and test the product and relied upon the expert’s conclusions regarding the product.
“The trial court in this case acted in a stunningly irresponsible manner. Responsible corporate actions should be encouraged by the courts, not discouraged by the imposition of outrageous punitive damages,” said RLC President Deborah White. “When retailers are subjected to punitive damages based on improper considerations, it opens the door to serious constitutional concerns and unfair liabilities.”
Furthermore, the brief urges the Court to reverse its misguided conclusion that the defendant had negligently failed to comply with federal regulations when in fact, the regulation had never before been thought to apply to the product sold and the product did not even exist when the agency promulgated its regulations.
According to the brief:
“The trial court’s failure to undertake a careful analysis should be corrected. In addition, the Court should clarify that when punitive damages are based on gross negligence and compensatory damages are substantial, a one-to-one ratio between punitive and compensatory damages is at the outer limit of any constitutionally permissible award.”
The full brief can be found here. The brief was drafted by King & Spalding Attorneys Ashley Parrish and Karen Grohman.
The Retail Litigation Center is a public policy organization that identifies and engages in legal proceedings which affect the retail industry. The RLC, whose members include some of the country’s largest retailers, was formed to provide courts with retail industry perspectives on significant legal issues, and highlight the potential industry-wide consequences of legal principles that may be determined in pending cases.