United States District Court, E.D. North Carolina, Southern Division
Earl Britt Senior U.S. District Judge
matter is before the court on the issue of the jury verdict
on punitive damages.
April 2018, the jury returned its verdict regarding the
claims of plaintiffs Joyce McKiver, Delois Lewis, Daphne
McKoy, Alexandria McKoy, Antonio McKoy, Archie Wright, Jr.,
Tammy Lloyd, Deborah Johnson, Ethel Davis, and Priscilla
Dunham. The jury awarded each of these plaintiffs $75, 000 in
compensatory damages and $5, 000, 000 in punitive damages.
The court directed the Clerk to delay entry of judgment
pending the parties' briefing on the issue of punitive
damages. Plaintiffs filed a brief, (DE # 276), and defendant
filed a motion to impose the North Carolina statutory cap on
punitive damages, (DE # 275).
a diversity case, state substantive law governs the
circumstances justifying an award and the amount of punitive
damages, and federal law governs district and appellate court
review of the jury award.” Def. Indus., Inc. v. Nw.
Mut. Life Ins. Co., 938 F.2d 502, 504-05 (4th Cir.
1991). North Carolina substantive law applies here. N.C. Gen.
Stat. § 1D-25(b) provides in relevant part that
“[p]unitive damages awarded against a defendant shall
not exceed three times the amount of compensatory damages or
two hundred fifty thousand dollars ($250, 000), whichever is
contend that § 1D-25(b)'s limitation on the amount
of punitive damages is unconstitutional as applied.
Specifically, they argue that in this case for private
nuisance, the statute violates their right to a jury trial
under the North Carolina Constitution, Article I, Section 25,
which provides “In all controversies at law respecting
property, the ancient mode of trial by jury is one of the
best securities of the rights of the people, and shall remain
sacred and inviolable.” They recognize that in
Rhyne v. K-Mart Corp., 594 S.E.2d 1, 14 ( N.C.
2004), the North Carolina Supreme Court held “§
1D-25 in no way infringes upon plaintiffs' right to trial
by jury as guaranteed by our state Constitution.”
Nonetheless, plaintiffs argue Rhyne is
distinguishable because the underlying claim in this case is
for private nuisance and therefore is a controversy
respecting property under Article I, Section 25. Defendant
maintains that the court is required to reduce the punitive
damages award per plaintiff to $250, 000 pursuant to §
court concludes Rhyne controls. In that case, the
nature of the plaintiffs' underlying claims (false
imprisonment/unlawful detention, malicious prosecution,
intentional infliction of emotional distress, and negligence)
was not relevant to the court's analysis. Rather, the
court focused on what “property” means in the
jury trial constitutional provision:
“Property, ” as used in Article 1, Section 25,
and its similarly worded predecessors, has been defined by
this Court as “embrac[ing] everything which a man may
have exclusive dominion over.” This Court similarly
noted in 1872 that “[i]n all actions where legal
rights are involved, and issues of fact are joined by
the pleadings, the plaintiff is entitled to a trial by
Although Article I, Section 25 appears to embody a broad
definition of the term “property, ” a controversy
in which punitive damages are assessed is not one which
enforces a plaintiff's legal rights and, therefore, does
not respect property. Without question, vested rights of
action are property, just as tangible things are property.
“‘A right to sue for an injury is a
right of action; it is a thing in action, and is
property.'” However, an entitlement to an award of
punitive damages does not represent a right vested in a
plaintiff. A plaintiff's recovery of punitive damages is
fortuitous, as such damages are assessed solely as a means to
punish the willful and wanton actions of defendants and,
unlike compensatory damages, do not vest in a plaintiff upon
[P]laintiffs have no independent right to, or
“property” interest in, an award of punitive
damages. As such, the jury's role in awarding punitive
damages can be dictated by our state's policy-making
body, the General Assembly, without violating plaintiffs'
constitutional right to trial by jury.
Rhyne, 594 S.E.2d at 12-13 (most alterations in
original; citations omitted).
accordance with this decision and § 1D-25(b),
defendant's motion is ALLOWED, and the court will reduce
the amount the jury awarded to each plaintiff for punitive
damages to $250, 000. The court will not direct the entry of
judgment pending the filing, and disposition, of a motion
pursuant to Federal Rule of Civil Procedure
 Plaintiffs agree that if §
1D-25(b) applies, then each plaintiffs punitive damages
recovery is limited to $250, 000. (Br., DE ...