The 7th Circuit Court of Appeals heard arguments Wednesday in a personal injury suit over a southern Illinois grain elevator explosion that led to a $180 million jury verdict.
Attorneys for the two defendant companies urged the federal appeals panel to reverse the district court’s judgment, or at least lower some of the awards for damages, while the plaintiffs’ legal team asked for the lower court judgment to be affirmed.
Wednesday’s arguments stem from an April 2010 explosion at ConAgra Food Inc.’s grain facility in Chester that injured John Jentz, Robert Schmidt and Justin Becker.
The three men were injured when a bin holding processed grain exploded.
At that time, Becker was an employee of West Side Salvage, which ConAgra hired to clean out a bin that the plaintiffs claim had started to smolder a month earlier and had not been cleaned in 17 years.
Jentz and Schmidt worked for A& J Bin Cleaning, a company that West Side hired to help with the project. It was not a party to the suit.
The plaintiffs filed suits, which were later consolidated, in southern Illinois’ federal court against ConAgra, claiming that it knew the bin was dangerous, but failed to get it fixed in a timely manner because it was trying to find a cheaper contractor than West Side.
ConAgra filed cross-claims for contribution against West Side, alleging that West Side was the proximate cause of the plaintiffs’ injuries because among other reasons, its foreman sent Jentz and Becker back into the bin to remove tools after they had been evacuated and before it exploded.
Following a month-long trial before U.S. District Judge Michael Reagan, the jury returned a verdict awarding the three plaintiffs a total of about $180 million in damages.
The jury awarded Jentz, who sustained severe burns over 70 to 75 percent of his body, about $41.5 million in compensatory damages and $34.3 million in punitive damages.
Schmidt –who suffered second-degree burns on his hands, neck and face– was awarded nearly $1.9 million in compensatory damages and $33.3 million in punitive damages, which was later reduced.
The jury awarded Becker –who sustained burns over about 12 percent of his body–about $35 million in compensatory damages and $33.3 million in punitive damages. The jury also awarded $237,500 to Becker’s wife, Amber, for loss of consortium.
In addition, the jury awarded ConAgra $3 million for property damage on its cross-claims for contribution against West Side, which was also ordered to pay about $20 million of the damages ConAgra owed and about $1 million in punitive damages to Jentz, according to court documents.
On behalf of West Side, attorney John G. Schultz of Franke, Schultz & Mullen PC in Kansas City told the federal appeals panel that the district court erred when it applied the cost of repair, as opposed to fair market value of damages, on ConAgra’s property damage claim.
Schultz also told the appeals panel the district court erred when it let one of the plaintiffs’ witnesses testify on issues outside the scope of his expertise; failed to respond to a juror’s question over punitive damages; and determined that ConAgra could assert a breach of contract claim against West Side.
In addition, Schultz argued that the lower court shouldn’t have submitted Jentz’s claim for punitive damages against it to the jury because there was no evidence that West Side exhibited willful and wanton behavior or a conscious disregard for the safety others.
U.S. Judge Ilana Diamond Rovner of the 7th Circuit, however, told Schultz she had a problem with his argument over willful and wanton conduct.
She said that West Side’s foreman ordered the plaintiffs to go back into the bin to retrieve tools before it exploded and that a reasonable jury could find that constituted willful and wanton conduct since the bin presented an obvious danger.
After Schultz told Rovner that the foreman didn’t know his order would cause harm, U.S. Judge Frank Easterbrook asked what the record shows about the probability of a bin exploding once it’s already smoldering.
As Schultz started to respond, Easterbook interrupted, saying he wasn’t “remotely” answering his question, to which Schultz replied that he didn’t recall any testimony on that topic.
Easterbrook asked the same question over probability to ConAgra’s attorney, Christopher Landau of Kirkland & Ellis LLP in Washington D.C.
Like Schultz, Landau ran into some problems trying to answer that question.
When Landau started to explain that there is a risk of explosions when grain bins are on fire, Easterbrook told him he was “talking off the top of your head” and said “I really want to know what the evidence shows.”
The plaintiffs’ attorney, Andrew Schapiro, appeared to have learned from the two attorneys who went before him and tried to answer Easterbrook’s question early on in his arguments.
Schapiro, of Quinn, Emanuel, Urquhart & Sullivan LLP in Chicago, told the panel that there is no evidence in the record about the probability of grain bins exploding once they are on fire.
The issue came up again toward the end of Schapiro’s arguments when he urged the panel to affirm the punitive damages award.
Easterbrook told him that knowing the potential risk and probability of such a situation seems “absolutely essential” in order to determine whether the defendants showed disregard.
During his arguments, Landau told the judges that the decision of West Side’s foreman to send the plaintiffs back into the bin after they were evacuated to retrieve tools shows that the awards against his client, ConAgra, should be reversed.
The conduct of West Side’s foreman, Landau said, “broke any chain” of causation between ConAgra and the plaintiffs.
Landau went to on to say that ConAgra is being held liable for millions of dollars in damages when it hired West Side, a so-called expert in the field, to fix the problems with its bin and as such, owes no duty to its employees and subcontractors.
Saying that “this case is as much about common sense as common law,” he told the panel that West Side should have known about the risks associated with the job and taken the appropriate steps to protect the plaintiffs.
Putting aside the issue of liability, Landau argued in his briefing to the 7th Circuit that “the evidence here does not remotely justify an award of punitive damages – much less the largest award of punitive damages in the history of Illinois law—against ConAgra.”
He wrote in his August brief that “if ever a case underscored how the tort system in the country has degenerated into a lottery, this is it.”
Asking the federal appeals panel to reverse the lower court judgment, Landau said the district court erred when it denied ConAgra a new trial on the issue of liability and denied it a judgment as a matter of law on punitive damages.
On behalf of the plaintiffs, however, Schapiro said the lower court and the jury got it right.
In regards to Landau’s argument that the amount of punitive damages was excessive, Schapiro reminded the panel that the explosion “ended up with two people burning alive essentially.”
Regardless of what happened on the day of the incident, Schapiro said ConAgra should have tried to fix its bin problem at the first onset of smoke a month earlier, but instead chose to shop around for a cheaper contractor.
ConAgra, he added, created the risk by “waiting 17 years to clean the bin,” a task he said should be done yearly.
“If ConAgra had followed its own procedures,” Schapiro said that “none of this would have happened.”
In addition to Easterbrook and Rovner, U.S. Judge Daniel Manion sat on the panel that heard arguments in the case that is now under advisement.