The owner of a biological resource center that accepted donated bodies and supplied specimens to medical, academic, and research facilities pled guilty to a count of illegal control of a criminal enterprise after providing facilities with contaminated and unauthorized tissue. The families of the donated bodies then brought a separate lawsuit alleging various tort claims against the center’s owner. After trial, a jury awarded the families $8.5 million dollars in compensatory damages and $50 million in punitive damages.
Partly due to a clerical error, the owner missed the window to timely file for a new trial under Ariz. R. Civ. P. 59 and failed to timely move to extend the deadline. As a result, the owner filed a Rule 60(b) motion requesting relief from the punitive damages award under subsection (1) based on a party’s “mistake, inadvertence, surprise, or excusable neglect” and subsection (6) justifying relief for “any other reason.” The trial court granted the owner relief under Rule 60(b)(1) and reduced the punitive damages award to $8.5 million. Both parties appealed. The owner appealed arguing that a further reduction was necessary. The families cross-appealed arguing the court lacked jurisdiction to adjust the damages award.
On appeal, the Arizona Court of Appeals, Division One, vacated and remanded. The Court focused on whether the trial court had jurisdiction to modify the jury’s award under Rule 60(b) despite the owner’s failure to timely contest the judgment under Rule 59. The Court found that relief from the judgment was inappropriate under Rule 60(b)(1) because the owner did not exercise the diligence necessary to benefit from the rule. The Court noted the owner knew or should have known that a judgment was coming, and the owner failed to review the docket despite the ease to do so. Similarly, the Court found relief under 60(b)(6) unjustified because the circumstances of the case did not meet the “extraordinary circumstances” required to grant relief from the judgment. The Court noted that relief under Rule 60(b)(6) has been granted where a direct appeal was unavailable. Because the owner could have appealed the award of punitive damages or could have timely moved for a new trial under Rule 59, “extraordinary circumstances” were absent and relief under Rule 60(b)(6) was inappropriate. Thus, the trial court lacked jurisdiction to consider the constitutionality of the punitive damages award.
The Court vacated and remanded with instructions.
Judge Howe authored the decision of the Court, joined by Judges Furuya and Brown.
Posted by: Annabel Barraza