AUSTIN, Texas (Legal Newsline) - Jurors in San Saba County took cattle theft too seriously when they awarded $1.25 million in exemplary damages against a rancher for taking 13 head that strayed across a dry river bed, the Supreme Court of Texas ruled on June 25.
The justices found the award disproportionate to the $5,327.11 that Thomas Bennett gained by selling the cattle of neighbor Randy Reynolds.
The justices felt that if they didn't slash the award, the U. S. Supreme Court would.
"The Supreme Court has placed a constitutional fence around exemplary damages, one that our lower courts must police to prevent the acute danger of arbitrary deprivation of property," Justice Don Willett wrote.
Third District appeals judges in Austin must reduce the award. They had upheld it on grounds that, "Texans know better than to steal cattle."
Willett didn't specify an amount but suggested $10,000, the maximum fine Bennett would have paid on a criminal conviction.
He beat criminal charges but lost to Reynolds in civil court.
Willett suspected that jurors in the civil trial wanted to dish out punishment that the criminal court failed to deliver.
He quoted a 1993 decision of the U. S. Supreme Court that, "Punitive damages are not a substitute for the criminal process."
Bennett and Reynolds owned ranches on the Colorado River, which normally serves as a natural property barrier confining cattle.
When the river runs dry, cattle meander into neighboring ranches.
Willett wrote, "The stray cattle are usually located and returned, but occasionally they escape for good."
Bennett started replacing a fence in 1996, told Reynolds a new fence would cost $9,000, and said Reynolds should pay half. Reynolds didn't pay.
In 2000, the river dried up. Reynolds counted heads and came up 23 short.
He spotted six on Bennett's ranch and retrieved them. He reported the others to the Texas Southwestern Cattle Raisers Association.
Around that time, Bennett ordered ranch hands to help him round up 13 heads and sell them at auction.
The hands told him he didn't own them, but they carried out his order.
One of them, Larry Grant, bought a disposable camera on the way to the auction and snapped pictures.
He quit his job and gave the pictures to the cattle raisers association.
Bennett filed a small claim suit seeking $4,500 from Reynolds for the fence.
Reynolds prevailed at trial and, still in court, said he was missing some cattle. He asked Bennett if he had seen them.
Bennett ran upstairs to the San Saba County sheriff's office and accused Reynolds of stealing his cattle. Reynolds ran upstairs and reported his cattle missing.
The sheriff and a deputy drove to the ranches but found no missing cattle.
In 2002, grand jurors indicted Bennett for third degree felony cattle theft.
Reynolds sued him and his business, Bonham Corp., for conversion. Reynolds pleaded to lift a $200,000 limit on exemplary damages due to malice.
After jurors in criminal court acquitted Bennett, he filed a counterclaim in civil court alleging Reynolds and Grant conspired to accuse him falsely.
At trial on the claim and counterclaim, jurors found that Bennett and the corporation committed felony theft with malice.
They assessed $5,327.11 in compensatory damages, plus exemplary damages of $1 million against the corporation and $250,000 against Bennett.
District Judge Murray Jordan approved the verdict, and so did appeals judges.
At the Supreme Court, Bennett claimed he didn't act with malice, Reynolds didn't suffer substantial injury and the corporation shouldn't owe exemplary damages.
The justices disagreed on all three points but couldn't justify the grand total.
Willett wrote that since 1989, the U. S. Supreme Court has steadily restricted exemplary damages and tightened the standards for assessing them.
With few exceptions, he wrote, the U. S. Supreme Court does not permit exemplary awards more than four times as great as actual damages.
Reynolds needed to show "a particularly egregious act" to qualify for an exception, Willett wrote, and he didn't show it.
"If courts fail to diligently police the 'particularly egregious' exception, they insulate from due process review precisely those cases where judicial review matters most: those involving unsympathetic defendants where juries are most likely to grant arbitrary and excessive awards," he wrote.
Willett wrote that Texas is the top cattle raising in the nation, home to 13.8 million head that contribute $15 billion to the state economy.
Justice Phil Johnson concurred in the decision but wrote separately that he found no malice. No one was hurt or threatened, he wrote.