Dan is a truck driver who works for Package Express (PE) in the State of Loyola.  PE is a large national firm that delivers packages and express mail for its many customers.  It has a fleet of thousands of trucks and has profits of around $100 million each year.
    Until recently, each PE truck had a large display (similar to a computer monitor) on the dashboard that listed the driver's next delivery stop in large letters.  The display was connected via a wireless signal to the nearest distribution center.  The display would give turn-by-turn directions in a large font to the next pick-up or delivery address.  For safety reasons, drivers were forbidden to use cell phones on the job.
    Two years ago, PE came under new managers who wished to increase profits for investors by cutting costs.  They reasoned that almost all employees had cell phones that could receive text messages.  PE management decided to eliminate the large displays in trucks because they were quite expensive.  Their new policy was that all drivers had to take their personal cell phones to work (PE paid them a $50 credit each month to help pay the cell phone fees).  Information was now transmitted to the drivers by means of text messages on their cell phones.  
    PE knew that text messages on cell phones were much harder to read than those on the displays that PE previously used, and that therefore accidents were likely to increase.  So PE instituted a company rule that drivers could only check their messages while the truck was stopped.  This was consistent with a State of Loyola law that prohibits any cell phone use in a moving vehicle.
    PE drivers were therefore expected to stop along the side of the road to read the directions to their next delivery location.  This took a great deal of time.  PE drivers were paid a fixed amount for an 8 hour day, but because of this new system, drivers had to spend 9-10 hours completing their deliveries.  They were not paid for this extra time.  Almost all PE drivers began to read their text messages while driving, so that they could finish their shifts on time.  PE was aware that this was happening, but did nothing to stop it (since they did not want to pay drivers for the extra time).  PE was also aware that its accident rate had doubled in almost all parts of the country since it instituted the new system.
    One day Dan was driving his PE truck and got lost.  While the truck was moving, he squinted and looked down to read the text message with directions on his cell phone.  He drove his truck through a stop sign in a residential neighborhood and slammed into the house of the Gomez family.  The impact severely damaged the outside wall of their living room and also caused a grandfather clock to fall over and break to pieces.  Mrs. Gomez had inherited the clock from her parents, who recently died.  Mrs. Gomez and her brother had originally given the clock to their parents on their 50th wedding anniversary.  It was the only substantial heirloom she had from her parents.
    The falling clock also caused minor injury to Mr. Gomez's leg, but he settled this issue with PE for $2000 during mediation.
    The remaining injuries were not resolved by mediation, so the Gomez found a lawyer and sued PE for their remaining damages.  The following facts were proven at trial, and you should assume they are true.  The clocks are still being manufactured today by a small family company in Kentucky and cost $15,000 new.  Mrs. Gomez and her brother paid $10,000 for it 25 years ago, and it was still in good condition at the time of the accident.  The clocks are also available used and normally cost around $8000 in good condition.  Mrs. Gomez testified that she was very attached to it and all the money in the world could not replace it.
    The living room wall can be fixed for $10,000.  The damage reduced the value of the house by $3000, because it did not affect the inside of the house and is not very visible from the street.  The Gomez testified that they are fastidious people who keep their house in great shape and that they would definitely have the damage fixed because they want to make a good impression on the neighbors.
    The Gomez also asked for punitive damages against PE, arguing that the cell phone policy was outrageous and dangerous.  They produced documents at trial in which PE analysts predicted that the policy would lead to more accidents, but also stated that the accidents were likely to be minor and that using cell phones would save PE an average of $100,000 a year in each of the 38 states where it operated.  
    The jury awarded $25,000 for the clock.  It also awarded $10,000 to repair the wall; the trial judge lowered this amount to $3000.  Finally, the jury awarded $3,800,000 in punitive damages.  Because Dan had no real assets, the lawsuit was solely against PE.  
    Both the Gomez and PE appeal.  You are a law clerk for Judge Learned Foot, who asks you to write a memo addressing the issues below.  Loyola law normally follows the law of California, and if there is no California law, it follows general common law principles.  The judge also tells you not to consider possible questions relating to vicarious liability.  The issues you should address are:
    1.    Does the jury seem to have correctly calculated damages for the clock? [about 15%]
    2.    Did the trial judge correctly reduce the award for damages to the wall, or should the jury's award be reinstated? [about 20%]
    3.    Did the jury properly award punitive damages, based on the state standard? [about 1/3 of total points]
    4.    Assuming PE should pay at least some punitive damages, is the amount that the jury awarded proper under substantive due process? [about 1/3]