SCOTUSblog

Today’s Transcripts | 12.3.08

2008-12-03T20:17:00Z

The transcript of today’s argument in Philip Morris USA, Inc. v. Williams (07-1216) is now available here.

The transcript of today’s argument in Haywood v. Drown (07-10374) is now available here.

Oral Argument Recap: Kansas v. Colorado

2008-12-03T21:00:02Z

David Schwartz discusses Monday’s argument in Kansas v. Colorado.

One might think that an original jurisdiction case about expert witness fees arising from a water compact dispute might lack some of the flair that other Supreme Court cases display. Yet submerged within this rough lies a diamond of a constitutional issue, namely the contours of the Supreme Court’s original jurisdiction authority as granted by Article III. It was with this diamond that Kansas Attorney General Six opened in his oral arguments, claiming that the Constitution does not give Congress the power to make exceptions and regulations for the Court’s original jurisdiction, unlike in the Court’s appellate jurisdiction. The justices had two responses to this argument.

The first, and most immediate, was a response by Chief Justice Roberts, who wondered if the Court even had to reach the constitutional issue, given the statutory structure of the case. Indeed, many of the justices had questions on the differences between 28 U.S.C. § 1920, which Kansas says only applies to, inter alia, compensation for expert witnesses in lower courts, and 28 U.S.C. § 1911, which General Six argued is merely a congressional grant of discretion that the Court already has. This reading was supported both by the fact that in 219 years of the Court’s original jurisdiction practice, it never referred to any congressional cost provision as dictating its practice.

This discussion led to the second response from the Court as to General Six’s constitutional argument, which is to accept, arguendo, the claim. However, as Justice Alito questioned, why not continue to follow the Court’s tradition in other areas of original jurisdiction and model the Court’s procedural rules for original jurisdiction cases on the congressional rules for appellate jurisdiction, thus using 28 U.S.C. § 1851’s $40 a day limit as a good guidepost? General Six appeared to have difficulty answering this question, but eventually Chief Justice Roberts hit upon an answer: because $40 is a terrible limit, a fact with which both sides agreed, the Court should not stick to such an arbitrary number. As Justice Breyer clarified, it would not matter if the expert witness was Albert Einstein or Steven Spielberg; the Court would still limit fees to $40 a day. The next question, however, was why the Court’s original jurisdiction is sufficiently special so as to deviate from the appellate jurisdiction limit? General Six answered that relying on the $40 limit would simply be inequitable: for example, the Special Master received almost a million dollars in compensation, but the 22 experts, on whom both sides relied heavily, would only receive thirty thousand dollars. However, many justices were still troubled by the question, as Justice Scalia put it, “What is magical about original actions?”

Colorado Attorney General Suthers tried to focus on the statutory structure, a plain language reading of which, Colorado argued in its brief, favored the $40 limit. The justices had three types of responses to this statutory argument. The first and most pervasive pattern of questioning for General Suthers dealt with the Court’s concern over the slippery slope argument, to which the Court was, in the words of Chief Justice Roberts, “particularly sensitive”: if Congress can regulate how much money to pay expert witnesses in the Court’s original jurisdiction cases, what else can it regulate? General Suthers had two responses. The first was that Congress has already regulated the original jurisdiction, for example in 28 U.S.C. §1251, which provides that some of the Court’s original jurisdiction is not exclusive to the Court, and if this is such a sensitive area, then why is the Court only dealing with it for the first time in 2008? Later, General Suthers made his second argument, which was that Section 1920 is a purely procedural matter; however, if Congress had tried to interfere with the Court’s ability “to do what courts do as a central matter,” for example, make substantive changes to the Court’s jurisdiction as in Marbury v. Madison, then the Court could strike that down. This led to a discussion of what the Court’s “inherent power” is – i.e., whether it is a default power or something more. General Suthers argued that it was a default power that disappeared when Congress acted, unless it tried to intrude on a central judicial function. Nonetheless, at the end of General Suthers’s argument, the justices seemed to still be unsatisfied with this slippery slope argument.

The second line of questioning dealt with the statutory language itself. First, Justice Souter was concerned that Colorado’s reading of Section 1920 rendered Section 1911 redundant, as now both covered expert witness fees. General Suthers, attempting to flatter Justice Souter by calling him Justice Ginsburg (“You’re not the first to have done that,” responded Justice Souter), replied that if Section 1911 were redundant, then so too were its companion statutes, 28 U.S.C. §§ 1913-1914, covering fees in lower courts, thus proving too much. The justices tried to sort out exactly what the different statutes covered, with Justice Scalia concerned that in fact Section 1911 meant two different types of fees by referring to “the fees to be charged by its clerk” and “the fees of the clerk.” General Suthers responded to Justice Scalia’s lament that “it’s a messy, messy bunch of statutes” with a uniformity argument, emphasizing that it is important for the Court to avoid issuing a conflicting rule for its original jurisdiction cases, given that so many of its cases are not exclusive.

The third line of questioning dealt with the equity implications of Colorado’s rule. In Kansas’s oral arguments, Justice Ginsburg asked whether Kansas had ever found a previous original jurisdiction case in which the Court departed from the $40 a limit, to which General Six replied that he had not. Returning to this question with General Suthers, Justice Ginsburg raised concerns that both the Special Master and any witnesses appointed by the Special Master could be compensated “fairly,” but if one party calls an expert who renders great service to the Court, that expert only gets $40 a day. General Suthers responded that while this was in fact unfair, and that Congress should change the limit, this is no more unfair to Kansas than to any other litigant in federal court. Justice Scalia also replied that in the end, the expert witness does get paid, just not by the side that lost the case (the Special Master had previously determined that Kansas was the substantially prevailing party).

In his rebuttal, General Six argued that the wording of Section 1920 should not dissuade the Court from finding in Kansas’s favor: although the wording changed in 1948 to appear to include the Supreme Court, the 1948 revision made no indication that the wording signaled a substantive shift in the statute’s scope, unlike other places, where Congress specifically stated it was making a substantive change. When Justice Ginsburg pointed out that the Constitution in fact uses the term “judge” to refer to both justices and judge, General Six responded that so did “the paper I got on my way in here [that] told me not to refer to any of you as ‘judges.’” However, General Six continued, if this was a substantive change, it has gone unnoticed by the Court, every major treatise, and any commentary in 60 years.

SG recommends denial in sovereign immunity case

2008-12-03T19:40:42Z

The federal government on Tuesday recommended the Court deny certiorari in Biomedical Patent Management Corp. v. California Dept. of Health Services (07-956), a patent dispute involving the limits of state sovereign immunity. The brief, filed in response to an order last April inviting the views of the Solicitor General, is available here. To view previous certiorari stage filings in the case, click here.

SCOTUSwiki Preview: Haywood v. Drown

2008-12-03T20:59:36Z

In advance of today’s argument in Haywood v. Drown (07-10374), Stanford student David Owens prepared this write-up of the case for SCOTUSwiki.

Pursuant to New York Correction Law § 24, New York courts lack jurisdiction under state or federal law to entertain civil actions seeking money damages against Department of Corrections (DOC) officers, which means these courts cannot entertain causes of action under 42 U.S.C. § 1983 against DOC officials. Today in No. 07-10374, Haywood v. Drown, the Court will consider whether this limitation violates the Supremacy Clause of the Constitution.

Background

This case stems from petitioner Keith Haywood’s two Section 1983 actions in New York courts against DOC employees. These actions followed two guilty verdicts in DOC administrative hearings stemming from incidents involving DOC officials—one related to an alleged physical altercation, and another for improper mail solicitation. Haywood filed his suits in the state supreme court (New York’s lowest trial court of general jurisdiction), where both sets of defendants moved to dismiss the complaints for lack of jurisdiction based on Section 24, which provides in pertinent part that: (1) “no civil action shall be brought in any court of the state, except by the attorney general on behalf of the state, against any officer or employee of the department [of corrections], in his personal capacity, for damages arising out of any act done or the failure to perform any act within the scope of employment”; and (2) “any claim for damages arising out of . . . the scope of employment . . . shall be brought and maintained in the court of claims as a claim against the state.” The trial court agreed and dismissed the complaints.

The state’s intermediate appellate court affirmed, as did the state’s court of last resort, the New York Court of Appeals, by a vote of four to three. The majority of the Court of Appeals first interpreted the Supremacy Clause as prohibiting a state from refusing “to entertain a suit for the sole reason that the cause of action arises under federal law” and thereby “maintain[ing] an equilibrium between state and federal causes of action.” Thus, a Supremacy Clause violation cannot occur when “there is no discrimination against the federal claim in favor of similar state claims.” Thus, the majority held, Section 24 merely creates a “neutral jurisdictional barrier” to all damages claims, both state and federal, in state courts against correction officers and does not violate the Supremacy Clause. Nor did it the fact that a plaintiff can instead sue the state, pursuant to a waiver of sovereign immunity, in the Court of Claims alter the analysis, as “it was Congress that decided to exempt states as responsible parties from the purview of the federal statute.” (This claim, on its face, raises an interesting issue because it was in fact the Supreme Court, rather than Congress, which held that States are not “persons” for purposes of § 1983; relatedly, a federal statute seeking to deem states as “persons” would certainly face serious Eleventh Amendment difficulties.)

Taking aim at the majority’s analysis, the three dissenters vigorously argued that Section 24 has two adverse effects. First, it burdens the litigation of § 1983 actions by preventing state courts from adjudicating claims for money damages, even though those courts have jurisdiction over the parties and the type of claim brought. Notably, by shifting claims from employees to the state in the Court of Claims, this adverse effect is also in tension with the text of § 1983, which provides a remedy against “every person” who, under the color of law, violates a person’s rights. Second, the statute immunizes only a select group of state employees from § 1983 damages.

Thus, the dissent contended that “if you strip away the veneer of the majority’s arguments . . . [Section 24] . . . is not a neutral jurisdictional barrier to a particular type of claim” and is thus not a “valid excuse” for this jurisdictional limitation. Haywood filed a petition for certiorari, which was granted on June 16, 2008.

Petition for Certiorari

The petition for certiorari advanced three primary reasons for granting the writ, all of which expand on a key theme: Section 24 was enacted because the New York legislature regards Section 1983 claims against corrections officers as “bad policy.”

First, the petition alleges that the New York Court of Appeals decision is in “severe tension” with the Supreme Court’s Supremacy Clause jurisprudence as outlined in Felder v. Casey, Howlett v. Rose, and Martinez v. California. This tension emerges because Section 24 is essentially an “immunity statute” that precludes suits against DOC officials, and, as such, runs contrary to Howlett, which, citing Martinez, indicated that “a State cannot immunize an official from liability for injuries compensable under federal law.” Importantly, Howlett and Felder acknowledge that states may limit jurisdiction when they have a “valid excuse for doing so,” which includes “neutral rules” of procedural administration, but Haywood urges that Section 24 fails this neutrality test because the law, in effect, has a consequence of baring jurisdiction over some Section 1983 claims based on the official, not the subject matter. Neutral subject matter jurisdictional rules, however, cannot discriminate in such fashion, making this a Supremacy Clause violation.

Second, the petition emphasizes the gravity of the issue with respect to the sixty-thousand-plus individuals currently confined in New York’s seventy state prisons.

Finally, the petition urges the Court to take the case because Section 24 “provides an ideal template” for states that disagree with congressional policy goals to close their courts to federal remedies designed to achieve those goals.

Opposing certiorari, the New York Attorney General’s office, representing the DOC employees, began by arguing that this case was insignificant because there is no circuit split on the question presented.

The State further argued that two substantive reasons militated against granting certiorari. First, New York prisoners are still able to obtain “full redress” for civil rights violations, either by filing in federal court (where most § 1983 claims are filed) or by bringing suits against the officers relating to actions taken outside the officers’ “scope of employment” (as defined by state law). Moreover, allowing suits founded on state constitutional law alone to proceed against the state directly, which would indemnify the officers acting within the scope of their employment anyway, is sufficient because the state constitutional provisions “generally provide protections at least as broad as their counterparts in the United States Constitution.”

Second, the State argued that under Howlett the Supremacy Clause permits states to decline jurisdiction over federal claims when they have a “valid excuse,” which includes a “neutral rule governing the administration of the courts.” Section 24 is such a valid excuse because it does not “discriminate” against federal claims, but instead furthers the state’s legitimate interest in “minimizing the effect of prisoner damages claims against corrections employees, many of which are frivolous and vexatious.”

Merits Filings

The merits filings pick up where the cert.-stage filings left off. Haywood again emphasizes that New York enacted Section 24 because it regards § 1983 as “bad policy,” while the State emphasizes the tradition of state control of state courts and its ability to limit jurisdiction over its courts through “neutral rules.”

Haywood advances four specific arguments in support of his claim that Section 24 violates the Supremacy Clause. First and foremost, he argues that Section 24 was intended to prevent suits against DOC officials. Emphasizing that Section 24’s historical antecedent was, in fact, an immunity statute, he contends that the State has acted to “cloak its prison employees with absolute immunity from private damages suits for their official conduct, regardless of whether their conduct violates the law.” To this end, Haywood urges, it is irrelevant that federal courts remain open to adjudicate § 1983 claims; this fact has no bearing on whether the state’s restrictions violate the Supremacy Clause.

Second, the availability of the state-law alternative in the Court of Claims does not remedy the Supremacy Clause violation. Here, Haywood emphasizes the differences between the federal and state remedies: although punitive damages, attorney’s fees, and jury trials are available in the former, they are precluded under the latter. Further, suits under Section 1983 are subject to a three-year statute of limitations, while the state remedy has a very short ninety-day notice provision.

Third, Haywood takes aim at the New York court system, arguing that the State’s “gerrymandering of its jurisdiction to exclude specific federal claims” is unconstitutional. Again relying on Howlett, Haywood argues that states cannot skirt congressional directives simply by invoking the word “jurisdiction” when, as here, the New York Constitution provides state supreme courts with “general original jurisdiction in law and equity.” These courts of general jurisdiction, therefore, typically hear similar (i.e., tort) claims arising under § 1983 and, anomalously, are permitted to hear actions against state corrections officials when the claim is for declaratory or injunctive relief alone. Thus, in a suit seeking both structural reform and damages arising out of a single incident, a plaintiff would be required to file her § 1983 claim for injunctive relief in state court but would be precluded from seeking damages from the employee in the same court; instead, the action would be required to proceed against the state in the limited fashion provided by the Court of Claims.

Finally, and related to the broad jurisdiction of the New York supreme courts generally, Haywood argues that although Felder permits states to limit federal claims in courts via “neutral and uniformly applicable” rules of procedure unrelated to “any particular substantive cause of action,” Section 24 fails this neutrality standard. In particular, it applies only to a particular group of state employees, and is codified with the state’s substantive laws governing the Department of Corrections rather than in the rules of court procedure. Haywood again returns to his “bad policy” theme, asserting that because Section 24 reflects the legislature’s disagreement with the substance of § 1983 remedies, it is not “neutralized” by the fact that it applies to civil rights claims arising under state law and federal law. Instead, Haywood alleges, the State’s rule turns the “supreme law of the land into a menu from which states may freely pick and choose, depending on their own priorities and views” – which, on its face, violates the Supremacy Clause.

The State responds to these attacks with three broad arguments. First, the State grounds Section 24 in state sovereignty, emphasizing that an “essential attribute” of this sovereignty is the “authority to establish and regulate the jurisdiction of state courts.” One potentially interesting tactical maneuver to note is that the State begins its argument with an implicit attempt to court Justice Kennedy’s vote by quoting his concurrence from a federalism decision, and relying upon a decision he authored, Alden v. Maine, as the basis of its sovereignty argument. With a discussion of Alden, the Federalist Papers, and even a cameo by the Tenth Amendment, the State contends that Section 24 is an extension of this power and regulates the jurisdiction of New York courts to further legitimate interests in sound judicial administration.

In its second argument, the State turns to the interests in “sound judicial administration” underlying Section 24 and argues that it is not – as Haywood alleges – an “immunity” provision. Instead, it merely regulates the subject matter jurisdiction of the state supreme courts and assigns adjudication of these claims to another court, where a remedy is available in the form of a damages action against the State. Doing so furthers the State’s interest in sound judicial administration because prisoners’ claims are both numerous and frequently frivolous and the Rule minimizes the “disruptive effect” of damages suits against correction employees. Tucked within this sound administration argument is a point which may be contentious: “A damages action against the State is the functional equivalent of a damages action against an employee who is indemnified by the State.”

Third, the State essentially responds to Haywood’s arguments regarding “neutral rules” by arguing that Section 24 does not discriminate against the federal claim because state law damages claims against DOC officials must also follow this procedure; therefore, the State reasons, Haywood cannot rely on Howlett and Felder, which are distinguishable. In short, much of the argument comes down to whether, and to what extent, the Court thinks Section 24 is analogous to the impermissible rules struck in these two important cases.

Finally, two amicus briefs were filed, both on behalf of Haywood—one by a group of constitutional law and federal jurisdiction professors (including David Shapiro of Harvard and Dean Erwin Chemerinsky) and another by a group of public interest groups and law school clinics. Both substantially track the arguments made by Haywood regarding whether Section 24 is a “valid excuse” because it is a “neutral rule” under Howlett, but they also provide a greater emphasis on the background assumptions of federal jurisdiction and the limitations of state sovereignty, responding, at least in part, to arguments made to this effect by the State.

New briefing on tobacco case? Maybe

2008-12-03T19:39:51Z

After spending nearly a full hour Wednesday morning on the minutiae of jury instructions and Oregon state court precedents, the Supreme Court began thinking about a bolder approach: should it start over with a new round of briefing in the major new tobacco punitive damages case? That was the suggestion thrown out by Chief Justice John G. Roberts, Jr., as the Court was about to wind up its hearing on Philip Morris USA v. Williams (07-1216). The idea, perhaps, will be explored further when the Court meets in private on Friday to discuss what to do about the case.

Roberts’ suggestion came after three of his colleagues — Justice David H. Souter, doing so fervently, and Justices Anthony M. Kennedy and Stephen G. Breyer, somewhat obliquely — raised a concern that the Court needed a way to assure that when it makes a constitutional ruling, lower courts will not nullify it by coming up with a procedural escape hatch.

That is a concern that Philip Morris has been trying hard to stoke in challenging — for the third time in the Supreme Court — a $79.5 million punitive damages verdict in favor of a smoker’s widow, Mayola Williams. The tobacco company has argued that the Oregon Supreme Court “defied” a 2007 Supreme Court ruling telling the state tribunal to reconsider that verdict by applying a newly minted constitutional limitation. The state court did not do so, instead upholding the verdict afresh under a state procedural rule for jury instructions.

The state court’s response was the main focus of most of Wednesday’s argument. The Court, in granting review of Philip Morris’ new challenge last June, had agreed to hear only the validity of that response by the state court. The Court did not grant review on a second issue the company had put forth: whether the $79.5 million verdict was just too high, under Supreme Court constitutional limitations.

But the Chief Justice, reacting to the way the hearing unfolded in late stages on Wednesday, suggested that the Court might now grant review of the second issue, and order new briefing and argument on it (something that still could be accomplished this Term). That, Roberts said, would be one way the Court could avoid a ruling that might encourage state courts to defy constitutional rulings. In short, the Court would be addressing the constitutionality of the $79.5 million verdict on “excessiveness” grounds rather than on the refusal-to-obey issue that Philip Morris had also raised. (That, incidentally, also would have the virtue of the Court not having to say unpleasant things about the Oregon Supreme Court.)

Both lawyers in the case — Stephen M. Shapiro for Philip Morris, Robert S. Peck for Mrs. Williams — did not embrace the idea with enthusiasm, but both conceded that would be an alternative the Court could pursue. No member of the Court publicly opposed the idea, although Justice Ruth Bader Ginsburg — who had voted earlier to uphold the $79.5 million verdict — seemed a bit hesitant.

The Chief Justice’s late suggestion marked a dramatic shift in the atmospherics of the hearing, because the Court up to that point had been focused mainly on reexamining the way the Oregon trial judge and appeals courts had handled the jury instruction issue that lies at the core of Philip Morris’ challenge. The company had wanted the jurors told that they could not impose punitive damages for conduct for anyone not a party to the case, but the trial court refused to do so.

In minute detail, the Justices went over the exchanges the lawyers had with the trial judge about that issue, and Justice Breyer, in particular, dwelled at length on just what some 28 Oregon state court precedents had to say on that question. With that as the focus, the hearing did not go well for Philip Morris’ Shapiro — even from the beginning, when Justice Souter told Shapiro that he had “a steep hill to climb” to keep Mrs. Williams from a chance to raise the procedural rule as she sought to sustain the verdict in her favor.

The argument also covered the issue of whether the state court had the authority to shift to a state law-based ground for affirming that verdict. Shapiro suggested that the adequacy of its state law explanation was a matter of federal law, and urged the Court to find that the state Supreme Court had not shown its reliance was a proper alternative to facing the constitutional question. The Justices’ questions and comments, however, suggested that they did not regard the state court as having acted in some deliberately defiant way.

Peck, Mrs. Williams’ counsel, also spent the bulk of his time on the procedural issue, stoutly defending its long pedigree and routine application in Oregon. He seemed to have difficulty mainly with Justice Breyer and those 28 state-court precedents that bore on the issue. Those, Breyer said, were not very clear authority.

It was Breyer who, well into Peck’s side of the argument, began exploring the implications of a constitutional ruling by the Court that might get undermined by a state court refusing to follow it. The Justice wondered about how the Court could ensure, say, in a death penalty case, that a lower court would apply what the Court had decided.

As Peck engaged in an exchange with Breyer, Justice Antonin Scalia jumped in, asking whether the lawyer was claiming that the Supreme Court had been “in error” in ordering the state Supreme Court to apply the new constitutional limitation laid down in the 2007 decision by the Justices. “Is it up to a state court,” Scalia pressed, “to sit in judgment about whether our remand orders are in error, or not?”

Peck said the mandate was not wrong, but contended that the Court had left room for the state court to do as it did in insisting on its procedural bar. But, Scalia countered, “that’s not what it says…the Oregon Supreme Court applied the wrong constitutional standard…That has nothing to do with the issue we have been discussing this morning.”

It was at that point that Justice Souter asked: “How do we guard against making constitutional decisions that are simply going to be nullified by some clever device raising a procedural issue or an issue of state law issue when the case goes back? Is there any way to assure against, in effect, a bad faith response to our decision…?” Perhaps, Souter said, the Court might have to tell state courts how they should arrange their procedures for review following a remand, in order to assure that a constitutional ruling gets followed and that no state law issue are left dangling to be raised later.

Peck resisted that point, but then Justice Kennedy said that, “we do it all the time” in criminal cases “because of the importance of the constitutional right.” When Peck said that the Court could rely on the good faith of state courts in applying their procedural rules, Kennedy shot back: “But it serves very little interest.”

That apparently provided the impetus that led the Chief Justice to comment that “there’s another way to protect our constitutional authority in this case…If we have some concern, if there is something malodorous about the fact that the Oregon Supreme Court waited until the last minute to come up with this rule that was before it all the time…, we can avoid having to address what we do in…that consideration, simply by saying: ’Look, we are going to go ahead with the questions presented’ “ – that is, review would be granted on the question of the excessiveness of the Philip Morris verdict.

Although Peck said the issue had been briefed in the case’s previous filings, and had at least been discussed briefly in the 2007 oral argument, the Chief Justice ultimately suggested that the way to proceed would be to grant review of that issue and then have “normal briefing” and argument.

SG recommends denial in ERISA case

2008-12-03T17:13:14Z

The federal government on Tuesday recommended the court deny certiorari in AK Steel v. West (07-663), an ERISA case. The brief, filed in response to an order last June inviting the views of the Solicitor General, is available here. To read previous certiorari stage filings in the case, click here.

Today at the Supreme Court | 12.3.08

2008-12-02T20:53:08Z

At 10 a.m., the Court will hear argument in Philip Morris USA, Inc. v. Williams (07-1216), on whether the Oregon Supreme Court improperly upheld a $79.5 million punitive damage upward under a state procedural rule. Steven Shapiro of Chicago will argue for the petitioner, and Robert Peck of Washington, D.C., will argue for the respondent.

At 11 a.m., the Court will hear argument in Haywood v. Drown (07-10374), on whether the Supremacy Clause bars states from stripping state courts of jurisdiction over certain federal constitutional claims. Jason Murtagh of Philadelphia will argue for the petitioner, and New York Solicitor General Barbara Underwood will argue for the respondent.

Argument preview: Tobacco case, 3rd round

2008-12-03T02:28:05Z

At 10 a.m. Wednesday, the Supreme Court will hear oral argument in Philip Morris USA, Inc., v. Williams (07-1216). Arguing for the tobacco company will be Stephen M. Shapiro of Mayer Brown in Chicago. Representing Mayola Williams will be Robert S. Peck of the Center for Constitutional Litigation in Washington, D.C. Filings in the case can be found on ScotusWIKI at this link.

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For most of a decade, Philip Morris USA, Inc., the cigarette company, has been feuding with the Oregon courts over a punitive damages award to the widow of a smoker – Mayola Williams. In the meantime, the verdict, with interest, has just about doubled. The Supreme Court has been drawn into the feud twice before; now, the company’s third appeal seeks to turn the fight into a contest between the Supreme Court and the Oregon Supreme Court.

Background

In 1993, the Supreme Court told the states that the Constitution does not allow juries to impose “grossly excessive” punishment for corporate wrongdoing. That was in the case of TXO Production Corp. v. Alliance Resources Corp. Since then, the Court has returned to the task of spelling out just what level of punitive damages verdict would be struck down as “excessive.” No one in corporate America has tested the issue more often in state and federal courts than the nation’s cigarette makers, who have been frequent targets of punishing verdicts. There is a special place in those litigation annals for Philip Morris USA v. Williams (now docketed in the Supreme Court under 07-1216). By the end of the current Court Term, there will be a third precedent bearing that title.

The case grew out of the smoking addiction and the death of an Oregon man, Jesse D. Williams. For nearly five decades, he smoked cigarettes, up to three packs a day. About six months after he was diagnosed with inoperable lung cancer, he died. That was in 1997. Two years later, after a trial in which lawyers for his widow, Mayola, mounted a sweeping challenge to the entire cigarette industry for widespread harms to smokers in general, a jury awarded Mayola $821,485.50 in compensatory damages and $79.5 million in punitive damages. The verdict came, Philip Morris has since complained, after the trial judge refused to instruct jurors that their verdict was not to punish Philip Morris with punitive damages to make up for wrongdoing toward others not involved in the lawsuit; the judge had rejected the company lawyers’ proposed Instruction 34 – now, one of the most celebrated jury admonitions in civil litigation history, and certainly the most famous instruction never given.

After the verdict, however, the trial judge reduced the punitive award to $32 million, and the compensatory award was reduced to $521,485 under an Oregon law capping damages for wrongful; death. Both sides, dissatisfied, appealed. The Oregon Court of Appeals ruled that the judge should not have reduced the punitive verdict, reinstating it. It found no flaw in the judge’s refusal to give Instruction 34, saying the far-ranging harm caused by industry deception about the health hazards of smoking made it “appropriate to consider the effects of defendant’s actions on persons other than Williams.” The Oregon Supreme Court refused to hear the case, but Philip Morris took the dispute on to the Supreme Court.

On Oct. 6, 2003, the Supreme Court (docket 02-1553) sent the case back to state courts “for further consideration in light of State Farm Mutual Automobile Insurance Co. v. Campbell” — the April 2003 ruling that laid down the rule that punitive damages could not be used to punish and to deter conduct not related to the harms done to those who sued. This time, the Oregon Supreme Court took on the case, again upholding the full $79.5 million punitive award after concluding that the jury could have reached the verdict because of the impact of Philip Morris’ conduct on “thousands of Oregonians” in addition to Williams. That was in February 2006.

Philip Morris returned to the Supreme Court (docket 05-1256), and the Supreme Court granted review. The Court, in its decision on Feb. 20, 2007, made a binding constitutional rule of what it had implied in the State Farm ruling – that is, that a punitive damage award violates due process if it is based in part on a jury’s desire to punish a wrongdoer for harming “non-parties” — “strangers to the litigation.” It said the state Supreme Court was to “apply the standard we have set forth,” perhaps leading to a new trial or at least a reduction of the punitive verdict. It declined to rule on a second question it had agreed to consider – whether the $79.5 million verdict was excessive.

The state Supreme Court, in response last Jan. 31, said “it is our task to apply the constitutional standard set by the Supreme Court in our consideration of the sole issue raised by Philip Morris, viz., whether the trial court erred in refusing to give proposed jury instruction No. 34.” But, it said, it would not need to reach the federal constitutional issue – that is, the State Farm standard – if there is “an independent and adequate” basis in state law for upholding the jury’s punitive verdict.

And that is what it did. It found that the jury instruction had contained errors, and thus ran afoul of a state jury instruction standard dating back decades – that is, a judge’s failure to give a proposed instruction will not be overturned if the instruction was not “clear and correct in all respects…and altogether free from error.” It went on to find Instruction 34 was flawed, misstating Oregon law in two respects. In the end, it was satisfied that the judge committed no error in refusing to give the instruction; it once again upheld the $79.5 million verdict.

Petition for Certiorari

Philip Morris on March 24 started its third appeal to the Supreme Court (docket 07-1216), raising two issues. First, it argued that, once the Supreme Court had ruled on the merits of its federal constitutional claim and told a state court to apply the proper standard, the state court had no authority – for the first time in nine years of litigating this case – to opt instead to rely on a state procedural rule. Second, it raised all over again the second issue the Court had agreed previously to review then left undecided – whether the $79.5 million verdict was constitutionally too high under the Court’s due process standards.

Lambasting the Oregon Supreme Court, the petition contended that the state court was bound to apply the State Farm standard and lacked the authority not to do so, that the procedural rule should have come into the case before the Supreme Court had ruled, and that the use of the rule was “nothing more than a pretext for the Oregon Supreme Court’s refusal to protect Philip Morris’ due process rights.”

“The Oregon Supreme Court’s defiance of this Court’s directive should not be countenanced,” the petition brusquely asserted. “The Oregon Supreme Court had no authority either to disobey the clear instructions of this Court or to conjure up state-law procedural grounds for the judgment after both it and this Court had reached the merits of Philip Morris’s federal claim.”

Mayola Williams’ lawyers urged the Supreme Court to bypass this case, arguing that the procedural rule had been applied in this very case before the most recent state court ruling, that the rule dates back to 1916 and is regularly applied, and that 15 other states follow the same rule. The opposition also argued that the procedural rule was not a “meaningless ritual,” but an important safeguard of a fair trial based on correct instructions to the jury. It also contended that Philip Morris had misrepresented the conclusions of the state courts, including its assertion that the state court had “defied” the Supreme Court by failing even to consider the State Farm standard. The procedural rule, it

Nothing in the Supreme Court decision in February 2007, the response argued, required Mrs. Williams to abandon her reliance upon the state procedural rule in defending the punitive verdict.

The Court granted review on June 9, 2008, but only on the question of the state court’s reliance upon the procedural bar following remand of the case by the Supreme Court. It thus declined to rule on whether the $79.5 verdict was invalid.

Merits Briefs

The two sides’ merits briefs renew their conflicting stances on whether the Oregon Supreme Court “defied” the Supreme Court, on whether Philip Morris had sufficient notice that the procedural rule would be belatedly used against it, on whether the procedural rule has legitimacy under Oregon law, and on whether the Supreme Court had already – at least implicitly – rejected the procedural rule’s use in this case.

Philip Morris puts new emphasis on its contention that the only proper remedy, at this stage, is for the Supreme Court to directly order a new trial, rather than returning the case to state courts for one more chance to examine the constitutional standard’s application to the $79.5 million verdict. Although the Supreme Court had suggested that a reduction of that award might be a proper outcome, the company argued that “there is no way to know what amount of punishment a properly instructed jury would have imposed. In this case, had the jury understood that it could punish Philip Morris only for the impact of its conduct on Jesse Williams, it might well have selected an award far below the constitutional holding.”

In response, Mrs. Williams’ lawyer contended: “It is time for this litigation marathon to end. Jesse Williams’ widow has courageously fought against great odds to bring this case to trial and prevailed nine years ago in an intensely contested, well-managed five-week jury trial….At this late stage, after all of the full briefings, exhaustive hearings, and multiple decisions, sending an individual without the resources and experience of its opponent back to square one again would epitomized the idea that justice delayed is justice denied.” Moreover, the brief added, the factual and legal landscape on tobacco company liability has changed markedly in those nine years, so that a retrial now could not present the same issues as in the original trial.

An array of business and conservative advocacy groups support Philip Morris’ appeal, arguing that it is not uncommon for lower courts to defy the Supreme Court’s repeated admonitions to control soaring punitive damage verdicts, and contending that litigants need to know – at trial, not later – what the procedural ground rules will be for trying punitive damages cases. Business groups in particular stressed their keen interest in enforcement of the Supreme Court declaration that punitive verdicts are not to be imposed to fulfill a jury desire to punish someone other than the litigants.

The Criminal Justice Legal Foundation, in a brief supporting neither side, urged the Supreme Court to write a new definition of what kind of state-law ground would be adequate to head off review of a federal issue. In the past, the brief said, the Supreme Court has used “a haphazard patchwork [of phrases] that has drawn considerable scholarly criticism.” The definition it proposed: “the claimant should have notice that the rule exists and applies to his situation and should have a reasonable opportunity to present his federal claim.”

Mayola Williams picked up, unsurprisingly, the support of the state of Oregon and seven other states, urging the Court to protect the authority of state courts to employ their procedural rules when cases are returned to them by the Supreme Court for a new look. She also draws the support of four retired Justices of Oregon’s highest court, defending the integrity of that court and arguing that the rule it applied is familiar and long-standing. Other amici on her side of the case include an array of anti-tobacco groups, trial lawyers, and professors of legal procedure.

Analysis

Philip Morris’s task on this third appeal is to hold together the five-Justice majority that sent the case back to the Oregon Supreme Court. The other four Justices seem beyond its reach: they already had found the $79.5 million punitive verdict to be valid. It is thus unlikely that they would take a different stance just because the state court had found a new way to sustain that verdict – unless, of course, they were to accept the argument that the state court had “defied” a clear Supreme Court mandate.

The five Justices who ordered the new look are unlikely to read the state Supreme Court’s response as negatively as Philip Morris has characterized it, and yet they could see in that response a threat to the integrity of the constitutional rule against punishing for harm to non-parties. That was a major development in the push to narrow the scope of punitive damages in general, as a majority of the Court, made up of different Justices, has been attempting to do since at least 1993.

It would appear that Mayola Williams’ lawyers have done a fairly good job of defending the pedigree of the state procedural rule at issue, so the Court may not be so ready to accept Philip Morris’ characterization of it as novel and perhaps even surprising. Rather than get into the niceties of state law interpretation, the Court’s majority may want to reach for a simpler response: simply order a new trial, and let both sides take their chances. It is hard to know whether the plight of Mrs. Williams, waiting for finality, would be persuasive for at least some in that majority – perhaps Justice Stephen G. Breyer (although he wrote the 2007 decision) or Justice David H. Souter. The others in that majority were Chief Justice John G. Roberts, Jr., and Justices Samuel A. Alito, Jr., and Anthony M. Kennedy.

The four on the other side were Justices Ruth Bader Ginsburg, Antonin Scalia, John Paul Stevens and Clarence Thomas.

Today’s Transcripts | 12.2.08

2008-12-02T20:14:54Z

The transcript of today’s argument in Entergy Corp. v. EPA (07-588) is now available here.

The transcript of today’s argument in Fitzgerald, et vir v. Barnstable School Committee, et al. (07-1125) is now available here.

Analysis: The problem of claiming too little

2008-12-02T21:38:24Z

Analysis

It is it entirely possible that a Supreme Court case could be lost because the original lawsuit that started it all was not better prepared, or asked too little. Whether that has happened this time was the issue that lingered in the courtroom Tuesday as the Justices heard Fitzgerald, et al., v. Barnstable School Committee, et al. (07-1125) — an important case on the remedies available to school children and their parents if a pupil is sexually intimidated by another pupil.

The Court, or at least most of the Justices who spoke out, seemed to want to resolve the legal issue at stake: when Congress passed Title IX to deal with sex bias at federally funded schools (and colleges), did it intend to wipe out any constitutional claim of sex bias at those schools? That is the question the Court had granted and, as Justice Antonin Scalia suggested several times, why not decide it now?

The reason, of course, was that several members of the Court seemed troubled that the original complaint filed in federal court in Boston may have been too spare, or perhaps too opaque in what it was seeking. At one point, in fact, Justice Stephen G. Breyer wondered whether the Court should simply dismiss this case as one that should not have been granted “and wait until somebody does this again.”

When Charles A. Rothfeld, the Washington attorney for the couple that sued over the claimed sexual harassment of their kindergarten girl on the bus by a third grade boy, tried to fill the perceived holes in the lawsuit, Breyer somewhat sarcastically wondered if that meant the complaint would have encompassed an allegation that girls were discriminated against if not allowed to play hockey — a thought that Breyer seemed to be implying was frivolous, at best.

Justice Ruth Bader Ginsburg also pressed Rothfeld about the supposed skimpiness of the complaint’s constitutional allegations — the ones that the lawyer had suggested would go beyond what was being claimed under Title IX. Where, she asked, was there an assertion tohat girls were treated less favorably than boys — so-called “disparate treatment”? The lawyer tried to recover by saying that the case “went off the tracks at the earliest possible stage,” so it would have been futile to fill out the constitutional claims when the trial judge had indicated they were barred because Title IX provided the only remedy.

Justice Scalia, though, noted that the Court had been “warned about these” shortcomings in the initial opposing brief filed by the Barnstable school board, but “we nonetheless granted cert.” Scalia, who referred to the right of parents and children to bring a private lawsuit to enforce their Title IX rights as a mere “invention” of the Supreme Court, appeared bent on getting a ruling on the interrelationship between that “invention” and a constitutional claim under the 1871 civil rights act (Section 1983).

Chief Justice John G. Roberts, Jr., expressed some concern that, since Title IX had some limitations on the remedy available for sex bias in education, allowing a Section 1983-based lawsuit would allow lawyers to “circumvent” those limits. But that was one of the few comments that suggested the Justices were wary of the prospect of reviving constitutional claims in this setting.

The Barnstable School Committee’s lawyer, Kay H. Hodge of Boston, got into some difficulty at the very outset by claiming that Title IX would actually give parents and children greater protection against gender bias than would the Constitution’s guarantee of equal protection. Justice Ginsburg appeared surprised at the assertion, and insisted on an explanation.

Hodge said there would be a need to prove “specific intent” in order to win a constitutional claim of sex bias at school, but it would be enough under Title IX to show only “deliberate indifference.” She then went on, however, to complicate her case by suggesting that the essential definition of wrongdoing under both Title IX and Section 1983 was the same: “deliberate indifference” and that, if the case was lost on Title IX, there would be nothing left to claim under the Constitution.

Justice Breyer asked if it would be possible to imagine a case in which an institution covered by Title IX would be found not to have violated that law, but still could be accused of violating the Constitution. Hodge said she could not imagine such a case. In this case, she added, there could not be claims under both Title IX and the Constitution because the parents’ claims under both were “virtually identical.”

Rather than get into the interplay between those laws, Breyer suggested, why not send the case back to the First Circuit Court for elaboration? Hodge replied that, because of the overlap in the claims, “there is no issue in controversy anymore” for the First Circuit to decide. But Justice Scalia promptly interjected: “I don’t know why we ought to get into that. Why not decide what we took to decide…and then for all these loose ends, send it back to the Court of Appeals?”

When Hodge said “there must be an issue in controversy,” Scalia responded: “He [Rothfeld] says there is an issue in controversy; that’s good enough for me.”

The Court is expected to decide the case in the spring.