November 22, 2008

Federalist Society Conference Panel: "Civil Litigation Under the Roberts Court"

At the annual Federalist Society Conference in Washington D.C., there have been numerous interesting panel discussions and speakers. Two of the panels offered interesting insights into punitive damages jurisprudence in the Roberts Court.

The first panel was moderated by Dean Kenneth W. Starr of the Pepperdine Law School. The panelists were Carter Phillips, nationally known appellate lawyer at Sidley & Austin, Gregory Katsas, Assistant Attorney General, Civil Division, Robert Peck of the Center for Constitutional Litigation, Dr. Roger Pilon of the Cato Institute, and the Hon. Jerry Smith of the Fifth Circuit Court of Appeals. The official title of this panel was "Civil Litigation Under the Roberts Court," but many of the panelists discussed punitive damages in some detail.

Carter Phillips noted that the court is taking a much greater interest in business cases generally and such cases are making up a much higher percentage of cases on the docket. He made the point that in his view there has never been a US Supreme Court opinion that has been more ignored and defied than State Farm v. Campbell in that almost no lower court will give effect to its strong suggestion that a 1:1 ratio is the constitutional maximum in cases of high compensatory damages. He also contended that the Roberts court seems to be avoiding the substantive due process aspect of its punitive damages jurisprudence. He pointed to Williams II, Exxon Shipping and Williams III as cases where the due process ratio argument was raised but the court has declined to reach that question. This continues to leave open the mystery of where Chief Justice Roberts and Justice Alito stand on this issue. Will they be like the two justices they replaced (Renhquist and O'Connor) or will they be more like Justices Scalia and Thomas who do not believe there is any substantive due process limit on state punitive damage awards (even though they personally believe in a 1:1 ratio as shown in their concurrence in Exxon Shipping's common law holding that such a ratio is important).

Greg Katsas pointed out that he believes the holding in Williams II on the jury instruction required to show juries the appropriate and inappropriate uses for evidence of harm to others (punishment vs. evidence of reprehensibility) is not likely to drive many jury outcomes in a different direction. He believes it is significant that Justice Souter and others embraced the empirical and other reasons for supporting a 1:1 ratio in Exxon Shipping, but it is too soon to tell if this will spill over into the due process cases.

Robert Peck referred to the court's punitive damages docket as the modern obscenity cases: the justices know a too high punitive award when they see it. He found it significant that the court upheld a $500 million plus award of punitive damages in Exxon Shipping in a case where they found Exxon had basically been a good corporate citizen after the spill. Thus, the 1:1 ratio is not going to apply in any but the least egregious cases. He thought a very significant aspect of the opinion was its footnote refusing to credit good scholarship because it was funded by Exxon. He also thought the empirical evidence was very telling and demonstrates that there really is no nationwide problem with punitive damages. He says it is only outlier cases that get attention and social scientists would say that society does not need to worry about outliers. Also, the outliers are mostly low compensatory awards which should have higher ratios.

He mentioned that he had a punitive damage case where the court of appeals had upheld a $17.5 million punitive award on a $2 million compensatory award. The other side filed cert on the 1:1 ratio argument. It was held for 9 months while Exxon Shipping was decided and then was denied a few days later. He believes the 1:1 statement in State Farm was very weak and noted that the Utah Supreme Court on remand in State Farm upheld a 9:1 ratio and the Supreme Court denied cert.

He then discussed the Williams III case. He is one of the counsel for Williams. He said that the court's "prurient interest in this case is huge." He said the majority of focus in the briefing and oral argument of Williams II was on the excessiveness argument, which the court ultimately did not reach. At oral argument, he said Justice Breyer commented that a 100:1 ratio would be ok if Phillip Morris behaved badly enough. He agreed that the court's approach to harm to non-parties would ultimately have no effect. At oral argument Justice Scalia said sending the case back to Oregon would be pointless because the Oregon courts could reject the proposed instruction on a different ground. This is, of course, what happened and now the case is back at the court. Peck contends that the Oregon Supreme Court simply applied a 92 year old rule in Oregon requiring a proposed instruction to be perfect.

At the end of the day, Peck thinks if this case went back to trial with the proper instruction, the result will be the same.

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