Dunn v. HOVIC

ALITO, Circuit Judge,

concurring:

I concur in the judgment. I also join Parts I, II, III, and V of the opinion of the court. I do not fully agree with the analysis in Part IV of the court’s opinion, which discusses the question whether the punitive damage award in this case was excessive under Virgin Islands law or under the Due Process Clause. Hence, I write briefly to explain my disagreement with the court’s discussion of those questions.

In considering the propriety of the punitive damages award under Virgin Islands law, I begin with 1 V.I.C. § 4, which states:

The rules of the common law, as expressed in the restatements of the law approved by the American Law Institute and to the extent not so expressed, as generally understood and applied in the United States, shall be the rules of decision in the courts *1392 of the Virgin Islands in eases to which they apply, in the absence of local laws to the contrary.

In order to understand the meaning of this provision, I think it is helpful to examine its origins. Before 1917, the Virgin Islands were generally subject to “[t]he Common and Statute Law of Denmark.” Colonial Law of April 6, 1906, § 67. After the United States acquired the Virgin Islands, Congress, in the Act of March 3, 1917, ch. 171, § 2, 39 Stat. 1132 , provided for this body of Danish law to remain in effect “insofar as compatible with the changed sovereignty and not in conflict with the provisions of [this] Act.” This provision was effectively abrogated, however, in 1920 and 1921, when the Colonial Councils of the Municipality of St. Croix and the Municipality of St. Thomas and St. John, acting pursuant to authority delegated by Congress in the 1917 Act, adopted comprehensive new Codes of Laws. Each of these Codes contained an identical provision stating that (tit. iv, ch. 13, § 6): “[t]he common law of England as adopted and understood in the United States shall be in force in this District, except as modified by this ordinance.”

In Callwood v. Virgin Islands Nat’l Bank, 221 F.2d 770, 775 (3d Cir.1955), our court, in an opinion by Judge Maris, interpreted this provision as follows:

[T]he Virgin Islands have adopted the rules of the common law of England as followed and understood in the United States and we think that the district court in applying those rules is justified in considering the well considered expressions of them which the American Law Institute has incorporated in its Restatements of the Law.

At the time of the Callwood decision, a commission, which included Judge Maris as one of its members, was preparing what later became the Virgin Islands Code. This Code, including title 1, § 4, was enacted in 1957. The Revision Note for this provision states that the earlier provisions had been

rewritten more accurately to express the concept of the Common Law as constituting a body of rules established by precedent, as distinguished from a body of statutory law, and to extend the application of the rules to the restatements of the law prepared and approved by the American Law Institute. See Callwood v. V.I. Nat. Bank, C.A.3d 1955, [ 3 V.I. 540 ] 221 F.2d 770 .

In light of this history, I interpret 1 V.I.C. § 4 to mean that the law of the Virgin Islands, in the absence of a relevant statutory provision, is “the body of rules established by precedent” 1 “as generally understood and applied in the United States” 2 and that, as suggested in Callwood, the Restatements provide a presumptively authoritative summary of this body of precedent. I do not interpret 1 V.I.C. § 4 to mean that the Restatements, whether adopted before or after 1957, are tantamount to Virgin Islands statutes. On the contrary, I agree with the analysis of this question in Varlack v. SWC Caribbean Inc., 550 F.2d 171 (3d Cir.1977). Addressing a conflict between a provision of the Restatement (First) of Torts (issued in 1934) and a provision of a Tentative Draft of the Restatement (Second) of Torts, the court observed that “we read the statute as looking to the Restatements only as an expression of ‘the rules of common law.’ ” 550 F.2d at 180 (emphasis in original). 3 Thus, 1 V.I.C. § 4 does not incorporate all of the Restatement provisions in effect in 1957 as if they were actual statutory text; nor does it delegate to the American Law Institute the authority to enact changes in the law of the Virgin Islands in all of the areas covered by the Restatements. While some of our opinions cite provisions of the Restatements as if they were statutory law, I respectfully submit that these references (which I take to be merely a form of shorthand) are potentially misleading.

*1393 It is also inaccurate, in my view, to suggest that we are free to do in this case whatever some state supreme court might feel free to do in a comparable ease before it. The role of the highest court of each state is defined by its own state’s constitution, statutes, and legal traditions, and many of these courts may have greater authority to contribute to the development of state common law than we have under 1 V.I.C. § 4.

Because of 1 V.I.C. § 4, our task, in considering whether the punitive damage award in this case is excessive under Virgin Islands law, is to determine whether the award is consistent with the general body of relevant precedents handed down by American courts. Working within this framework, I agree with the court that the award in this case, after remittitur, is permissible. To the extent that the court mounts a defense of the merits of these precedents, however, I disassociate myself from that analysis. When the common law as understood and applied in the United States provides a clear rule, 1 V.I.C. § 4 requires us to apply that rule regardless of our judgment as to the rule’s merits. Congress and the Virgin Islands Legislature have the authority and discretion to pass new statutes and thereby adopt for the Virgin Islands different rules contrary to and arguably superior to the common law approach, but, under current law, we do not hhve such authority. If we had such authority, however, I would find much in the existing precedents that merits critical reexamination. 4

With respect to OCF’s argument that the punitive damage'award in this case violates due process, I agree with the court’s conclusion that this argument is unsound. I am puzzled, however, by the fact that the court, in addressing this question, seems to place significant reliance on studies and articles that attempt to debunk the critics of punitive damages. Maj. Op. at 1387-88. I am at a loss to understand precisely what bearing these studies have on the constitutional question before us. I certainly do not think that the content of the Due Process Clause can be ascertained by tallying up the entries in the Index to Legal Periodicals. And I am not willing to appear to endorse the views op policy. questions expressed in the writings that the court cites or to vouch for the accuracy of their underlying empirical research.

In sum, while I do not entirely agree with the analysis in Part IV of the court’s opinion, I agree with its ultimate conclusion. I therefore concur in the judgment, and I join the portions of the court’s opinion that were previously noted.

. 1 V.I.C. § 4, Revision Note.

. 1 V.I.C. § 4.

. See also Haize v. Hanover Insurance Co., 536 F.2d 576 , 578 n. 1 (3d Cir.1976) ("It could be argued that the 1942 Restatement of Judgments no longer expresses the rules of the common law to the extent it requires mutuality, and that therefore the common law 'as generally understood and applied in the United States' governs.”).

. Two examples illustrate my point. The first is the court’s statement that "[e]ven if there were some level of award that would itself evidence prejudice and passion” and thus warrant a new trial, "we cannot hold that the $25 million award here, albeit large, necessarily indicates a verdict tainted by prejudice and passion.” Maj.Op. at 1383. The court goes on to hold, however, that this award was not only "large” but 25 times too large. Thus, the court in effect holds that even if an award could be so big that it would show passion or prejudice, an award that is merely 25 times too big is not big enough. I must say that I do not find this reasoning compelling.

The second example is the court’s statement that "a typical ratio for a punitive damages award to a defendant’s net worth may be around one percent.” Maj.Op. at 1383. This pronouncement is based on a footnote in Cash v. Beltmann North American Co., 900 F.2d 109 , 111 n. 3 (7th Cir.1990), which in turn cited ,as support for this proposition six reported cases in which the average ratio was 0.49% and the median was 0.21%. The footnote also includes a "but see” citation to two additional cases in which the ratios were 40% and 23.33%. To my mind, this extremely small and disparate sample does not show what the typical ratio is in fact. More important, this sample clearly does not show what ratio is needed to serve the purposes of punitive damages — to deter and punish.