Amicus Curiae Brief — Epic Systems Corporation, Petitioner v. Tata Consultancy Services Limited, et al.

No. 20-1426

In the Supreme Court of the United States

EPIC SYSTEMS CORPORATION, PETITIONER

v.

TATA CONSULTANCY SERVICES LIMITED, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE

ELIZABETH B. PRELOGAR

Solicitor General

Counsel of Record

BRIAN M. BOYNTON

Acting Assistant Attorney

General

MALCOLM L. STEWART

Deputy Solicitor General

AUSTIN L. RAYNOR

Assistant to the Solicitor

General

MICHAEL S. RAAB

CHARLES W. SCARBOROUGH

STEVEN H. HAZEL

Attorneys

Department of Justice

Washington, D.C. 20530-0001

SupremeCtBriefs@usdoj.gov

(202) 514-2217

QUESTION PRESENTED

Whether the court of appeals erred in holding that

the state-law punitive-damages award in this case exceeded the maximum amount allowed by the Due Process Clause.

(I)

TABLE OF CONTENTS

Page

Interest of the United States....................................................... 1

Statement ...................................................................................... 1

Discussion ...................................................................................... 8

A. The court of appeals’ analysis was incomplete ............... 9

1. Statutory limits on punitive-damages awards

inform the Gore analysis ............................................ 9

2. The court below misapplied the Gore factors ........ 11

B. Further review is not warranted ................................... 15

1. Petitioner’s current, notice-based argument

was neither pressed nor passed upon below .......... 15

2. There is no conflict in the circuits ........................... 17

3. The decision below has limited significance ........... 19

Conclusion ................................................................................... 24

TABLE OF AUTHORITIES

Cases:

Abner v. Kansas City S. R.R.,

513 F.3d 154 (5th Cir. 2008) ................................... 10, 17, 18

Arizona v. ASARCO LLC, 773 F.3d 1050

(9th Cir. 2014).................................................9, 10, 11, 17, 18

BMW of N. Am., Inc. v. Gore, 517 U.S. 559 (1996) ... passim

BNSF Ry. Co. v. United States Dep’t of Labor,

816 F.3d 628 (10th Cir. 2016) ............................................. 19

Bankers Life & Cas. Co. v. Crenshaw,

486 U.S. 71 (1988) ............................................................... 15

Browning-Ferris Indus. of Vt., Inc. v. Kelco

Disposal, Inc., 492 U.S. 257 (1989) ................................... 10

Capitol Records, Inc. v. Thomas-Rasset,

692 F.3d 899 (8th Cir. 2012), cert. denied,

568 U.S. 1229 (2013)............................................................ 22

Cooper Indus., Inc. v. Leatherman Tool Grp., Inc.,

532 U.S. 424 (2001).......................................................... 2, 10

(III)

IV

Cases—Continued:

Page

Cutter v. Wilkinson, 544 U.S. 709 (2005) ............................ 15

Easley v. Reuss, 532 F.3d 592 (7th Cir. 2008) .................... 16

Exxon Shipping Co. v. Baker, 554 U.S. 471 (2008) ............ 21

Halo Elecs., Inc. v. Pulse Elecs., Inc.,

579 U.S. 93 (2016) ......................................................... 20, 23

Honda Motor Co. v. Oberg, 512 U.S. 415 (1994) ................. 23

Lebron v. National R.R. Passenger Corp.,

513 U.S. 374 (1995).............................................................. 16

Luciano v. Olsten Corp.,

110 F.3d 210 (2d Cir. 1997) ................................................ 17

Pacific Mut. Life Ins. Co. v. Haslip,

499 U.S. 1 (1991) ....................................................... 2, 13, 20

Seaboard Air Line Ry. v. Seegers,

207 U.S. 73 (1907) ................................................................. 9

Sony BMG Music Entm’t v. Tenenbaum,

719 F.3d 67 (1st Cir. 2013) ................................................. 22

St. Louis, Iron Mountain & S. Ry. Co. v. Williams,

251 U.S. 63 (1919) ............................................................... 22

State Farm Mut. Auto. Ins. Co. v. Campbell,

538 U.S. 408 (2003)..................................................... passim

TXO Prod. Corp. v. Alliance Res. Corp.,

509 U.S. 443 (1993)........................................................ 1, 2, 9

Taco Cabana Int’l, Inc. v. Two Pesos, Inc.,

932 F.2d 1113 (5th Cir. 1991), aff ’d,

505 U.S. 763 (1992).............................................................. 21

Timbs v. Indiana, 139 S. Ct. 682 (2019) .............................. 15

United States v. Bajakajian, 524 U.S. 321 (1998) .............. 14

Washington v. Glucksberg, 521 U.S. 702 (1997) ................. 21

Yee v. City of Escondido, 503 U.S. 519 (1992) .................... 16

V

Constitution and statutes:

Page

U.S. Const.:

Amend. VIII (Excessive Fines Clause) ........................ 14

Amend. XIV, § 1 (Due Process Clause) ............ passim

Civil Rights Act of 1964, Tit. VII,

42 U.S.C. 2000e et seq. ............................................ 17, 18, 19

Clayton Act, 15 U.S.C. 12 et seq. .......................................... 20

15 U.S.C. 15(a) ................................................................. 20

Copyright Act of 1976, 17 U.S.C. 101 et seq. ....................... 22

17 U.S.C. 504(c)(1) ........................................................... 22

Lanham Act, 15 U.S.C. 1051 et seq. ..................................... 21

15 U.S.C. 1117(a) ............................................................. 21

Patent Act of 1952, 35 U.S.C. 1 et seq. ................................. 20

35 U.S.C. 284 .................................................................... 20

Sherman Act, 15 U.S.C. 1 et seq. .................................... 20

Wis. Stat.:

§ 134.90(4)(b) ...................................................................... 5

§ 895.043 ............................................................................. 5

§ 895.043(2)........................................................... 11, 12, 19

§ 895.043(3)................................................................... 5, 12

§ 895.043(6)....................................................... 5, 11, 12, 19

42 U.S.C. 1981a(a)(1) ............................................................. 19

42 U.S.C. 1981a(b)(1) ....................................................... 17, 19

42 U.S.C. 1981a(b)(3)(A)-(D) ................................................ 17

An Act concerning Monopolies and Dispensations

with Penal Laws, and the Forfeitures thereof,

1623, 21 Jac. 1, c. 3, § 4 (Eng.) ........................................... 21

Miscellaneous:

Edward D. Cavanagh, Detrebling Antitrust

Damages: An Idea Whose Time Has Come?,

61 Tul. L. Rev. 777 (1987)................................................... 20

In the Supreme Court of the United States

No. 20-1426

EPIC SYSTEMS CORPORATION, PETITIONER

v.

TATA CONSULTANCY SERVICES LIMITED, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE

INTEREST OF THE UNITED STATES

This brief is submitted in response to the Court’s order inviting the Solicitor General to express the views

of the United States. In the view of the United States,

the petition for a writ of certiorari should be denied.

STATEMENT

A. “Punitive damages may properly be imposed to

further [the government’s] legitimate interests in punishing unlawful conduct and deterring its repetition.”

BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 568 (1996).

This Court has held, however, that the Due Process

Clause prohibits “grossly excessive” punitive-damages

awards, id. at 562 (quoting TXO Prod. Corp. v. Alliance

Res. Corp., 509 U.S. 443, 454 (1993) (plurality opinion)),

because such an award “furthers no legitimate purpose

and constitutes an arbitrary deprivation of property,”

State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S.

(1)

2

408, 417 (2003). The Due Process Clause requires that

“an award of punitive damages [be] based upon an ‘application of law, rather than a decisionmaker’s caprice,’ ” id. at 418 (quoting Cooper Indus., Inc. v. Leatherman Tool Grp., Inc., 532 U.S. 424, 436 (2001)), and

that “a person receive fair notice not only of the conduct

that will subject him to punishment, but also of the severity of the penalty that [the government] may impose,” Gore, 517 U.S. at 574.

In Gore, the Court articulated “[t]hree guideposts”

to structure the due-process inquiry. 517 U.S. at 574.

The first guidepost looks to the “degree of reprehensibility of the defendant’s conduct,” to ensure that an

award is not “ ‘grossly out of proportion to the severity

of the offense.’ ” Id. at 575-576 (quoting Pacific Mut.

Life Ins. Co. v. Haslip, 499 U.S. 1, 22 (1991)). For example, “ ‘trickery and deceit’ * * * are more reprehensible than negligence.” Id. at 576 (quoting TXO, 509

U.S. at 462 (plurality opinion)). The second guidepost

evaluates “the ratio between harm, or potential harm,

to the plaintiff and the punitive damages award,” bearing in mind a “long legislative history, dating back over

700 years and going forward to today, providing for

sanctions of double, treble, or quadruple damages to deter and punish.” Campbell, 538 U.S. at 424-425. The

third guidepost looks to “civil penalties authorized or

imposed in comparable cases,” Gore, 517 U.S. at 575, reflecting the “ ‘substantial deference’ ” that courts should

give “to legislative judgments concerning appropriate

sanctions for the conduct at issue,” id. at 583 (citation

omitted).

B. Petitioner licenses customizable software to

healthcare providers for the management of their pa-

3

tients’ records. Pet. App. 3a. To assist providers in using the software, petitioner operates a web portal called

UserWeb, a repository of training materials, guides,

and updates. Id. at 3a-4a. UserWeb contains trade secrets and other confidential information pertaining to

petitioner’s software. Id. at 4a.

Petitioner’s largest client, Kaiser Permanente, hired

respondent to assist it in implementing updates to petitioner’s software and testing its functionality. Pet. App.

4a-5a. 1 In addition to offering consulting services, respondent produced its own health-records software,

which at the time was licensed principally in India. Id.

at 5a. In light of this potential conflict of interest, petitioner declined respondent’s repeated requests for full

access to the confidential information stored on UserWeb. Id. at 5a-6a.

In 2011, respondent hired an individual who had previously obtained UserWeb login credentials by falsely

identifying himself as a Kaiser employee. Pet. App. 6a.

Once employed by respondent, that person informed his

supervisor of his credentials, and the supervisor instructed him to access the UserWeb portal. Ibid. During the next two years, dozens of respondent’s employees downloaded more than 150,000 pages from UserWeb, including confidential information and trade secrets. Ibid.; see id. at 77a. Respondent used the information to prepare a “comparative analysis” to help determine the viability of entering the U.S. market to

compete with petitioner. Id. at 7a. That analysis compared respondent’s software with petitioner’s software

Respondent Tata America International Corp. is wholly owned

by respondent Tata Consultancy Services Ltd. For ease of reference, and consistent with the decision below, this brief refers to the

two entities collectively as “respondent.” See Pet. App. 2a n.1.

1

4

and identified functional discrepancies between the two

products. Id. at 7a-8a.

A whistleblower eventually brought respondent’s

misconduct to light. Pet. App. 8a. But even then, when

Kaiser and petitioner investigated, “multiple * * * employees [of respondent] lied to investigators about [respondent’s] access to UserWeb.” Ibid. One of those

employees later admitted that his manager had instructed him to lie. Id. at 44a.

C. Petitioner filed suit in the United States District

Court for the Western District of Wisconsin, alleging a

variety of state and federal claims, including misappropriation of trade secrets, fraudulent misrepresentation,

and unfair competition. See Pet. App. 57a, 73a.

1. Respondent’s misconduct continued into pretrial

discovery. See Pet. App. 9a. As a sanction for respondent’s “repeated, egregious failures to maintain and allow timely access to relevant discovery materials,” the

district court permitted the jury to draw an adverse inference in specified circumstances. Id. at 61a; see id. at

9a.

The district court bifurcated proceedings into liability and damages phases. Pet. App. 9a. At the liability

stage, the jury found in petitioner’s favor on all claims.

Ibid. At the damages stage, the jury returned an award

of $140 million in compensatory damages for respondent’s use of petitioner’s data to create the comparative

analysis, and an additional $100 million for other uses of

petitioner’s confidential information. Id. at 11a. The

jury also awarded $700 million in punitive damages.

Ibid.

Respondent filed post-trial motions challenging the

jury’s damages awards. The district court upheld the

$140 million compensatory award for respondent’s illicit

5

use of petitioner’s data to perform the comparative

analysis. The court explained that this amount reflected the cost that respondent would otherwise have

been required to incur in order to develop the aspects

of petitioner’s software reflected in the analysis. Pet.

App. 66a-67a. The court set aside, for lack of sufficient

evidentiary support, the additional $100 million award

for other uses of petitioner’s data. Id. at 69a.

Based on its reduction of the compensatory-damages

award to $140 million, the district court also reduced the

punitive-damages award to $280 million, the maximum

amount permitted by Wisconsin law. Pet. App. 75a.

Wisconsin law authorizes punitive damages for a wide

range of torts when “the defendant acted maliciously toward the plaintiff or in an intentional disregard of the

rights of the plaintiff,” while limiting such awards to

“twice the amount of any compensatory damages * * *

or $200,000, whichever is greater.”

Wis. Stat.

2

§ 895.043(3) and (6). The court rejected respondent’s

argument that even the reduced punitive-damages

award violated the Due Process Clause. Pet. App. 75a80a. Applying the Gore guideposts, the court found that

respondent’s “widespread, knowing and unauthorized

access and downloading of [petitioner’s] confidential information” was reprehensible, and that a 2:1 ratio of punitive to compensatory damages “falls well within the

range” of reasonableness. Id. at 77a-78a.

The district court also relied on a special cap applicable to tradesecret claims that likewise limits punitive damages to twice the

amount of compensatory damages, Wis. Stat. § 134.90(4)(b). See

Pet. App. 75a. Because the certiorari petition does not mention that

provision, see Pet. 2-3, and the court of appeals did not discuss it,

this brief similarly limits its discussion of Wisconsin law to Section

895.043.

2

6

2. On appeal, respondent renewed its constitutional

challenge to the punitive-damages award. See Pet. App.

40a. Applying the guideposts articulated in Gore, the

court of appeals agreed with respondent that the award

was constitutionally excessive. Id. at 40a-51a.

As to the first guidepost, reprehensibility, the court

of appeals analyzed “five factors” that it gleaned from

Campbell. Pet. App. 41a. The court acknowledged that

respondent’s conduct “involve[d] a repeated course of

wrongful acts,” and that the harm to petitioner resulted

from respondent’s “intentional attempts to deceive” petitioner. Id. at 43a-44a. The court emphasized, however, that respondent had neither caused “physical

harm” nor “evinced an indifference to or a reckless disregard of the safety of others,” and that petitioner “is

not financially vulnerable.” Id. at 42a-43a. In the

court’s view, although respondent’s “conduct justifies

punishment,” it “was not reprehensible ‘to an extreme

degree.’ ” Id. at 45a (citation omitted).

With respect to the second guidepost, the ratio between punitive damages and harm or potential harm,

the court of appeals noted that this case presents “an

unusual issue” because the compensatory award reflects “the benefit to [respondent]” resulting from its

theft of trade secrets, not “any harm suffered by [petitioner].” Pet. App. 45a. The court found, however, that

respondent had “waived any argument that the compensatory award is the incorrect denominator in the ratio

analysis.” Id. at 46a. Assessing the award on that basis,

the court concluded that the ratio between punitive and

compensatory damages generally “ ‘should not exceed

1:1’ where the compensatory award was ‘substantial.’ ”

Id. at 50a (citation omitted).

7

The court of appeals held that the third guidepost,

comparable civil penalties, “generally deserves less

weight than the other two.” Pet. App. 50a (citation

omitted). The court nonetheless recognized that Wisconsin’s “statutory cap on punitive damages * * * is one

indication of what the Wisconsin legislature has judged

to be an inappropriate sanction for reprehensible conduct: any punitive award exceeding a 2:1 ratio is inappropriate.” Id. at 51a. The court therefore acknowledged that the third guidepost “does not point toward”

the award “being unconstitutional.” Ibid.

In light of these considerations, the court of appeals

remanded for the district court to reduce the punitivedamages award “to, at most, $140 million”—“a 1:1 ratio

relative to the compensatory award.” Pet. App. 51a.

3. Petitioner requested panel and en banc rehearing. Pet. App. 54a. In the rehearing petition, petitioner

argued for the first time that respondent’s constitutional challenge should be resolved without reference to

the Gore guideposts because the Wisconsin statutory

cap satisfies any due-process concerns by providing defendants fair notice of their maximum exposure. See

C.A. Pet. for Reh’g 7-9. 3 The panel modified its opinion

in minor respects but did not address petitioner’s new

argument. Pet. App. 1a; see Pet. 12. The Seventh Circuit denied rehearing en banc without recorded dissent.

Pet. App. 53a-54a.

Petitioner asserts that it raised this contention at oral argument.

Cert. Reply Br. 3. But in the cited exchange, petitioner’s counsel

never mentioned the Wisconsin statute, let alone argued that it

made the Gore guideposts irrelevant. See C.A. Docket Entry No.

52, Oral Argument at 41:20-42:00 (Jan. 16, 2020), https://go.usa.gov/

xt2eA.

3

8

DISCUSSION

This Court has construed the Due Process Clause to

“prohibit[ ] the imposition of grossly excessive or arbitrary punishments on a tortfeasor.” State Farm Mut.

Auto. Ins. Co. v. Campbell, 538 U.S. 408, 416 (2003). Petitioner contends (Pet. 13-18) that this rule rests exclusively on a fair-notice rationale, such that a punitivedamages award that complies with a statutory cap necessarily survives due-process review. Petitioner’s conception of the applicable due-process rule is overly narrow. Nevertheless, because courts must “ ‘accord ‘substantial deference’ to legislative judgments concerning

appropriate sanctions for the conduct at issue,’ ” BMW

of N. Am., Inc. v. Gore, 517 U.S. 559, 583 (1996) (citation

omitted), statutory limits should materially inform the

analysis. The court of appeals’ assessment of the three

Gore factors gave insufficient weight to Wisconsin’s

statutory cap and misapprehended those factors in

other ways as well.

The deficiencies in the court of appeals’ analysis,

however, do not warrant this Court’s review. Petitioner’s current, notice-based claim was neither pressed

nor passed upon below, and this case does not implicate

a conflict in the circuits. And while petitioner suggests

(Pet. 24) that the decision below calls into question various federal statutes that authorize or mandate

enhanced-damages awards, those statutes differ materially from the Wisconsin law at issue here. Properly

read, the court of appeals’ decision has no necessary implications for the constitutionality of those federal provisions. Further review is not warranted.

9

A. The Court Of Appeals’ Analysis Was Incomplete

1. Statutory limits on punitive-damages awards inform

the Gore analysis

The due-process standard articulated in Gore is best

suited to evaluating the constitutionality of “unrestricted state common law damages awards.” Arizona

v. ASARCO LLC, 773 F.3d 1050, 1057 (9th Cir. 2014) (en

banc). Such an award was at issue in Gore itself, where

the jury was vested with “fairly unbounded discretion.”

517 U.S. at 595 (Breyer, J., concurring); see id. at 565

(majority opinion). Neither Gore nor Campbell involved

a statutory cap on punitive damages. See ibid.; Campbell, 538 U.S. at 415. The Court therefore had no occasion to address the proper due-process test when the

legislature has made a specific judgment about the size

or availability of punitive damages.

Petitioner contends (Pet. 16) that the Gore Court eschewed “substantive limits” on punitive damages and

instead sought exclusively to assess “whether a defendant had fair notice.” In petitioner’s view, “[w]here the

statute provides unambiguous prior notice to the defendant of the possible scope of punitive damages that

its conduct may trigger, the notice justification for due

process review is satisfied.” Pet. 17.

Petitioner is mistaken. The relevant precedents rest

on both “procedural and substantive” justifications.

Campbell, 538 U.S. at 416 (emphasis added). Although

fair notice is a critical consideration, see Gore, 517 U.S.

at 574, the Due Process Clause also “imposes substantive limits ‘beyond which penalties may not go.’ ” TXO

Prod. Corp. v. Alliance Res. Corp., 509 U.S. 443, 454

(1993) (plurality opinion) (quoting Seaboard Air Line

Ry. v. Seegers, 207 U.S. 73, 78 (1907)). On its face, the

determination whether an award is “grossly excessive,”

10

Campbell, 538 U.S. at 416, necessarily entails an inquiry

(albeit a deferential inquiry) into whether “the measure

of punishment is both reasonable and proportionate,”

id. at 426; see Cooper Indus., Inc. v. Leatherman Tool

Grp., Inc., 532 U.S. 424, 433-434 (2001) (describing the

“ ‘grossly excessive’ ” standard as a “substantive

limit[ ]”) (citation omitted).

Nevertheless, although a statutory cap does not obviate all constitutional concerns, this Court has long

recognized that “legislative judgments concerning appropriate sanctions for the conduct at issue” deserve

“ ‘substantial deference.’ ” Gore, 517 U.S. at 583 (quoting Browning-Ferris Indus. of Vt., Inc. v. Kelco Disposal, Inc., 492 U.S. 257, 301 (1989) (O’Connor, J., concurring in part and dissenting in part)). Legislative determinations about the availability and scope of punitive

damages are relevant to each Gore guidepost.

As to the first guidepost, the legislature’s decision to

authorize or require enhanced damages for a specific

category of misconduct often reflects its judgment that

such conduct is especially reprehensible. See ASARCO,

773 F.3d at 1057 (noting that statute at issue “clearly

sets forth the type of conduct, and mind-set, a defendant must have to be found liable for punitive damages”).

As to the second guidepost, a statutory provision that

limits punitive damages to a specified multiple of compensatory damages embodies the legislature’s judgment as to the appropriate ratio, reflecting, for example, the difficulty of “detect[ing]” the misconduct in

question. Gore, 517 U.S. at 582; see Abner v. Kansas

City S. R.R., 513 F.3d 154, 164 (5th Cir. 2008) (noting

“that Congress has effectively set the tolerable proportion”). And as to the third guidepost, a court has little

(if any) need to advert to “the civil or criminal penalties

11

that could be imposed for comparable misconduct,”

Gore, 517 U.S. at 583, when the legislature has specifically addressed the availability and permissible amount

of punitive damages for a particular wrong. See

ASARCO, 773 F.3d at 1058 (“We need not search outside the statutory scheme Congress enacted for legislative guidance in other contexts.”).

2. The court below misapplied the Gore factors

In analyzing the three Gore factors, the court of appeals failed to appreciate the significance of Wisconsin’s

statutory cap on punitive damages. The court also misapprehended other aspects of this Court’s due-process

jurisprudence.

a. With respect to the reprehensibility guidepost,

the court of appeals acknowledged that respondent had

made “repeated, intentional attempts to deceive [petitioner].” Pet. App. 44a. The court nevertheless concluded that respondent’s conduct was not sufficiently

egregious to justify the $280 million award. The court

based that determination largely on the facts that respondent’s theft of trade secrets had not “evinced an indifference to or a reckless disregard of the safety of others” and that petitioner “did not suffer physical harm.”

Id. at 42a.

The court of appeals’ focus on physical harm and

safety could be read to place victims of economic torts

at a structural disadvantage in obtaining enhanced

damages. That outcome would be inconsistent with the

Wisconsin legislature’s judgment that certain economic

torts may warrant punitive damages up to twice the

amount of compensatory damages. See Wis. Stat.

§ 895.043(2) and (6) (setting a generally applicable limit,

but excluding discrete torts and violations). To be sure,

the Wisconsin statute applies to multiple torts and thus

12

reflects a less particularized judgment as to reprehensibility than do the various federal statutes that target

specific substantive categories of misconduct. See p. 19,

infra. But in addition to exempting certain types of

wrongdoing from the punitive-damages cap, Wis. Stat.

§ 895.043(2) and (6), Wisconsin law authorizes punitive

damages only when tortfeasors “act[] maliciously toward the plaintiff or in an intentional disregard of the

rights of the plaintiff,” id. § 895.043(3). Although that

standard turns on the defendant’s state of mind rather

than on the substantive misconduct involved, it reflects

a legislative judgment about the types of wrongdoing

that potentially warrant punishment, and it is consistent with this Court’s observation that “ ‘trickery and

deceit’ are more reprehensible than negligence.” Gore,

517 U.S. at 576 (citation omitted). The court of appeals

inappropriately discounted the Wisconsin-law provisions that both authorize and limit the imposition of punitive damages.

The court of appeals’ unfavorable treatment of economic interests stemmed in part from its narrow conception of the “five factors” it gleaned from Campbell.

Pet. App. 41a; see id. at 41a-42a (quoting Campbell, 538

U.S. at 419). But those factors are nonexclusive and do

not supplant consideration of all the relevant facts and

circumstances. The Court in Gore observed that “infliction of economic injury, especially when done intentionally through affirmative acts of misconduct, * * * can

warrant a substantial penalty.” 517 U.S. at 576. Thus,

“evidence that a defendant has repeatedly engaged in

prohibited conduct while knowing or suspecting that it

was unlawful would provide relevant support for an argument that strong medicine is required to cure the defendant’s disrespect for the law.” Id. at 576-577. The

13

court of appeals accorded these considerations insufficient weight.

b. The court of appeals’ assessment of the ratio

guidepost was similarly flawed. The statutory cap at issue here represents the Wisconsin legislature’s judgment regarding the maximum ratio for this category of

claims, but the court accorded it no weight. This Court

has long looked to history in applying the Due Process

Clause, see, e.g., Pacific Mut. Life Ins. Co. v. Haslip,

499 U.S. 1, 17-18 (1991), and Wisconsin’s decision to cap

punitive damages at twice compensatory damages fits

within a well-established tradition, “dating back over

700 years and going forward to today, providing for

sanctions of double, treble, or quadruple damages.”

Campbell, 538 U.S. at 425. “Some 65 different enactments during the period between 1275 and 1753 provided for double, treble, or quadruple damages,” and

“[p]resent-day federal law allows or mandates imposition of multiple damages for a wide assortment of offenses.” Gore, 517 U.S. at 581 & n.33 (listing examples).

The court of appeals erred in disregarding the tradition

that the Wisconsin cap follows.

The court of appeals instead fastened on the Campbell Court’s observation that, “[w]hen compensatory

damages are substantial, then a lesser ratio, perhaps

only equal to compensatory damages, can reach the

outermost limit of the due process guarantee.” Pet.

App. 47a (quoting 538 U.S. at 425) (brackets in original).

The court of appeals even suggested that, as a general

rule, “the ratio ‘should not exceed 1:1’ where the compensatory award [i]s ‘substantial.’ ” Id. at 50a (citation

omitted).

That conclusion oversimplifies the relevant portion

of Campbell. The fact that a particular compensatory

14

award is “substantial,” Pet. App. 47a (citation omitted),

is not dispositive standing alone. It would be illogical to

suggest that the more harm a defendant inflicts, the less

susceptible he is to punitive damages. Rather, the size

of an award must be assessed in light of the purposes of

both punitive damages generally and the due-process

inquiry. A small compensatory award, for instance,

may indicate that any “noneconomic harm” was “difficult to determine,” thus justifying a larger punitive

award. Campbell, 538 U.S. at 425 (quoting Gore, 517

U.S. at 582). The court of appeals misapprehended this

Court’s precedents when it placed undue emphasis on

the size of the compensatory award standing alone.

c. Finally, the court of appeals acknowledged that,

because the challenged award complied with Wisconsin’s statutory cap, the comparable-penalties guidepost

did not support a finding of unconstitutionality. Pet.

App. 51a. The court stated, however, that this factor

“generally deserves less weight than the other two.” Id.

at 50a (citation omitted). Indeed, it is unclear whether

the court accorded the statutory cap any weight, as the

court stated before even discussing the cap that “a 2:1

ratio exceeds the outer-most limit of the due process

guarantee in this case.” Ibid.

At the very least, the court’s analysis gave insufficient weight to the third guidepost. The legislature’s

judgment as to the appropriate maximum penalty for

particular misconduct is entitled to “substantial deference.” Gore, 517 U.S. at 583 (citation omitted); cf.

United States v. Bajakajian, 524 U.S. 321, 336 (1998)

(observing, in the Excessive Fines Clause context, that

“judgments about the appropriate punishment for an

offense belong in the first instance to the legislature”).

15

A reasonable statutory cap is also responsive to fundamental concerns underlying due-process limits on punitive damages. It gives potential tortfeasors “fair notice” of the “maximum civil penalty.” Gore, 517 U.S. at

584. And by constraining the scope of jury discretion, it

reduces the risk that “juries will use their verdicts to

express biases.” Campbell, 538 U.S. at 417 (citation

omitted).

B. Further Review Is Not Warranted

Although the court of appeals’ due-process analysis

suffered from material flaws, its judgment does not

warrant this Court’s review.

1. Petitioner’s current, notice-based argument was neither pressed nor passed upon below

This case is a poor vehicle for resolving the question

whether a punitive-damages award that complies with a

reasonable statutory cap necessarily satisfies the Due

Process Clause. As “a court of review, not of first view,”

Cutter v. Wilkinson, 544 U.S. 709, 718 n.7 (2005), this

Court typically restricts its review to questions that

were “pressed” or “passed upon” below, Timbs v. Indiana, 139 S. Ct. 682, 690 (2019). That approach ensures

that the Court has the benefit of a lower court’s reasoning in analyzing complex legal and factual issues. See,

e.g., Bankers Life & Cas. Co. v. Crenshaw, 486 U.S. 71,

79-80 (1988) (plurality opinion).

In briefing and argument before the district court

and the Seventh Circuit panel, petitioner assumed that

Gore’s multifactor analysis governed. At no point did

petitioner suggest that Wisconsin’s cap obviated the

need to apply the Gore guideposts, and its brief before

the panel did not even cite the Wisconsin cap. See Pet.

16

C.A. Br. 48 (accusing respondent of “fail[ing] to consider [the Gore] factors”). Consistent with the parties’

submissions, the court of appeals assumed without discussion that Gore controls. Pet. App. 40a-41a, 51a. The

court accordingly did not address the question whether

Wisconsin’s cap renders the Gore guideposts superfluous.

Petitioner’s belated decision to raise its current,

notice-based argument in its unsuccessful rehearing petition below does not make this case a suitable vehicle

for resolution of the question presented. See Cert. Reply Br. 3; see also Easley v. Reuss, 532 F.3d 592, 595

(7th Cir. 2008) (per curiam) (declining to consider an argument raised for the first time in a rehearing petition).

In denying that petition, the court of appeals did not

(and had no obligation to) address petitioner’s new theory. Granting review therefore would force this Court

to grapple in the first instance with a complex question

of constitutional law.

To be sure, as petitioner observes (Cert. Reply Br.

2), “once a federal claim is properly presented, a party

can make any argument in support of that claim; parties

are not limited to the precise arguments they made below.” Lebron v. National R.R. Passenger Corp., 513

U.S. 374, 379 (1995) (quoting Yee v. City of Escondido,

503 U.S. 519, 534 (1992)) (brackets omitted). That rule

sensibly ensures that, when this Court grants review, it

may consider all relevant arguments before issuing its

decision. Assuming that petitioner’s notice-based theory qualifies as an “argument” rather than a “claim,”

Lebron, 513 U.S. at 379, the Court could therefore consider that argument in the event it granted the petition

for a writ of certiorari. But the Court’s ability to consider petitioner’s new theory at the merits stage does

17

not change the fact that, for purposes of the Court’s discretionary decision whether to grant the petition, the

absence of any reasoned analysis below renders this

case a poor vehicle for resolving the question presented.

2. There is no conflict in the circuits

Contrary to petitioner’s assertion (Pet. 19-21), the

decision below does not implicate any conflict in the circuits. Because the court of appeals did not address petitioner’s current, notice-based claim, it is unclear what

reasoning the court might have adopted, or what outcome it might have reached, if petitioner had timely

raised its current argument based on the Wisconsin

statutory cap.

Even if the court of appeals’ decision is construed as

implicitly rejecting that argument, the purportedly conflicting decisions that petitioner identifies are all meaningfully distinguishable. See Pet. 19-21 (discussing

ASARCO, supra; Abner, supra; and Luciano v. Olsten

Corp., 110 F.3d 210 (2d Cir. 1997)). Each of those decisions addressed the constitutionality of a punitivedamages award under Title VII of the Civil Rights Act

of 1964, 42 U.S.C. 2000e et seq., which prohibits specified forms of employment discrimination. Title VII authorizes punitive damages when defendants have acted

with malice or reckless indifference, while placing an

aggregate cap of between $50,000 and $300,000 (based

on the size of the employer) on specified compensatory

damages and punitive damages taken together. See 42

U.S.C. 1981a(b)(1) and (3)(A)-(D).

Luciano does not even arguably conflict with the decision below, as the Second Circuit conducted a complete due-process analysis without suggesting that the

statutory cap affected that inquiry. See 110 F.3d at 221222. In ASARCO and Abner, in contrast, the courts

18

acknowledged that the Title VII scheme informed the

due-process analysis. See ASARCO, 773 F.3d at 1056

(deeming “the rigid application of the Gore guideposts

* * * less necessary or appropriate” given the Title VII

framework); Abner, 513 F.3d at 164 (concluding that

“the combination of the statutory cap and high threshold of culpability for any award confines the amount of

the award to a level tolerated by due process”). But Title VII and the Wisconsin statute are materially distinct. Unlike the Wisconsin statute, Title VII reflects a

legislative determination that a particular substantive

category of misconduct—discrimination in employment—

is especially reprehensible. See ASARCO, 773 F.3d at

1056. Title VII also establishes “a consolidated damages cap that includes both specified compensatory and

punitive damages,” thereby “supplant[ing] traditional

ratio theory”—since “as the award for specified compensatory damages increases, the amount available for

a punitive damages award decreases.” Id. at 1057. The

facts of those cases differ from this one, too. The plaintiffs in both ASARCO and Abner were awarded nominal

damages but no further compensatory damages, making “a ratio-based inquiry * * * irrelevant.” Abner, 513

F.3d at 164; see ASARCO, 773 F.3d at 1058.

In short, any tension in the circuits is not yet ripe for

this Court’s review. As the Wisconsin statute and Title

VII illustrate, legislative limits on punitive damages

take different forms, with differing implications for the

due-process analysis. See pp. 19-23, infra (discussing

various federal enhanced-damages statutes). This

Court’s assessment of whether, and how, its existing

due-process framework applies to statutory punitivedamages regimes would benefit from additional consideration of that question in the lower courts.

19

3. The decision below has limited significance

Petitioner suggests (Pet. 24-25) that the decision below threatens the availability of enhanced damages under various federal statutes. Properly read, however,

the court of appeals’ decision does not cast doubt on the

validity of those statutes, virtually all of which differ

materially from the Wisconsin cap.

First, while the Wisconsin cap applies to a wide variety of torts, see Wis. Stat. § 895.043(2) and (6), many

federal enhanced-damages statutes target specific categories of misconduct. As discussed, Title VII targets

intentional employment discrimination. See 42 U.S.C.

1981a(a)(1) and (b)(1). The more specifically a statute

defines the range of covered conduct, the more likely it

is that the statute embodies a particularized “legislative

judgment[]” that the conduct warrants enhanced damages. Gore, 517 U.S. at 583 (citation omitted). For example, a statute tailored to a particular form of wrongdoing may embody a judgment that the conduct at issue

reflects a sufficient “degree of reprehensibility” to warrant punitive damages. Id. at 575; see, e.g., BNSF Ry.

Co. v. United States Dep’t of Labor, 816 F.3d 628, 644

(10th Cir. 2016) (“For the reprehensibility guidepost,

we used § 1981a’s plain language.”). Alternatively, it

may embody a determination that “the injury is hard to

detect or the monetary value of noneconomic harm” is

“difficult to determine” in a certain class of cases,

thereby justifying a “higher ratio.” Gore, 517 U.S. at

582. Under either rationale, the legislature’s judgment

deserves “substantial deference.” Id. at 583 (citation

omitted).

Second, whereas the Wisconsin statute limits punitive awards to a maximum of twice compensatory damages, see Wis. Stat. § 895.043(6), many federal statutes

20

mandate a particular damages multiplier. Under the

Clayton Act, 15 U.S.C. 12 et seq., for example, a successful plaintiff “shall recover threefold the damages by him

sustained.” 15 U.S.C. 15(a). Mandatory multipliers reflect an express legislative determination regarding the

proper ratio between compensatory and enhanced damages. See Gore, 517 U.S. at 580, 583. They also alleviate, to a greater degree than a damages cap, the concerns underlying the Gore framework. Most notably,

they remove jury discretion as to the amount of enhanced damages, thereby eliminating the prospect of an

award predicated on “bias or whim.” Campbell, 538

U.S. at 418 (quoting Haslip, 499 U.S. at 59 (O’Connor,

J., dissenting)).

Third, although the Wisconsin cap, like other statutes authorizing “double, treble, or quadruple damages,” accords with “a long legislative history,” Campbell, 538 U.S. at 425, certain federal statutes manifest

especially deep-rooted and particularized historical traditions. In patent-infringement suits, for example,

“[e]nhanced damages are as old as U. S. patent law.”

Halo Elecs., Inc. v. Pulse Elecs., Inc., 579 U.S. 93, 97

(2016). The Patent Act of 1952, 35 U.S.C. 1 et seq., authorizes a court to “increase the damages up to three

times the amount found or assessed,” 35 U.S.C. 284, reflecting a historical tradition that dates back to 1793,

when federal law “mandated treble damages in any successful infringement suit,” Halo Elecs., 579 U.S. at 97.

The Clayton Act’s treble-damages remedy for antitrust

violations, see 15 U.S.C. 15(a), traces to the original enactment of the Sherman Act, 15 U.S.C. 1 et seq., in 1890

and, in turn, to a 17th-century English law governing

monopolies, see Edward D. Cavanagh, Detrebling Antitrust Damages: An Idea Whose Time Has Come?, 61

21

Tul. L. Rev. 777, 778, 782 n.23 (1987) (citing An Act concerning Monopolies and Dispensations with Penal

Laws, and the Forfeitures thereof, 1623, 21 Jac. 1, c. 3,

§ 4 (Eng.)). The constitutionality of awards that fall

within these longstanding traditions is virtually beyond

question. Cf. Washington v. Glucksberg, 521 U.S. 702,

710 (1997) (“We begin, as we do in all due process cases,

by examining our Nation’s history, legal traditions, and

practices.”).

Fourth, although this case involves punitive damages, some federal statutes authorize multiple damages

for non-punitive purposes, such as to compensate a

plaintiff whose harm is difficult to measure or “to induce

private litigation to supplement official enforcement

that might fall short if unaided.” Exxon Shipping Co.

v. Baker, 554 U.S. 471, 494-495 (2008). The Lanham

Act, 15 U.S.C. 1051 et seq., for instance, authorizes

courts to award treble damages so long as the award

“constitute[s] compensation and not a penalty.” 15

U.S.C. 1117(a); see, e.g., Taco Cabana Int’l, Inc. v. Two

Pesos, Inc., 932 F.2d 1113, 1127 (5th Cir. 1991) (noting

that enhanced damages may “provide proper redress to

an otherwise undercompensated plaintiff where imprecise damage calculations fail to do justice”), aff ’d, 505

U.S. 763 (1992). The Gore framework does not apply to

non-punitive awards. The Court observed in Campbell

that “[i]t should be presumed a plaintiff has been made

whole for his injuries by compensatory damages, so punitive damages should only be awarded if the defendant’s culpability * * * is so reprehensible as to warrant

the imposition of further sanctions.” 538 U.S. at 419.

That mode of analysis is inapposite when a compensatory-

22

damages award cannot be presumed to make the plaintiff whole, or when an enhanced-damages award is predicated on something other than reprehensibility.

Fifth, whereas the punitive award in this case was

capped at twice the compensatory damages, see Pet.

App. 75a, certain federal laws authorize recovery of

statutory damages without regard to an award of compensatory damages. Under the Copyright Act of 1976,

17 U.S.C. 101 et seq., for instance, a successful plaintiff

may elect to recover statutory damages of between $750

and $30,000 rather than actual damages. 17 U.S.C.

504(c)(1). This Court has assessed the constitutionality

of such awards under a separate test that asks whether

“the penalty prescribed is so severe and oppressive as

to be wholly disproportioned to the offense and obviously unreasonable.” St. Louis, Iron Mountain & S.

Ry. Co. v. Williams, 251 U.S. 63, 67 (1919). The use of

a separate test in this context is appropriate, as “Gore’s

second and third guideposts cannot logically apply to an

award of statutory damages.” Sony BMG Music

Entm’t v. Tenenbaum, 719 F.3d 67, 70 (1st Cir. 2013).

“The second due process guidepost requires a comparison between the award and the harm to the plaintiff, but

a plaintiff seeking statutory damages * * * need not

prove actual damages.” Id. at 70-71. And under the

third guidepost, “statutory damages are the civil penalties authorized.” Capitol Records, Inc. v. Thomas-Rasset,

692 F.3d 899, 908 (8th Cir. 2012), cert. denied, 568 U.S.

1229 (2013).

Sixth, although the punitive-damages determination

in this case was entrusted to a jury, see Pet. App. 2a,

some federal statutes entrust it to a judge. Under the

Patent Act, for instance, a district judge determines

whether a jury’s damages award should be enhanced.

23

See Halo Elecs., 579 U.S. at 103. But the Gore line of

precedents is rooted in significant part in concerns

about jury arbitrariness. “Jury instructions typically

leave the jury with wide discretion in choosing

amounts,” raising the risk “ ‘that juries will use their

verdicts to express biases.’ ” Campbell, 538 U.S. at 417

(quoting Honda Motor Co. v. Oberg, 512 U.S. 415, 432

(1994)); see Gore, 517 U.S. at 596 (Breyer, J., concurring) (noting that “jurors” cannot be expected “to interpret law like judges”). When decisions concerning the

possible enhancement of damages are entrusted to

judges, those concerns are substantially reduced.

If a court of appeals relies on the Seventh Circuit’s

decision to hold that an enhanced-damages award under

federal law violates the Due Process Clause, this

Court’s review may be warranted at that time. But

given the important distinctions between the Wisconsin

cap at issue here and the various federal laws that authorize enhanced damages, the decision below is not

properly understood to affect those statutes.

24

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

ELIZABETH B. PRELOGAR

Solicitor General

BRIAN M. BOYNTON

Acting Assistant Attorney

General

MALCOLM L. STEWART

Deputy Solicitor General

AUSTIN L. RAYNOR

Assistant to the Solicitor

General

MICHAEL S. RAAB

CHARLES W. SCARBOROUGH

STEVEN H. HAZEL

Attorneys

FEBRUARY 2022