# Opposition Brief — Getty Petroleum Corp. v. Bartco Petroleum Corp.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1989
- **Citation:** 490 U.S. 1006

## Text

; Supreme Court, USe:.
6) FILED |
\ MAR & 1998

SIASEPHEE. SPANIOL, JR,
CLERK

No. 88-1335

IN THE

Supreme Court of the United States

OcrToBER TERM, 1988

GETTY PETROLEUM CORP.,
a Petitioner,
— against —

BARTCO PETROLEUM CORP.,
NICHOLAS J. BARTOLOMEO,
ANTHONY GOLIO,

Respondents.

RESPONDENTS’ BRIEF IN OPPOSITION
TO PETITION FOR WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT

RALPH PERNICK*
CuiFForD J. CHu

Hayt, Hayt & LANDAU
600 Northern Boulevard
Great Neck, New York 11021
(516) 466-5800

*Counsel of Record

ow

TABLE OF CONTENTS

Statement Pursuant to Rule 28.1 of this Court ...
pe eee TELS ree eee
eee
eee ee eran ene

1. Petitioner's Argument Based Upon
Fed.R.Civ.P. 51 Should Be Rejected .......

2. Petitioner’s Argument Based Upon
Fed.R.Civ.P. 49(a) Should be Rejected .....

3. On the Merits, the Second Circuit’s Decision
that Punitive Damages Are Not Available
Under the Lanham Act Is Consistent with
the Statutory Language, Legislative History
and with All Other Courts of Appeal that
Have Considered this Issue................

I So Oe eee Oe a hee ee id tae,

Page

~

ii
STATEMENT PURSUANT TO

RULE 28.1 OF THIS COURT

The only respondent that is a corporation, Bartco Petroleum
Corp., is wholly-owned by respondent Nicholas J. Bartolomeo.

TABLE OF AUTHORITIES

Page
Air et Chaleur, S.A. v. Janeway, 757 F.2d 489

yea desde a sscsscaeces. 6
American Electronics, Inc. v. Neptune Meter Co.,

30 A.D.2d 117, 290 N.Y.S.2d 333 (1st Dep’t

IS 8
Anderson v. Cryovac, Inc., 862 F.2d 910 (1st Cir.

EE 7
Barnett v. Housing Authority of City of Atlanta,

7a? F.a0 1671 (1ith Cir. 1963) .............. 7
Brockett v. Spokane Arcades, Inc., 472 U.S. 491

eee 9
Browning-Ferris Industries of Vermont, Inc. v.

Kelco Disposal, Inc., Dkt. No 88-556 ......... 3
ne eee Ge wo. oo (1063)............. ll
Chevron, U.S.A., Inc. v. NRDC, 467 U.S. 837

a 4
City of Newport v. Fact Concerts, Inc., 453 U.S.

ec. che snes ese eses 3-6
Cohen v. West Haven Bd. of Police Com'rs., 638

F.2d 496 (2d Cir. 1980)...............0. 00. 5
Dell Publishing Co. v. Stanley Publications, Inc.,

9 N.Y.2d 126, 172 N.E.2d 656 (1961)......... 8

Elwood v. Pina, 815 F.2d 173 (1st Cir. 1987) .

i

~]

iv

Emery-Waterhouse Co. v. R.I. Hospital Trust
Nat. Bank, 757 F.2d 399 (Ist Cir. 1985) ......

Erie R. Co. v. Tompkins, 304 U.S. 64 (1938) ....

Fleischmann Distilling Corp. v. Maier Brewing
Co., TS Ua Tee es as Sie ctearrasicss

Gasoline Products Co. v. Champlin Refining Co.,
ae eres hype

Gemveto Jewelry Co., Inc. v. Jeff Cooper, Inc.,
568 F.Supp. 319 (S.D.N.Y. 1983) ............

Getty Petroleum Corp. v. Island Transportation
Corp., 862 F.2d 10 (2d Cir.), cert. pending,
EUG. Di I, 5 9 oh ace crea ss

G.H. Mumm Champagne v. Eastern Wine Corp.,
142 F.2d 499 (2d Cir.), cert. denied, 323 U.S.
PE EE oe ei go nk ee ee ee

Hanover State Milling Co. v. D.D. Metcalf, 240
RR. SRS rapa apye perce parity ae ee eee rare

Hudnall v. Sellner, 800 F.2d 377 (4th Cir.), cert.
denied, 479 U.S. 1069 (1987), rehearing
denied, 480 U.S. 941 (1987) .................

James v. Powell, 19 N.Y.2d 249, 225 N.E.2d 741
See RAE TORE A SN Ga brs eee care EINE

Koufakis v. Carvel, 425 F.2d 892 (2d Cir. 1970) .

Mobil Oil Corp. v. Higginbotham, 436 U.S. 618
(1978), rehearing denied, 439 U.S. 884 (1978) .

Newburger, Loeb & Ce., Inc. v. Gross, 563 F.2d
1057 (2d Cir.), cert. denied, 434 U.S. 1035
Sth cere eae ee ee ee ees

Page

11

Osterneck v. E. T. Barwick Industries, Inc., 825
F.2d 1521 (11th Cir.), affirmed, Dkt. No.

RR at SA ar a or Ae ay

Perfect Fit Industries, Inc. v. Acme Quilting Co.,

618 F.2d 950 (2d Cir.), cert. denied, 459 U.S.

i eee sa

Ralph Schrader, Inc. v. Diamond Intern. Corp.,

833 F.2d 1210 (6th Cir. 1987) ...............

Rickard v. Auto Publisher, Inc., 835 F.2d 450

ON ivi cnc tcoess

Singleton v. Wulff, 428 U.S. 106 (1976).........

Texas Industries, Inc. v. Radcliff Materials, 451

SS i i nr

United States v. Steffens, 100 U.S. 82 (1879).....

Volkswagenwerk Aktiengesellschaft v. Wheeler,

814 F.2d S12 (ist Cir. 1967).................

Walker v. Sheldon, 10 N.Y.2d 401, 179 N.E.2d

WN ee re

Washington v. Confederate Nation Bands and

fg | OI eT),

Weaver v. Bowers, 657 F.2d 1356 (3d Cir.)(en

banc), cert. denied, 455 U.S. 942 (1982) ......

Williamson v. Handy Button Mach. Co., 817

F.2d 1290 (7th Cir. 1985) ...................

Page

10-11

PRELIMINARY STATEMENT

1. This matter deals primarily with the issue of whether Con-
gress intended punitive damages to be an available remedy under
the Lanham Act, 15 U.S.C. §§ 1051 et seq., dealing with
trademarks.

The underlying action was commenced in January 1986. Peti-
tioner alleged violations of the Lanham Act, and various pen-
dent state claims. All of the state pendent claims (except breach
of contract) were voluntarily withdrawn by petitioner prior to
the conclusion of the first trial [App. at A5-A8]:

There were two jury trials of this action. At the first trial in
June 1987, the first jury assessed punitive damages against
respondents under the Lanham Act totalling $7,400,000.

Respondents timely moved for a remittutur or for a new trial
on the ground of excessiveness [JA 1323]. By order dated June
22, 1987, the district court granted the motion but ruled on the
merits that punitive damages were available under the Lanham
Act [App. at B3 - B6]. This ruling was plainly on the merits, and
did not rely upon or refer to Fed.R.Civ.P. 51; indeed, the district
court subsequently noted, without referring to Rule 51, that it
believed its holding on the merits was compelled by a decision
in its own circuit [App. at C3-C4].

During a conference held prior to the second trial, respondents
requested the district court to certify the issue of availability of

' References to the Appendix filed in this Court by petitioner are designated
as [App. at ___]. References to the Joint Appendix filed in the court of ap-
peals are designated as [JA ____].

Petitioner acquired the trademark from Getty Oil Company, an unrelated
company, and did not itself develop the underlying product [App. at A-4].
Although petitioner claims that respondents were “bootlegging” gasoline [Peti-
tion at 9], the district court refused to permit petitioner's counsel to use that
term, or to suggest that quality of gasoline was in issue [A 548]. Furthermore,
no evidence of quality of petitioner's gasoline, or of the unbranded gasoline,
was permitted.

punitive damages under the Lanham Act, pursuant to 28 U.S.C.
§ 1292(b). The district court declined to certify the question [JA
213], and a second trial - limited to the amount of punitive
damages under the Lanham Act - was held between July 13 and
15, 1987 before a different jury.

At the conclusion of the second trial, a verdict was rendered
against respondents totalling $2,005,000. This constituted over
52, 32 and 5 times the amount of the compensatory damages
assessed against respondents Bartco, Bartolomeo and Golio
respectively.

Respondents served a post-trial motion, which inter alia sought
judgment notwithstanding the verdict on the ground that the
Lanham Act did not permit punitive damages [JA 204-206, 213,
216-220]. In response, petitioner did not refer to either Rule 51
or Rule 49(a), but argued that Lanham Act punitive damages
were permitted under a court of appeals decision in the govern-
ing circuit. Moreover, petitioner did not claim that its punitive
damage award was based upon any state claim.

Petitioner's first reference to Rule 51 was in its brief to the court
of appeals. In addition, petitioner’s claim that it had not
withdrawn its state unfair competition cause of action - upon
which, petitioner claims, punitive damages are available - was
also raised for the first time in its brief to the court of appeals.

2. In an exhaustive opinion, the court of appeals held that (a)
Rule 51 did not bar consideration of respondents’ argument that
Congress did not intend punitive damages to be a permissible
remedy under the Lanham Act; (b) the statutory language, the
legislative history, and the unanimous view of the other circuits
that had considered the issue all indicated that the Lanham Act
did not authorize the imposition of punitive damages; and (c)
the punitive damage award could not be affirmed on the theory
that it was based upon a state unfair competition cause of ac-
tion, because that cause of action was expressly withdrawn by

petitioner during the first trial, and because there were no jury
instructions as to the elements of such cause of action [App. at A].

Petitioner then filed a petition for rehearing in which it claim-
ed, for the first time in this entire litigation, that the punitive
damage award could be sustained pursuant to Fed.R.Civ.P. 49(a).
This argument was based upon the questionable assertions that
(a) Rule 49(a) applies even to claims that have been expressly
withdrawn; (b) by proving trademark infringement under the
Lanham Act, petitioner of necessity also proved all of the elements
of an unfair competition cause of action under New York law;
and (c) punitive damages were available thereon. The court of
appeals denied the petition for rehearing - mistakenly described
as having been made by respondent Bartco {App. at E].

ARGUMENT

The decision of the court of appeals exhaustively reviewed the
language, legislative history and uniform case law concerning
the availability of punitive damages under the Lanham Act, and
its decision does not conflict with any decision of this Court or
any other court. Petitioner’s Rule 51 arguments are foreclosed
by this Court’s decision in City of Newport v. Fact Concerts, Inc.,
453 U.S. 247 (1981), and the claimed conflict is illusory. Petitioner's
Rule 49(a) arguments begin from unaceptable premises, and the
record does not otherwise permit proper resolution of such issues
by this Court. Further review is therefore unwarranted.

In addition, assuming arguendo that this court decides to hear
this case, respondents will raise two issues that were timely
presented to and rejected by the district court and not passed
upon by the court of appeals: (a) whether the Excessive Fines
or Due Process Clauses of the United States Constitution place
any restrictions on the amount of punitive damages or in the way
they are computed, an issue the Court has agreed to consider.
Browning-Ferris Industries of Vermont, Inc. v. Kelco Disposal.
Inc., Dkt. No. 88-556; and (b) whether the issue of the amount
of punitive damages (the scope of the second trial) was an issue
“so distinct and separable from the others that a trial of it alone

may be had without injustice.” Gasoline Products Co. v. Champlin
Refining Co., 283 U.S. 494, 500 (1931).’

1. Petitioner's Rule 51 arguments are undermined by this
Court’s decision in City of Newport v. Fact Concerts, Inc., 453
U.S. 247 (1981), which, as the court of appeals observed, involv-
ed “a similar procedural history” [App. at A9]. In that case, peti-
tioner had not proposed a jury instruction concerning the
availability of punitive damages, but raised the issue in a post-
trial motion. Jd. at 253. The district court noted that the issue
was not timely under Rule 51, but reached the merits nevertheless.
Id.° The court of appeals likewise decided the merits, after noting
that none of the factors that ordinarily bar review of untimely-
raised issues was present. Id. at 254-255.*

? Respondents raised the first issue by a proposed jury instruction requiring the
amount of punitive damages to be “reasonably related to, and not dispropor-
tionate” to the amount of actual damages, expressly relying upon the Amend-
ments cited above [JA 153]. Nevertheless, the actual charge that was given merely
stated that punitive damages were to punish and deter, and to set an example
and ‘warning to others, and that “the amount assessed should be sufficient to
accomplish the purpose, and at the same time should not be in an amount in
excess of the sum that is likely to accomplish the purpose” [JA 561-562].

Prior to the second trial, respondents raised the Gasoline Products issue in
a letter to the district court [JA 200-203] that the district court, by order [JA
197-199], made part of the record.

As prevailing parties on the punitive damages issue, respondents may urge,
without a cross-petition, “any ground properly raised below whether that ground
was relied upon, rejected, or even considered by the District Court or the Court
of Appeals.” Washington v. Confederate Bands and Tribes, 439 U.S. 463, 476
n. 20 (1979), since the judgment of the court of appeals would not be changed
thereby. Chevron, U.S.A., Inc. v. NRDC, 467 U.S. 837, 842 n. 7 (1984).

’ The instant case is a stronger vehicle for not applying Rule 51, since petitioner
did not urge its application to the district court and the district court did not
refer to Rule 51.

* Even if the issue of availability of punitive damages was raised for the first
time on appeal, the court of appeals would not have been precluded from con-
sidering it. “The matter of what questions may be taken up and resolved for

(Footnote continued)

Accordingly, in City of Newport, this Court reached the merits
notwithstanding Rule 51. Disclaiming any reliance on the “plain
error” doctrine that some lower courts had applied in such cir-
cumstances, 453 U.S. at 256 and n. 13, 257 n. 16, and observing
that given the “evolving” nature of the boundaries of the substan-
tive law in the area, Id. at 256, this Court reached the merits.

The same facts are present here. The district court reached
the merits; the court of appeals also reached the merits; the “ques-
tion was squarely presented and decided on a complete trial
record [and] was argued by both sides to the Court of Appeals
. -.” 453 U.S. at 257. Similarly, the dispute involves “a wholly
separable issue of law, on which the jury rendered a special ver-
dict susceptible of rectification without further jury proceedings.”
Id. at 256 n. 12.5

Petitioner’s attempts to create a conflict are unavailing. Like
City of Newport, this case does not involve “plain error” [App.
at Al0]. Accordingly, this case does not present the issue of
whether “plain error” is a permissible exception to Rule 51.

the first time on appeal is one left primarily to the discretion of the courts of
appeal, to be exercised on the facts of individual cases. . . .|WJjhere the proper
resolution is beyond any doubt, or where injustice might otherwise result,” a
court of appeal may resolve an issue not passed upon by the district court.
Singleton v. Wulff, 428 U.S. 106, 121 (1976) (citations omitted). “[W ]here ques-
tions of public importance are involved, appellate courts may sua sponte decide
purely legal issues that are necessary to a just decision.” Cohen v. West Haven
Bd. of Police Com'rs., 638 F.2d 496, 500 n.6 (2d Cir. 1980) (collecting cases).

* Petitioner’s statement that respondents “twice proposed charges [concerning
punitive damages] of their own” [Petition at 33] is disingenuous. At no time
did respondents’ proposed charges concede that punitive damages were available
under the Lanham Act. Indeed, the second trial was held after the district court
had rejected respondents’ arguments that punitive damages were not available
[JA 213], and it would have been presumptuous and possibly contemptuous for
respondents to press this point by submitting a proposed instruction that was
inconsistent with the district court’s previously-stated conclusion. In short, the
district court was well aware of respondents’ arguments on the substantive issue,
and reached the merits of the issue. The purpose of Rule 51 was therefore
satisfied.

Moreover, several circuits have noted, consistently with the
result reached here, that “plain error” is not the only exception
to Rule 51, and that obvious instances of misapplied law can be
corrected on appeal despite lack of compliance with Rule 51. See,
e.g., Osterneck v. E. T. Barwick Industries, Inc., 825 F.2d 1521,
1533 (11th Cir.) (where “error” is so fundamental as to result in
a miscarriage of justice, or when the district court’s instruction
amounts to plain error“ [citations and internal quotations omit-
ted]), affirmed on other grounds, Dkt. No. 87-1201; Air et Chaleur,
S.A. v. Janeway, 757 F.2d 489, 494 (2d Cir. 1985). Cf. William-
son v. Handy Button Mach. Co., 817 F.2d 1290, 1295 (7th Cir.
1985) (City of Newport may create an exception where issue was
contested-and new trial not required); Weaver v. Bowers, 657
F.2d 1356, 1361 (3d Cir.)(en banc) (“in unusual circumstances the
courts of appeal also have inherent power to reach issues although
not timely raised below”), cert. denied, 455 U.S. 942 (1982).°

Petitioner suggests that in City of Newport, this court merely
explicated its exercise of its own discretionary certiorari authority.
However, Rule 51 does not apply to proceedings in this Court
since the Federal Rules of Civil Procedure “govern the procedure
in the United States district courts . . .” Fed.R.Civ.P. 1. Not supris-
ingly, petitioner cites no cases in support of its claim that in Ci-
ty of Newport, this Court “limited its decision to circumstances
in which it would review an issue by granting a writ of certiorari
... [Petition at 24-25]. Indeed, as shown above, the courts of
appeal have uniformly held that City of Newport’s application

° The suggestion [Petition at 25, 45] that the courts of appeal cannot sua sponte
decide an issue for the first time on appeal, even though the issue is of a legal
nature and the parties have not been hampered in preparing an adequate record,
is belied by the cases. See, e.g., Ralph Schrader, Inc. v. Diamond Intern. Corp..,
833 F.2d 1210, 1214 (6th Cir. 1987); Volkswagenwerk Aktiengesellschaft v.
Wheeler, 814 F.2d 812, 820-821 (Ist Cir. 1987); Hudnall v. Sellner, 800 F.2d 377,
383 n. 5 (4th Cir.), cert. denied, 479 U.S. 1069 (1987), rehearing denied, 480
U.S. 941 (1987).

of Rule 51 is applicable to the lower courts as well. The claimed
conflict is illusory.’

-

2. This case is an inappropriate vehicle for this Court to deter-
mine the applicability of Fed.R.Civ.P. 49(a). Neither the district
court nor the court of appeals referred to such rule; ironically,
in light of petitioner’s argument that Rule 51 bars reaching the
substantive issue, petitioner’s Rule 49(a) claim was not presented
until petitioner’s petition for rehearing in the court of appeals.

More fundamentally, petitioner’s Rule 49(a) argument is flawed
for three reasons. First, Rule 49(a) was not intended to resurrect
claims that were expressly withdrawn, but rather was intended
to be applicable only where an incomplete special verdict was
employed with respect to a cause of action that remained in the
case. See Anderson v. Cryovac, Inc., 862 F.2d 910, 915-916 (1st
Cir. 1988). Second, petitioner presupposes - without any authority
- that the elements of the state unfair competition cause of ac-
tion are precisely coterminous with those of a cause of action
for trademark infringement under the Lanham Act. In other
words, petitioner erroneously assumes that by proving the federal
claim, the state claim was automatically also established. Third,
assuming arguendo that petitioner proved a prima facie case
under state law, petitioner also incorrectly assumes that New York
law would permit punitive damages thereunder.

In New York, a high standard is required to obtain damages
- as opposed to injunctive relief - on an unfair competition claim
based on infringing conduct. More specifically, even where the
infringement is deliberate, the plaintiff must show actual con-
fusion - not likelihood of confusion. Perfect Fit Industries, Inc.
v. Acme Quilting Co., 618 F.2d 950, 955 (2d Cir.), cert. denied,

’ Petitioner's reliance upon Elwood v. Pina, 815 F.2d 173 (1st Cir. 1987); Emery-
Waterhouse Co. v. R.I. Hospital Trust Nat. Bank, 757 F.2d 399 (1st Cir. 1985);
and Barnett v. Housing Authority of City of Atlanta, 707 F.2d 1571 (11th Cir.
1983) is misplaced. Elwood and Barnett did not involve “plain” error and (unlike
the instant case) in both cases the district court had refused to address the merits.
815 F.2d at 176; 707 F.2d at 1581 n. 18. Emery-Waterhouse did not involve any
error at all. 757 F.2d at 410, 411.

459 U.S. 832 (1982); G.H. Mumm Champagne v. Eastern Wine
Corp., 142 F.2d 499, 501 (2d Cir.), cert. denied, 323 U.S. 715
(1944); Gemveto Jewelry Co., Inc. v. Jeff Cooper, Inc., 568
F.Supp. 319, 335 (S.D.N.Y. 1983) (Weinfeld, J.).*

Petitioner offered no proof at either trial to establish actual
confusion by consumers. As Judge Learned Hand stated in G.H.
Mumm, to obtain damages under New York unfair competition
law for infringing conduct, “it is necessary to show that buyers,
who wished to buy plaintiff's goods, have been actually misled
into buying the defendant’s . . .” 142 F.2d at 501. Nevertheless,
petitioner offered no testimony from any purchaser of gasoline
at any of the three gasoline stations, or from any consumer survey
expert.

Thus, since petitioner’s proof failed to establish a prima facie
case for damages on a state unfair competition claim, it cannot
rely upon such cause of action as an alternate basis for punitive
damages. Petitioner’s reference to Hanover State Milling Co. v.
D.D. Metcalf, 240 U.S. 403, 413 (1916) (“the common law of
trademarks is but a part of the broader law of unfair competi-
tion”), is unavailing, since this Court was merely explaining the
historical origins of trademark law, and not purporting to hold
that a prima facie case for damages under a state unfair com-
petition claim involves the identical elements of a prima facie
case for damages under the Lanham Act.

Assuming arguendo that petitioner established a prima facie
case for damages under state unfair competition law, New York
law demonstrates that punitive damages are unavailable. An Ap-
pellate Division case exemplifies this point. In American Elec-
tronics, Inc. v. Neptune Meter Co., 30 A.D.2d 117, 290 N.Y.S.2d
333 (1st Dep’t 1968), the Appellate Division reversed a punitive

* The sole New_York case cited by petitioner, Dell Publishing Co. v. Stanley
Publications, Inc., 9 N.Y.2d 126, 172 N.E.2d 656 (1961), does not purport to
set forth the necessary elements of an unfair competition claim under New York
law. Moreover, Dell dealt with an action for injunctive relief, not damages, and
nowhere refers to punitive damages.

damages award, “since no public right is involved and the
underlying private wrong is susceptible of adequate compensa-
tion,” citing James v. Powell, 19 N-Y.2d 249, 225 N.E.2d 741 (1967),
and Walker v. Sheldon, 10 N.Y.2d 401, 179 N.E.2d 497 (1961).

The Appellate Division’s reference to “adequate compensation”
is highly significant, since § 35 of the Lanham Act, 15 U.S.C.
§ 1117(a), provides a plaintiff with powerful express statutory
remedies in addition to recovery of actual damages.’ However,
New York law provides that where additional remedies are
available to insure that a claim will be brought, punitive damages
are not permitted. James, 19 N.Y.2d at 26, 225 N.E.2d at 747;
Walker, 10 N.Y.2d at 404, 179 N.E.2d at 498; Newburger, Loeb
¢> Co., Inc. v. Gross, 563 F.2d 1057, 1080 (2d Cir.), cert. denied,
434 U.S. 1035 (1978); Koufakis v. Carvel, 425 F.2d 892, 907 (2d
Cir. 1970).°

Moreover, the record is inadequate for this Court in the first
instance to resolve the Rule 49(a) issue. As the court of appeals
observed, petitioner withdrew all of its claims except its Lanham

* In the instant case, petitioner has fully benefitted from the remedies arsenal
of the Lanham Act. Upon remand after the court of appeals’ decision, the district
court issued an amended judgment (which has been fully satisfied and is not
being appealed) that awarded petitioner $111,924.50 as an enhanced recovery
under 15 U.S.C. § 1117(a), and attorney fees of $130,710.62 under the same
statute.

° These points were raised on appeal by respondents, but the court of appeals
did not have to reach these issues because the state claims were no longer in
the case [App. at A7-A9].

These matters were also raised by the defendants in Getty Petroleum Corp.
v. Island Transportation Corp., 862 F.2d 10 (2d Cir.), cert. pending Dkt. No.
88-1330. See Appendix in No. 88-1330 at C4-Cl0. Indeed, because these mat-
ters had not been resolved by the district court in that case, the Second Circuit
remanded it, /d., 862 F.2d at 14, but the district court on remand did not ad-
dress these issues. In view of these circumstances, this Court should not treat
the district court’s implicit rejection of these arguments as an authoritative con-
struction of state law, particularly where such state law is not statutory. See,
e.g., Brockett v. Spokane Arcades, Inc., 472 U.S. 491, 499-500 and note 9 (1985).

Act claim during the charging conference, and the first jury was
not instructed as to the elements of a state unfair competition
cause of action [App. at A7-A9]. Respondents did not seek to in-
troduce any evidence on such state claim, including testimony
showing absence of actual consumer confusion, or testimony that
consumers consider gasoline to be a fungible product. Indeed,
the district court precluded any evidence concerning gasoline
quality (see note 1 above). Respondents would therefore be pre-
judiced if this Court were to assume that any such state claim
had been proven.

3. On the merits of the only substantive issue presented by the
petitioner (whether punitive damages are a permissible remedy
under the Lanham Act), petitioner avoids any claim that the
language of the statute, the legislative history, or relevant caselaw
supports its position. The detailed discussion of the court of ap-
peals [App. Al2-A24] as to these matters does not require repeti-
tion here”

Instead, without-expressly using the phrase, petitioner argues
that some inchoate “federal common law” authorizes the courts
to fashion a punitive damages remedy. However, there is no
general federal common law, Erie R. Co. v. Tompkins, 304 USS.
64, 78 (1938), and this is particularly true with respect to
trademarks. United States v. Steffens, 100 U.S. 82 (1879); Rickard
v. Auto Publisher, Inc., 735 F.2d 450, 458 n. 30 (11th Cir. 1984).

The two lower court cases cited by petitioner for this position
[Petition at 60] have been undermined by this Court’s subsequent
decision in Texas Industries, Inc. v. Radcliff Materials, 451 U.S.
630 (1981), which teaches that the federal courts’ power to create

" This Court’s consideration of the merits would not affect many actions, since
few trademark actions are filed in the federal district courts. For the year en-
ding June 30, 1987, of the 238,982 actions filed therein, only 1% (2,395) were
trademark actions. Annual Report of the Director of the Administrative Office
of the U.S. Courts, Schedule C-2 at 177, 180. Furthermore, review of the an-
notations suggests that many of these trademark actions seek only injunctive
relief.

11

federal common law is restricted to very limited circumstances.”
In conclusion, “federal common law” is too slender a reed to sup-
port punitive damages under the Lanham Act. To do so would
ignore Congress’ 26 years of deliberations concerning what should
be the appropriate relief in trademark cases. By enacting a statute
that does not expressly permit punitive damages yet expressly pro-
vides monetary relief in excess of a successful plaintiffs actual
damages, “Congress has struck the balance for us.” Mobil Oil
Corp. v. Higginbotham, 436 U.S. 618, 623 (1978), rehearing
denied, 439 U.S. 884 (1978)." Indeed, in Fleischmann Distilling
Corp. v. Maier Brewing Co., 386 U.S. 714, 719, 721 (1967), this
Court observed that “in the Lanham Act, Congress meticulous-
ly detailed the remedies available to a plaintiff who proves that
his valid trademark has been infringed. . . . Congress intended
§ 35 of the Lanham Act to mark the boundaries of the power
to award monetary relief in cases arising under the Act.”

2 These circumstances “fall into essentially two categories: those in which a
federal rule of decision is necessary to protect uniquely federal interests and
those in which Congress has given the courts the power to develop substantive
law.” Texas Materials, 451 U.S. at 640 (quotations and internal citations omitted).

The latter exception explains why punitive damages are permitted under the
federal Reconstruction civil rights statutes: Congress expressly authorized the
courts to fashion appropriate remedies, by its enactment of 42 U.S.C. § 1988.

'’ Even where the right alieged to have been violated is founded upon the Con-
stitution rather than a statute, the fact that Congress has carefully crafted a
comprehensive remedies provision counsels caution in permitting judicially-
created remedies. Bush v. Lucas, 462 U.S. 367, 373-374, 378, 388 (1983).

= 12

CONCLUSION
The petition for a writ of certiorari should be denied.

Dated: Great Neck, New York
March 6, 1989

Respectfully submitted,

RALPH PERNICK
Counsel of Record
Hayt, Hayt & LANDAU
600 Northern Boulevard
Great Neck, NY 11021
(516) 466-5800

CuiFForD J. Cuu,
Of Counsel

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385002_0897%3A3. Public record. Not legal advice.