Amicus Curiae Brief — Bankers Life & Casualty Co. v. Crenshaw

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Court, US. |

xs ‘ FILED

4 FA 1889

No. 85-1765

JOSEPH F. SPANEOL, SF

CAERR

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1986

BANKERS LIFE AND CASUALTY COMPANY

Appellant

LLOYD M. CRENSHAW

Appellee

On Appeal from the Supreme Court

of Mississippi

BRIEF OF AMICI CURIAE CONSUMERS

UNION OF U.S., CONSUMER FEDERATION

OF AMERICA AND NATIONAL CONSUMERS

LEAGUE IN SUPPORT OF APPELLEE

Andrew F. Popper

Counsel of Record

The American University

Washington College of Law

Washington, DC 20016

July, 1987 (202) 885-2645

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TABLE OF CONTENTS

Page

STATEMENT OF CONSENT... 2. cece veveceveseves 1

INTEREST OF THE AMICI CURIAE.... es eeeeeee 1

SUMMARY OF ARGUMENT ....-.-0 eee eee eeeeeees 3

ARGUMENT... ccccccccccceves peeescecceosceseos 6

I. NEITHER BRITISH HISTORY NOR

PRECEDENT SUPPORTS THE PROPOSITION

THAT THE AMERCEMENTS CLAUSE IN THE

MAGNA CARTA HAD THE PURPOSE OR

EFFECT OF LIMITING CIVIL DAMAGES

cocgeces peSeUReP OSS SE SE CNeSe See vese®

A. The Magna Carta Did Net

Articulate Requirements

Applicable to Disputes Between

Private Parti€S....ceeeeeseevees 6

B. The Magna Carta Was a Public Law

DOCUMENC. cc cccccseees TeETERELES ¢.

C. The Law Pertaining to Punitive

Damages in Commonwealth Countries

Is Not Constrained by the Magna

CACM. cccccccsesecesccecesevees 17

Il. THE PROHIBITIONS OF THE EIGHTH

AMENDMENT ARE APPLICABLE TO CRIMINAL

SANCTIONS. PUNITIVE DAMAGES ARE NOT

CRIMINAL SANCTIONS... .....5550065 22

A. The History of the Excessive

Fines Clause otf the Eighth

Amendinent Suggests that the

Framers Intended to Keep in Check

the Power of the Executive to

Impose Excessive Fines in

Criminal CaSe@S...ceeeeeeeesceess 22

— | sarah a

B. Punitive Damages Are Not Criminal

SANCTIONS. ccoccccevecscesesseseeune

C. Punitive Damages Are Part of Our

Common Law Heritage............36

Ill. PUNITIVE DAMAGES PLAY A VITAL ROLE

IN THE AMERICAN CIVIL TORT SYSTEM.

A DECISION CURTAILING PUNITIVE

DAMAGES WOULD HAVE A SEVERE AND . 4

ADVERSE EFFECT ON THE AMERICAN ;

COMBUNR. ..0scccccccccesuesnnnnnne

A. A Fixed Limit or Preestablished

Ratio for Punitive Damages Would

Frustrate the Purposes Underlying

Punitive DamagesS.........+..2++-4l )

B. It is Appropriate That Punitive

Damages Are Provided to the

Plaintiltl..cccccvccccccscsecsssseee

C. Punitive Damages Improve Business

Practices and Upgrade Product

Quality..cccccecse ocvcccccceces --49

D. The System Mandating Jury

Determination of Punitive

Damages, Coupled With Judicial

Review Is Proper and Sufficient

to Assure a Just Outcome.......52

CONCLUSION. .ccccccccccccsccescs ee ee 56

iii

TABLE OF AUTHORITIES

CASES: Page

Bahner v. Marwest Hotel Co., [1969] 6

Dalbetls LEER) BEsccoccccceccccscccccces 19

Booth v. Maryland, 55 U.S.L.W. 4836 (U.S.

Ee BOOP Peccccccccccecesccccecs 36

Brink's, Inc. v. City of New York, 546 F.

Supp. 403 (S.D.N.Y. 1982), aff'd, 717

F.2d 700 (2d Cir. 1983)...-.2+00444-54

Broome v. Cassell & Co., [1971] II Q.B.

(jj ae eee ee eee neeoocoeeeees 20

Campus Sweater & Sportswear Co. v. M.B.

Kahn Construction Co., 515 F. Supp. 64

(D.S.C. 1979), aff'd, 644 F.2d 877 (2d

De UE Dect ccccocereecsecceccce 42,51

Cassell & Co. v. Broome, [1972] A.C.

Cy re TITTLE TET 20

City of Newport v. Fact Concerts, Inc.,

453 U.S. 247 (1981)..... eeeeccoce 00294

City of Scranton v. People's Coal Co., 274

Pa. 63, L117 A. 673 (1922). ccccccccee 26

Commodore Corp. v. Bailey, 393 So. 2d 467

Le 55

Dalton v. Bob Neill Pontiac, Inc., 476 F.

Supp. 789 (M.D.N.C. 1979)......-20e-. 26

Day v. Woodworth, 54 U.S. (13 How.) 363

(dT rr rerrrrrrrrrre 36

Devlin v. Kearney Mesa AMC/Jeep Renault,

155 Cal. App. 3d 381, 202 Cal. Rptr.

2646 (6th DLSE. 1986). cccccccecees cca

Doroszka v. Lavine, lll Conn. 575, 150 A.

692 (1930)........ seaeeeneeseoeuenees 47

Dun and Bradstreet, Inc. v. Greenmoss

Builders, Inc., 472 U.S. 749 (1985).39

Duncan v. Louisiana, 391 U.S. 145 (1968),

reh'g denied, 392 U.S. 947 (1968)...53

E. Hulton & Co. v. Jones, [1910]

A.C. . Rae rerrr *e #@eee«#es#se#* # @ 20

Electrical Workers v. Foust, 442 U.S. 42

CLD FP ccececece pide e ebwene eee ews 54

Fleet and Semple v. Hollenkemp, 13 B.Mon.

219, 52 Ky. 175 (1852).......--+000- 37

Fleming v. Nestor, 363 U.S. 603 (1960)..31

Fogg v. McKnight, [1968] N.Z.L.R. 330...19

Foster v. Floyd, 2/6 Ala. 428, 163 So. 2d

213 (1964). ccccccces WYTTITITITT LT. 44

Gertz v. Robert Welch, Inc., 418 U.S. 323

CLD 7Edccccececs Cae ewe ee saben euesanne 39

Gryc v Dayton-Hudson Corp., 297 N.W.2d 727

(Minn.), cert. denied, 449 U.S. 921

(1980) ccccccccsccececs UTTTUTiLiLiT 52

Gulf Atlantic Life Ins. Co. v.Barnes, 405

So. 20 916 (Ala. 1981)... ccceeeeees 54

Hanover Insurance Co. v. Hayward, 464 A.2d

156 (Me. LOS ccccccccecccecesesesceses

Hicks v. Herring, 246 S.C. 429, 144 S.E.2d

151 TTP Bbc ccccccsovccenccccessessecee

Ingraham v. Wright, 430 U.S. 651

(1977) ccccccccccces Torrrrerv Tete. 23,24

Jesco, Inc. v. Shannon, 451 So. 2d 694

(Miss.), cert. denied, 469 U.S. 1073

(1984). cc cee nner eeeeecens oseereeee ee ee

Jolley v. FPuregro Co., 94 Idaho 702, 496

P.2d 939 (1972).....- ceueeanaense oe 49

Kelly v. Robinson, U.S. » 107 S.Ct.

353 (1986)... eeee Prrerrrerr rT. Ts 29

Knuppfer v. London Express Newspapers,

[1943] I K.B. arr “es eee oeereveveevneeve 20

Lanese v. Carlson, 32 Conn. Supp. 163, 344

A.20 361 (1975)... cee e eee rrerrereces 47

Linsley v. Bushnell, 15 Conn. 225

(1842) “eneee e666 8 06 82 6.0 © Se Gaeakaungaea & & ms 37,43

Lewis v. Daily Telegraph, [1903] I Q.B.

SOS cccsscccevesecs bcatevetesecweuss 20

Malco, Inc. v. Midwest Aluminum Sales,

Inc., 14 Wis. 2d 57, 109 N.W.2d 516

McElroy v. Cowper-Smith & Woodman, [1967]

62 D.L.R. (II) 65...+eee- eccccceee 719

McKinnon v. F.W. Woolworth Co, {1968} 70

D.L.R. (II) 280... cece eeereeeeecces 19

Merrells v. Tariff Manufacturing Co., 10

Conn. 388 (1835)..ceeeneeeveess Ores sf

Milwaukee and St. Paul Rwy. v. Arms, 91

Pee: Bee Chew Eb 666600 6664048450008 37

Minneapolis & St. Louis Rwy. v. Beckwith,

Bae. Walle Mee OO 66566646204 68 440%40 37

Missouri Pacific Rwy. v. Humes, 115 U.S.

512 bo: BREE res genginee ee © 8 @ 36

Oppenhuizen v. Wennersten, 2 Mich. App.

288, 139 N.W.2d 765 (1965).......... 49

Palmer v. A. H. Robins Co., 684 P.2d 187

Pd Bear os be 6 6ue bebe és se 30

Pan Am Petroleum Corp. v. Hardy, 370

S.W.2d 904 (Tex. Civ. App. 1963)....47

Reserve Life Insurance Co. v. McGee, 444

So. 2d 803 (Miss. 1983)............. 55

Rook v. Fairrie, [1941] I K.B. 507...... 20

Rookes v. Barnard, [1964] A.C. 1129,

o> ‘ife yy SS) |. eee passim

San Francisco Civil Service Association

Local 400 v. Superior Court of Marin

County, 16 Cal. 3d 46, 127 Cal. Rptr.

332, 344 P.2G 1331 (1976)... cccccces 30

Security Aluminum Window Manutacturing

Corp. v. Lehman Associates,Inc., 108

N.J. Super 137, 260 A.2d 298 (1970).34

Silkwood v. Kerr-McGee Corp., 464 U.S. 238

FOES 6666606 65 4690465600 0000 00s Sa

Smith v. Wade, 461 U.S. 30 (1983)....38,40

vil

Snowden v. Osborne, 269 So. 2d 858 (Miss.

LPT Zdccceseces *e © @ “eee«eeseeee#eeekeje#s*s*# * # # 48

Solem v. Helm, 463 U.S. 277 (1983)...... 27

South Carolina State Highway Dept. v.

Southern Ry., 239 S.C. 227, 122 S.E.2d

422 (1961)... cc rnc cccecevves TryTiTT

Standard Oil Co. of Indiana v. Missouri,

224 U.S. 270 (ABLL) ccccccccccscceee eS

State v. State Board of Equalization, 133

Mont. 43, 319 P.2d 1061 (1958)..-....33

Story Parchment v. Patterson Parchment

Paper, 282 U.S. 555 (1930)... cee 000 4D

Taylor v. Louisiana, 419 U.S. 522

TESTO dccccceceveree ee ge ree ey ae ee 53

Tri-Tron International v. Velto, 525 F.2d

432 (9th Cir. 1975)... cece eeveeeeees 54

Tull v. United States, U.S. , 107

S.C. LES CADET Pec ccccccecevceces 44-5

Uren v. John Fairfax and Sons, [1967]

se Fe eae PO res. 2 te 19

United States v. Stangland, 242 F.2d 843

(7th Cir. 1957). cece eeessecevees 27,33

United States v. Ward, 448 U.S. 242

oi. } PPT PPPPTPTTTI TTT TT ee

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

N.E.2d 497 (1961)... cccccnsecsvevces 51

Yazoo & M.V.R. Co. v. May, 104 Miss. 422,

61 So. 449 (19OL3). cece ween ence evees 5S

viil

Yazoo & M.V.R. Co. v. Williams, 87 Miss.

344, 39 So. 489 (1905).....622244443-4

Youssoupoff Vv. Metro-Goldwyn-Mayer

Pictures Ltd, [1934] 50 T.L.R. 581

(1934). cc ccecvccvecces eeeeeese tat te in i

Zwick v. Freeman, 373 F.2d 110 (2d. Cir.

yp PPPUTPPPTTTTTP ETT LL

CONSTITUTIONAL PROVISIONS:

Eighth Amendment (Excessive Bail

ClaAuSe) cc ccccccccccsccceeccssecs passim

Eighth Amendment (Excessive Fines

ClauSe) -ccccccccccccccecseces .+++passim

Eighth Amendment (Cruel and Unusual

Punishments ClauSe@)....-eeeeeeees passim

STATUTES:

42 U.S.C. § 2011 et. seq. (1976 ed. and

Supp. V).-.-eeeeees bG060606 06 6886000 0R- 29

42 U.S.C. § 1983 (1982)... cee eee ee evees 39

ENGLISH STATUTES:

English Bill of Rights of 1689, 1 Wm. &

M., Sess. 2, Ch. 2 (1689)......-. passim

Magna Carta, 25 Edw. I, Ch. I, 1 Stat. at

Large 131-32 (1297)... eeeees passim

STATE STATUTES:

Miss. Code Ann. § 11-1-55 (Supp. 1986)..56

Miss. Code Ann. § 83-5-33 (1972)......4.-. 35

l4c. Tex. Ins. Code Ann. § 2i-21-2 (Vernon

RGB dc wccccvesovevececessetesosesees DT

N.Y. Ins. Law § 2601 (Consol. 1985)..... 35

La. Rev. Stat. Ann. § 1214 (West 1978)..35

Mass. Ann. Laws Ch. 176 dad § 3 (1987)....35

TREATISES:

G. Adams & R. Schuyler, Constitutional

History of England 128 (1935).......12

E. Bernzweig, By Accident Not Design: The

Case for Comprehensive Injury Repara-

CIONS BE (19SO). cccccccccevevscsseces 50

4 W. Blackstone, Commentaries *372-3....11

Clerk & Lindsell, The Law of Torts, 15th

@G. 242-3 (1962). cccccces ‘o4ueees seen

J. Fleming, The Law of Torts 584-5 (5th

Sic OTF hvccrcncacecevoevesecevveces 19

A. Harding, A Social History of English

Law 61 (1966)... cs ee ener eereecececes 9

2 W. Holdsworth, A History of English Law

CIDSS) cccccccceecesccccecesevcocens 10,14

6 W. Holdsworth, A History of English Law

F19TEdcccecavececvecsescvsvsessesegeeree

J.C. Holt, Magna Carta 232 (1965)....... 4S

C. Kinnane, A First Book on Anglo-American

Law 2n@. @6. 272 (195Z) -coccecese ere

Lobingier, The Laws of England in the

Thirteenth century With A New Inter~

pretation of the Barons' Reply at

Merton 4 (Nn.d.)..ee- [ubee cues ces ee€ 13

B. Nicholas, Roman Law 210 (1962)..-+6+- 38

The Oxford English Dictionary, Vol. I 279

(1971). ce eeeereeererees seeeeeee rere: *

R. Perry & J. Cooper, Sources of Our

Liberties: Documentar Origin of

Individual Liberties in the United

States Constitution and the Bill of

Rights 238 (1972). cece ee eeereeees es

2 F. Pollack & F.W. Maitland, The History

of English Law Before the Time of

ey I [1239-1307] 522-23 (2d.ed.

1911), 493 (2d. ed. 1923)......-passim

D. Pugsley, The Roman Law of Property and

Obligations 31 (1972). cece eeeeereees 38

2 J. Saunders, Words and Phrases Legally

Defined 5 (1969)... eeeeeererereers 18

B. Schwartz, A Commentary on the Consti-

tution of the United States (Part 3)

754 (1968) eeeeeenee ee eceovoeveeee2e020202808 8 ® 25

62 Selden Society, Introduction to the

Curia Regis Rolls, 1199-1230 A.D. 463,

473-9, 465 et. seqg., 476, 469 (C.T.

Flower, ed. 1944)... eeee. ooeee passim

80 Selden Society, Novae Narrationes cci

(S.E. Shanks, CG. 1963)... eee eeeeres 10

‘2 J.Story, Commentaries on the Constitu-

tion of the United States 623-24 (4th

ed. LB73S)cccccccccscccccsece ee @e 8 @ ere

2 Vinogradoff, Oxford Studies in Social

and Legal History, Customary Rents 186

CLL) PPPS TOPETTTTT TTT.

W. Walsh, A History of Anglo-American Law

309 C1FSadecccccesecevevcccsceovccoeckds

G. Williams & B. Hepple, Foundations of

the Law of Tort 69 (1976)....... “Seeune

RESTATEMENTS:

Restatement (Second) of Torts § 908

Comment a@ (1977). cc ceeccvveeeseevecs 30

Restatement (Second) of Torts § 908

comment C (1977). ccccccccveces verry...

PERLODICALS:

Borowsky, Punitive Damages in California:

The Integrity of Jury Verdicts, 17

U.S.F. L. Rev. 147 (1983)... ceeceees 44

Brutus II, To the Citizens of the State of

New York, New York Journal, November

1, 1787, reprinted in 13 The Docu-

mentary History of the Ratification of

the Constitution, 1 Commentaries on

the Constitution: Public and Private,

21 February to 7 November 1787 524

(Kaminski & Saladino eds. 1981).....26

Burrow & Collins, Insurance Crisis--Texas

Style: The Case for Insurance Reform,

xii

18 St. Mary's L.J. 759 (1987).......48

Demarest & Jones, Exemplary Damages as an

Instrument of Social Policy: Is Tort

Reform in the Public Interest, 18 St.

Mary's L.J. 797 (1987)....6656.4++4+42,58

Kindregan & Swartz, The Assault on the

Captive Consumer: Emasculating the

Common Law of Torts in the Name of

Tort Reform, 18 St. Mary's L.J. 673

TO Ga 4 bb 06-066 6600000000000008024608

Kornblum & Thornton, The Seismic Impact

of Punitive e_Damages in Actions Against

Insurers, 77 Best's Rev. 36 (1976)..49

Landes & Posner, New Light on Punitive

Damages, Regulation 33, October

RE a

Levine, Demonstrating and Preserving the

Deterrent Effect of Punitive Damages

in Insurance Bad Faith Actions, 13

U.S.F. L. Rev. 613 (1979).......passim

Levitt, Punitive Damages--Preventative

Steps, 1973 Ins. Lede 2) Aa

Morris, Punitive Damages in Tort Cases, 44

Harv. L. Rev. 1173 (1931)........... 43

Owen, Punitive Damages in Products Liabil-

ity Litigation, 74 Mich. L. Rev. 1257

(1976) wcccccccvccccvcccesccccee sPassim

Comment, Punitive Damages: An Appeal for

Deterrence, 61 Neb. L. Rev. 651

CLPSZdcccccccceseccecceeceese *e © *# © © © 46

Xiil

Note, Punitive Damages and the

Reasonable Relation Rule: A Study

in Frustration of Purpose, 9 Pac.

Led. 823 (1979) cc cccvesveveeseseses 44

Schwartz & Adler, Product Recalls: A

Remedy in Need of Repair, 34 Case W.

Res. 401 TIPS h scecccscscossavscecesese

The Vitality of the Doctrine of Punitive

Damages in Maine, 35 Me. L. Rev. 447

29S spccacece *e © ff © © © @ *eneeeteneeeee#e*e* *# #* # @ 38

No. 85-1765

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1986

BANKERS LIFE AND CASUALTY COMPANY

Appellant

LLOYD M. CRENSHAW

Appellee

On Appeal from the Supreme Court

of Mississippi

BRIEF OF AMICI CURIAE CONSUMERS

UNION OF U.S., CONSUMER FEDERATION

OF AMERICA AND NATIONAL CONSUMERS

LEAGUE IN SUPPORT OF APPELLEE

STATEMENT OF CONSENT

The Consumers Union of United States,

Inc., the Consumer Federation of America,

and the National Consumers League have ob-

tained consent from all parties to this

case to submit this brief, and they have

Filed the consent letters with the Clerk

of the Court.

INTEREST OF THE AMICI CURILAE

Consumers Union iS a4 = non-profit

membership organization founded in 1936.

It engages regularly in conSuiier advocacy

before the executive, judicial, and legis-

lative branches of government.

Consumer Federation of America is a

coalition of over 200 national, state, and

local consumer, senior citizen, labor,

farm, cooperative, and rural organizations

representing more than 30 million people

in matters pertaining to the well-being of

the American consumer.

The National Consumers League has

worked for safety and teieneas ot consu-

mers and workers since 1899. The League

seeks to insure that consumer and worker

protections are enforced and updated by

Supporting necessary legal action.

The Consumers Union, Consumer Federa-

tion of America, and the National Consu-

mers League are deeply concerned about

insurance practices and the role punitive

damages play in assuring a responsive and

consumer-oriented insurance industry.

Members of each organization have insur-

ance similar to the appellee. st 46 if

the interest of the members of each

Organization to maintain a strong tort

system including a mechanism that permits

punitive damages in appropriate circum-

Stances. Without such a system, the mem-

bers of these organizations will be denied

an essential private sector ordering

mechanism, resulting in the potential for

increased insurance rates, poor customer

service, and an economic incentive to

reject legitimate claims. Maintenance of

the Mississippi tort system, including

punitive damages, serves the interests of

Consumers Union, the Consumer Federation

of America, and the National Consumers

League.

SUMMARY OF ARGUMENT

This case concerns the propriety of

punitive damages under Mississippi tort

law. It is contended that punitive dam-

ages awarded under that system violate the

Eighth Amendment prohibition against ex-

cessive fines.

The Eighth Amendment derives from the

English Bill of Rights, and the English

Bill of Rights articulates certain values

found in the Magna Carta. Neither the

Magna Carta, the English Bill of Rights,

nor the Eighth Amendment impose any con-

straints on private tort law judgments.

All three documents address the rela-

tionship between the executive and the

citizenry.

The English Bill of Rights and the

Eighth Amendment prohibit the executive

branch from imposing harsh or excessive

sanctions in criminal cases. The relevant

provision of the Magna Carta permits the

King to collect amercements (fines or

specialized taxes) only if a jury of peers

determines the amount to be = amerced.

Amercements were to be proportional to the

harm done to the King and bore no rela-

tionship to the embryonic civil tort

system.

The conclusion that a civil damage

proportionality requirement can be gener-

alized from these historic documents is

counter to history. All Commonwealth

countries apply these documents to their

legal systems, and ali have = punitive

datiageS without any reference to this view

of history.

The Eighth Amendment applies’ to

Criminal sanctions. It can be applied to

Civil fines imposed by the legislature if

the purpose and effect of those fines

parallels precisely the criminal law in

all respects. Punitive damages are civil;

to apply the Eighth Amendment it must be

established that they are for all purposes

a criminal sanction. That conclusion

contravenes 200 years of Caselaw, ignores

findings by this Court declaring punitive

damages to be part of traditional state

law, ignores the fact that punitives are

not legislative in origin, and ignores the

full range of purposes underlying wititeied

daniages.

If this Court decides tu review puni-

tive damages on the merits, the Missis-

Sippi system will survive scrutiny.

Punitive damage awards made by properly

instructed juries and subject tu remit-

titur and appellate review comport with

due process. A fixed ratio between puni-

tive damages and compensatory damages is

arbitrary and unfair. Punitive damages

punish gross misconduct, deter future mis-

conduct, and serve other functions central

to the civil tort system. To preserve the

constitutional and beneficial system of

punitive damages, the decision of the Mis-

sissippi Supreme Court should be affirmed.

ARGUMENT

NEITHER BRITISH HISTORY NOR PRECEDENT

SUPPORTS THE PROPOSITION THAT THE

AMERCEMENTS CLAUSE IN THE MAGNA CAR‘TA

HAD THE PURPOSE OR EFFECT OF LIMITING

CIVIL DAMAGES

A. The Magna Carta Did Not Articulate

Requirements Applicable to Disputes

Between Private Parties.

The appellants contend that the pro-

portionality requirement in the Amerce-

ments Clause of the Magna Carta (Chapter

20) establishes d fundamental axiom

applicable to modern civil punitive damage

verdicts. This’ premise is highly ques-

tionable, based on a review of the history

at the time of the Magna Carta, the

English Bill of Rights, the Eighth Amend-

ment, and modern caselaw.

There is little question tha* amerce-

ments were fines payable to the King.

They were not payable to private parties.

Amercements coexisted with civil damages.

"The distinction between amercemwents and

damages is well known. The former were

payable to the Crown after legal! action or

for an error or ineptitude which took

place in its course; the latter repre-

sented the loss incurred by a litigant

through an unlawful act. They were pay-

able to [the private litigant]. ..." 62

Selden Society, Introduction to the Curia

Regis Rolls, 1199-1230 A.D. 463 (C.T.

Flower ed. 1944) [hereinafter C.T.

Flower].

Sums payable CAT Ough plercements were

not remedies to settle digputes between

private plaintiffs and private defendants.

Private disputes that resulted in civil

damages, particularly pertaining to dis-

seisin, were somewhat unusual in the

thirteenth century, though there are

numerous recorded cases. C.T. Flower,

Supra, at 473-479. When parties were

aggrieved by serious misconduct, a

punitive judgment could be imposed: "And

SO in a characteristically English fashion

punishment was to be inflicted in the

course of civil actions: it took the form

of manyfold reparation, of penal and

exemplary damages." 2 F. Pollock & F.W.

Maitland, The History of English Law

Before the Time of Edward I [1239-1307]

522 (2nd ed. 1911) (emphasis added).

Similarly, civil damages could reflect a

"moral" judgment pertaining to misconduct.

C.T. Flower, supra, at 475. A separate

system of civil justice that emerged later

through the dominant writ of trespass and

that was designed to provide money damages

to aggrieved parties was in its embryonic

Stage in the thirteenth century. Pollock

& Maitland, supra, at 523.

Many civil actions concluded with

separate awards ior civil damages to be

paid to the private litigant and an

amercement or court fee to be paid to the

justice or court. C.T. Flower, Supra, at

465 et seq.; A. Harding, A Social History

of English Law 61 (1966). The sums pay-

able for amercements were guided by

Chapter 20 of the Magna Carta; in con-

trast, civil damages paid to the private

litigant “were much less’ standardised."

C.T. Flower, supra, at 473. Civil datages

in these earliest of tort actions "vary

widely; and then, as now, their assessment

must have been difficult." C.T. Flower,

supra, at 476.

Chapter 20 of the Magna Carta placed

limits on the amercement or fining power

of the King. Among other things, the

clause requires proportionality and dic-

tates that "the amercement should be in

proportion to the wrong done; .. . this

meant the wrong done to the lord or the

court, and not to the other party to

litigation in that court." 80 Selden

Society, Novae Narrationes’ cci (S.E.

Shanks ed. 1963) (emphasis added) .+ Thus,

the executive abuse inherent in amerce-

ments related to extortive practices by

the King. Such control was accomplished

through the proportionality requirement

and by assuring that a jury rendered a

MPhis concept 1S central to the case belure

the Court. It underscores the proper meaning of

amercements or fees payable to the hing. ‘The

source, Selden Society, Novae Narrationes, supra,

at cci, indicates this interpretation derives from

Natura Brevium and Fitzherbert, Grand Abridpement

of the Laws of England (1514). These sources are

based on original case material from Bracton's

authoritative work on the thirteenth century.

"I]t is ultimately to Bracton and to Bracton

alone that we must look for an account ofr this

period [1216-1272]. . . ." 2 W. Holdsworth, A

History of English Law 280-88 (1923).

determination on the amount of an amerce-

ment, aS opposed to a judge of the court

of the King. The sole function of the

court was to declare that an amercement or

fine was due, at which point it became the

obligation of the jury to fix the amount.

W. Walsh, A History of Anglo-American Law

309 (1932); 4 W. Blackstone, Commentaries

*372-3.

The desire to control executive ex-

cesses was borne of the fact that the

amercement "system" involved fines and

taxes imposed by the executive for the

purpose of generating revenue. Aller ce-

ments could be imposed on an individual,

Or used as a tax generally, “laid upon the

County, Hundred, or Wapentake as a whole.

~- « »-" 2 Vinogradoff, Oxford Studies in

Social and Legal History, Customary Rents

186 (1974). A great concern underlying

the Magna Carta was that the Kings’ bench

could amerce an entire Community. 2 F.

Pollock & F.W. Maitland, The History of

English Law Before the Time of Edward I

493 (2nd ed. 1923). "[T)he fines and

" amercements were another branch of the

King's revenue. .. ." The Oxtord English

Dictionary, Vol. I, 279 (1971). The

relationship to be confined, therefore,

was between the King and the various

communities, not, as the appellants’

argument implies, between two private

persons involved in a legal dispute.

The barons who pressed the Magna

Carta on the King did so because "he had

been violating the law in his’ conduct

towards them . . . [and] they had learned

that they could not trust him... ." G.

Adams & R. Schuyler, Constitutional

History of England 128 (1935). The con-

cern was that the King and his courts

through the force of office would be able

to implement a public law system, and

particularly a taxation system, that could

Cripple the baronage. It was that senti-

ment that led to the adoption of Chapter

20 regarding amercements, and 473 years

later led to the adoption of an excessive

fines clause in the English Bill of Rights

that was again designed to contro] the

executive excesses of the King. 6 WwW.

Holdsworth, A History of English Law 232

(1924).

B. The Magna Carta Was a Public’ Law

Document.

It is contrary to history to assert

that the Magna Carta was designed tuo have

an impact on the damage awards payable to

private persons. The "Magna Carta was an

instrument of public law; little place

will be found in it for private law prin-

Ciples." Lobingier, The Laws of England

in the Thirteenth Century With a New

Interpretation of the Barons' Reply at

Merton 4 (a .G.)« William Holdsworth

warned legal historians agaliist such

overextrapolation of the meaning of the

Magna Carta: "Like all documents which

have attained not merely fame but sanc-

tity, it has become the source of dogmas

and doctrines of which its framers never

dreamt; and an attempt to ascertain the

meaning which the men of 1215 attached to

some of its more famous clauses, no doubt

would, if it were a theological document,

be denounced as blasphemous." 2 W. Holds-

worth, A History of English Law 209

(1923).

This is not to suggest that the Magna

Carta was inapplicable to private persons,

but rather to suggest that it was appli-

cable to transactions between. private

persons and the King. Similarly, it is

not suggested that excessive amercements

were not a problem; indeed they were.

Amercements were assessed as taxes for a

series of real or imagined transgressions

of the King's interests. These included

"false verdicts, the variation of pleas or

verdicts, contempt of court and some minor

offenses, which can be brought together as

breaches cf etiquette." C.T. Flower,

Supra, at 469. In many cases, both plain-

tiff and defendant were amerced, high-

lighting the inapplicability of the

amercements clause restraints to private

Civil actions. C. Kinnane, A First Book

on Anglo-American Law 272 (2nd ed. 1952).

The simple fact is that the Magna Carta

did not address relations between and

among private persons. For example, as to

the wonperformance of contract or unlawful

debt, "the Charter laid down nothing."

And as to most other matters, the Charter

"only touched the fringes... ." J.C.

Holt, Magna Carta 232 (1965).

From all this, several things are

clear. First, a control on amercements

was a control on executive authority, not

a dictate regarding private damages.

Second, the drafters of the Magna Carta

had tremendous faith in the jury and

directed that juries determine amounts for

amercements and damages, recognizing full

well the lack of certainty in that pro-

cess. Third, the Magna Carta did not

apply to damages paid to private persons

but applied exclusively to the activities

of the King. It is no accident of history

that the Magna Carta was written by barons

who sought to control executive authority,

that the English Bill of Rights was writ-

ten by those who sought to control the

"perversions of judicial prerogatives of

the Crown" by creating prohibitions on

“excessive fines," 6 W. Holdsworth, A

History of English Law 232 (1924), and

that the Bill of Rights of the United

States Constitution was written to address

the concerns of antifederalists who feared

the excesses of an overreaching and intru-

sive federal government. In sum, the his-

torical antecedents leading to the English

Bill of Rights and the Eighth Amendment

excessive fines clause suggest exclusively

a desire to control executive authority

and in no way suggest a desire to control

the ability of an individual state to

implement a punitive damage system in

cases between private persons.

C. The Law Pertaining to Punitive Damages

in Commonwealth Countries Is Not

Constrained by the Magna Carta.

In the last century, the policies

underlying punitive damages have been

debated openly in Great Britain. Neither

the Magna Carta nor the English Bill of

Rights has played a role in this analysis.

In Great Britain, exemplary damages

"are awarded to teach the defendant that

‘tort does not pay' and to deter him and

others from Similar conduct in the

future." Clerk & Lindsell, The Law of

Torts 242-43 (15th ed. 1982). Punitive

damages are provided "to punish the

defendant in an exemplary manner, and

vindicate the distinction between a

willful and innocent wrongdoer." 2 J.

Saunders, Words and _ Phrases Legally

Defined 5 (1969).

In Rookes v. Barnard, [1964] A.C.

1129, [{1964] I All E.R. 367, the House of

Lords placed limits on punitive damages by

confining the categories in which punitive

damages may be awarded. Rookes permits

punitive damages where there has been

arbitrary or abusive behavior by a yovern-

ment servant, where a defendant has pro-

fited substantially by engaging in miscon-

duct, or where a statute authorizes puni-

tive damages. Rookes v. Barnard, Supra,

[1964] A.C. at 1226-27, I All E.R. at 410-

ll. These limitations, however, have had

little effect on the ability of juries in

Great Britain to award supplemental

damages, since “aggravated damages" are

available in most civil actions for tort,

and can be given "to soothe the injured

feelings of a plaintiff, . . . [for] in-

solence or arrogance" or similar reasons.

G. Williams & B. Hepple, Foundations of

the Law of Tort 69 (1976); see J. Fleming,

The Law of Torts 584-85 (Sth ed. 1977), in

which the author notes the similarity

between exemplary damages and aggravated

damages.

The limitation in Rookes has been

considered in the major common law juris-

dictions’ that apply Magna Carta and

English Bill of Rights principles, ineclu-

ding Australia, Canada, Ireland, and New

Zealand. Each country has rejected the

2 giving the doctrine

Rookes limitations,

of punitive damages a “wider interpreta-

tion." Owen, Punitive Damages in Products

“australia, Uren ev. John Fairtax & Sons,

[1967] A.L.K. 25; Canada, McElroy v. Cowper -Smith

& Woodman, [1967] 62 D.L.R. (11) 65; McKinnon v.

F.W. Woolworth Co., [1968] 70 D.L.k. (11) 280;

Bahner_v. Marwest Hocel Co., [1969] 6 D.L.R. (TIT)

22; New Zealand, Fogg v. McKnight, |1968] N.Z.L.R.

330.

Liability Litigation, 74 Mich. L. Rev.

1257, 1264, n.23 (1976). Prior to Rookes

Vv. Barnard, British courts considered

punitive damages at great length and in

detail. In each instance, punitive

damages were found to be fundamental to

the British legal system.?

So deeply

entrenched is the doctrine of punitive

damages in Great Britain that Lord Demming

refused to follow the limitations of

Rookes v. Barnard in his decision to award

Punitive damages in Broome v. Cassell &

Co., [{1971] II Q.B. 364, 368-69. This

refusal to follow Rookes was rebuked on

appeal. Cassell & Co. v. Broome, [1972]

A.C. 1027.

Without going further into the intri-

cacies of British legal doctrine, it is

See Youssoupoff V. Metro-Gui dwyti-Mayer

Pictures Ltd., [1934] 50 T.L.R. 581, 582; Rook v.

Fairrie, [1941], I K.B. 507, 516; Knuppfer v. Lon-

don Express Newspapers Ltd., [1943] I K.B. 80, 85;

Lewis v. Daily Telegraph, [1963] | Q.B. 340, 381;

E. Hulton & Company v. Jones, [1910] A.C. 20, 25.

clear that punitive or exemplary damages

are alive and well in Commonwealth coun-

tries. The 1964 Rookes limitations are

the result of the intrusive role played by

the higher British courts in the affairs

of inferior courts and have nothing to do

with the constitutional or historical

contentions of the appellant. In the

absence of a federal system, it is not

uncommon for the House of Lords to engage

in a review of jury verdicts. In con-

trast, it would be most unusual for the

United States Supreme Court to becuitie

involved in a day-to-day assessment of

jury verdicts in civil punitive datiage

cases, determined under state law,

involving two private parties.

THE PROHIBITIONS OF THE EIGHTH AMEND-—

MENT ARE APPLICABLE TO CRIMINAL

SANCTIONS. PUNITIVE DAMAGES ARE NOT

CRIMINAL SANCTIONS.

A. The History of the Excessive Fines

Clause of the Eighth Amendment Sug-

gests that the Framers Intended to

Keep in Check the Power of the Execu-

tive to Impose Excessive Fines in

Criminal Cases.

The history of the excessive fines

Clause in the English Bill of Rights is

straightforward: the drafters were con-

cerned with "(t]he recent perversions of

the judicial prerogatives of the Crown."

6 W. Holdsworth, A History of Engiish Law

232 (1924). Their concerns focused on the

mode of criminal punishment, controlling

excessive bail and fines, and placing

controls on the use of criminal treason

trials. Holdsworth, supra, at 233-34,

410-12. Justice Story's treatise on the

U.S. Constitution demonstrates the effect

of the British experience on the U.S. Bill

of Rights: "It was, however, adopted as

an admonition to all departments of the

national governments, to warn them against

such violent proceedings as had _ taken

place in England in the arbitrary reigns

of some of the Stuarts." 2 J. Story, Com-

mentaries on the Constitution of the

United States 623-24 (4tn ed. 1873)

(footnote omitted). The English Bill of

Rights is the direct source of the Eighth

Amendment.

It has been argued that the excessive

fines clause of the Eighth Amendment

applies to civil proceedings, notwith-

Standing the history of the English Bill

of Rights. However, in Ingraham v.

Wright, 430 U.S. 651, 665-66 (1977), this

Court analyzed the history of the Eighth

Amendment, paying particular attention to

the question of whether it applied to

matters beyond criminal prosecutions. The

case holds that the three clauses of the

amendment were designed "to limit the

power of those entrusted with the crimi-

nal-law function of government." 430 U.S.

at 664. Making reference to an earlier

draft of the Eighth Amendment that

explicitly included a "criminal case

limitation on the Eighth Amendment," this

Court held:

{[A}lthough the reference to ‘criminal

cases' was eliminated from the final

draft, the preservation of a similar

reference in the Preamble (footnote

omitted) indicates that the deletion

was without substantive significance.

- « « $= (T]he principai concern of the

American Framers appears to have been

with the legislative definition of

crimes and punishments. .. . But if

the American provision was intended to

restrain government more broadly than

its English model, the subject to

which it was intended to apply--the

Criminal process--was the same.

430 U.S. at 665-66. Quite obviously, the

Eighth Amendment was read by this Court as

applicable only to criminal cases.

The conclusions of this Court in

Ingraham are consistent with the histori-

cal perspective of the amendment.* It is

difficult to identify any original source

material devoted exclusively to the exces-

Sive fines clause, since most of the prin-

Cipals were arguing for an amendment to

control criminal sanctions and thus did

not address individually fines, bail, or

punishment. Typical of this dialogue is

the commentary of Brutus II (penname of

Melantnhon Smith, a New York State anti-

federalist strategist), who wrote that

adoption of the Bill of Rights was essen-

tial "for the security of life, in crimi-

nal prosecutions, . .. ." To accomplish

this objective, Smith sponsored an amend-

ment that guaranteed that “excessive bail

4See KR. Perry & J. Cooper, Sources of Our

Liberties, Documentary Origin of Individual Liber-

ties in the United States Constitution and Bill of

Rights 238 (1972); B. Schwartz, A Commentary on

the Constitution of the United States (pt. 3) p.

754 (1968), discussing the Eighth Amendment pro-

hibitions as a cure for problems relating to

"monetary fines as penalties for criminal

offenses."

should not be required, nor excessive

fines imposed. ">

It is illogical to assert that a

Clause designed to control the criminal

enforcement power of the federal govern-

ment has an original meaning that allows

it to be used to place controls on one

state's implementation of its civil

justice system. It is certainly under-

Standable that parties contronted with

Civil fines or punitive damages would seek

constitutional protection. However, civil

Sanctions are the province of the state

courts and legislatures and are not

matters for assessment under the Eighth

Amendment excessive fines clause.®

Brutus Il, Yo the Citizens of the Stute ot

New York, New York Journal, November 1, 1987,

reprinted in 13 The Documentary History ot the

Ratification of the Constitution, 1 Commeritaries

on the Constitution: Public and Private, 21

February to 7 November 1787, pp. 524, 527

(Kaminski & Saladino eds. 1981).

eCity of Seranton v. Peoples' Coal Co., 274

Pa. 63, 117 A. 673, 676, (1922); Dalton v. Bob

(cont'd)

B. Punitive Damages Are Not Criminal

Sanctions.

In Solem v. Helm, 463 U.S. 277

(1983), this Court held that the principle

of proportionality should be applied to

Criminal sentences assessed under the

Eighth Amendment. United States v. Ward,

448 U.S. 242 (1980), permits certain

proceedings labeled "civil" to be analyzed

as if they were “criminal” for purposes of

Eighth Amendment review, raising two

central questions for this Case. First,

are punitive damages criminal séuccions,

thus activating the principle of propor-

tionality? Second, should the Court find

punitive damages are in the nature of

Criminal sanctions, does the Mississippi

scheme for imposing punitive damages pass

constitutional muster? See Discussion,

Part III, infra.

Neill Pontiac, Inc., 476 F. Supp. 789, 797, n.13

(M.D.N.C. 1979); Zwick v. Freeman, 373 F.ed 110,

119 (2d Cir. 1967); United States v. Stangiand,

242 F.2d 843, B48 (7th Cir. 1957).

Punitive damages serve multiple pur-

poses including punishment, a_ function

also served by the criminal law. The mere

fact that one of the purposes underlying

punitive damages is similar to one of the

purposes underlying criminal law does not

change the stark legal fact that punitive

damages are recognized to “have long been

a part of traditional state tort law."

Silkwood v. Kerr-McGee, 464 U.S. 238, 255

(1984).

Implicitly, Silkwood allows for the

recognition of different protective re-

gimes within our legal system. In limited

Circumstances, punitive damages are avail-

able to private persons who have been

wronged by gross misconduct. Civil fines

address governmental needs, insuring the

implementation of legislatively-mandated

behavioral norms, / and are subject to

scrutiny by the federal courts, while

punitive damages are subject to scrutiny

pursuant to state tort law principles.

464 U.S. at 257.

To move punitive damages into the

domain of civil fines and then move civil

fines into the domain of criminal fines

would require large jurisprudential leaps,

ignoring whole blocks of established

precedent. Recently the Court made quite

a clear distinction between fines "paid to

the state as an abstract and impersonal

entity, often calculated without regard to

the harm the defendant has caused... ,"

Kelly v. Robinson, U.S. , 107 S.Ct.

353, 361, n.1G (1986), and punitive dam-

ages, referred to as a system of "wholly

private penalties. .. . 107 S.Ct. at

Ty2 U.S.C. § 2011 et seq. (1976 ed. and Supp.

V) provides the Nuclear Regulatory Commission with

the ability to seek civil fines for noncompliance

with various rules pertinent in the Silkwood case.

362, n.13. The notion that punitive

damages are wholly different than civil or

Criminal fines is common to our jurispru-

dence. 8

In San Francisco Civil Service Assn.

v. Superior Court of Marin County, 16 Cal.

3d 46, 127 Cal. Rptr. 131, 544 P.2d 1331

(1976), the court confronted the question

of whether civil fines for raw sewage

discharge were similar in character to

punitive damages. The court held that a

Civil fine could “be imposed upon a public

entity because the monies thereby col-

lected civilly are not punitive damages.

o « « 26 Cal. 30 at 49, 127 Cal. Rptr.

at 134, 544 P.2d 1334. This position is

reflected in the Restatement (Second) of

Sin Palmer v. A.H. Kobins, 684 P.2d 187, 217

(Colo. 1984), the Colorado Supreme Court was asked

to analogize a punitive damage system to a fine

system without limits. ‘The court found the exces-

sive fines ciause “has no application to a civil

proceeding involving a punitive damage claim

ancillary to a civil cause of action."

Torts: "Punitive damages are to be dis-

tinguished from qui tam awards and civil

penalties or forfeitures." § 908 Restate-

ment (Second) of Torts, comment a (1977).

A transformation of punitive damages

from a civil to criminal sanction can

occur if it is clear that the legislative

sanction was written with the purpose of

establishing a penalizing mechanism and is

overtly punitive ‘in purpose and effect

based on the precedent and history of the

sanction. United States v. Ward, 448 U.S.

242, 248-49 (1980). To succeed in this

metamorphic venture, the appellant must

establish by “only the clearest proof"

that the state legislature had engaged in

a drastic form of mislabeling. Cf.

Fleming v. Nestor, 363 U.S. 0603, 617

(1960).

It is hard to see how punitive dam-

ages can be considered criminal, based on

the above proof standard, particularly

Since this Court has recently held that

they are “part of traditional state tort

law" and that they are not civil fines.

Silkwood, 464 U.S. at 255. They are not

legislatively-created sanctions. They are

the consequence of state common law. They

derived from the system of private wrongs,

not public wrongs. There is not a single

instance in all of American jurisprudence

in which a court has accepted the proposi-

tion that a state common law tort remedy

(not a legislative sanction) could somehow

be recharacterized as a Criminal sanction.

To blur the distinction between civil pri-

vate redress and criminal sanction would

throw our jurisprudence back to the thir-

teenth century, to a time where the dis-

tinctions between civil law and criminal

law, public fines and private remedies,

were difficult to delineate. ?

It has been argued in prior cases

that punitive damages are similar to

Criminal sanctions and that this imposi-

tion would offend double jeopardy prohi-

bitions, if there is a state criminal

prosecution addressing the same miscon-

duct. The profound distinction between

private civil punitive damages and crimi-

nal enforcement, however, prompts many

courts to take the position that “when

exemplary damages are justified, they

INormal ly, to be covered under the excessive

fines clause, tthe fine must be "money exacted from

a person guilty of a crime as pecuniary punish-

ment." South Carolina State Highway Dept. v.

Southern Ry., 239 S.C. 227, 122 S.E.2d 422, 424

(1961). From the broader perspective of a state

"excessive fines" clause, the fine must be a

"penalty exacted by the state for some criminal

offense." State of Montana v. State board of

Equalization, !33 Mont. 43, 319 P.2d 1061, 1063

(1958). Even so, it has been suggested that if a

court were to characterize punitive damages as a

civil penalty, “the Eighth Amendment argument is

inapposite." United States v. Stangland, 242 F.2d

843, 848 (7th Cir. 1957).

should not be withheld merely because a

civil or criminal penalty has been or may

be imposed." Security Aluminum Window

Mfg. v. Lehman Associates, 108 N.J. Super.

137, 260 A.2d 248, 254 (1970). A number

of jurisdictions allow juries to consider

the fact of criminal prosecution in

assessing the amount of punitive damages,

e.g., Hanover Insurance v. Hayward, 464

A.2d 156, 159 (Me. 1984).

As a matter of policy and practice,

there are significant differences between

the objectives underlying criminal law

enforcement and civil punitive damages. ?°

First, criminal enforcement is intended to

punish those who have violated rules

pertinent to the public at large. Puni-

tive damages redress a violation of a

private nature. Second, criminal enforce-

these are discussed in greater detail in

Part Ill. However, these "beneficial" aspects of

punitive damages highlight the difference between

punitive damages and criminal enforcement.

ment holds the possibility of the denial

of liberty interests, a matter that cannot

be readily equated with any form of civil

Sanction. Third, criminal enforcement in

the area of insurance bad faith is almost

nonexistent, thus providing only the most

theoretical deterrent.?+

In contrast,

punitive damages have had a substantial

and beneficial effect on practices in the

insurance’ industry. Fourth, punitive

damages accommodate a retributive interest

see generally Levine, Demonstrating and

Preserving the Deterrent Effect of Punitive Dam-

ages _in Insurance Bad Faith Actions, 13 U.S.F. L.

Rev. 613, 619-20 (1979). Appellants argue that

punitive damages ought to be awarded, if at all,

in proportion to the Mississippi criminal sane-

tions pursuant to Miss. Code Ann. § 83-5-33

(1972), although this statute does not cover

Insurance bad faith nonpayment based on a plain

reading of Miss. Code Ann. 83-5-35, which defines

"deceptive practices." Further, there is no

record that reveals whether any statutory criminal

enforcement has ever occurred in the bad faith

area. Finally, the lack of criminal enforcement

in the insurance bad faith area is readily ascer-

tainabie in many states. See, e.g., l4c Tex. Ins.

Code Ann. § 2)-c1l-2 (Vernon 1981); N.Y. Ins. Law

§ 260i (Conso]. 1985); La. Rev. Stat. Ann. § 1214

(West 1978); Mass. Ann. Laws. Ch. 176d § 3 (14987).

unmet in criminal enforcement. Unlike the

Criminal justice system, where fairness

concerns make it difficult for certain

types of victims even to be heard in

court, the civil punitive damage system

provides victims with recourse based on

the nature of the wrongfulness of the act

occasioned upon them. Booth v. Maryland,

55 U.S.L.W. 4836 (U.S. June 15, 1987).

C. Punitive Damages Are Part of Our Common

Law Heritage.

In Day v. Woodworth, 54 U.S. (13

How.) 363, 371 (1851), this Court found

that punitive damages are proper, so much

so that argument as to their validity was

not tolerated. Further, the Day Court

suggested that punitive damages were not

“criminal in character." Id. In Missouri

Pacific Ry. v. Humes, 115 U.S. 512, 521

(1885), this Court approved the use of

punitive damages to "blend together the

interests of society and the aggrieved

individual." The Court went on to note

that such awards were a matter for the

jury and were not bound by "very definite

rules," yet "the wisdom of the practice"

was not debatable. Quite clearly, the

nineteenth century view of punitive

damages was that the doctrine was "too

well settled now to be shaken, that

exemplary damages may in certain cases be

assessed." Milwaukee & St. Paul Ry. v.

Arms, 91 U.S. 489, 492 (1875). State

courts” reflect the same perspective,

finding punitive damages appropriate based

on the manner in which an injury was

inflicted "whether by negligence, wanton-

ness, Or with or without malice." Pleet &

Semple v. Hollenkemp, 52 Ky. (13 B. Mon.)

175, 180 (1852); Merrells v. The YTariff

Mfg. Co., 10 Conn. 388 (1835); Linsley v.

Bushnell, 15 Conn. 225 (1842).

This Court considered the constitu-

tionality of punitive damages in Minnea-

polis & St. Louis Ry. v. Beckwith, 129

U.S. 26, 36 (1889), holding: "The imposi-

tion of punitive or exemplary damages

- «+ « Cannot be opposed as in conflict

with the prohibition against the depriva-

tion of property without due process of

law." These holdings reflect the history

of punitive damages. Looking to the legal

systems in the United States, Great Brit-

ain, and even to Roman law, it is evident

that punitive damages are a fundamental

part of our jurisprudence.?!?

More recently, this Court allowed the

use of punitive damages against law

enforcement officers even though’ such

damages might have a chilling or intimi-

dating effect on certain law enforcement

functions. In Smith v. Wade, 461 U.S. 30

(1983), this Court determined that puni-

lp, Pugsley, The Koman Law of Property and

Obligations 31 (1972); B. Nicholas, Roman Law 210

(1962); Owen, Punitive Damages in Products Liabil-

ity Litigation, 74 Mich. L. Rev. 1258, 1262, n.17

(1976); The Vitality of the Doctrine of Punitive

Damages in Maine, 35 Me. L. Rev. 447, 451 (1983).

tive damages could be awarded by a jury in

actions brought pursuant to 42 U.S.C.

§ 1983 (1982). The opinion does not

address the question of damage limits,

though it does confirm the validity of

punitive damages as a deterrent to mis-

conduct. 461 U.S. at 36-37, n.5.

An equally difficult but substan-

tively different application of punitive

damages occurs in the area of defamation.

In Gertz v. Robert Welch, Inc., 418 U.S.

323 (1974), the Court considered the

chilling force of punitive damages in

defamation cases, and determined that such

awards were proper so long as the state

applied the conventional malice tes. used

in this area even when dealing with

private plaintiffs. This standard was

modified in Dun & Bradstreet v. Greenmoss

Builders, InC.-s 472 U.S. 749 (1985),

permitting punitive damages without a

finding of actual malice so long as the

speech does not involve matters of public

concern.

Both Smith v. Wade and Gertz permit

an endorsement of punitive damages in

extraordinarily complex policy settings,

and both cases maintain punitive damages

withcut damage proportionality rules even

though there are powerful contrary federal

policy considerations. Given that his-

tory, one is hard pressed to see why

punitive damages ought to be prohibited or

modified in a state insurance bad faith

case where there are no overt federal

interests.

III

PUNITIVE DAMAGES PLAY A VITAL ROLE

IN THE AMERICAN CIVIL TORT SYSTEM. A

DECISION CURTAILING PUNITIVE DAMAGES

WOULD HAVE A SEVERE AND ADVERSE EFFECT

ON THE AMERICAN CONSUMER.

Punitive damages are a civil remedy

available to private parties and are not

the proper subject for review under the

Eighth Amendment excessive fines clause.

vee

Outside of apparent constitutional

interests, such as implementation of

federal civil rights laws or First

Amendment matters, punitive damages are

best left to the decisionmaking of each

individual state. However, should this

Court determine that a substantive review

of punitive damages is in order, then the

following concerns become relevant.

A. A Fixed Limit or Preestablished Ratio

for Punitive Damages Would Frustrate

the Purposes Underlying Punitive

Damages.

A decision that compels the states to

establish fixed ratios or clearly-deli-

neated proportions in punitive damages

would allow business interests to calcu-

late easily the proper sum to be set aside

to accommodate judgments. This would have

a disastrous effect on the deterrent value

of punitive damages. "Conscious wrong-

doers must know they cannot estimate the

cost of their misdeeds by coldly calcula-

ting the number of dead or injured and

their resulting limited compensatory

expenses. They must know that their

financial existence may be threatened by

the evil they contemplate." Demarest &

Jones, Exemplary Damages as an Instrument

of Social Policy: Is Tort Reform in the

Public Interest, 18 St. Mary's L.J. 797,

833 (1987).

The lack of preestablished ratios has

been considered by the courts in the past.

In many cases courts favor an indivi-

dualized punitive damage system not bound

by mathematical equations. "The admoni-

tory function of punitive damages does not

lend itself to formulation. .. . The

refusal to specify a ratio is due to the

need to individualize punitive damage

verdicts. One must look to behavior, not

to results, to determine the need to

admonish, and. . . the amount which must

be awarded. . . .”" Campus Sweater &

Sportswear Co. v. M.V. Kahn Construction

Co., 515 F. Supp. 64, 106 (D.S.c. 1979).+3

Other courts!4 have struggled to find a

proper calculation mechanism but have come

up empty handed:

Frankly, we are unable to find that

formula. Instead of making a mathe-

matical breakthrough we discovered

what everyone probably already knows:

the formula does not exist. And, we

have concluded, that is properly so.

Although we may now live in a

highly computerized society, it is

important to recognize that the jus-

tice system need not and should not

mirror a mechanistic view of life.

NaC ae Accordingly, we examine the

usual factors recited by appellate

courts when reviewing punitive damage

awards, applying those factors in the

customary manner to reach what’ we

believe is a decision consistent with

precedent.

Devlin v. Kearney Mesa AMC/Jeep Renault,

'3see Morris, Punitive Damages in Tort Cases,

44 Harv. L. Kev. 1173, 1180-81, n.9 (1931),

rejecting proportional ratios as "arbitrary";

Owen, Punitive Damages in Product Liability

Litigation, 74 Mich. L. Rev. 1258, 1316 (1976),

rejecting ratios due to their failure to take into

account appropriate damage factors.

V4 insley v. Bushnell, 15 Conn. 225, 235

(1842), “there is no rule of damages fixed by law"

to accommodate punitive damages.

155 Cal. App. 3d 381, 202 Cal. Rptr. 204,

209 (1984). |

Many states follow the lead of the

Mississippi courts:

{There} is no inflexible -guide by

which the jury can be conducted to

their determination of the amount of

the penalty which must be inflicted to

adequately punish the culprit’ and

protect the public. . .. They [the

jury) cannot be directed or required

to award any sum in punitory damages,

no matter how flagrant the transgres-

Sion of private or public right...

Yazoo & M.V.R. Co. v. Williams, 87 Miss.

344, 39 So. 489, 492 (1905).?°

Although this Court has not addressed

the matter specifically, it has suggested

that a plaintiff's entitlement to the

'3see Malco _v. Midwest Aluminum Sales, 14

Wis.2d 57, 109 N.W.2d 516 (1961); Foster v. Floyd,

276 Ala. 423, 163 So. 2d 213 (1964); Note, Puni-

tive Damages and the keasonable Relation Rule: A

Study in Frustration of Purpose, 9 Pac. L.J. 823,

852 (1979); Borowsky, Punitive Damages in Cali-

fornia: The Integrity of Jury Verdicts, 17 U.S.F.

L. Kev. 147, 164-65 (1983), condemning the reason-

able relation rule as a decisional pretext;

Restatement (Second) of Torts § 908, comment c

(1977), permitting substantial punitive damages

where actual damages are nominal.

“recovery of uncertain damages" is not

flawed constitutionally and that defen-

dants are entitled to certainty in ascer-

taining what conduct is wrong, but they

are not entitled to certainty "in respect

to [the] . . . amount" of damages. Story

Parchment v. Patterson Parchment Paper,

282 U.S. 555, 562 (1930). Recently, this

Court characterized punitive damages as a

"legal remedy that is not a fixed fine."

Tull v. United States, U.S. , 107

S.Ct. 1831, 1838, n.7 (1987). Tull fol-

lows well established precedent’ that

defendants have no particular entitlement

to a fixed maximum in cases where punish-

ment is in the form of a fine. Standard

Oil Co. of Indiana v. Missouri, 224 U.S.

270, 286 (1911) (applying this principle

in a quo warranto proceeding). Accord-

ingly, the lack of a fixed limit on a fine

does not present any constitutional

inficmity.

If the essence of the appellants’

contention is that a punitive damage award

without a clear limitation is unconstitu-

tional, the overwhelming body of authority

rejects that proposition. Finally, a

fixed ratio or set sum creates the very

real possibility that punitive damages

will be awarded irrationally, since the

amount of compensatory damages, the likely

multiplier, bears little relation to the

degree of culpability of the actor.

B. It Is Appropriate That Punitive Dam-

ages Are Provided to the Plaintiff.

It has been argued that the _ sole

function of punitive damages is punishment

and deterrence. However, a careful

inquiry into the field of punitive damages

reveals that they serve multiple purposes.

16, ratio rule “undermines the deterrent

effect of punitive damages by stressing the actual

resulting harm rather than the sociai undesira-

bility of the defendant's conduct." Comment,

Punitive Damages: An Appea! for Deterrence, 61

Neb. L. Rev. 651, 676 (1982).

— =a

There is little question that punitive

damages provide resources to an aggrieved

plaintiff who, through no fault of his or

her own, has been thrust into an abnormal

risk category.

Individuals who suffer at the hands

of others whose behavior is sufficiently

bad to be characterized as gross or wanton

misconduct are in no way winners of some

bizarre lottery. The destruction of

family life, the trauma of protracted

litigation, the displacement of emotional

equilibrium, and various costs?’

Tin some states, notably Connecticut,

punitive damages are permitted explicitiy for the

purpose of assisting with attorneys fees so long

as they do not exceed two times compensatory

damages. ‘The general rule in that state is that

punitive damages are “essentially compensatory,

not punitive. . . ." Lanese v. Car!son, 32 Conn.

Supp. 163, 344 A.2d 361, 364 (1975); Doroszka v.

Lavine, 111 Conn. 575, 578, 150 A. 692 (1930).

Other jurisdictions allow punitive damages for

"inconvenience, reasonable attorneys fees, and

other losses tvo remote to be considered under

actual damages." Pan Am Petroleum v. Hardy, 370

S.W.2d 904, 908 (Tex. Civ. App. 1963). Beyond

deterrence and punishment, Mississippi recognizes

that punitive damage awards encourage private

(cont'd) a

pertaining to pursuing legal claims can be

addressed by a punitive damage award.

Owen, Supra, at 1296-98.

The notion that plaintiffs receive

resources beyond compensation when their

injuries are the result of egregious

misconduct is rarely addressed in prac-

tical terms. Policy concerns surrounding

unjust enrichment promote only nominal

18 It

analysis. is time to be more

forthright. 9

persons to bring wrongdoers before the court.

Snowden v. Osborne, 269 So. 2d 858 (S.Ct. Miss.

1972).

18.06 be sure, many argue that direct payment

to plaintiff is particularly troubling due to what

they see as the "tort crisis." The best thinking

in the area is that whatever problems exist in the

tort field, punitive damages play no substantial

role. Landes & Posner, New Lipht on Funitive

Damages, Regulation 33, October 1986; Burrow &

Collins, Insurance Crisis--Texas Style: The Case

for Insurance Reform, 18 St. Mary's L.J. 759, 763-

65 (1987); Kindregan & Schwartz, The Assault on

the Captive Consumer: Emasculating the Common Law

of Torts in the Name of Tort Reform, 18 St. Mary's

L.J. 673, 695 (1987).

"Sn few states are more straightforward in

distussing punitive damages; Hicks v. Herring, 246

S.C. 429, 144 S.E.2d 151, 155 (1965), allows puni-

(cont'd)

C. Punitive Damages Improve’ Business

Practices and Upgrade Product Quality.

While there are various concerns

associated with punitive damages, there is

little dispute that punitive damages have

a salutary effect on practices in the

insurance industry, improving processes

associated with handling’ claims and

providing better, more understandable

information to insurers. Levine, supra,

at 625; Kornblum & Thornton, The Seismic

Impact of Punitive Damages in Actions

Against Insurers, 77 Best's Rev. 36, 44

(1976); Levitt, Punitive Damages--

Preventative Steps, 1973 Ins. L. J. 332.

In evaluating punitive damages in the

insurance industry, one is compelled to

take a hard look at what motivates

liability insurance corporations. Some

tive damages to vindicate a private right. Jolley

v. Puregro Co., 94 Idaho 702, 496 P.2d 939, 947

(1972), permits punitive damages for "rectifica-

tion of wrongs"; Oppenhuizen v. Wennersten, 2

Mich. App. 288, 139 N.W.2d 765 (1965), permits

punitive damages tu address embarrassment.

commentaries are quite frank:

(L]iability insurers are not in busi-

ness to compensate injured persons,

but, rather, to maximize profits for

their stockholders. This they can

accomplish only by = avoiding the

payment of compensation--by denying or

defeating as many claims as they can,

and by paying as little as possible on

the rest. The costs incurred in this

process may be expensive .. . but

that is precisely how the system is

designed to function. Calling it a

"compensation system" and expecting it

to perform as though it were is as

naive as calling a jackass a thorough-

bred and expecting it to win the Ken-

tucky Derby.

E. Bernzweig, By Accident Not Design: The

Case for Comprehensive Injury Reparations

86 (1980). Given the potential of this

corporate inclination, some balancing

factor is required. "The disparity in

wealth between an insurer and an insured

is itself evidence of the need to deter

the defendant insurer from wielding the

power incident to such wealth in an unfair

and oppressive manner." Levine, supra, at

636.

It 1s argued regularly that compensa-

tory damages are sufficient to cover the

needs of injured persons and to provide

sufficient deterrence to future miscon-

duct. Such arguments are devoid of

21 Many cases where

empirical support.

punitive damages are awarded reflect a

pattern of misconduct on the part of the

defendant, repeated over a period of

201t is also the case that many of the Legal

mechanisms designed to address corporate miscon-

duct have not lived up to their promise. Schwartz

& Adler, Product Kecalls: A Remedy in Need of

Repair, 34 Case W. Res. 401 (1984).

2lwalker v. Sheldon, 10 N.¥.2d 401, 406, 179

N.E.2d 497, 499 (1961); Campus Sweater & Sports-

wear Company v. M.B. Kahn, 515 F.Supp. 64, 104-05

(D.S.C. 1979), holding that punitive damages deter

manufacturers from misconduct, encourage the pro-

duction of safer products, and “serve as a type of

private revenge which is carried out in the courts

rather than through duels or in back alleys." The

court held further "there is no exact monetary

standard which can be used aS a measure. ;

There is no formula for punitives as the amount to

be awarded is particularly within the judgment and

discretion of the jury, subject to the supervisory

powers of the trial judge over jury verdicts.

The main things to be considered are the

character of the tort committed, the punishment

which should be meted out therefore, «nd the

ability of the wrongdoer to pay." 515 F.Supp. at

105-00.

years, interspersed with various compensa-

tory damage awards. Compensatory awards

have not deterred the defendants, prompt-

ing the Supreme Court of Minnesota to

conclude that punitive damages are parti-

cularly effective in preventing repetitive

forms of misconduct. Gryc v. Dayton-

Hudson, 297 N.W.2d 727 (Minn.), cert.

denied, 449 U.S. 921 (1980).

In the insurance industry, a compen-

satory damage award is likely to be little

more than the amount of money to which the

insured was entitled under the policy in

the first instance had litigation not been

initiated. A result of the elimination of

punitive damages will be to increase the

economic incentive for insurers willfully

to deny claims on unjust grounds.

D. The System Mandating Jury Determina-

tion of Punitive Damages, Coupled With

Judicial Review Is Proper and Suffi-

cient to Assure a Just Outcome.

Giving juries decisionmaking

authority in the punitive damage area

based on carefuily-evolved state standards

conforms with a uniformly-held perception

that juries are our best guard against

misuse of power. Taylor v. Louisiana, 419

U.S. 522, 530 (1975). We trust juries to

demonstrate conscience, allowing them to

assess community standards and make highly

complicated decisions. Duncan v. Louisi-

ana, 391 U.S. 145, 155-56 (1968). Since

this Court is willing to allow juries to

decide matters of life and death, they

should be trusted "to make a fair assess-

ment of punitive damages in a civil tort

case." Demarest & Jones, Exemplary

Damages as an Instrument of Social Policy:

Is Tort Reform in the Public Interest, 18

St. Mary's L.J. 797, 824 (1987).

Implicit in the appellants’ challenge

is the assertion that juries will, some-

how, make inaccurate or unfair determina-

tions for punitive damages. At least

three times in the recent past this Court

remarked on the capacity of juries to

ass 3S punitive damages, not questioning

the competence of the citizenry to make

intelligent and fair judgments. *4 The

confidence of this Court in the ability of

juries to make intelligent judgments is

reflected at the state level. 23

In Mississippi, punitive judgments

are "left to the sound judgment of the

eecity of Newport v. Fact Concerts, 453 U.S.

247, 270 (1981); Electrical Workers v. Foust, 44e

U.S. 42, 50-51 (1979); Gertz v. Robert Weich,

Inc., 418 U.S. 323, 349-50 (1974).

“3See Brink's v. City of New York, 540 F.

Supp. 403, 413 (S.D.N.Y. 1982), holding that for

punitive damages the "jury functions in a quasi-

judicial capacity and is vested with broad discre-

tion. . . . The court may intervene and set aside

a verdict when the amount of the award 1S so

excessive that it shocks the judicial conscience

or it appears that it is result of passion and

prejudice"; Gulf Atlantic Life Insurance to. ¥.

Barnes, 405 So. 2d 916, 925 (Ala. 1981), holding

"the amount of damages is left largely to the dis-

cretion of the jury; however, this discretion is

not absolute"; Tri-Tron Int'l v. Velto, 525 F.ed

432, 438 (9th Cir. 1975), holding: "courts will

not interfere with the award unless it appears to

have been influenced by passion, prejudice, or

some improper motive, or unless it is outrageously

disproportionate either to the wrong, or the

situation or circumstance of the parties."

jurors. This province of the jury should

not be interfered with, unless it should

appear that the amount awarded was so

apparently excessive as to show passion

and prejudice. ..." Yazoo & M.V.R. Co.

v. May, 104 Miss. 422, 61 So. 449, 450

(1913). More recent Mississippi decisions

suggest some refinements on the _ review

standard. 24

Although the standard for review in

Mississippi provides the jury with consi-

derable latitude, the admonition against

excessiveness is not a hollow one. In

Jesco v. Shannon, 451 So. 2d 694, 704

(Miss.), cert. denied, 469 U.S. 1073

(1984), the Supreme Court of Mississippi

refused to allow a punitive damage

24commodore v. Bailey, 393 So. 2d 467, 471-72

(Miss. 1981), holding that a jury award for puni-

tive damages can be set aside if it is “arbitrary

or unreasonable. The amount cannot be determined

by any fixed rule"; Reserve Life Insurance v.

McGee, 444 So. 2d 803 (Miss. 1983), suggesting

that review is aiso available for "exceptional

Causes."

instruction based on an_ insubstantial

assertion of the willfulnese of the defen-

dant's misconduct. In addition to conven-

tional review in Mississippi, courts can

avail themseives of remittitur pursuant to

Miss. Code Ann. § 11-1-55 (Supp. 1986).

Through conventional review, remittitur,

and properly-phrased jury instructions,

the process of awarding punitive damages

proceeds in a fair way, fully consistent

with the obligation of the state of

Mississippi to implement its judicial

system in a manner that comports with

fundamental due process. “>

CONCLUSION

It has been demonstrated that neither

history, precedent, nor policy support a

reversal of the Mississippi Supreme Court.

There is no generic principle of propor-

“The Mississippi system conforms with the

decisionmaking and review recommendation of § 908

Restatement (Second) of Torts (1979).

tionality commanding fixed ratios or pre-

established limits in punitive damage

cases. There is no constitutional basis

to review punitive damages under the

Eighth Amendment. Finally, a close look

at punitive damages reveals a useful,

fair, and beneficial system.

Respectfully submitted,

Andrew F. Popper

Counsel of Record

The American University

Washington College of Law

Washington, DC 20016

(202) 885-2645

Attorney for Amici Curiae

Consumers Union, Consumer

Federation of America,

and the National Consumer

League

July 13, 1987

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