Petitioners Brief — Pacific Mutual Life Insurance v. Haslip
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————
No. 89-1279
IN THE
Supreme Court of the Un tes
OcToBER TERM, 1989
PACIFIC MUTUAL LIFE INSURANCE COMPANY,
Petitioner,
VS.
CLEOPATRA HASLIP, CYNTHIA CRAIG,
ALMA M. CALHOUN and EDDIE HARGROVE,
Respondents.
ON WRIT OF CERTIORARI
TO THE SUPREME COURT OF ALABAMA
BRIEF OF PETITIONER
Of Counsel: BRUCE A. BECKMAN
VICKI “V.W. LAI Counsel of Record
ADAMS, DUQUE & HAZELTINE ADAMS, DUQUE & HAZELTINE
523 West Sixth Street 523 West Sixth Street
Los Angeles, California 90014 Los Angeles, California 90014
(213) 620-1240 (213) 620-1240
OLLIE L. BLAN, Jr. J. MARK HART
BERT S. NETTLES SPAIN, GILLON, GROOMS,
SPAIN, GILLON, GROOMS, BLAN & NETTLES
BLAN & NETTLES 2117 Second Avenue North
2117 Second Avenue North Birmingham, Alabama 35203
Birmingham, Alabama 35203 (205) 328-4100
(205) 328-4100
Attorneys for Petitioner
Pacific Mutual Life Insurance Company
PETITION FOR CERTIORARI FILED FEBRUARY 7, 1990
CERTIORARI GRANTED APRIL 2, 1990
Lawyers Brief Service / Legal Printers / (213) 383-4457 / (714) 720-1510
adie
QUESTIONS PRESENTED
The following questions are presented by the Petitioner:
1. Whether Alabama law, as applied below, violates Due
Process by allowing the jury to award punitive damages as a
matter of "moral discretion," without adequate standards as
to the amount necessary to punish and deter and without a
necessary relationship to the amount of actual harm caused.
2. Whether Alabama law violated Pacific Mutual’s right to
Due Process under the Fourteenth Amendment by allowing
punitive damages to be awarded against it under a respondeat
superior theory.
3. Whether the amount of punitive damages in this case
was excessive, in violation of Pacific Mutual’s Due Process
right to be free of grossly excessive, disproportionate dam-
ages awards.
4. Whether the suit below, although nominally civil, must
be considered sufficiently criminal in nature as to the puni-
tive damages awarded therein to entitle Pacific Mutual to
certain protections under the Fifth and Fourteenth Amend-
ments to the United States Constitution.
5. Whether Alabama law is discriminatory in violation of
the Equal Protection Clause of the Fourteenth Amendment,
by encouraging disproportionate punishment without rational
basis.
6. Whether the constitutional defects in the award of puni-
tive damages against Pacific Mutual were cured by judicial
review and the potential for a remittitur.
=»
RULE 29.1 STATEMENT
Pursuant to Rule 29.1 of the Rules of this Court, petitioner
Pacific Mutual Life Insurance Company states that it is a
California mutual insurance company. It has no parent
company, non-wholly owned subsidiary or affiliate.
—
- lil -
TABLE OF CONTENTS
Page
QUESTIONS PRESENTED .....°........... i
RULE 29.1 STATEMENT. ............... ii
TABLE OF AUTHORITIES............... ix
OPINIONS BELOW................... l
EE ES eee l
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED ............... 1
STATEMENT OF THE CASE ............. 2
EE 2
B. THEACTIONBELOW ........... 3
C. STATEMENTOFFACTS.......... 3
1. Respondents’ Prior Coverage... .. . 3
2. Mr. Ruffin’s Solicitation ........ 3
3. Pacific Mutual Did Not Issue Group
ME ow tt tt ttt 4
4. The Separate Applications to Union
Fidelity and Pacific Mutual. ..... . 4
5. Issuance of the Separate Health and
EE 4
6. Pacific Mutual’s Agents’ Contract
Forbade Mr. Ruffin’s Conduct ..... 5
-iv-
Page
7. Cancellation of Union Fidelity’s
Health Coverage ............ 5
8. Mrs. Haslip’s Hospitalization. .... . 6
“TP ws Gs oe ce oe ke 6
>: Ts: 4s owe eee 6
i: SERRA ere ek Sy ag ee oe 7
c. The Punitive Damage Jury
fe a ee we ee oe oS 7
Wes Fes 64 24 3 eo 8 8
e. Pacific Mutual’s Appeal. .... . 8
f. The Alabama Supreme Court
Ras en eo Sig we ee se 8
g. Pacific Mutual’s Petition for
DS Fo Caw ew ee 9
SUMMARY OF ARGUMENT.............. 9
1. Standardless Jury Discretion. ........ 9
2. Respondeat Superior. ............ 10
3. Excessiveness ofthe Award ......... 10
4. Criminal Procedural Protections ....... 11
5. Judicial Review Did NotCure........ 11
ALABAMA LAW, AS HERE APPLIED, AND
PUNITIVE DAMAGES DOCTRINE GENER-
ALLY, VIOLATES DUE PROCESS BY
ALLOWING THE JURY TO AWARD PUNI-
TIVE DAMAGES AS A MATTER OF
“MORAL DISCRETION,” WITHOUT ADE-
QUATE STANDARDS AS TO THE
AMOUNT NECESSARY TO PUNISH AND
WITHOUT A NECESSARY RELATIONSHIP
TO THE AMOUNT OF ACTUAL HARM
igs Sehr” ihe a a Gana aaa
A. Punitive Damages Are Punishment,
Imposed Through State Action, And
As Such Are Subject To Due Proc-
a
B. The Jury Instruction On Punitive
Damages In This Case, Which
Conformed To Alabama Law, Gave
The Jury Unlimited Discretion To
Set The Amount Of Punishment To
Be Imposed. This Violated Pacific
Mutual’s Right To Due Process
Under The Fourteenth Amendment... .
1. Basic Due Process Required
Adequate Standards To Limit
Jury Discretion In Determining
The Severity Of Punishment ... .
Page
II.
IIT.
- Vi -
2. The Jury Instruction In This
Case, Which Froperly Stated
Alabama Law, Was Hopelessly
Vague And Incomprehensible
As A Basis. For Determining
a ee
C. The Absence Of Prior Establishment
Of The Punishment To Be Imposed
On Pacific Mutual for Mr. Ruffin’s
Conduct Violated Pacific Mutual's
Right to Due Process. ..........
ALABAMA LAW VIOLATED PACIFIC
MUTUAL’S RIGHT TO DUE PROCESS
UNDER THE FOURTEENTH AMEND-
MENT, BY ALLOWING PUNITIVE DAM-
AGES TO BE AWARDED AGAINST IT
UNDER A RESPONDEAT SUPERIOR
a, ee ee ee ee a ae ee
A. The Punitive Damages Award
Herein Violated Due Process By
Imposing Punishment For Conduct
Not Authorized Or Ratified, And
Not Performed To Benefit The
is e678 he es oe Ke 8
THE AMOUNT OF THE AWARD OF PUNI-
TIVE DAMAGES IN THIS CASE WAS
EXCESSIVE, IN VIOLATION OF PACIFIC
MUTUAL’S DUE PROCESS RIGHT TO BE
FREE OF GROSSLY EXCESSIVE, DIS-
PROPORTIONATE DAMAGES AWARDS . .
Page
.32
IV.
VI.
CONCLUSION
- Vii -
THE SUIT BELOW, ALTHOUGH NOMI-
NALLY CIVIL, MUST BE CONSIDERED
CRIMINAL IN NATURE AS TO THE PUNI-
TIVE DAMAGES AWARDED THEREIN,
ENTITLING PACIFIC MUTUAL TO PRO-
TECTION UNDER THE FIFTH AND FOUR-
TEENTH AMENDMENTS TO THE UNITED
STATES CONSTITUTION ..........
A. Beyond A Reasonable Doubt Stand-
DS Gus 6 + 6-04 ob 6 @ we
Ww tt tt te te es
C. UpperLimitOn Awards.........
D. Separation In The Order Of Trial Of
Liability Issues From Punitive
Damages Issues .............
ALABAMA PUNITIVE DAMAGES LAW
IS DISCRIMINATORY IN VIOLATION
OF THE EQUAL PROTECTION CLAUSE,
BY ENCOURAGING DISPROPORTIONATE
PUNISHMENT, WITHOUT RATIONAL
GP ee a ee ee
THE CONSTITUTIONAL DEFECTS IN THE
AWARD OF PUNITIVE DAMAGES
AGAINST PACIFIC MUTUAL IN THIS
CASE WERE NOT CURED BY JUDICIAL
REVIEW AND THE POTENTIAL FOR A
© 6 6.6 6 6 0 6 08 &.0 018 6
Page
- Viii -
Page
APPENDIX A
PARTIAL LIST OF ALABAMA JURY VER-
DICTS AWARDING PUNITIVE DAMAGES
OF$:00,000ORMORE ............ Al
APPENDIX B
VARIOUS ALABAMA STATUTORY OF-
FENSES AND CORRESPONDING MAXI-
otis. Leelee Peres Bl
- ix -
TABLE OF AUTHORITIES
Page
Cases
A.B. Small Co. v. American Sugar Refining Co.
ST. 13, 16, 37
Addington v. Texas
441 U.S. 418 (1979)... .....020-20,,20202.. 39
Aetna Life Ins. Co. v. Lavoie
470 So.2d 1060 (Ala. 1984). .....,.,...... 12
American Fed. of Labor v. Swing
ee 13
Baggett v. Bullitt
ER ie ee ene 44
Bankers Life and Casualty Ins. Co. v. Crenshaw
Co eee 18
Bell v. Wolfish
I Ea rt te i to A Bag 12
Bouie v. Columbia
Pee NS «6 so ok Se SreeQ 23, 42, 45
Browning-Ferris Industries of Vermont v.
Kelco Disposal, Inc.
492U.S.___, 109 S.Ct. 2909 (1989)... . . 9, 17, 33
Burgess v. Salmon
neil CE og aN Crd sre Ne 23, 37
Caider v. Bull
3 U.S. (3 Dall.) 386 (1798) ....... 23, 24, 32, 45
Page
Charter Hospital Of Mobile, Inc. v. Weinberg
to be published at 558 So.2d 150,
1990 Ala. Lexis 17 (Jan. 12, 1990). . . . 17, 21, 44, 46
City of Newport v. Fact Concerts, Inc.
a ae a ee eer 19
Civil Rights Cases
og ee ee are ar 13
Coates v. City of Cincinnati
ee 15, 20
Connally v. General Const. Co.
og GT ee a ee ae 15
Coombes v. Getz
a 23
Crowe v. State
485 So.2d 351 (Ala.Cr.App. 1984),
rev'd. on other grounds 485 So.2d 373
(Ala. 1985), cert. denied,
ee I 6 ek GC ee et eh eee A 20
Cummings v. Missouri
71 U.S. (4 Wall) 277 (1867)... ...... 23, 37, 40
Devlin v. Kearny Mesa AMC/Jeep/Renault, Inc.
ope FR OT ee ee 19, 20
Dobbert v. Florida
_ i | |, See a eee 24
Dowling v. Garner
195 Ala. 493, 70 So. 150 (Ala. 1915) ........ 17
° Ri -
Page
Electrical Workers v. Foust
See ee ea eee 18
Ettor v. Tacoma
6 o''o ke ee ebb ee eee 23
Ex Parte Garland
Pe Wes Oe We Ce ss 6s 6 es le ee 23
Fletcher v. Peck
> as PD OP CUED 6 6 ec 0 eee 0 e's 23
Furman v. Georgia
ED sab. V 6 2 6 bos 6 Sere See 44
Gertz v. Robert Welch, Inc.
es I oad se ae Oe SS 14, 18, 35, 41
Giaccio v. Pennsylvania
0 ee eee 13, 14, 20, 37
Gore v. United States
a Pn as 6 5 hb ce ee eS 6 8 ES 26
Grayned v. City of Rockford
A ee a 15, 42, 45
Greenbelt Coop. Publishing Assn. v. Bresler
ee eae ee 44
Gregg v. Georgia
es IG es ks Sa a 48 16, 33
Hammond v. City of Gadsden
493 So.2d 1374 (Ala. 1986). .......... 41-47
- Xli-
Page
Hogan v. Alabama Power Co.
oon Se.ae Se (Ale. 1977). www tt 17
How Ah Kow v. Nunan
12 Fed.Cas. 252 (Case 6, 546, 1877). ........ 40
Hughes v. Superior Court Of California
I, ge eS Ce a a 25
In Re Paris Air Crash
622 F.2d 1315 (9th Cir. 1980),
cert. denied, 449 U.S. 976 (1980) ......... 13, 37
In Re Winship
ae ee a ee 38
Jacobs v. Board of School Commissioners
490 F.2d 601 (7th Cir. 1973)... .........0.., 13
Jenkins v. Werger
564 F.Supp. 806 (D. Wyo. 1983). .......2..., 20
Jordan v. De George
ee Ne i ee oe ee ec ee bees 13
Kennedy v. Mendoza-Martinez
2 37
Kolender v. Lawson
oe 20
Lanzetta v. New Jersey
Ee 15
- xiii -
Page
Livingston v. State
419 So.2d 270 (Ala. Cr. App. 1982). ........ 26
Logan v. Zimmerman Brush Co.
ee eee ee ee 31
Marks v. United States
ee ee a ee ae 22, 23, 42
Mathews v. Eldridge
oS ee ee 38-40, 46
Miller v. Florida
eee 16, 22, 24, 26
Morissette v. United States
ee ee ee eee 28
New York Central And Hudson River
R.R. Co. v. United States
PU IS 6 oe 6s ee et ee eee 28, 30
Old Dearborn Distributing Co. v.
Seagrams-Distillers Corp.
PU SEs 6 5 6 6s 2 0 eke ee BE 41
Papachristou v. City of Jacksonville
Re eae ee ee ee ee 40
Plyler v. Doe
ee ee ee 33, 40
Riss & Co. v. United States
262 F.2d 245 (8th Cir. 1958). .......... 28, 30
- XiV -
Page
Roberts v. United States Jaycees
oo 42, 45
Robinson v. California
iC Sse 6 sw sg ee a ee ee 8 31
Roginsky v. Richardson-Merrell, Inc.
ee 35
Roller v. Holly
es 6 6 ocs p 6 6.8 & 6 ee 0 6 8 17
Rookes v. Barnard (1964)
ASL. 1029; | AB Bag. Regt. 367... 2. ww we 21
Rosenbloom v. Metromedia, Inc.
ee 14, 18, 41
Rummel v. Estelle
en ig g ln ee s 47
Shelley v. Kraemer
I a a ee eet a eis iS 13
Smith v. Goguen
CG ee ee eee 20
Smith v. Wade
PE I ies Cd Ke k's oe oe oe 14, 19
Solem v. Helm
Ne ea es ey 8 ie ee 33-35, 47
Standard Oil Of Texas v. United States
of & ef. Lo Se 28, 30
- XV -
Page
Suits v. State
507 P.2d 1261 (Okla.Crim. 1973) .......... 24
Thompson v. City Of Louisville
Ee 31
Toole v. Richardson-Merrell, Inc.
251 Cal.Age.26 669 (1967)... we ee ee 35
Travelers Indemnity Co. v. Armstrong
442 N.E.2d 349 (Ind. S.Ct. 1982) ...... 38-39 41
Trop v. Dulles
CE. + 6. 6 « 6 6s » 6% 32, 33, 37
Tullidge v. Wade
8 SS 21
2-D’s Logging, Inc. v. Weyerhauser Co.
ee 45
United States v. A & P Trucking Co.
ee ae 28
United States v. Balint
ae eas ec eee be 6 eo 28
United States v. Batchelder
ee 16, 26
United States v. Cohen Grocery Co
a 15, 45
United States v. Eaton
oN 26
- XVi -
Page
United States ex. rel. Marcus v. Hess
at7 US. Sey Gee cc ce hte Cee 32, 37
United States v. Halper
490 U.S. _, 109 S.Ct. 1892 (1989)... ..... 33, 37
United States v. Hudson and Goodwin
11 U.S. (7 Coamesh) 32 (IBID) 2 ww wc et 24, 26
United States Trust Co. v. New Jersey
EF ST, eee 23
United States v. Ward
O48 U.S. BER CREEP. we ee cetwre eee 33
Village of Hoffman Estates v. Flipside,
Hoffman Estates, Inc.
ee 0 | 14
Walters v. St. Louis
347 US. pe CURD. weet kt eee 41
Weaver v. Graham
450 US. SECISR) ww eve siecon es eee 22, 23
Williams v. Illinois
See U.S. dae CORT. cece ee eee 48
Wisconsin v. Constantineau
OR |) er a 714
Yick Wo v. Hopkins
869 U.S. Se Che tte te eee 25, 40, 45
Oe ee tN TD el seri aie ee
eie,.~
- XVii -
Page
United States Constitution
ES a ee ee ee 2
Fifth Amendment.......... 1, 10, 13, 22, 36, 37, 40
EE LE eee 37
Ee ee ee 33, 40
Fourteenth Amendment. ...........+24-. passim
Federal Statutes
EE eee l
Tee 19
State Statutes
Ala. Code §§ 13A-4-3, 13A-5-12 and
EE Oe 34
Calif. Ins. Code § 4010. ............. oa
Colo. Rev. Stat. § 13-25-127(2) (Supp. 1986). ...... 38
Publications
ALI Model Penal Code, Comment On § 207,
Tentative Draft No. 4(1956). ............, 29
IV Blackstone, Commentaries (1st Ed. Reprint). ..... 20
Campbell, Law Of Sentencing, §§ 1,2(1978)....... 24
Canfield, Corperate Responsibility For Crime
14 Colum.L.Rev. 469 (1914)... .......... 29
- XVili -
Clark, Handbook of Criminal Law (ist Ed. 1984). . .
Francis, Criminal Responsibility Of Corporations,
eee ee ee
Jeffries, Legality And Vagueness, And The
Construction Of Penal Statutes,
ho SS re
Mueller, Mens Rea And The Corporation,
ee eee
Note, Corporate Criminal Liability For Acts In
Violation Of Company Policy,
Ses Ge & 0 6 6 6-48 6 6 © 0 2
Perkins, Criminal Law (2d Ed. 1969). ........
Pound, Criminal Justice In America(1951)......
Rich, Law And The Administration Of Justice (1975) . . .
2 L. Schlueter and K. Redden, Punitive
Damages (2d Ed. 1989) .............
Tomas, The Penal Equation (1978)} .........
Wharton, Criminal Law, §9(1978)..........
Willis, Measure of Damages When Property
Is Wrongfully Taken By An Individuai,
22 Harv.L.Rev. 419(1909) ...........
0 heats Gms
xo
PETITIONER’S BRIEF ON THE MERITS
Pacific Mutual Life Insurance Company (“Pacific
Mutual”) respectfully submits its brief on the merits as
follows:
OPINIONS BELOW
The opinion of the Jefferson Circuit Court is unreported.
(Pet. App. Al-A16.]! The opinion of the Supreme Court of
Alabama [Pet. App. B1-B16] is reported as Pacific Mutual
Life Ins. Co. v. Cleopatra Haslip, et al., No. 87-482 (Sept.
15, 1989) (to be reported at 553 So.2d 537 (1990)).
JURISDICTION
The jurisdiction of this Court is invoked under 28 U.S.C.
Section 1257(a).
The judgment of the Supreme Court of Alabama was
entered on September 15, 1989. A timely petition for rehear-
ing was denied on November 9, 1989. [Pet. App. Cl.] On
December 22, 1989 Justice Kennedy issued an order granting
Pacific Mutual’s application for stay, which was confirmed
by the full Court on January 8, 1990. [Pet. App. E1.]
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED
1. The Fifth Amendment to the United States Constitution
provides in relevant part:
1 Documents in the Appendix to the Petition will be cited “Pet. App.,”
those in the Petitioner’s Reply to Respondents’ Brief in Opposition “Pet.
Reply Cert.,” and those in the Joint Appendix “JA.”
~ =
“No person shall ... be subject for the same
offense to be twice put in jeopardy of life or
limb; nor shall be compelled in any criminal
case to be a witness against himself, nor be
deprived of life, liberty or property, without due
process of law; nor shall private property be
taken for public use, without just compensation.”
2. The Fourteenth Amendment, Section 1, of the United
States Constitution provides in relevant part:
“... No state shall make or enforce any law
which shall abridge the privileges or immunities
of citizens of the United States; nor shall any
State deprive any person of life, liberty, or
property, without due process of law; nor deny
to any person within its jurisdiction the equal
protection of the laws.”
3. Article I, § 10[1], of the United States Constitution
provides in part:
“No state shall... pass any ... ex post facto
Law...”
STATEMENT OF THE CASE
A. THE PARTIES
Petitioner Pacific Mutual is a mutual life insurance com-
pany, owned by its policyholders [Calif. Ins. Code § 4010).
Respondents Cleopatra Haslip, Cynthia Craig, Alma
Calhoun and Eddie Hargrove (“respondents”) are employees
of the City of Roosevelt (“the City”) in the State of Alabama.
Respondents were participants in an insurance plan spon-
sored by the City in which Pacific Mutual provided individ-
ual life insurance coverage.
a,
B. THE ACTION BELOW
Respondents’ action against Pacific Mutual involved a
suit seeking punitive damages for the misconduct of one of
Pacific Mutual’s nonexclusive soliciting agents, Lemmie L.
Ruffin, Jr. (“Mr. Ruffin”), who at the time of the alleged acts
was acting on behalf of another company, Union Fidelity
Life Insurance Company (“Union Fidelity”) with respect to
a health insurance policy issued by Union Fidelity, not
Pacific Mutual. [RT 470-75.]”
Pacific Mutual, in an amendment to answer, raised the
federal constitutional challenges presented here. [JA 11-14,
25-27, 29-35.) The jury found Pacific Mutual to be
vicariously liable for punitive damages for Mr. Ruffin’s acts.
Pacific Mutual renewed its constitutional challenges by a
motion for directed verdict [JA 37-44], and by a post-trial
motion [CT 277-325].
Pacific Mutual appealed, again raising its federal constitu-
tional challenges, which were rejected in the opinion of the
Alabama Supreme Court affirming the trial court judgment.
[Pet. App. B1l.] Pacific Mutual petitioned for rehearing,
which was denied. [Pet. App. C1.]
C. STATEMENT OF FACTS
i. Respondents’ Prior Coverage
Respondents are employees of the City of Roosevelt. The
City allowed its employees to purchase a group health insur-
ance policy through the municipality. [RT 91.]
2. Mr. Ruffin’s Solicitation
Sometime in 1981, Mr. Ruffin, who was then a soliciting
agent for both Pacific Mutual and Union Fidelity, forwarded
a mail solicitation to the City [RT 431-32], and later met
with the City’s mayor, city attorney and city clerk. [RT 92,
2 The Clerk's Transcript will hereinafter be designated as “CT.” The
Reporter's Transcript of the proceeding will hereinafter be designated as
“7.
«lis
96, 132, 431-32.] Mr. Ruffin presented his Pacific Mutual
business card and discussed the City’s interest in obtaining
health and life insurance. [RT 92-93, 96, 98-99, 429,
435-36.]
3. Pacific Mutual Did Not Issue Group Health Policies
While Pacific Mutual issued individual life policies to
City employees, it did not underwrite group health insurance
policies for municipalities. [RT 442-43.] Pacific Mutual did,
however, allow its agents to broker business with other
insurance companies. [RT 469-70.] Mr. Ruffin at that time
was also a licensed agent of Union Fidelity. Union Fidelity,
a separate and distinct company from Pacific Mutual, did
issue group health insurance to municipalities. [RT 262-63.]
4. The Separate Applications to Union Fidelity
and Pacific Mutual
Mr. Ruffin submitted a proposal to the City indicating he
would place life insurance with Pacific Mutual and health
insurance with Union Fidelity. [RT 439, 442-43, 473,
475-76.] The City approved the proposals, and on August
19, 1981, Mr. Ruffin completed separate applications for the
City and its employees for group health coverage with Union
Fidelity and individual life policies with Pacific Mutual.
[RT 219-21, 283, 312-16, 335.] Mr. Ruffin then submitted
the City’s application for health insurance to Union Fidelity.
The City’s application for life insurance was submitted to
Pacific Mutual. Pacific Mutual and Union Fidelity are sepa-
rate companies witheut any affiliation. [RT 262-63.]
5. Issuance of the Separate Health and Life Policies
Union Fidelity approved the health application and issued
group health coverage to the City effective September 1,
1981. [RT 255.] Union Fidelity later confirmed the health
coverage by letter with the city clerk. [RT 138-39.] Pacific
Mutual approved tne applications for individual life insur-
ance and began issuing life insurance coverage to the City’s
employees. The premium checks for both the life and health
wis
insurance policies were collected by Mr. Ruffin. [RT
115-16, 141-42.]
6. Pacific Mutual’s Agents’ Contract Forbade
Mr. Ruffin’s Conduct
An arrangement was made with Union Fidelity to have
premium billings sent to Mr. Ruffin at his office in the
Pacific Mutual branch office in Birmingham. [RT 271.]
Under Mr. Ruffin’s sales agent’s contract with Pacific
Mutual, Mr. Ruffin was specifically forbidden from collect-
ing any premiums beyond the initial premium submitted with
the application. [JA 122-25.] Nevertheless, Mr. Ruffin
instructed the city clerk to make all premium checks payable
to him and to remit the premiums directly to him. [RT 141.]
Pacific Mutual’s agent in charge of the Birmingham
office, Patrick Lupia, was also licensed with Union Fidelity
and other companies. [RT 741.] Mr. Lupia was unaware Mr.
Ruffin was collecting premium checks from the City or
having the premium checks made payable to him indivi-
dually. [JA 83-84.] It appears that Mr. Ruffin failed to
remit premiums received by him from the City to Union
Fidelity. Union Fidelity sent lapse notices to respondents in
care of Mr. Ruffin and Mr. Lupia. Mr. Ruffin apparently did
not forward them to respondents. [RT 143, 147, 161-62, 256,
270.)
7. Cancellation of Union Fidelity’s Health Coverage
In the fall of 1981, the Union Fidelity health coverage for
the City was cancelled. Shortly thereafter, Mr. Ruffin
attempted to obtain replacement health insurance coverage
for the City’s employees. [RT 454-56, 479.] He appears to
have submitted applications therefor to Union Fidelity and to
John Alden Insurance Company. [RT 455, 456, 479.] Mr.
Ruffin’s deposition testimony, which was read at trial, was
that he continued to collect the health portion of the
premiums so that he would have the premium money to
submit to the replacement carrier. [RT 455.] An application
for health insurance was submitted by Mr. Ruffin to both
wis
John Alden and Union Fidelity. Mr. Ruffin received prelimi-
nary approval and was assigned a case number. [RT 455,
456-58.] However, before a policy was ever issued, respon-
dent Cleopatra Haslip was hospitalized. [/d.]
8. Mrs. Haslip’s Hospitalization
Mrs. Haslip was hospitalized for a kidney infection on
January 23, 1982 before a replacement policy was ever
issued. [RT 455, 456-58.} Mrs. Haslip incurred $2,500 in
hospital bills. Because the hospital could not confirm insur-
ance coverage it required her to pay a cash sum toward her
final bill upon her discharge. The hospital records for Mrs.
Haslip’s hospitalization do not list Pacific Mutual or Union
Fidelity as the insurer, but instead list another company,
Commercial Insurance Company. A claim for the hospital-
ization was never filed with Pacific Mutual. [RT 235.]
Mr. Ruffin testified that Mrs. Haslip called him after her
discharge, angered about having to write a check to the
hospital and demanded her premium payment back. [RT
458-60, 480-82.] With the deletion of Mrs. Haslip, there
were not enough participating employees for issuance of the
replacement policy, so Union Fidelity issued a premium
refund check to Mr. Ruffin, which he said he attempted to
tender to the city clerk, who refused to take the check. [RT
460.] Mr. Ruffin then placed the funds into his wife’s check-
ing account and did not return the funds to Union Fidelity or
Pacific Mutual. [JA 71-72.]
9. The Litigation
a. The Pleadings
Respondents commenced this action on May 25, 1982 in
the Jefferson Circuit Court alleging that Mr. Ruffin collected
premiums but failed to remit them to the insurers so that
respondents’ coverage lapsed without their knowledge. The
complaint claimed damages against Pacific Mutval and Mr.
Ruffin for fraud, breach of contract and bad faith. [JA 3-10.]
Union Fidelity was not named as a defendant. Respondents
yr
amended the complaint several times. [JA 11-17, CT 66-68.]
Pacific Mutual, in an amended answer, raised federal con-
stitutional challenges to an award of punitive damages. [JA
29-35.]
b. The Trial
The case was submitted to the jury on respondents’ fraud
claims on both the health and life insurance policies against
Pacific Mutual.
c. The Punitive Damage Jury Instructions
Following the trial court’s charge on the issue of liability,
the jury was instructed that once it determined there was
liability for fraud, it could award punitive damages in its
discretion. The court charged as follows:
“Now, if you find that fraud was perpetrated
then in addition to compensatory damages you
may «nm your discretion, when I use the word
discretion, I say you don’t have to even find
fraud, you wouldn’t have to, but you may, the
law says you may award an amount of money
known as punitive damages.
“This amount of money is awarded to the
plaintiff but is not to compensate the plaintiff
for any injury. It is to punish the defendant.
Punitive means to punish or it is also called
exemplary damages, which means to make an
example. So, if you feel or not feel, but if you
aie reasonably satisfied from the evidence that
the plaintiff, whatever plaintiff you are talking
about, has had a fraud perpetrated upon them
and as a direct result they were injured and in
addition to compensatory damages you may in
your discretion award punitive damages.
“Should you award punitive damages, in
fixing the amount, you must take into considera-
tion the character and degree of the wrong as
_ es
shown by the evidence and the necessity of
preventing similar wrongs.” [JA 103-106.)
d. The Verdict
On August 7, 1987 the jury rendered a verdict in favor of
each of the respondents and determined that Pacific Mutual
was liable for Mr. Ruffin’s acts on an apparent authority
respondeat superior basis, as follows:
Cleopatra Haslip — $1,040,000;°
Cynthia Craig — $12,400;
Alma Calhoun — $15,290; -
Eddie Hargrove — $10,288.
(CT 342-43.]
Pacific Mutual timely moved for new trial, or in the al-
ternative, judgment notwithstanding the verdict, again raising
its constitutional issues, which was denied on December 11,
1987. [Pet. App. Al.]
e. Pacific Mutual’s Appeal
Pacific Mutual raised a number of state law grounds of
error, and raised each of the constitutional arguments regard-
ing the award of punitive damages set forth in the Questions
Presented section, above.
f. The Alabama Supreme Court Decision
The Alabama Supreme Count, in a 5 to 2 decision affirmed
the judgment below on September 15, 1989. [Pet. App.
B1-B16.]
3 Mrs. Haslip’s claim was,as to the Union Fidelity health insurance
policy. Pacific Mutual was therefore fined on a respondeat superior basis
with respect to insurance it did not issue. in final argument, Mrs. Hasiip
claimed actual damages of $3,923.84, aggregated into a request for
compensatory damages of $200,000, and punitive damages of $3,000,000
[R.T. pp. 810, 812, 814]. In their reply to Pacific Mutual's Petition For
Rehearing before the Alabama Supreme Court, plaintiffs categorized the
general verdict as contaiaing a punitive damages award of $1,040,000.
[Pet. Reply Cert. App. Cl.]
. ¥
Justice Maddox and Justice Steagall of the Alabama
Supreme Court voted to vacate the punitive damages award,
finding that the punitive damages award in this case violated
the Due Process Clause of the Fourteenth Amendment. They
also concluded that Alabama’s judicial review processes did
not cure the violation. [Pet. App. B14-B16.]
g. Pacific Mutual’s Petition for Rehearing
Pacific Mutual filed a timely petition for rehearing regard-
ing the constitutional validity of punitive damages, citing the
concurrences in Browning-Ferris Industries of Vermont v.
Kelco Disposal, Inc., 492 U.S. ___, 109 S.Ct. 2909 (1989).
The Alabama Supreme Court denied that petition by an order
dated November 9, 1989. [Pet. App. C1.]
SUMMARY OF ARGUMENT
1. Standardless Jury Discretion. Alabama law for
determining the amount of punitive damages, and the jury
instruction in this case authorized thereunder, are imper-
missibly vague and incomprehensible, and therefore void
under the Due Process Clause of the Fourteenth Amendment,
because they contain no standard for determining the amount
to be awarded.
Punitive damages are punishment, and therefore the stand-
ard of scrutiny for vagueness should be similar to that in
criminal cases. The Due Process rules regarding void-for-
vagueness apply in civil actions and apply as to the deter-
mination of the severity of punishment.
The jury instruction in this case told the jury that if it
chose to punish by an awaid of punitive damages, in deter-
mining the amount it should consider the “character and
degree of the wrong” and the “necessity of preventing similar
wrongs.” The instruction is contentless and hopelessly vague
as to (i) under what circumstances punishment is deserved,
(ii) the relative degree of punishment to be imposed, and
7 *
(iii) the range within which punishment might properly be
imposed.
Prior decisions of this Court have incorporated into the
Fifth and Fourteenth Amendments the concerns of the Ex
Post Facto Ciauses as to fair notice of penalty and prohibi-
tion of retroactive changes in punishment adverse to the
defendant. The punitive damages award here violated this
fundamental principle of legality, that punishable conduct be
defined and the penalty be set prior to commission of forbid-
den conduct.
The vagueness of Alabama law was such that no standard
at all was supplied to the jury, which was left free to punish
selectively and arbitrarily and to give free reign to bias,
prejudice and wealth redistribution inclinations, in violation
of both Due Process and Equal Protection guarantees of the
Fourteenth Amendment.
2. Respondeat Superior. Due Process requires that cor-
porations not be punished on a respondeat superior basis
where, as here, the acts of the agent were not performed in
the business of the corporation, with intent tu benefit the
corporation.
Here, the fraudulent intent of Mr. Ruffin cannot be im-
puted to Pacific Mutual consistently with Due Process be-
cause, at the time Mr. Ruffin diverted the premiums on the
Union Fidelity policy, he was acting for himself, with respect
to the policy of another company. An agent stealing from
the principal cannot be deemed to have been acting with
intent to benefit the principal, nor can such theft be a valid
basis for punishment under Due Process.
3. Excessiveness of the Award. Civil penalty awards are
excessive in violation of Due Process if grossly dispropor-
tionate to the harm caused. Here, the award was in excess of
$1,000,000, where actual damages from nonpayment of
medical bills under the Union Fidelity policy, for which no
claim was ever made, was $3,923.94. Under any test of
excessiveness, the award imposed on Pacific Mutual on an
_
apparent authority basis for acts of Mr. Ruffin of pocketing
premiums, was excessive. If Pacific Mutual was involved in
the conduct at all, the premiums were stolen from it. Any
award in such circumstances is excessive.
4. Criminal Procedural Protections. Punitive damages
are punishment, and in this case, severe punishment. Under
the tests to determine the requirements or procedural Due
Process, additional trial procedural protections are required
to establish the appropriate level of confidence in the result,
in view of the risk to defendants in these cases. Such protec-
tions, as relevant to this case, are a beyond a reasonable
doubt standard of proof, unanimous jury, an upper limit on
awards, and bifurcation of the trial to try underlying liability
before trial of punitive damages issues.
Failure to accord these protections, other than unanimous
jury, to Pacific Mutual at the trial herein, violated Pacific
Mutual’s right to Due Process and requires vacation of the
award.
5. Judicial Review Did Not Cure. The reviewing courts
in Alabama had no better standards by which to review the
jury award than the jury had in rendering it. The various
factors cited by the Alabama Supreme Court to be considered
in reviewing punitive damages awards amount to no more
than a test of excessiveness. Further, the trial court did not
hold a hearing to consider such factors, and the reasons cited
by that Court as upholding the award are unrelated to such
factors. Judicial review merely transferred standardless
discretion to the reviewing courts, to make a judgment upon
bases which would have been equally invalid had the court
initially set the punishment. It is submitted that the punitive
damages award imposed upon Pacific Mutual should be
vacated.
o is
I. ALABAMA LAW, AS HERE APPLIED, AND
PUNITIVE DAMAGES DOCTRINE GENER-
ALLY, VIOLATES DUE PROCESS BY AL-
LOWING THE JURY TO AWARD PUNI-
TIVE DAMAGES AS A MATTER OF
“MORAL DISCRETION,” WITHOUT ADE-
QUATE STANDARDS AS TO THE AMOUNT
NECESSARY TO PUNISH AND WITHOUT
A NECESSARY RELATIONSHIP TO THE
AMOUNT OF ACTUAL HARM CAUSED
Alabama law and the jury instruction below which that
law authorized are impermissibly vague and indefinite re-
garding the severity of punishment to be imposed in a puni-
tive damages award, in violation of the Due Process Clause
of the Fourteenth Amendment.
The Dve Process clause of the Fourteenth Amendment
provides, “... [NJor shall any state deprive any person of
life, liberty, or property, without due process of law. . .”
A. Punitive Damages Are Punishment, Im-
posed Through State Action, And As
Such Are Subject To Due Process
Requirements.
Punitive damages under Alabama law,* and under the
laws of nearly all other states,» are imposed expressly for the
purpose of retribution and deterrence. These are punishment
purposes [Bell v. Wolfish, 441 U.S. 520 (1979)].
State action is present in this case, because actions by
State courts and judicial officers, in their official capacities,
including enforcement in litigation among private parties, of
private agreements, state law, and common law policy, is
4 Aetna Life Ins. Co. v. Lavoie, 470 $0.24 1060 (Ala. 1984),
5 2 L. Schlueter and K. Redden, Punitive Damages (2d Ed. 1989),
pp. 168-270.
a.
state action within the Fourteenth Amendment [Civil Rights
Cases, 109 U.S. 3, 11, 17 (1883); American Fed. of Labor v.
Swing, 312 U.S. 321 (1941); Shelley v. Kraemer, 334 U.S. 1
(1948)].
State action is further present because the imposition of
punitive damages is not a private right, but is a public inter-
est in retribution and deterrence; and plaintiffs in such ac-
tions act as private attorneys general in seeking to effect that
interest [Jn Re Paris Air Crash, 622 F.2d 1315, 1319-1320
(9th Cir. 1980), cert. denied 449 U.S. 976 (1980)].
The fact that the punishment® is imposed in a civil action
among private litigants does not insulate the matter from Due
Process scrutiny [A.B. Small Co. v. American Sugar Refining
Co., 267 U.S. 233, 239 (1925); Jordan v. De George, 341
U.S. 223, 231 (1951); Giaccio v. Pennsylvania, 382 U.S.
399, 401-403 (1966); Jacobs v. Board of School Commis-
sioners, 490 F.2d 601, 605 (7th Cir. 1973)].
In A.B. Small Co. v. American Sugar Refining Co., above,
an action to recover for the breach of two contracts for the
sale of sugar to a dealer, defenses were asserted that the
contracts were unlawful *s violating the Lever Act, which
made unlawful any “unjust or unreasonable ... charge in...
dealing with any necessaries,” or “to exact any excessive
price for necessaries,” These defenses were successfully
demurred to as violating the Due Process Clause of the Fifth
Amendment.
In upholding this ruling that the Lever Act violated the
plaintiff's Due Process rights in the context of a civil suit,
this Court stated, at page 239:
“The defendant attempts to distinguish those
cases because they were criminal prosecutions.
But that is not an adequate distinction. The
ground or principle of the decisions was not such
© «Pynishment” will be used in this brief to refer to the punitive damages
goals of retribution and deterrence.
-14-
as to be ap;licable only to criminal prosecutions.
It was not the criminal penalty that was held
invalid, but the exaction of obedience to a rule
or standard which was so vague and indefinite as
really to be no rule or standard at all. Any other
means of exaction, such as declaring the trans-
action unlawful or stripping a participant of his
rights under it, was equally within the principle
of those cases.”
The fact that states have chosen to enforce punishment
through civil actions by private attorneys general does not
affect Constitutional requirements. In Giaccio v. Pennsyl-
vania, 382 U.S. 399, 402 (1966), this Court held that the
placement of a civil label on a statute did not affect the
application of Due Process principles. While economic
regulations may be subjected to a less strict vagueness test
[Village of Hoffman Estates v. Flipside, Hoffman Estates,
Inc., 455 U.S. 489, 498 (1982)], it is submitted that where,
as in punitive damages cases, punishment is to be imposed
for proscribed conduct, a level of scrutiny should be given
similar to that applied to criminal sanctions. As noted in
prior decisions of this Court, punitive damages awards are
“quasi-criminal,”’ “serve the same function as criminal
penalties”® and are private fines imposed to punish and
deter conduct.? Close scrutiny is additionally appropriate
because of the stigma and loss of reputation which attaches
to a punitive damages award. [See Wisconsin v. Constan-
tineau, 400 U.S. 433 (1971)].
7 Smith v. Wade, 461 U.S. 30, 59 (1983), Rehnquist, J., dissenting.
8 Rosenbloom v. Metromedia, Inc., 403 U.S. 29, 82-84 (1971), Marshall,
J., dissenting.
9 Gertz v. Robert Welch, Inc., 418 U.S. 323, 350 (1974).
= +
B. The Jury Instruction On Punitive Dam-
ages In This Case, Which Conformed To
Alabama Law, Gave The Jury Unlimited
Discretion To Set The Amount Of Pun-
ishment To Be Imposed. This Violated
Pacific Mutual’s Right To Due Process
Under The Fourteenth Amendment.
Alabama punitive damages law, and the jury instructions
it authorized in this case provided no meaningful standards
whatsoever for determining the amount of punishment to be
imposed. As a result, both the law and jury instruction,
which accurately stated it, are impermissibly vague and
indefinite. The resulting award against Pacific Mutual is
therefore invalid.
1. Basic Due Process Required Ade-
quate Standards To Limit Jury Dis-
cretion In Determining The Severity
Of Punishment.
Laws forbidding or requiring conduct must give the per-
son of ordinary intelligence a reasonable opportunity to know
what is prohibited, so he or she may act accordingly. Vague
laws may trap the innocent by not giving fair warning.
[Grayned v. City of Rockford, 408 U.S. 104, 108-109 (1972);
Coates v. City of Cincinnati, 402 U.S. 611, 614 (1971);
Lanzetta v. New Jersey, 306 U.S. 451, 453 (1939); Connally
v. General Const. Co., 269 U.S. 385, 393, 395 (1926); United
States v. Cohen Grocery Co., 255 U.S. 81 (1921)].
In Grayned v. City of Rockford, above, this Court stated,
at 408 U.S., pages 108-109:
“A vague law impermissibly delegates basic
policy matters to policemen, judges, and juries
for resolution on an ad hoc and subjective basis,
with the attendant dangers of arbitrary and
discriminatory application.”
= @
These principles apply as weil to the prescription of the
range of punishment as to the definition of forbidden or
required conduct. [United States v. Batchelder, 442 U.S.
114, 123 (1979); Gregg v. Georgia, 428 U.S. 153, 189
(1976); Miller v. Florida, 482 U.S. 423, 429, 435-436
(1987)]. Where, as here, the range of permissible punish-
ment was not stated in a law to be enforced, this basic policy
decision was left to the jury and reviewing judges “on an ad
hoc and subjective basis, with the attendant dangers of arbi-
trary and discriminatory application.”
The same Due Process concerns apply in the case of civil
suits involving the consequences of forbidden conduct [A.B.
Small Co. v. American Sugar Ref. Co., 267 U.S. 233, 239
(1925))].
2. The Jury Instruction In This Case,
Which Properly Stated Alabama
Law, Was Hopelessly Vague And
Incomprehensible As A Basis For
Determining Puniskment.
In this case the trial court charged the jury:
“... [I)f you find fraud, you may in your
discretion award what is known as punitive
damages.
“
“This amount of money is awarded to the
plaintiff but is not to compensate the plaintiff
for any injury. It is to punish the defendant...
“Should you award punitive damages, in
fixing the amount, you must take into considera-
tion the character and the degree of the wrong as
shown by the evidence and the necessity of
preventing similar wrongs.” [RT 895, 898].
This jury instruction is incomprehensibly vague and
indefinite, and told the jury it could do as it pleased. The
two criteria stated are contentless and meaningless as stand-
. FP
ards for a decision on whether to punish or how much to
punish. “The character and degree of the wrong” is hope-
lessly vague as a basis for determining what conduct de-
serves punishment under what circumstances. Similarly, “the
necessity of preventing similar wrongs” set forth no mean-
ingful basis upon which the jury could decide whether
Pacific Mutual deserved punishment, and if so, how much
punishment was necessary or appropriate.
The jury was left to make these decisions based only upon
their biases or visceral reactions arising from their individual
temperaments, backgrounds and societal concerns, and were
therefore free to punish selectively and give reign to bias,
prejudice and wealth distribution tendencies. Due Process
must rest on a firmer foundation. [See Roller v. Holly, 176
U.S. 398, 409 (1900)).
As stated by Justice Brennan (concurring) regarding a
very similar instruction, in Browning-Ferris Industries of
Vermont, Inc. v. Kelco Disposal, Inc., 492 U.S. ____, 109
S.Ct. 2909 at page 2923:
“Guidance like this is scarcely better than no
guidance at all ... The point is ... that the
instruction reveals a deeper flaw: the fact that
punitive damages are imposed by juries guided
by little more than an admonition to do what
they think is best.”
In this case, which again is typical, the jury was, as noted
by Justice Brennan in Browning-Ferris [109 S.Ct. 2909 at
page 2923], “left largely to [itself] in making this important,
and potentially devastating, decision.”
10 Alabama case law recognizes that no legal measure limits this jury
discretion [Dowling v. Garner, 195 Ala. 493, 70 So. 150 (Ala. 1915);
Hogan v. Alabama Power Co., 351 So,2d 1378, 1382 (Ala. 1977); Charter
Hospital Of Mobile, Inc. v. Weinberg, to be published at 558 So.24¢ 150,
1990 Ala. Lexis 17 (Jan. 12, 1990), Houston, J., concurring).
ith.
This Court has noted the arbitrary and unpredictable
results of this unguided discretion in prior decisions.
In Gertz v. Robert Welch, Inc., 418 U.S. 323 (1974), this
Court invalidated punitive damages under state law standards
in defamation cases, and stated, at page 350:
“In most jurisdictions jury discretion over the
amounts awarded is limited only by the gentle
rule that they not be excessive. Consequently,
juries assess punitive damages in wholly unpre-
dictable amounts bearing no necessary relation
to the actual harm caused. And they remain free
to use their discretion selectively to punish
expressions of unpopular views... .”
In Rosenbloom v. Metromedia, Inc., 403 U.S. 29 (1971),
Justice Marshall, dissenting, analyzed punitive damages, in a
libel case, in terms directly applicable to the Due Process
concerns raised here by Pacific Mutual, stating at pages
82-84:
“... This discretion allows juries to penalize
heavily the unorthodox and the unpopular and
exact little from others.... These awards are
not to compensate victims; they are only
windfalls.... {iNJor is there even any way to
determine that the jury has considered the cul-
pability of the conduct involved in the particular
case. Thus the essence of the discretion is unpre-
dictability and uncertainty.”
In Electrical Workers v. Foust, «42 U.S. 42 (1979), this
Court banned punitive damages in union representation
cases, noting, at page 50, that “the impact of these windfall
recoveries is unpredictable and potentially substantial.”
In Bankers Life and Casualty Ins. Co. v. Crenshaw, 486
U.S. 71 (1988), Justice O’Connor, concurring, noted with
respect to the similar law and procedures in Mississippi, at
pages 87-88:
-19-
“ ... This grant of wholly standardless discre-
tion to determine the severity of punishment
appears inconsistent with due process.”
In City of Newport v. Fact Concerts, Inc., 453 U.S. 247
(1981), this Court banned punitive damages in suits against
municipal corporations in 42 U.S.C. § 1983 actions.
In Smith v. Wade, 461 U.S. 30 (1983), cogent objections
to punitive damages generally were set forth (Rehnquist, J.,
dissenting).
The concerns regarding punitive damages expressed in the
above cases are, it is submitted, Due Process concerns, appli-
cable here.
Because punitive damages awards in large measure de-
pend upon the degree to which the plaintiff's counsel has
succeeded in arousing the anger of the jury toward the defen-
dant, the awards, under present procedures, depend upon the
idiosyncratic reactions of each jury. This fact, and its conse-
quences, were commented upon in Deviin v. Kearny Mesa
AMC/Jeep/Renault, Inc., 155 Cal.App.3d 381 (1984), as
foilows, at page 388:
“The process through which a fact finder finds
punitive damages is somewhat contradictory.
On the one hand, the court or jury must be suffi-
cicatly disturbed to conclude the defendant must
be punished. On the other hand, although out-
raged, the fact finder cannot be vindictive. The
channeling of just the correct quantum of bile to
reach the correct level of punitive damages is, to
put it mildly, an unscientific process compli-
cated by personality differences. Conduct which
one person may view as outrageous another may
accept without feeling, depending on such di-
verse characteristics as an individual's back-
ground, temperament and societal concerns.
The process is further complicated by the lack of
objective criteria from either the Legislature or
- 20- z
the courts as to ‘how much’ is necessary to
punish and deter.” (Emphasis added.)
This is exactly the arbitrary and discriminatory enforce-
ment condemned by Due Process.
Because the decision of whether or not to award punitive
damare*s is committed to the moral discretion of each jury,
imposition of such punishment is necessarily arbitrary and
unpredictable. Devlin recognized that what may outrage one
jury, and lead it to award substantial punitive damages, may
leave another jury unmoved. The constitutional invalidity of
this type of situation was described by this Court in Coates v.
City of Cincinnati, 402 U.S. 611, 614 (1971) in which this
Court stated that many types of behavior can be restricted or
even prohibited but not constitutionally, “through the enact-
ment and enforcement of an ordinance whose violation may
entirely depend upon whether or not a [law enforcement
officer] is annoyed.” [See also Jenkins v. Werger, 564
F.Supp. 806, 808 (D. Wyo. 1983))].
Neither mey juries be allowed to pursue their personal
predilections.'' [Kolender v. Lawson, 461 U.S. 352, 358
(1983); Smith v. Goguen, 415 U.S. 566, 575 (1974)].
Juries at common law had no right to determine punish-
ment in a criminal case [see IV Blackstone, Commentaries,
pp. 354-355, 366-369, 371 (1st Ed. Reprint); Crowe v. State,
uM It is recognized that jury sentencing in criminal matters is permitted in
some states, and that this court, in Giaccio v. Pennsylvania, 382 U.S. 399
(1966), expressly stated, in footnote 8 at page 405, that it intended in that
decision “to cast no doubt whatsoever on the constitutionality of the settled
practice of many States to leave to juries finding defendants guilty of a
crime the power to fix punishment within legally prescribed limits.” It is
submitted that it is the lack of such “legally prescribed limits” which
Singularize the punitive damages award procedures in this case and rend .
them Constitutionally invalid.
a‘
—
~
485 So.2d 351, 363-364 (Ala.Cr.App. 1984), rev'd. on other
grounds 485 So.2d 373 (Ala. 1985), cert. denied, 477 U.S.
909 (1986)].!2
The effect of the arbitrary power given to juries in award-
ing punitive damages under Alabama law has led an addi-
tional justice of that court to rethink his position since the
opinions below in this case, in which he voted with the
majority.
In Charter Hospital of Mobile, Inc. v. Weinberg, 558
So.2d 150, 1990 Ala. Lexis 17 (Jan. 12, 1990), released for
publication April 16, 1990, Justice Houston, concurring in
the result, which vacated the punitive damages award on
state law grounds, appears to have been concerned because of
widely differing verdicts in two cases in which he viewed the
conduct as being the same. Justice Houston stated, at 1990
Ala. Lexis 17, pages 20-23:
“.. I recently noted that, for the same con-
duct, one insurance company and its special
agent were punished by a punitive damages
award of $21,130.86 ... and another insurance
company and its special agent were punished by
a punitive damages award of $2,490,000 ....
The instructions given to the juries in those two
cases were substantially the same.... [T]he
standard by which the jury is to gauge the
amount of punitive damages, if any, that it is
to award is incomprehensibly vague and
unintelligible. ... Under such a ‘standard,’ one
12 The common law right of juries to determine the amount of punitive
damuges appears in large part to be a result of the perceived inadequacy of
the compensatory damages then available to compensate for all detriment,
such as emotional distress. See Tullidge v. Wade, 95 Eng. Rep. 909 (1769).
The vastly expanded scope of civil damages available today invalidates
such a consideration. England, in Rookes v. Barnard (1964) A.C. 1129,
1221; 1 All Eng. Rept. 367, 411, re-examined punitive damages, and
severely limited their availability.
- 22.
jury can award $21,130.86 and another
$2,490,000 for the same ‘wrong.’ This does not
comply with the requirement of procedural due
process under the Alabama Constitution.”
Punishment was imposed upon Pacific Mutual by a jury
acting under instructions so vague as to provide no standards
at all for determining the relative culpability of Mr. Ruffin’s
conduct and the amount appropriate to punish Pacific Mutual
therefore vicariously. This absence of standards for deter-
mining punishment violated Pacific Mutual’s right to Due
Process under the Fourteenth Amendment.
C. The Absence Of Prior Establishmert Of
The Punishment To Be Imposed On
Pacific Mutual for Mr. Ruffin’s Conduct
Violated Pacific Mutual’s Right to Due
Process.
The Due Process Clause of the Fourteenth Amendment
requifes that permitted punishment be established before
commission of the punishable acts. Although prohibition of
changes in permitted punishment adverse to the defendant
has been the province of the Ex Post Facto Clauses,!* prior
decisions of this Court have found the concerns of the Ex
Post Facto Clauses to be so basic to the concepts of funda-
mental fairness embodied in the Due Process Clause that
"hose requirements are to be applied through the Due Process
Clauses of the Fifth and Fourteenth Amendments.
In Marks v. United States, 430 U.S. 188 (1977), this Court
held that a substantive change in obscenity standards made
by this Court could not be applied to a defendant retroac-
tively, under the Due Process Clause of the Fifth Amend-
merit, stating at pages 191-192 that while the Ex Post Facto
Clause applied only to the powers of legislatures, the concept
13 See Weaver v. Graham, 450 U.S. 24, 30-31 (1981); Miller v. Florida,
482 U.S. 423, 429, 435-436 (1987).
Ot i. eas ae
ee eye we
-%.
of fair warning embodied in it was fundamental to our con-
cept of constitutional liberty.
In Bouie v. Columbia, 378 U.S. 347 (1964), this Court
applied the same reasoning to invalidate a S.ate law convic-
tion under an expanded interpretation of punishable conduct
by the California Supreme Court, as violating the Due Proc-
ess Clause of the Fourteenth Amendment. !4
The Ex Post Facto Clauses have been stated to apply only
to the imposition of punishment [United States Trust Co. v.
New Jersey, 431 U.S. 1, 17 n. 13 (1977); Calder v. Bull, 3
U.S. (3 Dall.) 386, 390-391 (1798)]. It is submitted that the
punishment imposed by punitive damages is sufficient to
require the application through the Due Process Clause of the
Ex Post Facto Clause principles stated in the Marks and
Bouie cases, above, and Weaver v. Graham, 450 U.S. 24,
30-32 (1981) and Calder v. Bull, above.
Additionally, the Ex Post Fac'» Clauses have not been
limited in application to criminal prosecutions. In Fletcher
v. Peck, 10 U.S. (6 Cranch) 87, 138-139 (1810) the Ex Post
Facto Clause was applied in a case involving vested property
rights; and Cummings v. Missouri, 71 U.S. (4 Wall) 277,
327-328 (1867) and Ex Parte Garland, 71 U.S. (4 Wall) 333,
377-378-(1867), involved, in effect, license revocation pro-
ceedings for failure to take an oath following the Civil War,
which was held to be punishment. In Burgess ». Salmon, 97
U.S. 381, 385 (1878), a civil suit to collect a duty imposed
by law after the sale of the item was completed, this Court
stated that “ex post facto effect cannot be evaded by giving
civil form to that which is essentially criminal.”
14 See also Ettor v. Tacoma, 228 U.S. 148, 155-156 (1913), Fourteenth
Amendment Due Process violated by State statute repealing a vested right
to compensation; Coombes v. Getz, 285 U.S. 434 (1932), Fourteenth
Amendment Due Process violated by change in a State constitution
repealing liability of defendants during the course of litigation.
Sh.
The concerns of the Ex Post Facto Clauses apply directly
to punitive damages awards. No fair warning is given of the
amount of punishment. All determinations of punishment by
punitive damages awards are after the fact and adverse to the
defendant, except in those cases in which legislatures have
previously acted to limit punitive damages awards [see e.g.
Pet. Reply Cert. App. F].
Unless limits are set on punitive damages awards prior to
commission of the punishable acts, arbitrary, selective
punishment, at the whim of the particular jury or court,
becomes the rule, giving free reign to bias and prejudice.!°
This is contrary to all of the fundamental principles of
fairness and notice embodied in the Due Process and Ex Post
Facto Clauses. !®
15 Judges may impose punishment only to the extent the law has autho-
rized prior to commission of the acts for which punishment is to be
imposed [Calder v. Bull, 3 U.S. (3 Dall.) 386, 390 (1798); United States v.
Hudson and Goodwin, 11 U.S. (7 Cranch) 32, 34 (1812); Dobbert v.
Florida, 432 U.S. 282, 292 (1977); Miller v. Florida, 482 U.S. 423, 429,
435-436 (1987)).
Prior to the adoption of penal codes by the states, crimes were those
defined by the received common law of England. [Pound, Criminal Justice
In America, pages 106-121 (1951); Rich, Law And The Administration Of
Justice, pages 58-59 (1975); Wharton, Criminal Law, §9 (1978);
Campbell, Law Of Sentencing, §§ 1, 2 (1978)]. The punishment for those
crimes was fixed and established by the coc on law, and judges were
required to sentence in accord therewith although greater discretion was
allowed for misdemeanors [Tomas, The Penal Equation, p. 3 (1978)).
Also, by the Eighteenth Century, England had adopted a penal code
[Campbell, Law Of Sentencing, § 2 (1978)}.
In states permitting jury sentencing, juries must also sentence within
prescribed limits [See Suits v. State, 507 P.2d 1261 (Okla.Crim. 1973)).
16 Fair notice is one of the bases of the Ex Post Facto Clauses. See
Miller v. Florida, 482 U.S. 423 (1987), wherein this Court explained the
reasons for inclusion of the Ex Post Facto Clauses in the Constitution as
follows, at pages 425-430:
“... [T]he reason the Ex Post Facto Clauses were included in
the Constitution was to assure that federal and state legislatures
were restrained from enacting arbitrary or vindictive legis-
(continued)
ee
- 25.
It is a fundamental tenet of this society that such arbitrary
power is not given to any branch of government, or its in-
strumentalities. In Yick Wo v. Hopkins, 118 U.S. 356 (1886),
an ordinance regulating laundries was challenged as violating
the Equal Protection rights of Yick Wo, because, among
other reasons, the ordinance was administered in a way to
apply only to Chinese laundries. This Court held the or-
dinance to violate the Equal Protection Clause, stating, at
pages 369-70:
“When we consider the nature and the theory
of our institutions of government, the principles
upon which they are supposed to rest, and re-
view the history of their development, we are
constrained to conclude that they do not mean to
leave room for the play and action of purely
personal and arbitrary power....” (Emphasis
added.)
It is submitted that application of these principles to the
award of punitive damages in this case requires that the
award be vacated, with an opinion that no such awards can be
made in the absence of prior governmental action estab-
lishing the range of permitted punishment for defined, for-
bidden conduct.
While it is recognized that the United States Constitution
does not mandate separation of powers in state governments
[see e.g. Hughes v. Superior Court Of California, 339 U.S.
460, 467 (1950)], and therefore, state courts could theoreti-
cally announce such rules prospectively where state
(ftn. continued)
lation. ... [and] that legislative enactments ‘give fair warning
of their effect and permit individuals to .ely on their meaning
until explicitly changed.’ ... Thus, almost from the outset, we
have recognized that central to the ex post facto prohibition is
a concern for ‘the lack of fair notice and governmental restraint
when the legislature increases punishment beyond what was
prescribed when the crime was consummated.’ Weaver, 450
U.S., at 30, 67 L.Ed 2d 17, 101 S.Ct. 960.”
- 26 -
constitutions permit,!” it is submitted that the prescription
of punishment and the definition of punishable conduct are
appropriately legislative functions. !®
At the federal level the determination of the punishment
to be imposed for proscribed acts is an exclusive legislative
function [United States v. Hudson And Goodwin, 11 U.S. (7
Cranch) 32, 34 (1812); United States v. Eaton, 144 U.S. 677,
687-688 (1892); Gore v. United States, 357 U.S. 386, 393
(1958); see also Livingston v. State, 419 So.2d 270 (Ala. Cr.
App. 1982, applying Alabama law)].
In Gore v. United States, above, this Court stated, at page
393:
“In effect, we are asked to enter the domain of
penology, and more particularly that tantalizing
aspect of it, the proper apportionment of punish-
ment. Whatever views may be entertained re-
garding severity of punishment, whether one
believes in its efficacy or its futility ... these
are peculiarly questions of legislative policy.”
The legislature’s duty is satisfied by establishing a range
of permissible punishment for the particular offense [United
States v. Batchelder, 442 U.S. 114, 126 (1979)], prior to the
commission of the punishable act by the defendant [Miller v.
Florida, 482 U.S. 423, 435-436 (1987).
The absence of legislative or court action in Alabama to
perform the balancing and weighing of competing choices to
set the range of permitted punishment by way of punitive
damages prior to the acts involved, placed purely arbitrary
power in the jury and the reviewing courts, to set punishment
after the fact.
17 Clark, Handbook of Criminal Law, (1st Ed. 1984) p. 3.
18 See discussion in Jeffries, Legality And Vagueness, And The Construc-
tion Of Penal Statutes, 71 Va.L.Rev. 189, 190-195 (1985).
. Fr
This, it is submitted, violates the fundamental fairness
requirement of the Due Process Clause of the Fourteenth
Amendment.
The punitive damages award below should therefore be
vacated.
Il. ALABAMA LAW VIOLATED PACIFIC
MUTUAL’S RIGHT TO DUE PROCESS
UNDER THE FOURTEENTH AMENDMENT,
BY ALLOWING PUNITIVE DAMAGES TO
BE AWARDED AGAINST IT UNDER A
RESPONDEAT SUPERIOR THEORY
A punishment sanction was imposed upon Pacific Mutual
for acts of Mr. Ruffin, in pocketing premiums on Union
Fidelity medical insurance policies. The jury may have
found that Mr. Lupia had knowledge that billings and notices
were being sent to Mr. Ruffin care of Mr. Lupia at the
Pacific Mutual Agency office. Both were licensed with
Union Fidelity. No evidence showed that Mr. Lupia was
aware that Mr. Ruffin was collecting premiums contrary to
his contract.
No evidence showed that Pacific Mutual’s home office
received any notice of any alleged similar prior activity by
Mr. Ruffin before the actions in this case, or that Pacific
Mutual had any notice of the actions complained of in this
suit prior to the filing of the complaint.
No evidence showed any authorization for or ratification
of this conduct. In fact, Pacific Mutual’s contract with Mr.
Ruffin forbade him from collecting any premiums other than
the initial premium to be submitted with an application.
Pacific Mutual was therefore punished for unauthorized,
unratified actions of one, or possibly two of its agents for
acts they performed while acting on behalf of another com-
pany, Union Fidelity. The collecting of premiums was
- 28 .
forbidden, and stealing them cannot under any circumstances
be deemed to be within any authority of an agent.
When punitive damages were imposed on Pacific Mutual
on a respondeat superior basis, the focus for determination
of the amount of the damages shifted from Mr. Ruffin to
Pacific Mutual. It is self-evident that the jury would not
have imposed a fine of over one million dollars on Mr.
Ruffin. This factor contributed greatly to the fundamental
unfairness, excessiveness and disproportionality of the fine
imposed in this case, even though no wealth evidence was
admitted.
A. The Punitive Damages Award Herein
Violated Due Process By Imposing Pun-
ishment For Conduct Not Authorized Or
Ratified, And Not Performed To Benefit
The Principal.
In the law which has developed regarding the liability of
corporations for criminal acts of agents, the following rules
appear:
1. Legislatures have the authority to impose absolute
liability on corporations for acts of agents, in public welfare
crimes, unrelated to knowledge or any other mental element,
where the forbidden act or omission is so injurious to the
public interest that no mental element is required [United
States v. Balint, 258 U.S. 250 (1922); Morissette v. United
States, 342 U.S. 246 (1952)].
2. Legislatures may, consistently with Due Process,
impute the mental element of the agent to the corporation for
purposes of criminal liability under regulatory statutes,
where the agent is acting to benefit the corporation and
further its business [New York Central And Hudson River
R.R. Co. v. United States, 212 U.S. 481 (1909); See United
States v. A & P Trucking Co., 358 U.S. 121 (1958); Standard
Oil Of Texas v. United States, 307 F.2d 120 (Sth Cir. 1962);
Riss & Co. v. United States, 262 F.2d 245 (8th Cir. 1958)].
~- eee Ne ee ee wr ee —— =
- 29.
No such legislative programs are involved in this case.
Virtually all of the cases upholding corporate criminal
liability involve statutes regulating business activity. In ALI
Model Penal Code, Comment On § 207, Tentative Draft
No. 4 (1956), it is stated, at page 149:
“... [T)he great mass of legislation calling for
corporate criminal liability suggests a wide-
spread belief on the part of legislators that such
liability is necessary to effectuate regulatory
policy.”
Outside of the regulatory area, where fines are imposed to
achieve compliance under circumstances where it is in the
corporation’s financial interest to evade the statutory require-
ments, there would appear little justification for allowing
punishment of corporations for the punishable mental state
of agents performing unauthorized, unratified acts within the
scope of actual or apparent authority.!?
That punishment falls ultimately upon innocent share-
holders, or here, upon Pacific Mutual’s other policyholders,
who own the company.
However, assuming the viability of such awards, it is
submitted that the punitive damages award here violated Due
Process by imputing acts of Mr. Ruffin to Pacific Mutual
which were not performed to benefit, or with any intent of
benefiting, Pacific Mutual, and therefore are beyond the
point of fundamental fairness.
As noted above, virtually all of the cases holding corpora-
tions to criminal liability for acts of agents outside of the
absolute liability, public welfare offense area, have been
19 Canfield, Corporate Responsibility For Crime, 14 Colum.L.Rev. 469
(1914); Francis, Criminal Responsibility Of Corporations, 18 Il1.L.Rev. 305
(1924); Mueller, Mens Rea And The Corporation, 19 U.Pitts.L.Rev. 21
(1957); Note, Corporate Criminal Liability For Acts In Violation Of
Company Policy, 50 Geo. LJ. 547 (1962); Perkins, Criminal Law, (2d Ed.
1969).
. =
regulatory statutes, where the legislatures have expressed the
intent that the mental element of the agents be imputed to the
corporation. Courts, in enforcing this legislative intent, have
drawn the line for the imposition of such liability at the point
where the agent cannot be said to be acting to benefit, or for
the purpose of benefiting, the corporation. [See e.g. New
York Central And Hudson River R.R. Co. v. United States,
212 U.S. 481, 495 (1909); Standard Oil Of Texas v. United
States, 307 F.2d 120, 128 (Sth Cir. 1962); Riss & Co. v.
United States, 262 F.2d 245 (8th Cir. 1958).
It is submitted that the line so established is also the line
beyond which Due Process does not allow the actions or
intent of the agent to be imputed to the corporation for pur-
poses of imposing punishment.
In New York Central And Hudson River R.R. Co. v. United
States, above, which established the basic principles of
corporate criminal liability, this Court emphasized that
liability, civil and criminal, is imposed on corporations
“because the act is done for the benefit of the principal,
while the agent is acting within the scope of his employment
in the business of the principal.” [212 U.S. at 493.]
Where these factors are absent, such liability is not im-
posed. In Standard Oil Of Texas v. United States, 307 F.2d
120 (Sth Cir. 1962), employees of Standard Oil violated the
Connally “Hot Oil” Act by diverting oil from Standard’s
wells and falsely recording it as having been produced by
eligible wells of a third party. Standard Oil was convicted of
“knowingly” falsely recording the production. The Circuit
Court, in reversing the conviction, stated at page 128:
“
. Thus the taking in or paying out of
money by a bank telJez, while certainly one of
his regular functions, would hardly cast the
corporation for criminal liability if in such
‘handling’ the faithless employee was pocketing
the funds as an embezzler or handing them over
to a confederate under some ruse.”
x.
This example is exactly the basis upon which Pacific
Mutual was punished. The Court characterized such liability
as follows, at page 129:
“ .. [T]o say that acts done by servants ac-
tuated by such evil and specifically unlawful
motives were the acts of the very corporations
thus sought to be cheated or implicated in prac-
tices known to be in serious violation of law
and, moreover, to impute not only accountability
but ‘knowledge’ of such acts to the corporations,
would be to disregard every accepted notion of
respondeat superior.”
The Court then stated, as the governing rule, at page 129:
“[T]he corporation does not acquire that knowl-
edge or possess the requisite ‘state of mind
essential for responsibi'‘ty,’ through the activi-
ties of unfaithful servants whose conduct was
undertaken to advance the interests of parties
other than their corporate employer.”
It is submitted that the rule stated above is required by
Due Process. A defendant cannot be punished for an act or
omission so far removed from culpability that punishment
cannot be justified [Logan v. Zimmerman Brush Co., 455
U.S. 422, 429 (1982); Robinson v. California, 370 U.S. 660,
667 (1962); Thompson v. City Of Louisville, 362 U.S. 199
(1960)].
Mr. Ruffin’s actions were taken to benefit himself, while
dealing with the medical insurance policy issued by another
company. The trial court described a fraud justifying the
punitive damages award as, “... Ruffin knowingly and
intentionally committed fraud by collecting insurance pre-
miums on canceled policies and keeping the premiums for
himself.” ([Pet. Reply Cert. App. Al2.] In his deposition
testimony, Mr. Ruffin stated that he was collecting the
premiums after cancellation of the Union Fidelity policy for
submission with applications to other companies. Therefore,
. oe
he cannot have been acting for, or with intent to benefit,
Pacific Mutual.
Punishment of Pacific Mutual for Mr. Ruffin’s apparent
theft of the premiums from Pacific Mutual, assuining
arguendo, that Pacific Mutual could under any circumstances
be considered the principal as to such act, violated the con-
cept of fundamental fairness embodied in Due Process.
III. THE AMOUNT OF THE AWARD OF PUNI-
TIVE DAMAGES IN THIS CASE WAS
EXCESSIVE, IN VIOLATION OF PACIFIC
MUTUAL’S DUE PROCESS RIGHT TO BE
FREE OF GROSSLY EXCESSIVE, DIS-
PROPORTIONATE DAMAGES AWARDS
If this Court accepts the analysis set forth in above, re-
garding the standardless jury discretion to punish in this
case, the question of the excessiveness of this award, or
future punitive damages awards, would not be involved. The
issue would, rather, be the validity, if challenged, of state
legislative acts providing for punitive damages.
Here, the actual economic damage sought by all Respon-
dents was $3,923.94 [Pet. Reply Cert. App. A21-22]. Mrs.
Haslip sought a combination of economic and emotional
distress damages of $200,000 [/d., A22-23], and punitive
damages of $3,000,000 [/d., A23]. The punitive damages
award as to Mrs. Haslip alone, assuming the jury awarded the
full $200,000 in non-punitive damages, would be $800,000.
Respondents’ counsel presented the case to the Alabama
Supreme Court as involving a punitive damages award of
$1,040,000 [/d., C1].
A number of decisions of this Court have addressed the
issue of whether or not a particular penalty constituted
punishment, and the Constitutional implications of such a
finding [Calder v. Bull, 3 U.S. (3 Dall.) 286 (1798); United
States ex. rel. Marcus v. Hess, 317 U.S. 537 (1943); Trop v.
e
Dulles, 356 U.S. 86 (1958); United States v. Ward, 448 U.S.
242 (1980) and United States v. Halper, 490 U.S. ___, 109
S Ct. 1892, (1989)].
The punishment purpose of the punitive damages award
here is express. The jury was instructed that punitive dam-
ages were not to be awarded for compensation for injury, but
for punishment.
In Browning-Ferris Industries of Vermont, Inc. v. Kelco
Disposal, Inc., 492 U.S. ___, 109 S.Ct. 2909 (1989), Justice
Brennan, in his concurrence, suggested that Due Process
forbids excessive damages in civil cases, stating, at page
2923:
“Several of our decisions indicate that even
where a statute sets a range of possible civil
damages that may be awarded to a private
litigant, the Due Process Clause fortids damages
awards that are ‘grossly excessive,’ Waters-
Pierce Oil Co. v. Texas, 212 U.S. 86, 111
(1909), or ‘so severe and oppressive as to be
wholly disproportionate to the offense and obvi-
ously unreasonable,’ St. Louis, 1.M. & S.R. Co.
v. Williams, 251 U.S. 63, 66-67 (1919); see also
Southwestern Telegraph & Telephone Co. v.
Danaher, 238 U.S. 482, 491 (1915); Missouri
Pacific Railway Co. v. -« mes, 115 U.S. 512,
§22-23 (1885).”
The concern for proportionality of punishment thus ex-
pressed is a common theme under the Constitution [See Trop
v. Dulles, 356 U.S. 86 (1958); Gregg v. Georgia, 428 U.S.
153 (1976); Plyler v. Doe, 457 U.S. 202 (1982), and Solem v.
Helm, 463 U.S. 277 (1983)]. Due Process, Equal Protection
and the Eighth Amendment all share this concern.
The general rule regarding whether a punishmeni sanction
is excessive appears to be that the punishment must not be
grossly out of proportion to the severity of the offense [/d.].
28.
While the three part text for excessiveness and dispropor-
tionality set forth in Solem v. Helm, above, was applied in an
Eighth Amendment excessiveness context, it is submitted
that the same analysis is appropriate for consideration of
excessiveness under a Due Process analysis. In Solem, that
test was stated as follows, at pages 290-292:
“First, we look to the gravity of the offense
and the harshness of the penalty... .
“Second, it may be helpful to compare the
sentences imposed on other criminals in the
Same jurisdiction. If more serious crimes are
subject to the same penalty, or to less serious
penalties, that is some indication that the punish-
ment at issue may be excessive... .
“Third, courts may find i. useful to compare
the sentences imposed for commission of the
same crime in other jurisdictions.”
Applying the Solem test here, one can scarcely imagine a
criminal statute being upheld which imposed a million dollar
fine for vicarious liability of a principal not shown to have
had a mens rea.
The disproportion between the fine assessed in this case
against an innocent corporation for the unauthorized, un-
ratified fraud of a sales agent, and the fines established by
the Alabama legislature for serious offenses against the
public is so great that such fines are excessive in violation of
constitutional protections. [Compare the recent punitive
damages awards in Appendix A to the Statutory criminal
fines in Appendix B. They are shockingly disproportionate. }
See Ala. Code §§ 13A-4-3, 13A-5-12 and 13A-9-41 (1975).
Comparison of the award in this case with punitive damages
established by the Alabama Legislature where it has ad-
dressed the issue of the appropriate amount of civil punish-
ment with respect to specific conduct shows a similar dis-
proportionality [see Pet. Reply Cert. App. F].
- 35 -
Similarly, no criminal fine in virtually any state remotely
approaches the amount of the fine imposed upon Pacific
Mutual here. ‘This penalty award should therefore fail the
second Solem test.
With respect to the third Solem test, it is virtually impos-
sible to make any comparison of the fire imposed in this case
with fines imposed by other jurisdictions for the same
offense. In the majority of jurisdictions, punitive damages
are not allowed against a principal upon a respondeat supe-
rior basis, where no ratification or authorization is proven
and the agent is not in a managerial capacity [Pet. Reply
App. D]. Further, the arbitrary and unpredictable nature of
punitive damages in general makes comparisons an exercise
in futility, other than to show the arbitrary nature of the
doctrine. For example, in a products liability case, Toole v.
Richardson-Merrell, Inc., 251 Cal.App.2d 689 (1967), puni-
tive damages for falsifying drug test dates, resulting in blind-
ness, remitted to $250,000 were upheld, while in Roginsky v.
Richardson-Merrell, Inc., 378 F.2d 832 (2d Cir. 1967), a
case involving injury from the same drug, against the same
manufacturer, the court set aside the punitive damages award
entirely.
Under any test of excessiveness, however, it is submitted
that the punishment imposed upon Pacific Mutual on an
apparent authority basis was excessive. The award in this
case exemplifies the concern expressed in Gertz v. Robert
"’sIch, Inc., 418 U.S. 323, 350 (197%) regarding punitive
damage awards in wholly unpredictabie amounts bearing no
necessary relation to actual harm caused.
Even an $800,000 punishment sanction under the facts of
this case must be deemed to be grossly disproportionate to
any fault on the part of Pacific Mutual, and therefore, to
violate the Due Process Clause of the Fourteenth
Amendment.
. =
IV. THE SUIT BELOW, ALTHOUGH NOMI-
NALLY CIVIL, MUST BE CONSIDERED
CRIMINAL IN NATURE AS TO THE PUNI-
TIVE DAMAGES AWARDED THEREIN,
ENTITLING PACIFIC MUTUAL TO PRO-
TECTION UNDER THE FIFTH AND FOUR-
TEENTH AMENDMENTS TO THE UNITED
STATES CONSTITUTION
As noted above, the punitive damages award here was
imposed as punishment, and served the same function as a
criminal fine.
In an early analysis of punitive damages awards, Professor
Willis wrote:
“...+ No hypothesis, however ingenious, can
cloud the mind to the fact that exemplary dam-
ages put a man in jeopardy once, and if he is
also punished criminally for the same offense,
he is ‘twice put in jeopardy.” Again, when
assessed exemplary damages, the accused is
really punished for a criminal offense without
the safeguards of a criminal trial... . The proce-
dure and principles of criminal law are dis-
regarded, the rules of damages are forgotten, and
the machinery of justice is used for the avowed
purpose of giving the plaintiff that to which he
has no shadow of right.... The doctrine is
altogether inconsistent with sound legal princi-
ples and it is unfortunate that it ever found
lodgment in the law, and we look with admira-
tion upon any court brave enough to disown and
abandon it.”
20 a“
Willis, Measure of Damages When Property Is Wrongfully Taken By
An Individual, 22 Harv.L.Rev. 419, 421-422 (1909).
- 37.
Professor Willis’ comments sum up Pacific Mutual’s
experience in this case.
The rights of Pacific Mutual under the Fourteenth Amend-
ment to certain trial procedural protections incorporated from
the Fifth Amendment were violated by the trial procedures
below.
Where punishment is imposed in actions initiated by the
government, certain Fifth and Sixth Amendment protections
have been required [United States v. Halper, 490 U.S. ___,
109 S.Ct. 1892 (1989); Kennedy v. Mendoza-Martinez, 372
U.S. 144 (1963); Trop v. Dulles, 356 U.S. 86 (1958). See
also United States ex rel Marcus v. Hess, 317 U.S. 537
(1943)].
Here, the enforcement of the State’s interest in punish-
ment and deterrence was given over to private attorneys
general [Jn Re Paris Air Crash, 622 F.2d 1315 (9th Cir.
1980), cert. denied, 449 U.S. 976 (1980)]. The fact that the
punishment is imposed in a private action should not affect
the rights of the defendant made subject to possible severe
punishment [See A.B. Small Co. v. American Sugar Refining
Co., 267 U.S. 233, 239 (1925); Giaccio v. Pennsylvania, 382
U.S. 399, 401-403 (1966); Burgess v. Salmon, 97 U.S. 381,
385 (1878); Cummings v. Missouri, 71 U.S. (4 Wall.) 277,
326-27 (1867)]. To the defendant facing possible stigma and
severe financial penalties, the difference between an action
sec king a civil penalty and one seeking a criminal penalty is
small.
Further, the sheer magnitude of present punitive damages
awards [see e.g. Appendix A, setting forth the astonishing
number and size of recent Alabama punitive damages
awards, and the similar appendix to the amicus curiae brief
for the Association for California Tort Reform] requires that
rigorous procedural fairness be imposed in these trials.
It is submitted that, as relevant in this case, the procedural
protections required are (i) a beyond a reasonable doubt
burden of proof, (ii) unanimous jury, (iii) an upper limit on
- 38 -
the punishment, and (iv) trial of issues of underlying liability
prior to trial of issues relating to liability for and amount of
punitive damages.
Under the test of procedural Due Process set forth in
Mastews v. Eldridge, 424 U.S. 319 (1976), it is submitted
that -ach of the above is required. In Mathews, this Court set
for. the analysis for determining the requirements of proce-
dural Due Process in particular cases, stating, at page 335:
“.. .{[}dentification of the specific dictates of
due process generally requires consideration of
three distinct factors: first, the private interest
that will be affected by the official action;
second, the risk of an erroneous deprivation of
such interest through the procedures used, ard
the probable value, if any, of additional or substi-
tute procedural safeguards; and finally, the
Government’s interest, including the function
involved and the fiscal and administrative bur-
dens that the additional or substitute procedural
requirement would entail.”
Testing the trial procedures in this case by the three
Mathews factors shows that each of the following additional
protections were required.
A. Beyond A Reasonable Doubt Standard Of
Proof.
The trial court rejected Pacific Mutual’s requested jury
instruction for a beyond a reasonable doubt burden of proof.
Given the close analogy of punitive damages to criminal
fines, it is submitted that this enhanced burden of proof is
required by Due Process. [See Jn Re Winship, 397 U.S. 358,
364 (1970)]. Colorado has imposed a beyond a reasonable
burden of proof by statute [Colo. Rev. Stat. § 13-25-127(2)
(Supp. 1986)].
Other states have by statute or court decision required a
clear and convincing evidence test. In Travelers Indemnity
- 39 -
Co. v. Armstrong, 442 N.E.2d 349 (Ind. S.Ct. 1982), the
Court adopted that standard of proof, stating, at page 363:
“A rule that would permit an award of punitive
damages upon inferences permissibly drawn
from evidence of no greater persuasive value
than that required to uphold a finding of the
breach of contract — which may be nothing
more than a refusal to pay the amount demanded
and subsequently found to be owing — injects
such risks into refusing and defending against
questionable claims as to render them, in es-
sence, nondisputable. The public interest cannot
be served by any policy that deters resort to the
courts for the determination of bona fide com-
mercial disputes... .” (Emphasis added.)
It is submitted that the reasoning of the Indiana Court is
sound, but that a clear and convincing standard of proof,
while an improvement, is not sufficient in these cases. The
risks of erroneous fact finding and jury bias are too high in
cases where civil fines can be awarded which far exceed any
conceivable criminal fine. Such risk requires the enhanced
standard of proof to provide the necessary confidence in the
correctness of the fact finding involved. [See Addington v.
Texas, 441 U.S. 418, 423 (1979)].
B. Unanimous Jury.
Alabama required a unanimous jury in this case.
C. Upper Limit On Awards.
The necessity of such a limit has been discussed above.
Under the test in Mathews v. Eldridge, above, it is submitted
that such a limit is procedurally required. Limits fixed to
match conduct would alleviate much of the problemi associ-
ated with these awards. The fact that Alabama and other
states have limited punitive damages in many areas demon-
strates that no governmental interest would be adversely
affected.
ow
~ *
D. Separation In The Order Of Trial Of
Liability Issues From Punitive Damages
Issues.
Again under the test in Mathews v. Eldridge, above, it is
submitted that bifurcation is required of the order of trial, to
try the issues of underlying liability before issues related to
punitive damages and the amount of such an award.
If such bifurcation is not allowed, the defendant is put at
risk of erroneous findings of fact on liability issues. Here,
the jury below could not help but be influenced in determin-
ing whether or not Pacific Mutual should be held for Mr.
Ruffin’s fraud by evidence and argument relating to plain-
tiffs’ request for emotional distress and punitive damages.
This unnecessary risk can easily be avoided by controlling
the order of proof and submitting the question of underlying
liability to the jury prior to continuing the trial, if necessary,
as to punitive damages issues.
Vv. ALABAMA PUNITIVE DAMAGES LAW {S
DISCRIMINATORY IN VIOLATION OF
THE EQUAL PROTECTION CLAUSE,
BY ENCOURAGING DISPROPORTIONATE
PUNISHMENT, WITHOUT RATIONAL
BASIS.
The Fifth, Eigintth and Fourteenth Amendments, and the Ex
Post Facto Clauses, all embody a concern for even-handed
application of the law to all. [Plyler v. Doe, 457 U.S. 202
(1982); Yick Wo v. Hopkins, 118 U.S. 356 (1886); Papach-
ristou v. City of Jacksonville, 405 U.S. 156 (1972); How Ah
Kow v. Nunan, 12 Fed.Cas. 252 (Case 6, 546, 1877); Cum-
mings v. Missouri, 71 U.S. (4 Wall.) 277, 325 (1867).]
The Equal Protection cases generally deal with clas-
sifications which discriminate against groups, protecting
against religious, racial, ethnic and gender bias, among
others. Classifications which are arbitrary or capricious are
YY
invalid. [Walters v. St. Louis, 347 U.S. 231 (1954); Old
Dearborn Distributing Co. v. Seagrams-Distillers Corp., 299
U.S. 183 (1936).]
Under Alabama law, and punitive damages law generally,
each jury or court is allowed to classify and discriminate in
deciding who among those “guilty” of substantially the same
conduct should be punished, and how severely to punish
those chosen for punishment.
The effects of this unpredictable discretion is to allow
juries to punish the unpopular and indulge bias and prejudice
[Gertz v. Robert Welch, Inc., 418 U.S. 323, 250 (1974);
Rosenbloom v. Metromedia, Inc., 403 U.S. 29, 82-84 (1971)
(Marshall, J., dissenting)] and to inhibit access to the courts
for the resolution of disputes [Travelers Indemnity Co. v.
Armstrong, 442 N.E.2d 349, 363 (Ind. S.Ct. 1982)].
An example of this differential punishment in Alabama is
discussed above, in Section I.B, wherein Justice Houston
noted the great disparity in awards for substantially the same
conduct made by two different juries which were identically
instructed. It is submitted that the award of punitive dam-
ages here, and the Alabama law under which it was made,
violated both the Due Process and Equal Protection rights of
Pacific Mutual. The award should be vacated.
VI. THE CONSTITUTIONAL DEFECTS IN
THE AWARD OF PUNITIVE DAMAGES
AGAINST PACIFIC MUTUAL IN THIS
CASE WERE NOT CURED BY JUDICIAL
REVIEW AND THE POTENTIAL FOR A
REMITTITUR
The Alabama Supreme Court stated at page 11 of its
opinion [Pet. App. B13] that review of the punitive damages
award by the trial court under the procedures established in
Hammond v. City of Gadsden, 493 So.2d 1374 (Ala. 1986)
~
further established that the Due Process Clause had not been
violated. In fact no such review occurred.
In Hammond, the Alabama Supreme Court established
seven factors to be considered by the trial court in reviewing
a challenged award of punitive damages. They are:
(i) whether there is a reasonable relationship between
the punitive damages and the harm done by the defendant;
(ii) the reprehensibility of defendant’s conduct;
(iii) the profit to defendant from such conduct;
(iv) the wealth of the defendant;
(v) the costs of litigation;
(vi) whether criminal sanctions have been imposed; and
(vii) whether other civil awards have been made against
defendant for the same conduct.
These factors are largely unreviewable, and merely trans-
fer discretion to the reviewing court. For example, the
“reasonable relationship” test has proved to be meaningless
because virtually any ratio of punitive to actual damages can
be and has been held to be “reasonable.” These factors
amount to no more than the “gentle test of excessiveness,”
particularly given the extraordinary deference given to the
jury decisions in these cases. At most, use of the language of
these criteria merely disguise the true bases of the court’s
decisions, which are subjective value judgments.
Where, as here, there were no meaningful standards to
guide the jury, trial court and appellate review is meaning-
less. Courts, no more than juries, can be given unbridled
discretion to determine the amount of punishment after the
defendant has acted. [Grayned v. City of Rockford, 408 U.S.
104, 108-109 (1972); Marks v. United States, 430 U.S. 188,
191-192 (1977); Bouie v. Columbia, 378 U.S. 347 (1964); the
vice of vague standards is that no meaningful review can be
made [Roberts v. United States Jaycees, 468 U.S. 609, 629
(1984)].
~-@-
The trial court review in this case illustrates this fact.
That court did not conduct a Hammond hearing, and the
reasons stated by the trial court for upholding the award were
not Hammond factors. The trial court’s reasons were stated
as follows [Pet. App. A15]:
“Although the award is for a great amount of
money, it is the considered opinion of this Court
that it is not excessive as a matter of law, though
this Court would in all likelihood have rendered
a lessor amount; nor is the verdict based upon
bias, passion, corruption, or other improper
motive. The jury seems to fashioned [sic] their
awards in proportion to the damage done each
plaintiff; awarding the most damaged plaintiff,
Cleopatra Haslip, the larger award and the least
damaged plaintiff, Eddie Hargrove, the least
award.
“The jury was composed of male and female,
white and black and in the opinion of the Court,
acted conscientiously throughout the trial.”
These stated reasons demonstrate only the subjective
reaction of the trial judge, tempered by deference to the
jury verdict. The resulting judgment was affirmed by the
Alabama Supreme Court, upon a presumption of the correct-
ness of the verdict.
Even if a review utilizing Hammond criteria had been
given, it would not have cured the defects.
Justice Maddox, in his dissent below [Pet. App. B16]
stated his view of these criteria as follows:
“While I applaud the procedure this Court has
adopted to review and revise the jury’s decision
based upon its ‘standardless discretion,’ I cannot
believe that procedure is sufficient to accord to
litigants all the due process protection the Consti-
tution envisions.” [Footnote omitted.]
“AVAILABLE COPY
- 44 -
It is submitted that judicial review does not and cannot
cure the constitutional defects in the punitive damages award
in this case. A procedure for review of a decision made
under an unconstitutional law does not and cannot cure the
unconstitutionality of the law. [Baggett v. Bullitt, 377 U.S.
360, 373 (1964); See Furman v. Georgia, 408 U.S. 238
(1972); cf. Greenbelt Coop. Publishing Assn. v. Bresler, 398
U.S. 6, 7-11 (1970).]}
In Baggett v. Bullitt, 377 U.S. 360 (1964), this Court
stated, at p. 373:
“Well-intentioned prosecutors and judicial
safeguards do not neutralize the vice of a vague
law.”
These defects are worsened because, in Alabama, as in
most states, extraordinary deference is given to the jury’s
decision as to punitive damages, and a jury’s punitive dam-
age award will only be disturbed if it is, in the judgment of
the reviewing court, so excessive as to show that it must have
been the product of bias, passion, prejudice, corruption or
other improper motive. [Hammond v. City of Gadsden, 493
So.2d 1374, 1379 (Ala. 1986)]. This deference is enhanced
in Alabama because of that state’s interpretation of the provi-
sion in the Alabama Constitution, confirming a right to jury
trial.?!
“tk Ge —— oe such a broad field for
t it cannot cure underlying
defects, and as noted above, merely transfers standardless
discretion to the reviewing courts.
21
See the concurring opinion of Houston, J.. i ’
' ; , J., in Charter Hospital
ae Inc. v. Weinberg, 1990 Ala. Lexis 17, to be published at 558 ra
- ¢ an. 12, 1990), in which the effect of this provision on judicial review
of jury verdicts appears to contribute to his view that review under
Hammond procedures cannot cure the constituti
ul
punitive damages law. nstitutional defects in Alabama
+
In 2-D’s Logging, Inc. v. Weyerhauser Co., 632 P.2d 1319
(Or. 1981), the appellate court made note of this problem,
stating at page 1326:
“(Punitive damages doctrines have] resulted in
a perplexing and contorted mode of judicial
review ... which, in reality, is an imprecise
pattern of subjective judicial reactions mixed
with some episodes of deference to jury ver-
dicts.... At least in cases where there is no
specific statutory authorization for their award,
the imposition of punitive damages involves a
policy or value judgment.”
Decisions by reviewing courts in these cases are equally
1s invalid as the original jury awards, because they are made
6.’ a Stan ardless basis.
the Hammond factors are equally deficient in content as
standards for juries in setting awards as for reviewing courts
in overseeing such awards, because (i) these “standards” are
insufficient as guides to determine the amount of punishment
(only two of the factors are directed to that issue), and (ii) no
range of permissible punishment would have been set in
advance of Pacific Mutual’s conduct, to give fair warning of
the consequences of committing whatever wrongful acts were
involved. [Grayned v. City of Rockford, 408 U.S. 104,
108-109 (1972); United States v. Cohen Grocery Co., 255
U.S. 81 (1921); Calder v. Bull, 3 U.S. (3 Dall.) 386, 390
(1798); Bouie v. Columbia, 378 U.S. 347 (1964)]. Decisions
by either a jury or a court would still be made upon the basis
of the subjective reactions of the jurors or judges, with no
effective or reviewable limit on their discretion as to the
amount of the award. Such decisions are necessarily ar- -
bitrary, and therefore invalid. [Grayned v. City of Rockford,
408 U.S. 104, 108-109 (1972); Roberts v. United States
Jaycees, 468 U.S. 609, 629 (1984); Yick Wo v. Hopkins, 118
J.S. 356, 369-370 (1886)]. Review of such awards would
still necessarily be by the “gentle test of excessiveness.”
, *
Discretion unguided by any objective, meaningful standards
would still reside in the jury, and be transferred to reviewing
courts upon motion or appeal.
Justice Houston has now joined Justices Maddox and
Steagall in concluding that Alabama review procedures do
not cure the Due Process defects at the jury levei. In Charter
Hospital of Mobile v. Weinberg, 1990 Alabama Lexis !7
(Jan. 12, 1990), Justice Houston“ stated that he had believed
that post trial court review would pass constitutional muster,
but that because of the deference to jury verdicts required by
the Alabama Constitution he had to conclude such review did
not cure the defects. Justice Houston stated, at 1990 Ala.
Lexis 17, pages 22-23:
“Setting standards for post-trial review of a
jury’s verdict ... does not comply with this
constitutional provision, since the standard by
whicl the jury is to gauge the amount of puni-
tive damages, if any, that it is to award is incom-
prehensibly vague and unintelligible.”
It is submitted that under the three-part test of procedurai
Due Process set forth in Mathews v. Eldridge, 424 U.S. 319
(1976), the provision for remittitur by reviewing trial and
appellate courts does not satisfy the requirements of Due
Process for adequate limits on jury discretion.
The concern expressed by this Court, that there is a lack
of objective standards limiting the jury’s imposition of
punishment, and juries are left free to render awards without
any necessary relationship to actual harm, cannot be met by
the generalized, subjective and highly judgmental factors
suggested by the Alabama Supreme Court.
22 Justice Hovston recommended in his concurrence that juries be
instructed with factors essentially the same as the Hammond factors. This
would not cure the Constitutional defects for the reasons stated in the text.
+ -P
CONCLUSION
Punitive damages law, as applied in this case, and as
presently applied generally, is overwhelmingly lacking in
fundamental fairness. The law gives no fair notice of the
consequences of prohibited conduct because of the vague and
contentless criteria upon which the award was founded. The
jury was sent to deliberate with no meaningful standards to
guide it as to the amount of punitive damages awardable.
This unbridled discretion leads to arbitrary, discriminatory
and unpredictable awards
The jury was told only to consider the “character and
degree of the wrong,” and the “necessity of preventing simi-
lar wrongs.” As recognized by Justice Houston, these
criteria are hopelessly vague and incomprehensible as stand-
ards for a jury to use in assessing punitive damages.
These instructions left the jury free (i) to give reign to
biases and prejudices and to punish selectively; (ii) to allow
others “guilty” of equally “reprehensible” conduct to go
unpunished; (iii) to punish unpopular and target defendants;
and (iv) to render awards with no necessary relationship to
actual harm caused.
if the award had been made initially by the trial court
utilizing the same criteria contained in the pattern jury in-
struction, the award would be equally invalid. Therefore,
trial court review did not, and could not cure the defects at
the jury level. Similarly, appellate review based upon these
criteria, or the Hammond criteria, amounted to no more than
the “gentle test of excessiveness.” A determination of exces-
Siveness in these circumstances means only that the visceral
reactions of the reviewing justices were that the award either
was or was not too large [See Rummel v. Estelle, 445 U.S.
263, 275 (1980); Solem v. Helm, 463 U.S. 277, 308 (1983),
Burger, C.J., dissenting].
- 48 -
Withcut objective limits on the amount of punitive dam-
ages which may be awarded for specified conduct, no fair
warning of the consequences of any particular conduct is
given, and the result is punishment on an ad hoc, after-the-
fact basis. Such punishment violates the concerns for funda-
mental fairness and fair warning embodied in the Due Proc-
ess Clause of the Fourteenth Amendment.
If the Alabama legislature had enacted a statute making
conduct of the class of Pacific Mutual’s involvement with
Mr. Ruffin subject to civil penalty of $1,000,000, a‘ter Mr.
Ruffin’s fraud, both Due Process and Ex Post Facto Clauses
concerns would invalidate application thereof to Pacific
Mutual. But that is what was allowed through the jury and
reviewing court procedures in Alabama in this case.
This lack of fundamental fairness was exacerbated by the
trial procedure employed, which aliowed (i) trial of the
punitive damages claim concurrently with the agency issues,
thereby tainting the fact finding as to agency; and (ii) the
award of punitive damages to be made upon a preponderance
of the evidence basis, so that a fine in excess of $1,000,000
could be imposed on the slightest tipping of the balance in
favor of Respondents.
Although Alabama did not allow wealth evidence, the
amount of the award was clearly based upon the jury’s
perception of Pacific Mutual’s ability to pay, which has no
relationship to deterrence or fault, and is a punishment of
status [See Williams v. Illinois, 399 U.S. 235 (1970)].
Given Pacific Mutual’s tenuous connection to the punish-
able conduct of Mr. Ruffin for which it was punished on a
respondeat superior basis, Due Process was also violated by
such an award. Even applying the rules for imposing
criminal liability on corporations for violations of statutory
offenses, Pacific Mutual would not validly be subject to
punishment. Such liability depends upon the agent acting to
benefit, or with intent to benefit, the corporatiom No such
intent could conceivably be found in Mr. Ruffin’s pocketing
- 49 -
of the premiums on the Union Fidelity policy. Punishing
Pacific Mutual under these circumstances was akin to punish-
ing a bank because a teller embezzled funds.
No statute existed in Alabama making Pacific Mutual’s
conduct punishable, and setting the range of permitted
punishment. No received common law supplied these defi-
ciencies. The jury was allowed, in fact instructed, to view
the evidence through the prism of its biases, and to impose or
withhold punishment in any amount as it chose, limited only
by its perception of Pacific Mutual’s assets. Due Process
requires more.
It is subrnitted that the award of punitive damages should
be vacated. :
Dated: June 1, 1990
Respectfully submitted,
Of Counsel: BRUCE A. BECKMAN
VICKI W.W. LAI Counsel of Record
ADAMS, DUQUE ADAMS, DUQUE & HAZELTINE
& HAZELTINE 523 West Sixth Street
Los Angeles, California 90014
(213) 620-1240
OLLIE L. BLAN, JR. J. MARK HART
BERT S. NETTLES SPAIN, GILLON, GROOMS,
SPAIN, GILLON, GROOMS, BLAN & NETTLES
BLAN & NETTLES 2117 Second Avenue North
Birmingham, Alabama 35203
(205) 328-4100
Attorneys for Petitioner
Pacific Mutual Life Insurance
Company
APPENDIX A
alee
-A l-
PARTIAL LIST OF ALABAMA JURY VERDICTS
AWARDING PUNITIVE DAMAGES
OF $500,000 OR MORE
FROM JANUARY 1, 1990 TO APRIL 30, 1990
(* indicates wrongful death case)
1990
Wilburn v. Luxaire, et al. $50,000,000*
Mobile County Circuit Court
CV-88-147 et seq. (April, 1990)
$50,000,000 punitive damages, plus
previous settlement of $11,500,000
for wrongful death of five-member
family resulting from alleged negli-
gence involving heating unit.
Sue Chumney as Administrator 3,000,000*
of the Estateof Christopher E.
Long, deceased v. Flowers Hospital
Houston County Circuit Court
CV-87-587 (1990)
Wrongful death of child.
Settled post-trial.
Tate v. P.P.G. Industries 2,500,000*
U.S. District Court for the Southern
District of Alabama (February 19, 1990)
Punitive damages for wantonness in
wrongful death case.
Carter v. Old American 1,400,000
Insurance Company
Lauderdale County Circuit Court
(April, 1990) $1,400,000 punitive
damages for bad faith nonpayment of
health insurance claim. See 544 So.2d
917 (Ala. 1989) wherein summary
judgment for the insurer was reversed.
-A 2-
Burden v. Empire Fire & Marine $ 1,400,000
Ins. Co.
Lauderdale County Circuit Court
CV-88-244 (March 2, 1990)
Alleged bad faith for failing to settle
uninsured motorist claim. $400,000
awarded for compensatory damages
and $1,000,000 for punitive damages.
Post-trial motions pending.
American Employers Insurance 1,150,000
Company v. Southern Seeding
Services, Inc., et al.
U. S. District Court for the Northern
District of Alabama CV 87-G-0294S
Verdict awarding $400,000 in compen-
satory damages and $750,000 in punitive
damages on February 22, 1990.
Appeal filed 3/27/90.
Braden v. Dorsey Motor Sales, Inc. 1,000,000
Autauga County Circuit Court
(April 3, 1990) $1,000,000 punitive
damages, $15,600 compensatory
damages for alleged fraudulent mis-
representation by car dealer that a used
car was “new.”
William Thornton v. Yamaha 750,000*
Motor Co., Ltd., et al.
Montgomery County Circuit Court
CV-88-1639-TH (April 18, 1990)
Wrongful death.
No appeal pending.
-A 3-
PARTIAL LIST OF ALABAMA JURY VERDICTS
AWARDING PUNITIVE DAMAGES
OF $500,000 OR MORE
FROM JANUARY 1, 1989 TO DECEMBER 31, 1989
(* indicates wrongful death case)
1989
Braswell v. Conagra $13,150,000
U.S. District Court for Middle
District of Alabama (Southern Division)
88-00741-T-S (November, 1989)
Breach of contract and fraud.
$4,050,000 in compensatory damages
and $9,100,000 in punitive damages.
Appeal pending.
Sigafoose, v. Babson Brothers Co. 10,000,000
Baldwin County Circuit Court
CV-86-573 (1989)
$10 million punitive damages for
fraud involving $21,000 compensa-
tory claim.
Settled post-trial.
Robbins v. State Farm Mut. 5,000,000
Auto. Ins. Co.
541 So.2d 477 (Ala. 1989)
Macon County
$5 million punitive damages for
bad faith and fraud involving $700
disability claim. Remitted to $500,000.
Affirmed by Alabama Supreme Court.
Thornton v. Knollwood Park Hospital 5 ,000,000*
Mobile County Circuit Court
CV-85-1275 (1989)
Wrongful death.
Settled on Appeal.
-A 4-
Turner v. Alabama Power Company $ 4,000,000*
Montgomery County Circuit Court
CV-88-1700-PH (August 30, 1989)
Wrongful death suit.
Appeal pending.
United Serv. Auto Ass'n. v. Wade 3,500,000
544 So.2d 906 (Ala. 1989)
Walker County
$3.5 million nonjury punitive damages
verdict for bad faith remitted to $2.5
million. Compensatory damages of
$166,795 plus $21,962 on contract count.
Appeal pending.
Ford v. Colonial Mortgage Co. 3,000,000
Russell County Circuit Court
CV-89-010 (November 1989)
Punitive damages for fraudulent breach
of residential home loan commitment.
Appeal pending.
Lindblom v. Intercontinental 3,000,000
Life Ins. Co.
Jefferson County Circuit Court
CV-86-7156 (1989)
Bad faith & fraud involving $10,000
death benefit.
Appeal pending.
Olympia Spa v. Johnson 3,000,000*
547 So.2d 80 (Ala. 1989)
Mobile County
Wrongful death.
Affirmed by Alabama Supreme Court.
10.
11.
12.
13.
14.
-A 5-
Land & Associates, Inc. v. Simmons $ 2,500,000
(Ms.87-1313, December 22, 1989]
____ $o.2d___—s (1989)
Mobile County
Fraud involving $10,000 in life
insurance proceeds.
Affirmed by Alabama Supreme Court.
Majid Jahandarfard, et al. v. Lomax * 500,000*
Killough, et al.
Madison County Circuit Court
CV88-1269P (November 8, 1989)
Wrongful Death.
Appeal pending.
Pettus, Estate of v. Vari-Care 2,500,000*
Mobile County Circuit Court
CV-86-196 (June 20, 1989)
Wrongful death.
Appeal pending.
Blackburn, et al. v. Altus Bank 2,038,753
Mobile County Circuit Court
CV-88-2263 (November 30, 1989)
Alleged fraud. Two plaintiffs.
$1,538,753 for one plaintiff, $500,000
for other plaintiff.
Appeal pending.
White, et al. v. Georgia Casualty 2,000,000
Insurance Co.
Barbour County Circuit Court,
Clayton Division
CV-84-037 (June 28, 1989)
Bad faith action.
Appeal pending.
15.
16.
17.
18.
19.
-A 6-
Stoval, Estate of v. Montgomery
Health Care, et al.
Montgomery County Circuit Court
CV87-173-TH (1989)
Wrongful death.
HealthAmerica, et al. v. Menton
551 So.2d 235 (Ala. 1989)
Mobile County
Fraud involving $2,400 claim
for medical benefits.
Affirmed by Alabama Supreme Court;
Cert. denied by Supreme Court of
United States.
1,800,000
Phillips v. United American Ins. Co.
Etowah County Circuit Court
CV-87-132JSS (June 2, 1989)
Bad faith and fraud involving $264
unpaid balance on medical claim.
Settled post-trial.
1,800,000
Turner v. Deutz-Allis
Credit Corporation
Barbour County, Clayton Division
CV-85-043 (October 9, 1989)
No post-trial relief. Appeal pending.
1,609,500
Beyer v. Beech Aircraft Corp.
Jefferson County Circuit Court
CV-81-2120 (1989)
Wrongful death.
1,500,000*
$ 2,000.000*
20.
21.
22.
23.
-A 7-
Terry v. John Carner and
Leisure American, Inc.
Jefferson County Circuit Court
CV 85-6777 (November 1, 1989)
Fraud claim involving $5,500
actual damages.
Settled prior to appeal.
Porter v, Hook
554 So.2d 382 (Ala. 1989)
Jackson County
Action for breach of written contracts.
Breach of unwritten joint venture
agreement and fraud against cable
television owner.
Remitted to $300,000 by trial court.
Full verdict reinstated by Supreme
Court of Alabama.
Central Alabama Electric Coop.
v. Tapley
546 So.2d 371 (Ala. 1989)
Tallapoosa County
Wrongful death.
Affirmed by Alabama Supreme Court.
Pacific Mutuai Life Ins. Co. v. Haslip
[Ms.87-842, Sept. 13, 1989]
553 So.2d 537 (Ala. 1989)
Fraud. Affirmed by Alabama
Supreme Court.
Cert. granted by Supreme Court
of United States.
$ 1,500,000
1,300,000
1,000,000*
1,000,000
24.
25.
26.
27.
-A 8-
Carlis v. Ft. Deposit Motor Co., etal. $ 1,000,000
Macon County Circuit Court
CV-87-30 (April 19, 1989)
Fraud involving sale of credit life
insurance; approximately $1,000
compensatory damages.
$1,000,000 remitted to $250,000.
Appeal pending.
Shelby County v. Bailey 1,000,000*
545 So.2d 743 (Ala. 1989)
Jefferson County
Wrongful death - $500,000 each
for two deaths.
Affirmed by Alabama Supreme Court.
United American Ins. Co. v. Brumley 1,000,000
$42 So.2d 1231 (Ala. 1989)
Marion County
Bad faith involving compensatory
damages of $5,000.
Affirmed by Alabama Supreme Court.
Rehearing denied.
Kumar v. Lewis 875,000*
Tuscaloosa County Circuit Court
CV-86-97 (January 27, 1989)
Medical malpractice involving death of a child.
Affirmed by Alabama Supreme Court on 4/06/90.
28.
29.
30.
31.
-A 9-
Battles’ Entertainment, Inc.
v. First Federal Savings &
Loan Association of Russell
County, et al.
Lee County Circuit Court
CV-88-083 (April 20, 1989)
Fraud in connection with a sale
of real estate.
Settled post-trial.
Robert McDonald v. Continental
Casualty Company (CNA)
Houston County Circuit Court
(March 9, 1989)
Alleged tort of outrage due to
late payment of workmen’s com-
pensation benefits.
Motions for J.N.O.V. and/or remittitur
denied by trial court.
Appeal pending.
Thomas v. Principal Mut. Ins. Co.
Mobile County Circuit Court
CV-85-1275 (1989)
Bad faith failure to pay $1,000
death benefit.
Set aside by trial court on defendant’s
motion for J.N.O.V. - Appeal pending.
Harris v. M & § Toyota, Inc.
Jefferson County Circuit Court
CV-86-1344 (August 22, 1989)
Alleged fraud involving sale of used car.
Verdict set aside cn J.N.O.V.
Appeal pending.
$
$
800,000
750,000
750,000
500,000
-A 10-
32. Mallory v. Hobbs Trailers
33.
34.
554 So.2d 966
(Ala. September 29, 1989)
Jefferson County
Wrongful death. Trial court granted
defendant’s motion for J.N.O.V.
Original verdict reinstated by
Supreme Court of Alabama.
Rehearing denied.
Vintage Enterprises v. Jaye
547 So.2d 1169 (Ala. 1989)
Tallapoosa County
$500,000 punitive damages
and $20,000 compensatory,
relating to sale, order, delivery
of mobile home, fraud, wantonness,
negligence, warranty and Magnuson-
Moss theories.
Affirmed by Alabama Supreme Court.
Watson, Watson & Rutland v.
Rosser Fabrap Int'l
U. S. District Court for Middle
District of Alabama 88-H-1292-N
(M.D. Ala. 1989)
Intentional interference with
business relationship.
Post-trial motion pending.
500,000*
500,000
500,000
-A 11-
PARTIAL LIST OF ALABAMA JURY VERDICTS
AWARDING PUNITIVE DAMAGES
OF $500,000 OR MORE
FROM JANUARY 1, 1988 TO DECEMBER 31, 1988
(* indicates wrongful death case)
1988
Turner v. Southern Life & $ 5,000,000
Health Ins. Co.
Macon County Circuit Court
CV-87-91 (1988)
Punitive damages for bad faith
and fraud involving $1,000 death benefit.
Remitted to $500,000.
Appeal pending.
Industrial Chemical & 2,500,000*
Fiberglass v. Chandler 1,250,000
547 So.2d 812 (Ala. 1988)
Jefferson County
$3,750,000 punitive damages -
$2.5 million for wrongful death
and $1.25 million for breach of
warranty.
Affirmed by Alabama Supreme Court.
Industrial Chemical & 2,500,000*
Fiberglass v. Ensley 1,250,000
547 So.2d 812 (Ala. 1988)
Jefferson County
$3.75 million - $2.5 million for
wrongful death and $1.25 million
for breach of warranty.
Affirmed by Alabama Supreme Court.
-A 12-
Heathcoat v. Mitchell Potts, et al. $ 3,000,000*
U. S. District Court for the Northern
District of Alabama
Case No. 85-7805, 85-7288 (1988)
Wrongful death.
Clardy v. Sanders 2,750,000*
551 So.2d 1057 (Ala. 1989)
Montgomery County (January 15, 1988)
Wrongful death.
Affirmed by Alabama Supreme Court.
Proctor & Gamble Co. 2,750,000*
v. Staples
551 So.2d 949 (Ala. 1989)
Colbert County (March 2, 1988)
Wrongful death.
Reversed on appeal.
Settled thereafter.
E & § Facilities, Inc., et al. v. 1,750,000
Precision Chipper Corporation, et al.
Jefferson County Circuit Court
CV-84-6422 (April 4, 1988)
Alleged fraud in the procurement of
products liability insurance. Verdict for
$875,000 each against insurance agency
and insurance broker/wholesaler.
Affirmed by Alabama Supreme Court
on 4/12/90.
Walls v. Colonial Mortgage Co. 1,700,000
Russell County Circuit Court
CV87-194 (1988)
Fraud involving breach of residential
home loan commitment; compensatory
damages of $2,500 or less.
Settled pending appeal.
10.
11,
12.
13.
-A 13-
Trawick v. Michaels of $
Oregon Co.
U.S. District Court for Middle
District of Alabama 88-C-413N
(December 21, 1988)
Products liability involving rifle swivel.
Appeal pending on certified question
to Alabama Supreme Court.
1,000,000
Williams v. Rust International
Jefferson County Circuit Court
CV-82-174 (1988)
Wrongful death.
1,000,000*
Achord v. Momar, Incorporated
United States District Court for the
Middle District of Alabama,
Northern Division No.87-D-0824-N
(September 6, 1988)
Products liability suit.
Verdict includes $500,000 punitive damages.
No appeal.
863,625
Carner, et al. v. Commercial
Union Insurance Company, et al.
Jefferson County Circuit Court
CV-82-3504 (1988)
Breach of contract and bad faith.
811,804
Ramsey Health Care, Inc.
v. Follmer
24 ABR 1321
Jefferson County Circuit Court
CV-87-7215
Alleged fraud.
Affirmed by Alabama Supreme Court.
800,000
14.
15.
16.
17.
18.
-A 14-
Alabama Power Co. v. Courtney
539 So.2d 170 (Ala. 1988)
Chilton County
Wrongful death.
Affirmed by Alabama Supreme Court.
Consolidated Freightways
v. Pacheco-Rivera
524 So.2d 346 (Ala. 1988)
Jefferson County
Wrongful death.
Alabama Farm Bureau v. Hixon
533 So.2d 518 (Ala. 1988)
Montgomery County
Wrongful death.
Reversed on appeal.
Alabama Power Co. v. Capps
519 So.2d 1328 (Ala. 1988)
Butler County
Wrongful death.
Affirmed by Alabama Supreme Court.
L. W. Johnson & Assoc.
v. Rivers Constr. Co.
532 So.2d 618 (Ala. 1988)
Marion County
Fraud action by construction
county against developer involving
$165,000 compensatory damages.
Affirmed by Alabama Supreme Court.
750,000*
525,000*
500,000*
500,000*
500,000
-A 15-
PARTIAL LIST OF ALABAMA JURY VERDICTS
AWARDING PUNITIVE DAMAGES
OF $500,000 OR MORE
FROM JANUARY 1, 1987 70 DECEMBER 31, 1987
(* indicates wrongful death case)
1987
Dale, Estate of v. Griffin,
Dept. of Mental Health
Montgomery County Circuit Court
CV85-138-K (1987)
Wrongful death.
$11,701,372*
Estate of Jackson v. 5,100,000
Phillips Petrelesm Co. 2,550,000
676 F.Supp. 1142 (S.D. Ala. 1987)
Reduced punitive damages from
$5,041,694.04 to $300,000 in one case,
and from $2,519,439.85 to $150,000
in another.
Claim for conversion, intentional
interference with contractual relations
and wrongful exercise of lien rights.
New trial granted on refusal to remit
punitive damages.
Super Valu Stores, Inc. v. Peterson 5,000,000
506 So.2d 317 (Ala. 1987)
Etowah County
Breach of contract and fraud in
employment relationship.
Affirmed by Alabama Supreme Court.
-A 16-
Aetna Life Ins. Co. v. Lavoie
505 So.2d 1050 (Ala. 1987)
Mobile County
$3 million punitive damages for
bad faith refusal to pay $1,650
medical claim.
Initially affirmed by Alabama Supreme
Court, then vacated on appeal to
U.S. Supreme Court and thereafter
remitted to $500,000 by Alabama
Supreme Court and affirmed.
State Farm Mutual Automobile
Insurance Company v. Hollis, Adm.
ABR 87-808
Coffee County Circuit Court
CV-853 (1987)
Bad faith claim alleging negligent or
wanton failure to settle lawsuit and
wanton failure to file supersedeas bond.
Reversed and remanded for new trial.
Talmage v. Humana Hospital
Florence, et al.
Lauderdale County Circuit Court
CV-85-135 (September 10, 1987)
Wrongful death.
Settled post-trial.
Curry, Estate of v. Alabama
Gas, et al.
Montgomery County Circuit Court
CV86-323-G (1987)
Wrongful death.
$ 3,500,000
1,500,000
1,500,000*
1,250,000*
10.
11.
-A 17-
North Carolina Mut. Life. Ins. Co.
v. Holley
533 So.2d 497 (Ala. 1987)
Tallapoosa County
Bad faith.
Remitted to $500,000 by Alabama
Supreme Court.
Best Plant Food Products, Inc.
v. Cagle
510 So.2d 229 (Ala. 1987)
Jackson County
Breach of warranty/fraud/deceit
Affirmed by Alabama Supre: vurt.
Hixon v. Village West Traile Park
Montgomery County Circuit Court
CV-84-1447-PR (February 4, 1987)
Wrongful death.
Reversed and rendered on appeal.
Harmon v. Motors Ins. Corp.
493 So.2d 1370 after remand
525 So.2d 411 (1987) Calhoun County
$500,000 punitive damages for fraud
remitted to $40,000.
Affirmed conditionally.
$ 1,000,000
972,000
750,000*
500,000
-A 18-
PARTIAL LIST OF ALABAMA JURY VERDICTS
AWARDING PUNITIVE DAMAGES
OF $500,000 OR MORE «
FROM JANUARY 1, 1986 TO DECEMBER 31, 1986
(* indicates wrongful death case)
1986
Davison v. Mobile Infirmary $ 8,000,000
518 So.2d 675 (Ala. 1986)
Mobile County
$8 million punitive damages for medical
malpractice remitted to $1,350,000.
Beck, Murray, Tull v. Piper 5,175,000*
Aircraft, et al.
Jefferson County Circuit Court
CV-83-6266 (1: °6)
Wrongful death.
Black Belt Wood Yard v. Sessions 3,500,000*
514 So.2d 1249 (Ala. 1986)
Jefferson County
Wrongfui death.
Affirmed by Alabama Supreme Court.
Patricia L. Crandall, et al. 3,035,000*
v. Rudolph V. Williams
514 So.2d 1267 (Ala. 1987)
Madison County Circuit Court
CV-85-461, CV-85-379
consolidated (January 13, 1986)
One death - $500,000; one personal
injury - $2,500,000 (compensatory and
punicive - general verdict); two personal
injuries - $2,500 each (compensatory
and punitive - general verdict); one
subrogation - $30,000.
Affirmed.
-A 19-
Treadwell Ford, Inc. v. Campbell $
485 So.2d 312 (Ala. 1986)
Mobile County
Three plaintiffs - $1,000,000
wrongful death; $60,000 negligence;
and $350,000 which included compen-
satory damages and punitive damages
for fraud involving a defect in the acceler-
ator of a pickup truck.
Affirmed by Alabama Supreme Court.
Appeal dismissed by 486 U.S. 1028,
108 S.Ct. 2007, 100 L.Ed.2d 596
(U.S.Ala., May 31, 1988).
Alabama Power Co. v. Cantrell
507 So.2d 1295 (Ala. 1986)
St. Clair County
Wrongful death.
Affirmed by Alabama Supreme Court.
Appeal dismissed by 486 U.S. 1028,
108 S.Ct. 2008, 100 L.Ed.2d 596
(U.S.Ala., May 31, 1988).
AmSouth Bank v. Speigner
505 So.2d 1030 (Ala. 1986)
Elmore County
Wrongful completion, cashing
of $25,000 check.
Settled on appeal.
1,000,000*
350,000
1,000,000*
1,000,000
—_
-A 20-
Rollison Logging Company of
Alabama, Inc. v. John Ellis, et al.
Cherokee County Circuit Court
CV-84-03 (May 12, 1986)
Alleged fraud involving proposed
purchase of logging equipment.
Compensatory damages in the amount
of $78,416 and punitive damages in
the amount of $921.584.
Remitted to $200,000.
$ 1,000,000
-A 21-
PA tTIAL LIST OF ALASAMA JURY VERDICTS
AWARDING PUNITIVE DAMAGES
OF $500,000 OR MORE
FROM JANUARY 1, 1985 TO DECEMBER 31, 1985
(* indicates wrongful death cases)
1985
Holt v. State Farm Mutual $25,000,000
Auto Ins. Co.
Clay County Circuit Court
CV-82-060 (1985)
Fraud involving UM stacking;
$10,000 contract claim.
Settled post-trial.
McMillian v. Massey Ferguson, 10,500,000
Inc., et al.
Mobile County Circuit Court
CV-82-686 (1985)
$10.5 million general verdict which
included $584,000 actual damages
for partial leg amputation caused by
alleged wantonness in design &
manufacture of grain auger.
Settled pending appeal.
General Motors Corp. v. Edwards 4,000,000*
482 So.2d 1176 (Ala. 1985)
Jefferson County
Two plaintiffs at $2 million each.
Remitted by trial court to $1.4
million each.
Affirmed by Alabama Supreme Court.
Overruled by Schwartz v. Volvo
North American Corp.,
554 So.2d 927, 58 U.S.L.W. 2132
(Ala. July 28, 1989)
-A 22-
May v. Lloyd Noland Foundation
Jefferson County Circuit Court
CV-79-583 (1985)
Wrongful death.
Settled Post-trial.
$ 4,000,000*
Wright v. Superior Gas 3,600,000
Macon County Circuit Court
CV-84-47 (1985)
Wrongful death.
Settled post-trial.
American Pioneer Life Ins. Co. 3,000,000
v. Sandlin
470 So.2d 657 (Ala. 1985)
Marion County
$3 million punitive damages for
fraud involving $100,000
compensatory damages.
Affirmed by Alabama Supreme Court.
Pasquale Food Co. v. Shakey’s Inc. 3,000,000
Jefferson County Circuit Court
CV-82-2606 (1985)
Punitive damages for intentional
interference with business relation-
ship and improper acquisition of
trade secrets.
Hudson v. K&S Industries, Inc.
Montgomery County Circuit Court
CV-84-593 (1985)
Wrongful death.
2,000,000*
10.
-A 23-
Nationwide Mut. Ins. Co. v. Clay
469 So.2d 533 (Ala. 1985)
Mobile County
Bad faith involving $40,000 disabil-
ity claim.
Affirmed by Alabama Supreme Court.
Kathy Dunaway, as Mother and
Custodial Parent of Daniel Allen
Dunaway, a Minor, v. Alabama
Power Company
Montgomery County Circuit Court
CV-84-650-PR (December 13, 1985)
Wrongful death.
Appealed. JNOV for Defendant on 4/02/87.
(Reversed)
$ 1,250,000
500,000*
-
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Offense
Violation of provisions of Chapter
Alabama Code Section
Performing Abortion
Parental Consent to
§ 26-21
-B 5-
ALABAMA STATUTES LIMITING
THE AMOUNT OF PUNITIVE
DAMAGES KZCOVERABLE
Code of Alabama 5-19-19 [Charge of Interest in
excess of maximum, except bona fide error or
accident, double damages or ten times the excess
charge].
Code of Alabama 6-6-314 [unlawful detainer,
double damages].
Code of Alabama 8-19-10(a)(2) [using deceptive
trade practices in dealings with consumers, treble
damages].
Code of Alabama 8-19-5(19) and (20) [using
deceptive trade practices in dealings with noncon-
sumers, treble damages].
Code of Alabama 37-2-18 [liability for excessive
rates charged by common carriers, treble
damages].
Alabama Rules of Appellate Procedure, Rule 38
[frivolous appeals in civil cases, double costs].
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.