Amicus Curiae Brief — Pacific Mutual Life Insurance v. Haslip

|

WD

No. 89-1279

IN THE

Supreme Court of the Gnited States

OCTOBER TERM, 1989

PacIFIC MUTUAL LIFE INSURANCE COMPANY,

Petitioner,

Vv.

CLEOPATRA HASLIP, CYNTHIA CRAIG, ALMA M. CALHOUN

and EDDIE HALGROVE,

Respondents.

On Writ Of Certiorari To The

Supreme Court of Alabama

BRIEF AMICI CURIAE OF AETNA LIFE INSURANCE

COMPANY, ALLSTATE INSURANCE COMPANY,

BANKERS LIFE AND CASUALTY COMPANY,

THE OHIO CASUALTY INSURANCE COMPANY

AND RESERVE LIFE INSURANCE COMPANY

IN SUPPORT OF PETITIONER

Of Counsel: *THEODORE B. OLSON

LARRY L. SIMMS

ARTHUR A. PALMUNEN GIBSON, DUNN & CRUTCHER

AETNA LIFE INSURANCE 1050 Connecticut Avenue, N.W.

COMPANY Washington, D.C. 20036

JOHN B. REINIERS (202) 955-8500

ALLSTATE INSURANCE COMPANY Attorneys for Amici Curiae

ROBERT R. SHEEHAN *Counsel of Record

BANKERS LIFE AND CASUALTY

COMPANY

JOHN H. REHM, JR. Of Counsel:

THE OHIO CASUALTY

INSURANCE COMPANY

GEORGE R. KATOSIC

RESERVE LIFE INSURANCE

COMPANY

—_—_—_—_—_—_—__—_—_ EE

PRESS OF BYRON S. ADAMS, WASHINGTON, D.C. (202) 347-8203

THEODORE J. BOUTROUS, JR.

GIBSON, DUNN & CRUTCHER

QUESTION PRESENTED

Amici shall address the following question:

Whether the Due Process Clause of the Four-

teenth Amendment prohibits the imposition

of a punitive damage award in a case in

which the applicable state law does not es-

tablish the maximum punishment to which a

defendant may be exposed for conduct found

to warrant punishment.

TABLE OF CONTENTS

INTEREST OF THE AMICI CURIAE .............ccccc00e000:

SUMMARY OF ARGUMENT. ........0:.c.-cessscosscsscssseseosesees

ABSUREENT ...-cccccccesnserstatessinnansnniimmaan

A. Punitive Damages Are Ad Hoc, Capricious

and Essentially Limitless Punishments Im-

a Without Standards, Uniformity or

EEN SSE

B. Colonial and Early American Jurisprudence

Rejected the Concept That Punishment Could

Be Inflicted Without Express, Pre-Estab-

Bee6 LARIGD ....cccccesssnisnnenniniiannin

C. The Establishment of a Range of Penalties

Is a Quintessentially islative Task That

Is Necessary to the ment of Punish-

ment’s Theoretical Goals of Retribution and

DSRSTTCRED .occevccsssnsenscinmintaias

D. The Due Process Clause Requires Legisla-

tively Established Limits on the Maximum

Punitive Damage Award Permissible for a

Particular Type of Misconduct ................00-+.

CONC LR IOIN q..ccccecesevesorsccssesnnmnnniininiaaiie

12

16

24

27

ili

TABLE OF AUTHORITIES

CASES: Page

A.B. Small Co. v. American Sugar Ref. Co., 267

a 25

Ace Truck & Equipment Rentals, Inc. v. Kahn, 746

IIIS MID sc csscccconsssssssesosesercososee )

Aetna Life Insurance Co. v. Lavoie, 475 U.S. 813

i iaeracncensenasteecsocerssocccccocoes 1,8

Allis-Chalmers Corp. v. Leuck, 471 U.S. 202

aon ccecsescsconnenensees 4

Bankers Life and Casualty Co. v. Crenshaw, 486

sn cccnnnsnccasnensotencoonsaccosooes 2,5,9

Bankers Life and Casualty Co. v. Crenshaw, 483

SE, TIED cccscccesccscsesesoseceserereesees )

Berra v. United States, 351 U.S. 131 (1956) ........ 25

Bigelow v. RKO Radio Pictures, Inc., 327 U.S 251

SET ss scceresenccnsnncessocevecescossoscoosees 7

Bloom v. Illinois, 391 U.S. 194 (1968) ...........0000... 17

Bouie v. City of Columbia, 378 U.S. 347 (1964) ... 27

Browning-Ferris Industries of Vermont, Inc. v.

Kelco Disposal, Inc., 109 S. Ct. 2909

I scssnesnncosccoes 7-8,12,18

Burnham v. Superior Court of California, No. 89-

EY BE, BID cccccccccvccccccsccccosessesceveces 14

Calder v. Bull, 3 U.S. (8 Dall.) 386 (1798) ........... 14,27

Central Alabama Electric Cooperative v. Tapley, 546

So. 2d 371 (Ala. — pe ana 6,12

Coker v. Georgia, 433 U.S. 584 (1977) ........... 18

D'Ambrosio v. Pennsylvania National Mutual Cas-

ualty Insurance Co., 494 Pa. 501, 431 A.2d 966

iit cnccadincencevesoecobcorsrentccoceccess 4

Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc.,

Ne 18-19

Eichenseer v. Reserve Life Insurance Co., 881 F.2d

1355 (5th Cir. 1989), stay granted, March 19,

1990 (A-620), cert. pending (No. 89-1308) ...... 2

iv

Table of Authorities Continued

Page

Eichenseer v. Reserve Life Insurance Co., 894 F.2d

1414 (5th Cir. 1990) (dissent from denial of

PORTS GIF IED scctesscanciniscncsniinniitsiananennie 3,8,23,24

Electrical Workers v. Foust, 442 U.S. 42 (1979) .. 18

Fay v. Parker, 58 N.H. 342 (1872) ...........cccccceeeees 11,12

G. Amador Corp. v. The Ohio Casualty Insurance

Co., No. B029795 (Cal. Ct. App. Dec. 28, 1989),

stay granted, April 17, 1990 (A-718) .............. 3,10

Giaccio v. Pennsylvania, 382 U.S. 399 (1960) ....... 16

Gore v. United States, 357 U.S. 386 (1958) .......... 17-18

Green v. United States, 356 U.S. 165 (1958) ........ 16

Hawkins v. Allstate Insurance Co., 152 Ariz. 490,

jd P.2d 1073, cert. denied, 484 U.S. 874

SEU nestsaisnisanmiateniidiindiniaia dea TE ii, 3

Hicks v. Feiock, 485 U.S. 624 (1988) ........ cee 7,17

Hospital Authority of Gwinnett County v. Jones,

386 S.E.2d 120 (Ga. 1989), cert pending (No.

PTD connarinncstitsienmpiniiansisiniaiilisibininiiliiddlavbeiaaiappeecenien 9

Lanzetta v. New Jersey, 306 U.S. 451 (1939) ....... 25

Los Angeles Dept. of Water & Power v. Manhardt,

SS S&F Ee 5

McNamara v. King, 7 Ill. (2 Gilm.) 432 (1845) ..... 1]

Miller v. Florida, 482 U.S. 423 (1987) ................ 14,27

Miller v. Schnitzer, 78 Nev. 301, 371 P.2d 824

EET ‘sesriushitiaachasiecansesiitaialitiiadntibaiaiidaceiinatibnamtitiiinatitiin ;

Mistretta v. United States, 109 S. Ct. 647 (1989) . 15

Prentis v. Atlantic Coast Line Co., 211 U.S. 219

SERRE eS SRE ST 17

Rosenberg v. United States, 346 U:S. 273 (1953) - 18

Ay MO i Ie toll

Table of Authorities Continued

Page

Rosenbloom v. Metromedia, Inc., 403 U.S. 29

STI hice laa ia ciacatclitaatensen 19,27

Rummel v. Estelle, 445 U.S. 263 (1980) ...........00... 18

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

RUSE ES CELERANT eens OE a 27

Simmons v. General American Life Insurance Co.,

No. 87-1339 (Ala. Dec. 22, 1989), stay pending

SI ciclsccshssnidchsindanialaieichahsddniiaiseteisteiibdeaeapdaiiniabibiiainipai

Smith v. Wade, 461 U.S. 30 (1988) .......... ee 10,18

Standard Life Insurance Co. of Indiana v. Veal,

854 So. 2d 239 (Miss. 19777) ........ccccccccccscscceess 9

Standard Oil Co. v. Missouri, 224 U.S. 270

SN aida liar ia deintamatibnnneie 25,26

Taylor v. Hayes, 418 U.S. 488 (1974) ..... ee 17

The Ohio Casualty Insurance Co. v. G. Amador

Corp, stay granted, April 17, 1990 (A-713).... 3,10

Thomvson v. Oklahoma, 487 U.S. 815 (1988) ........ 18

Tison v. Arizona, 481 U.S. 137 (1987) .................. 21

Tull v. United States, 481 U.S. 412 (1987) ........... 24

Tullidge v. Wade, 3 Wils. K.B. 18, 95 Eng. Rep.

I AI ia iaiacciiesdiinidigptaiiiaadiaindbinenadenss 11

United States v. Batchelder, 442 U.S. 114 (1979) . 25

United States v. Grayson, 438 U.S. 41 (1978) ...... 14,15

United States v. Halper, 109 S. Ct. 1892 (1989) .. 16

United States v. Hudson, 11 U.S. (7 Cranch) 31

I ira ietaedhi diacritics h aa ciaeiidediebiiedibiiiaiadads 14

Waters-Pierce Oil Co. v. Texas, 212 U.S. 86

TTITTIEED : wiieheshidinsnseidaibpuideianphdenighieteidehiaidiialiaiahiaiaaidpeudibndigtainaete 26

Weaver v. Graham, 450 U.S. 24 (1981) ................. 17,27

Young v. United States ex. rel. Vuitton et Fils, 481

| SERRE ate RSC lenn ton 10

Table of Authorities Continued

Page

CONSTITUTION, STATUTES AND RULES:

U.S. Const. Art. I, § 10, Cl. 1 (Ex Post Facto

SPIE dennesdiinionbindcdanhidctethtiniieasditeasaidadinihiculsbiladdeesesis 27

ey CIID icincinsdibisiintciaincisincibiipesdiiiabiebeaonses 18

Fourteenth Amendment (Due Process Clause) ...... passim

Sentencing Reform Act, 28 U.S.C. § 991(b\1) ...... 15

STATE STATUTES:

Ala. Penal Code §§ 91, et seg. (1866) ..........c000000 14

Pa. H.B. 121, § 3, amending Pa. Code, ch. 83, tit.

I scccdteisnaddndeeinaiedliddasidimineiadeieenntenialidh Wsishiiniiniisddhdinnade 4

LEGISLATIVE MATERIALS:

S. Rep. No. 225, 98th Cong., 1st Sess. (1983) ...... 15

MISCELLANEOUS:

S. Benn, Punishment, 7 Encyclopedia of Philosophy

STD sshicscsinnincinacthaiianiihiaaniniie cilia idlliniaaiieetaillbibtaciaity 21

J. Bentham, An Introduction to the Principles of

Morals and Legislation (C. Wilson & R.

SN I el cctngnce 20

J. Bentham, The Rationale of Punishment

IIE sngbdinihesbibintdidbanececsdinbaidasasunentiniahiiae 16 19,20,21

L. Berkson, The Concept of Cruel and Unusual Pun-

I CIID tihiiistcdascsanssenclincitaadniidddeniinaindions 16,21

4 W. Blackstone, Commentaries on the Laws of Eng-

— £ RE eee eee 19,21-22

H. Dagge, Considerution on Criminal Law

SSI snsita ‘-diehleaniienshdihedancisiaihiaieiadidiialtetidedsenentecsnenes 21

M. Frankel, Criminal Sentences (1972) ..............006. 13

L. Friedman, A History of American Law (2d ed.

SEE ibidaliniinhiipdidiadaipibatiasiinidiniiitnbimmnrensisesnore 13

E. van der Haag, Punishing Criminals (1975) ...... 21

Se

vii

Table of Authorities Continued

Page

W. Hale, Handbook on the Law of Damages (2d ed.

SITETTED ciiisihiesiasieiiibniniceidcidiaaiiiidubacidhciasiisniaiinbesiniverrcetn 12

H.L.A. Hart, Punishment and Responsibility

SUIIIII siciidiatinspuibsinipiindithdinbionadagaiienneabineseidinnaeemnsseces 16,21

Morris, Punitive "4 in Tort Cases, 44 Harv. .

a ee 10,22-23

W. Paley, The Principles of Moral and Political

Philosophy (6th ed. London 1788) ...........:..00 21

M. Peterson, S. Sarma & M. Shanley, Punitive

Damages (Rand Inst. for Civil Justice 1987) .. 5

E. Pincoffs, The Rationale of Legal Punishment

III -ccsdidhddaaiiinidhlbisdlat a pibicebieetaiaitnibiablinevideiegeccenees 20,21

P. Reinsch, English Common Law in the Early

American Colonies (1977) ........ccccceeeececeeseeeeenees 13

B. Schwartz, The Bili of Rights: A Documentary

I MI Gabcatessedicinnitntiiiiesecsetseninumnessereese 13

The Laws of The Pilgrims (J. Cushing ed. 1977) .. 13

a ere

ee ED aU at cl A eM a eM a

eh en ea

IN THE

Supreme Court of the Gnited States

OCTOBEk TERM, 1989

89-1279

PACIFIC MUTUAL LIFE INSURANCE COMPANY,

Petitioner,

Vv.

CLEOPATRA HASLIP, CYNTHIA CRAIG, ALMA M. CALHOUN

and EDDIE HALGROVE,

Respondents.

On Writ Of Certiorari To The

Supreme Court Of Alabama

BRIEF AMICI CURIAE OF AETNA LIFE INSURANCE

COMPANY, ALLSTATE INSURANCE COMPANY,

BANKERS LIFE AND CASUALTY COMPANY,

THE OHIO CASUALTY INSURANCE COMPANY

AND RESERVE LIFE INSURANCE COMPANY

IN SUPPORT OF PETITIONER

INTEREST OF THE AMICI CURIAE

Amicus Aetna Life Insurance Company challenged

in this Court the “lack of standards governing pu-

nitive damages in Alabama’”’ under the Due Process

Clause of the Fourteenth Amendment in Aetna Life

Insurance Co. v. Lavoie, 475 U.S. 813, 828-29 (1986),

in which the Court first recognized that the stan-

~

dardless discretion of juries to impose punitive dam-

ages raises ‘important’ federal constitutional ques-

tions.

Two years later, in Bankers Life and Casualty Co.

v. Crenshaw, 486 U.S. 71 (1988), amicus Bankers Life

and Casualty Company argued to this Court that the

unfettered discretion of juries to inflict punitive dam-

ages in virtually unlimited amounts pursuant to

vague, retroactively applied standards violated the

Due Procgss Clause.

In a case presently on this Court’s docket, amicus

Reserve Life Insurance Company seeks review of a

$500,000 punitive damage award imposed by a United

States District Couirt after a bench trial for ‘“‘bad

faith’ delay in paying an insurance claim based upon

Reserve's alleged violation of a substantive standard

of conduct that was created by judicial decision four

years after the conduct at issue. Eichenseer v. Reserve

Life Insurance Co., 881 F.2d 1355 (5th Cir. 1989),

stay granted, March 19, 1990 (A-620), cert. pending

(No. 89-1303). The United States Court of Appeals for

the Fifth Circuit, like the Supreme Court of Alabama

in the case at bar, held that a potpourri of ‘‘factors”’

applied by the trial court in determining the amount

of the award sufficiently consirained the power to

punish for purposes of the Due Process Clause, and

affirmed the judgment. /d., at 1363. Judge Jones,

joined by Judges Gee, Jolly, and Smith, dissented from

denial of rehearing en banc in Reserve Life on the

grounds that the ‘bad faith refusal tort ... mocks

our notions of fundamental! fairness embodied in the

Due Process Clause’ because it simultaneously de-

prives defendants of advance notice of ‘the conduct

that could result in punitive damage awards’ and

gives courts and juries “unbridled discretion to pun-

ish’ for engaging in such conduct. 894 F.2d 1414,

1415 (5th Cir. 1990).

Amicus The Ohio Casualty Insurance Company was

recently assessed with ~ $10,000,000 punitive damage

award by a California jury for alleged bad faith han-

dling of an insurance claim; the punishment was af-

firmed by a California Court of Appeal in an

‘“‘unpublished”’ opinion that rejected Ohio’s federal due

process objections to punishment in the absence of an

express statutory range of penalties. G. Amador Corp.

v. The Ohio Casualty Insurance Co., B029795 (Cal.

Ct. App. Dec. 28, 1989), stay granted, April 17, 1990

(A-713) (O’Connor, Circuit Justice). The Supreme

Court of California, consistent with its practice in

recent years to refuse to examine the constitutionality

of seven- and eight-digit punitive damage awards, de-

nied review.

Amicus Allstate Insurance Company has similarly

experienced first hand the results of uninhibited pu-

nitive damage verdicts and the refusal of courts to

exercise meaningful contro] over such verdicts under

either state law or federal constitutional principles.

For example, in 1987 the Supreme Court of Arizona

reinstated a $3,500,0)C punitive damage award

against Allstate in a bad faith case notwithstanding

Allstate's objections to the award under the Due Proc-

ess Clause of the Fourteenth Amendment. See Hawk-

ins v. Allstate Insurance Co., 152 Ariz. 490, 733 P.2d

1073 (Ariz.), cert. denied, 484 U.S. 874 (1987).

Amici collectively conduct their respective insurance

businesses in all fifty States and, each day, process

thousands of insurance claims. In most of those jur-

isdictions, a mistake or delay in handling a claim may

result in an unpredictable and excessive punitive dam-

age award because of a determination, made years

later, that the claim should have been handled with

greater sensitivity or less frugality. In addition to the

amorphous common law fraud concepts applied in the

case at bar,’ the courts and legislatures of many

States have authorized unlimited punitive damage

awards for “bad faith’ failure to pay an insurance

claim, a new form of tort that has been recognized

by this Court as nothing ‘‘more than a way to plead

a certain kind of contract violation ...in order to

recover exemplary damages not otherwise available

under [state contract] law.’’ Allis-Chalmers Corp. vy.

Leuck, 471 U.S. 202, 217 (1985).

‘ Since its decision in this case, the Supreme Court of Alabama

has again rejected a Due Process Clause challenge to a punitive

damage award imposed vicariously against an insurance company

on the basis of the alleged fraud of an independent sales agent.

Simmons v. General American Life Insurance Co., No. 87-1339

(Ala. Dec. 22, 1989) (affirming $600,000 punitive damage award),

stay pending (A-845).

- For example, in February 1990 the Pennsyivania legislature

passed and its Governor signed into law H.B. 121 authorizing

“bad faith’ actions and the imposition of unlimited punitive dam

ages based upon a finding that an insurer has ‘‘acted in bad

faith.” Pa. H.B. 12], § 3, amending Pa. Code, ch. 838, tit. 42

(signed Feb. 7, 1990) (adding § 8371). As is typical in this area

of the law, the legislation does not even purport to define the

term “‘bad faith,” which has also not been defined by the Penn-

sylvania courts because those courts have in the past refused

even to recognize a bad faith right of action. See, ¢.g., D'Am-

hrosio Vv. Pennsylvania Natione! Mutual Casualty Insurance Co..

494 Pa. 501, 431 A.2d 966 (Pa. 1981) |

qu

This “‘tortification of contract law’’® has converted

civil justice systems into uncontrolled and manifestly

erratic organisms that have begun to supersede crim-

inal justice systems as the arenas in which to punish

and deter conduct perceived to be antisocial. The vir-

tually unlimited monetary punishments that can be

inflicted in these cases because a defendant ‘‘acts with

a certain mental state,’ Bankers Life, 486 U.S., at

87 (O'Connor, J., concurring), injects enormous un-

certainties into an area of the law in which predict-

ability and regularity are of particular importance. See

Los Angeles Dept. of Water & Power v. Manhardt,

435 U.S. 702, 721 (1978) (discussing the deleterious

effect of ‘‘[dJrastic changes in the legal rules govern-

ing ...insurance funds’’).

Amici contend that the Due Process Clause of the

Fourteenth Amendment precludes judicially imposed

punishments absent advance notice of the precise pub-

lic wrong for which society will extract punishment

and advance notice of the range of penalties that

might be inflicted for that specific conduct.‘

SUMMARY OF ARGUMENT

Punitive damages are intended not to compensate

for an injury inflicted but to impose an extracom-

pensatory punishment for conduct that is perceived

to be antisocial. As is true in most jurisdictions today,

*M. Peterson, S. Sarma & M. Shanley, Punitive Damages iv

(Rand Inst. for Civil Justice 1987).

‘The Court need not determine in this case the circumstances

under which a punitive damage award within a legislatively es-

tablished range of punishments could be subject to additional

constitutional limitations under the Due Process Clause.

the Alabama regime that produced the $1,077,978

punishment in this case authorizes the punishment for

deviation from vague, evolving and elastic “stand-

ards’’ and permits unfettered discretion to render a

punishment in virtually any amount. The court below

has stated that it “‘can envision no set of carved-in-

granite standards that would guide every jury” in

punitive damage cases because ‘‘the degree of pun-

ishment necessary to achieve [the goals of punishment

and deterrence] changes in every case” and in some

cases “juries should be entitled to punish defendants

so severely as to destroy them; justice demands that.”

Central Alabama Electric Cooperative vy. Tapley, 546

So. 2d 371, 377 (Ala. 1989) (emphasis in original).

Neither the jury nor the court below was constrained

in any way by a legislative (or even common law)

limit on the amount of punishment that could be in-

flicted against petitioner.

This unchecked license to impose a punishment in

virtually any amount violates a fundamental principle

underlying the Due Process Clause: that a State may

impose punishment on its citizens only pursuant to

standards established in advance. Historically, the re-

sponsibility for establishing appropriate levels and lim-

its of punishment for antisocial conduct has been

regarded as quintessentially that of the legislature.

In the Colonies, the establishment of maximum pun-

ishments by statutes (or their equivalent) was com-

monplace, reflecting the Colonists’ rejection of any

System in which the severity of punishment was left

to the post hoc discretion of juries or judges. By the

time the Fourteenth Amendment was ratified. the

States had uniformly rejected the concept of common

law crimes by enacting comprehensive criminal codes

defining substantive crimes and establishing specific

ranges of punishment for those crimes.

Punitive damages serve the same purposes as crim-

inal sanctions. Their infliction in the absence of leg-

islatively prescribed limits therefore departs from the

historical pattern that the judicial imposition of pun-

ishment must be preceded by adequate notice and

articulated limitations. States that permit the award

of punitive damages in the absence of statutory limits

deprive citizens of the notice that is the necessary

antecedent for constitutional punishment under the

Due Process Clause of the Fourteenth Amendment.

ARGUMENT

A. Punitive Damages Are Ad Hoc, Capricious and Es-

sentially Limitless Punishments Imposed Without

Standards, Uniformity or Predictability

The tort system vests the factfinder with wide lat-

itude to determine the amount of compensatory

damages’ necessary to make a plaintiff whole for ac-

tual injuries to redress a private wrong, but at least

the compensatory function provides some theoretically

objective guidance.’ In assessing punitive damages,

however, judges and juries are “‘guided by little more

than an admonition to do what they think is best.

Browning-Ferris Industries of Vermont, Inc. v. Keleo

See. e.g.. Miller v. Schnitzer, 78 Nev. 301, 371 P.2d 824.

828-24 (1962) (“The extent of such damage, by its very nature.

falls peculiarly within the province of the trier of fact tees [A}n

appellate court will disallow or reduce the award if its judicial!

conscience is shocked; otherwise it will not.’’). Compare Bige low

v. RKO Radio Pictures, Inc., 327 U.S. 251, 264 (1946) Gury need

only make a “‘just and reasonable estimate’’).

‘Cr. Hicks vy. Fevock, 485 U.S. 624, 647 (14988) (O'Connor. J...

dissenting)

Disposal, Inc., 109 S. Ct. 2909, 2923 (1989) (Brennan,

J. concurring). Thus, in this case the jury was not

intormed what maximum punishment might be ap-

propriate to fulfill society's objectives of retribution

and deterrence in redressing the alieged public wrong;

nor was it limited by any other meaningful standards

or guidelines by which to make its ultimate deter-

mination of the severity of the punishment to impose

on petitioner. The trial court could not provide the

jury with such guidance because no fixed limitations

or objective standards had been established in Ala-

vama to aid civil juries in performing retrospectively

in individual cases the role assigned prospectively and

generically in criminal cases to the legislature—that

of prescribing the limits of permissible punishments

for particular offenses.

In fact, civil juries are entrusted with the power

to punish and to establish ad hoc levels of punishment

in cases in which the substantive standards are them.

selves in a state of constant evolution. See Aetna Life

Insurance Co. y. Lavoie, 475 U.S. 813. 822 (1986). In

many punitive damages cases, the standard of liability

is itself like ‘‘a predator lurking in the shadows to

pounce on the unsuspecting.”’ Reserve Life, 894 F.2d.

at 1420. (Jones, J., dissenting from denial of rehear-.

ing en banc).” Having found liability under mercurial]

standards of conduct, civil juries are typically given

Although not to be considered in detail in this brief, amici

submit that the uncertainty regarding what conduct will warrant _

punitive damages reinforces the contention that the Due Process

Clause requires, at a minimum, that the upper limit of punish-

ment be established in advance of the conduct subsequently al-

leged to warrant the Imposition of punitive damages .

guidance no more explicit than that the amount of

the award must be sufficient to punish and deter.

See, e.g., Standard Life Insurance Co. of Indiana v.

Veal, 354 So. 2d 239, 249 (Miss. 1977).

As Justice O’Connor has observed, “ ‘the deter-

mination of the amount of punitive damages is a mat-

ter committed solely to the authority and discretion

of the jury.’”’ Bankers Life, 486 U.S., at 88 (O’Con-

nor, J., concurring), quoting Bankers Life and Cas-

ualty Co. v. Crenshaw, 483 So. 2d 254, 278 (Miss.

1985). Given this state of affairs, no person potentially

subject to punitive damages can possibly know in ad-

vance how much punishment a jury might impose.

Moreover, appellate review is of no comfort because

jury verdicts generally will be overturned only if the

punitive award is subjectively perceived by appellate

judges as “grossly and manifestly excessive,’’ Brown-

ing-Ferris, 109 S. Ct., at 2922 n.24, or happens to

‘‘ “shock [the] judicial conscience.’ ’’ Hospital Author-

ity of Gwinnett County v. Jones, 386 S.E.2d 120, 126

(Ga. 1989), cert. pending (No. 89-1315); accord Ace

Truck & Equipment Rentals, Inc. v. Kahn, 746 P.2d

132, 187 (Nev. 1987) (punitive damage award will not

be disturbed so long as it is ‘‘fair and just and rea-

sonable [according to the] sense [of nght and wrong]

most of us possess from childhood’’).

In affirming a $10,000,000 punitive damage award

against amicus Ohio Casualty, the California Court of

Appeal! justified this extremely vague and deferential

standard of appellate review as follows: ‘‘The calcu-

lation of punitive damages involves a ‘fluid process

of adding or subtracting depending on the nature of

the acts and the effect on the parties... and in this

10

regard juries have wide discretion in determining what

is proper.... The more reprehensible the act. the

greater the appropriate punishment.” G. Amador

Corp. v. The Ohio Casualty Insurance Co.. No.

B029795, slip op., at 27-28 (Cal. Ct. App. Dec. 28

1989) (unpublished) (citations omitted), stay granted,

April 17, 1990 (A-713) (O’Connor. Circuit Justice).

This ‘fluid process” of punishment is activated in

most cases by private prosecutors who seek not only

full compensation for their own losses, but also a

windfall punitive damage “bounty” as a reward for

their efforts. Smith v. Wade. 461 U.S. 30, 58 (1983)

(Rehnquist, J., dissenting). It is not surprising that

private plaintiffs would in such circumstances seek to

extract the largest possible punitive award irrespec-

tive of any relationship to the public purposes for

which it is in theory inflicted. As has been observed

“{a] person who is to profit by the punishment of

another is likely to prefer severe punishment to ad-

monition which will best serve social ends. and the

two are not necessarily synonymous....” Morris

Punitive Damages in Tort Cases, 44 Harv. L. Rev.

1173, 1178 (1981).* |

“The Court recently noted the incongruity of a similar ar-

rangement in Young v. United States er rel. Vuitton et Fils

48] l -S. 787 (1987). In that case, the Court exercised its su-

pervisory power to preclude appointment of interested private

litigants to prosecute criminal contempt actions against opposing

private litigants, even though the system in question turned the

punitive fine over to the government. In Young, Justice Black-

mun expressed the view that such prosecutors must. as a matter

of due process, be able to serve the public interest to the ex-

clusion of any private interest; thus, he would have reached the

same result as a matter of constitutional! compulsion. Jd... at 815

(Biackmun, J.. concurring). | |

1]

The punitive damage system operates without giv-

ing advance notice of what punishment may be im-

posed for what conduct. That it operates in this

fashion is primarily an historical accident. As in Eng-

land,’ early punitive damage cases in this country

confused the rationale for imposing ‘exemplary’

damages, deeming them compensation for ‘‘intangible

injuries’”’ or ascribing dual compensatory and punitive

justifications to jury awards that apparently exceeded

the amount necessary to compensate for actual tan-

gible injury. See, e.g., McNamara v. King, 7. Ill. (2

Gilm.) 432, 436 (1845). As the concept of actual dam-

ages expanded to include compensation for intangible

injuries such as mental anguish, there was ‘“‘nothing

left for ‘exemplary damages,’ as formerly understood,

to operate upon’ and punitive damages generally

came to be understood to refer to ‘‘punishment for

the sake of public example....”’ Fay v. Parker, 53

N.H. 342, 384 (1872). Because punitive damages were

the product of the evolving common law tort com-

pensation system, these monetary punishments im-

posed in ostensibly civil proceedings were, unlike

monetary punishments imposed in criminal proceed-

ings, left to the virtually unlimited, and rarely dis-

turbed, discretion of the jury.

The inconsistency between having statutorily lim-

ited monetary punishments in criminal cases and un-

limited monetary punishments in ‘punitive damage

cases did not go unnoticed. A commentator observed

in 1912 that ‘‘[it] certainly appears to be an incon-

gruity that one may be punished by the public for

‘ Nee. €.g.. Tullidae ie Wade, 3 Wils k.B 1&, 95 Eng. Rep

904 (CP. 1769).

12

—

the crime ... by a fine limited by statute, and again

punished in favor of the sufferer... for the same act,

by exemplary damages, with little limit on the dis-

cretion of the jury.”” W. Hale, Handbook on the Law

of Damages §§ 87-88, at 306 (2d ed. 1912). The full

impact of this limitless punishment regime on the civil

justice system was not, however, felt until mach later.

As long as punitive damage awards were relatively

rare and modest in amount, the system could tolerate |

an occasional aberration. The frequent and random

imposition of massive punitive damage awards is \

relatively recent phenomenon. See Browning-Ferris,

109 S. Ct., at 2924 (O’Connor, J., concurring and

dissenting). In the last two decades, the doctrine

transformed from a mere appendage to the tort com-

pensation system designed to make a defendant

‘‘smart’’'' into a full-fledged punishment scheme that,

as the court below has recognized, permits juries to

punish so severely as literally to destroy a defendant.

See Central Alabama Electric Cooperative, 546 So. 2d,

at 377.

B. Colonial and Early American Jurisprudence Rejected

the Concept That Punishment Could Be Inflicted

Without Express, Pre-Established Limits

The principle that limits on punishments must be

prescribed in advance, and its corollary that judges

and juries may not set such limits on an ad hoc basis,

were incorporated in our jurisprudence when the first

Colonists arrived on this continent in the early 17th

Century. For example, Chapter III of ‘“‘The Genera!

Laws and Liberties of New Plimouth Colony”’ se.s

forth a detailed scheme of punishments, inclucing

monetary punishments characterized simultaneously

Se Fay ¥. Pa rhe Fa 53 ew al 354.

13

as ‘“‘amercements” and ‘“‘fines’’ which could be im-

posed upon conviction of a crime. See The Laws o/

the Pilgrims (J. Cushing ed. 1977) (unnumbered

pages). The Colonists’ rejection of the notion that a

person could be punished without advance notice of

the maximum punishment for particular conduct, was

virtually universal. As stated in the Massachusetts

Body of Liberties of 1642,

no mans person shall be arrested, restrayned,

banished, dismembred, nor any wayes pun-

ished ...unless it be by vertue or equities

of some expresse law of the Country war-

ranting same, established by a general Court

and sufficiently published... .

1 B. Schwartz, The Bill of Rights: A Documentary

History 78 (1980); see also P. Reinsch, English Com-

mon Law in the Early American Colonies 53 (1977)

(codification of “essential elements of the law” was

universally considered necessary in the Colonies).

In establishing this principle. the Colonists were

implementing a precept of ancient lineage going back

to the Latin canon, ‘‘Nullem crimen, nulla poena, sine

lege,”’ the modern translation of which is, “there can

he no crime, and no punishment, except as the law

prescribes it."’ M. Frankel, Criminal Sentences 3

(1972) (emphasis in original). The Coionists accept-

ance of the concept ‘nulla poena, sine lege’ was sub-

sequently manifested in the States in the complete

codification of the criminal law and, ultimately, the

rejection of the concept of common law crimes. See

L. Friedman, A History of American Law 573 (2d

ed. 1985)..! As of the time of the ratification of the

-

In the early 19th Century. this Court rejected the concept

14

Fourteenth Amendment, nearly every State had en-

acted a comprehensive criminal code that defined pun-

ishable crimes and fixed maximum punishments." (A

compendium of those codes is reprinted in the Ap-

pendix hereto infra.) Moreover, as illustrated by the

Court's recent unanimous decision in Miller v. Flor-

ida, 482 U.S. 423 (1987), this Court has assumed, at

least since its decision in Calder v. Bull, 3 U.S. (3

Dall.) 386 (1798), that no person can be punished for

the commission of an offense deemed ‘‘criminal’’ un-

less an upper limit on the punishment has been an-

nounced prior to the commission of the acts leading

to conviction.

Thus, in ‘the early days of the Republic .. . [eJach

crime had its defined punishment.”’ United States v.

Grayson, 488 U.S. 41, 45 (1978). The “ ‘excessive

rigidity of the [mandatory or fixed sentence] sys-

tem’ gave way to a somewhat more flexible system

that permitted the sentencing authority ‘“‘to select a

of common law crimes at the federal level. It declared that prior

to prosecution of a federal offense, Congress ‘‘must first make

an act a crime [and] affix a punishment to it... .”’ United States

v. Hudson, 11 U.S. (7 Cranch) 31, 34 (1812)

~ In enacting these penal codes, the States rejected the notion

of open-ended, unlimited punishments. See, ¢.g., Ala. Penal Cod

chs. 1-10 (1866) (punishing variety of offenses, including forgery

counterfeiting. larceny, embezzlement, murder, robbery, bur-

glary, and arson); see id. §91, 92, 101, 102, 104-110, 118, 123,

129, 130, 135, 186, 188, 140, 144, 148, 158-155, 157-159, 162,

177-184, 186-190, 192-207 (imposing maximum fines for a variety

of offenses). The codification of criminal offenses with fixed max.

imum punishments throughout the States at and around the time

of the ratification of the Fourteenth Amendment demonstrates

the denth and breadth of the consensus among the several States

on this question. Cr Burnham v. Superior Court of California

No. 89-44. slip op., at 5-6 (U.S. May 29%, 1990) (plurality opinion)

15

sentence within a range defined by the legislature.”

Id. at 46 (emphasis in original) (citations omitted); see

also Mistretta v. United States, 109 S. Ct. 647, 650

(1989) (although ‘“‘Congress early abandoned fixed-sen-

tence rigidity [it] put in place a system of ranges

within which the sentencer could choose the precise

punishment”). Even under the “indeterminate sent-

encing’’ mode! adopted in some jurisdictions, the leg-

islature ‘‘defined the maximum [and] the judge

imposed a sentence within the statutory range.’ Mis-

tretta, 109 S. Ct., at 651; Grayson, 438 U.S., at 47."

This history demonstrates that woven into the fab-

ric of our legal heritage are fundamental concepts

that prohibit the imposition of punishment by the gov-

ernment in the absence of established limits. The re-

jection of unlimited monetary punishment in criminal!

cases casts grave doubt on the constitutionality of

unlimited monetary punishments imposed by the

States in civil eases. No principled constitutional dis-

tinction may be drawn between monetary sanctions

that are imposed to punish and deter on the basis of

whether such sanctions are labeled ‘criminal’ or

“civil” or whether they are assessed in criminal or

The Sentencing Reform Act, 28 U.S.C. § 991(b\1), was en-

acted, in relevant part, in response to the problems of uncer-

tainty and inconsistency in sentencing resulting from the

“unfettered discretion” conferred upon sentencing judges to im-

pose punishment “within the statutory range fixed by Con.

gress."’ Mistretta, 109 S. Ct., at 651, S. Rep. No. 225, 98th

Cong., ist Sess. 38-40 (1983). It is more than ironic that civil

juries empowered to impose punitive damages Possess vastly

broader discretion than the “unfettered discretion’’ conferred

upon sentencing Judges that Congress sought to eliminate by a

more determinate sentencing process

16

civil proceedings. It is clear that that ‘‘[t]he notion

of punishment ...cuts across the division between

the civil and criminal law,’’ United States v. Halper,

109 S. Ct. 1892, 1901 (1989), and therefore consti-

tutional restraints on punishment are ‘“‘nct to be

avoided by the simple label a State chooses to fasten

upon its conduct or its statute.’’ Giaccio v. Pennsy!-

vania, 382 U.S. 399, 402 (1966).

C. The Establishment of a Range of Penalties Is a Quin-

tessentially Legislative Task That Is Necessary To

the Fulfillment of Punishment’s Theoretical Goals of

Retribution and Deterrence

While the judiciary and legislature share responsi-

bility for the development of the law of compensation

for torts,'* legislatures customarily evaluate society's

level of disapprobation for particular conduct by es-

tablishing the maximum and minimum punishments

that may be imposed for specific offenses and trial

courts exercise discretion to sentence within that

range. See L. Berkson, The Concept of Cruel and Un-

usual Punishment 81-82 (1975); H.L.A. Hart, Pun-

ishment and Responsibility 15, 164 (1968); see

generally J. Bentham, The Rationale of Punishment

411-12 (1830)."

‘+ Although not raised by this case, judicial creation of ret-

roactive liability for punitive damages raises independent con-

stitutional concerns. See note 7, supra.

‘ Aside from punitive damage schemes. the only context in

which punishment is still administered in our judicial system in

the absence of established limits is in connection with the courts’

exercise of their inherent contempt power. In Green v. United

States, 356 U.S. 165 (1958), the Court, while adhering to the

historical rule that contempts of court could be tried without a

jury, insisted on the ‘‘careful use and supervision” of this power

17

The legislature is inherently in a better position

than aan or juries to make the broad, multifaceted

political, social, and economic policy judgments nec

essary to determine the desirable range of punishment

for particular misconduct. While a court “investigates,

declares and enforces liabilities as they stand on pres-

ent or past facts and under laws supposed already to

exist,” a legislature “‘looks to the future and changes

existing conditions by making a new rule to be applied

thereafter....’ Prentis v. Atlantic Coast Line Co.,

911 U.S. 210, 226 (1908); see also Weaver v. Graham,

450 U.S. 24, 29 n.10 (1981) (the legislature 1s confined

to “penal decisions with prospective effect and the

judiciary and executive to applications of existing

penal law”’). As the Court observed in Gore v. United

and sustained a three-year sentence for willful disobedience of

a surrender order as not being excessive because It was well

within” the maximum sentence under the federal criminal stat-

ute that punished the closely analogous crime of bail-jumping.

Concern for the open-ended nature of the punishments available

in contempt situations in those jurisdictions in which no legis:

latively imposed limits existed ultimately led the eg ote

terpose a jury in serious contempts, Bloom vy. Illinois, 34] - 5.

194 (1968), and to impose various other procedural restrictions

on the exercise of the criminal contempt power. €.9.. Taylor v.

Haves. 418 U.S. 488 (1974). That power is, of course, exercised

only sparingly and only under an elaborate set of constitutiona:

constraints fashioned by this Court under the Due Process

Clauses of the Fifth and Fourteenth Amendments. Whatever

mav be said for its continued exercise in the absence of iegis-

latively established limits on punishments, the historic concerns

that have moved this Court to tolerate its existence are not

present in the punitive damage system. CY. Hicks v. Feiock, 485

U.S. 624. 647 (1988) (O'Connor, J., dissenting) (“‘Because the

compensatory purpose limits the amount of the fines, the bw

temnor is not exposed to a risk of punitive sanctions that woul

make criminal protections necessary. }.

- - 18

States, 357 U.S. 386, 393 (1958), “views . . . regarding

severity of punishment ... are peculiarly questions of

legislative policy. ...’’ Accord Rummel v. Estelle, 445

U.S. 263, 283 n.27 (1980) (determining the ‘“‘serious-

ness” of an offense in the first instance is a question

of legislative policy); Rosenberg v. United States, 346

U.S. 273, 306 (1953) (Frankfurter, J., dissenting)

(“Congress not the whim of the prosecutor fixes the

sentence’’).

Moreover, proper fulfillment of the penal objectives

of retribution and deterrence, factors that the Court

has deemed relevant in determining whether a pun-

ishment comports with the Constitution,’* implicitly

mandates a legislatively established maximum punish-

ment for a specific offense. For example, the unlim-

ited character of punitive damages may chill desirable

conduct and thereby risk overdeterrence. See, e.g.,

Electrical Workers v. Foust, 442 U.S. 42, 50 (1979);

Browning-Ferris, 109 S. Ct., at 2924 (O'Connor, J.,

concurring and dissenting); Smith v. Wade, 461 U.S.

30, 59 (1983) (Rehnquist, J., dissenting); Dun & Brad-

street, Inc. v. Greenmoss Builders, Inc., 472 U.S. 749,

* Applying the Eighth Amendment in Thompson v. Oklahoma,

487 U.S. 815, 838 (1988) (plurality opinion), quoting Coker v

Georgia, 433 U.S. 584, 592 (1977), the Court held that the im-

position of the death penalty for offenses committed by persons

under 16 vears of age was unconstitutional as it did not serve

the retributive and deterrent objectives of punishment and was

therefore “nothing more than the needless imposition of pain

and suffering.’ Whether the punitive damage system serves or

undermines the objectives of punishment is similarly pertinent

in evaluating the constitutionality of that system under the Due

Process Clause of the Fourteenth Amendment. Cf Browning-

Ferris, 109 S. Ct., at 2921 n.23 (suggesting that ‘‘the due pro-

cess analysis of an award of punitive damages may track closel\

the Eighth Amendment analysis’’ urged by petitioners).

19

779 (1985) (Brennan, J., dissenting); Rosenbloom v.

Metromedia, Inc., 403 U.S. 29, 84 (1971) (Marshall,

J., dissenting). If, however, the legislature establishes

a maximum punishment, some measure of predicta-

bility—at least at the outer extreme—is created. Pre-

dictability has been considered a necessary condition

for punishment to achieve its goal of measured de-

terrence. See J. Bentham, The Rationale of Punish-

ment, at 41; see 4 W. Blackstone, Commentaries on

the Laws of England 16-17 (13th ed. 1800). Indeed,

as Blackstone observed, ‘‘it must be left to the ar-

bitration of the legislature to inflict such penalties as

are warranted by the laws of nature and society, and

such as appear to be the best calculated to answer

the end of precaution against future offenses.” /d.,

at 12.

Bentham’s utilitarian theory of punishment recog-

nizes that it is the legislature’s task to prescribe a

range of permissible punishments for a specific of-

fense. Positing that the goal of deterrence requires

the punishment to be proportional to the guilt of the

offender, Bentham set out six primary rules to guide

legislators in demarking the maximum and minimum

limits of punishment. Four of those rules mark the

limits ef punishment on the minimum side,’” and the

’ These four rules provide:

Rule 1. “The the value of punishment must not be less in

any case than what is sufficient to outweigh that of the profit

of the offense... .”’

Rule 2. “The greater the mischief of the offense, the greater

is the expense which it may be worth while to be at, in the

way of punishment... .”

Rule 3. “Where two offenses come in competition, the pun

20

other two rules aid in establishing maximum limits.'*

J. Bentham, An Introduction to the Principles or Mor-

als and Legislation 289-93 (C. Wilson & R. McCallum

ed. 1945): see J. Bentham, The Rationale of Punish-

ment, at 32-37; E. Pincoffs, The Rationale of Legal

Punishment 23-24 (1966).

The fulfillment of the objectives of punishment has

been achieved in our legal system by a complex bal-

ancing of the goals of retribution and deterrence

within a framework that ensures that punishment is

neither disproportionate nor excessive, a task for

which an ephemeral jury, convened to consider a sin-

gle isolated case, is singularly unsuited and _ ill-

equipped. As Justice Brennan has noted. the principle

ishment for the greater offense must be sufficient to induce a

man to prefer the less

Rule 4. ‘The punishment should be adjusted in such manner

to each particular offense, that for every part of the mischief

there may be a motive to restrain the offender from giving birth

OP we cus:

J. Bentham, An Introduction to the Principles of Morals and

Legislation 289-93 (C. Wilson & R. McCallum ed. 1945).

* These two rules provide:

Rule 5. “The punishment ought in no case be more than what

is necessary to bring it into conformity with the rules here given

[marking the limits of punishment on the minimum side]... .”’

Rule 6. “[T]he quantity actually inflicted on each individual

offender may correspond to the quantity intended for similar

offenders in general, the several circumstances influencing sen-

sibility ought always be taken into account.”

J. Bentham, note 17, supra, at 289-93. While Rule 6 is intended

to serve as a guide to the legislator, its principal purpose is to

guide the judge in conforming to the intentions of the legislature.

Id

2]

—

of proportionality is a necessary component of our

justice system because the retributive and deterrent

purposes that justify punishment themselves possess

inadequate self-limiting principles. Tison v. Arizona,

481 U.S. 137, 180 (1987) (dissenting opinion).

The concept of proportionality requires that pun-

ishment be consonant with society’s judgment re-

garding the seriousness of the offense. There must

therefore be limits on punishment for each offense

lest the punishment for that offense in a particular

case be more severe than that which society reserves

for more serious offenses. Unless it is provided with

sufficient legislative guidance, a jury plainly cannot

perform that function. S. Benn, Punishment, j En-

cyclopedia of Philosophy 32 (1967) (retributive justice

demands that the punishment ‘“‘fit the crime’); J. Ben-

tham, The Rationale of Punishment, at 32-37 (deter-

rence will be accomplished only by scaling the expense

of punishment to the mischief of the offense), L Berk-

son, at 66-69; H. Dagge, Consideration on Criminal

Lau: 167-71 (1772); H.L.A. Hart, at 25 (‘‘the guiding

principle is that of proportion within a system of pen-

alties between those imposed for different offenses

where these have a distinct place in a common sense

scale of gravity”); W. Paley, The Principles of Moral

and Political Philosophy 372-74 (6th ed. London 1788);

E. Pincoffs, at 3-5, 23-24; E. van der Haag, Punishing

Criminals 237 (1975).'*

“ As Blackstone observed, ideally a

scale of crimes should be formed, with a corresponding

scale of punishments, descending from the greatest to

the least: but if that be too romantic an idea. vet at

least a wise legislator wil] mark the principal divisions

to

rh

In punitive damage cases, unguided juries, like bolts

of lightning, wreak retribution on individual wrong-

doers in amounts determined primarily by instinct,

passion and the chemistry of a particular, wholly

unique case. Juries typically assess punitive damages

without any special training, expertise or instruction

regarding what measure of punishment is necessary

to achieve retribution and deterrence in society as a

whole or any informed sense of what society as an

institution has determined to be suitable punishments

for the same, similar, or more or less serious mis-

conduct. Remarkably, juries in punitive damage cases

are asked to perform this complex task in the absence

of any legislative guidance.

To say that the punitive damage system is not well-

conceived or designed to produce consistent results

that fulfill society’s retributive and deterrent goals is

an understatement. Parties who seek punitive dam-

ages are private prosecutors whose exclusive objec-

tives are to collect as large a bounty as they can

convince juries to impose. The punitive damage sys-

tem then turns over to the factfinder responsibility

for determining the amount of the bounty, often based

largely on the wealth of the defendant and almost

always based on the degree of hostility that the pros-

ecutor has been able to inspire toward the defendant.

The chemistry of combining these two functions is

calculated to produce results that bear no visible re-

lationship to the public purposes of punitive awards.

See Morris, Punitive Damages in Tort Cases, 44 Harv.

and not assign penalties of the first degree to offenses

of an inferior rank.

4 W. Biackstone. at 17-]8

23

L. Rev., at 1179 (‘‘Evaluation of past conduct [at the

liability stage of a trial] is a different type of problem

from control of future behavior.... [PJroblems of

social control may require more technical skill than

jurymen have or can acquire.’’). This open incitement

to the infliction of severe punishment against a

defendant with a deep pocket is built into much of

today’s punitive damage system.

Because the punitive damage system provides

wholly inadequate notice of the standards against

which liability will be measured, and the punitive con-

sequences for deviation from those standards, the

goals of retribution and deterrence that provide the

only justification for the system cannot be served.

Without sufficient standards to guide their policy-

making, juries and judges exercising vast discretion

to punish do so by legislating and executing their own

theories of retribution and deterrence for each par-

ticular case. See Reserve Life, 894 F.2d, at 1421

(Jones, J.) (‘the rubrics of punishment [and] deter-

rence ... are simply too uncertain to yield consistent

results’). Once a jury has acted, trial and appellate

judges—as ill-suited*’ as juries to make the kind of

political, social and economic judgments that ought to

go into the development of any fair and efficient sys-

tem of punishment—make no systematic attempt to

bring order and consistency to this system, even as-

suming they could do so by substituting their own ad

hoc judgments for those of the juries.”

“ In the absence of legislative standards, even a conscientious

trial judge is bereft of meaningful moorings when determining

the amount of appropriate punishment. See, e.g., Reserve Lye.

844 F.2d, at 1421 (Jones, J.). :

- This judicial abstinence is often based upon the assumption

24

Under this “‘system,”’ each punitive damage case

becomes a laboratory for social engineering in which

the jury formulates and applies its own unique theory

of punishment and deterrence and then disbands. The

existing punitive damage regime carries with it no

pretense of trying to achieve coherent, rational re-

sults. Instead, it is unavoidable that it will produce

bizarre and unpredictable results because there are

no overarching rules to govern its operation. See Re-

serve Life, 894 F. 2d, at 1421 (Jones, J.) (“‘The judicial

hands-off policy on punitive damages assures that no

unifying principle can or will emerge from the pen-

alties inflicted....”’).

D. The Due Process Clause Requires Legislatively Es-

tablished Limits on the Maximum Punitive Damage

Award Permissible for a Particular Type of Miscon-

duct

The Due Process Clause of the Fourteenth Amend-

ment requires that persons who are subjected to pun-

ishment be informed in advance at least of the range

of punishments available under the law for any par-

ticular conduct. This Court has observed, in the con-

text of punishment imposed in criminal proceedings,

that plaintiffs are constitutionally entitled to have a jury assess

the amount of damages in cases in which the Constitution oth-

erwise guarantees a jury trial on the issue of liability. This

assumption, while never wholly tenable, is now clearly misdi-

rected in light of this Court's recent decision in Tui! v. United

States, 481 U.S. 412 (1987). Thus, the courts have left to juries

the ad hoe determinations of retribution and deterrence, and

during this process, the one political institution in our system

capable of treating the social, political and economic issues in

volved in determining the appropriate scale of punishments—the

legislature—has abstained from establishing the necessary four

dation for this aberrationa!l and mischievous system.

25

that ‘vague sentencing provisions may pose consti:

tutional questions if they do not state with sufficient

clarity the consequences of violating a given criminal

statute.” United States v. Batchelder, 442 U.S. 114,

123 (1979). In the criminal justice system, due process

therefore requires that the “range of penalties’ be

established in advance so as to “‘inform[]. = the

courts, prosecutors, and defendants of the permissible

punishment alternatives available... . Id., at 126.

Indeed, it is a basic principle of our criminal law that

the government can prosecute a person only under a

criminal statute that ‘fairly and clearly define[s] the

conduct made criminal and the punishment which can

be administered.’ Berra v. United States, 351 U.S.

131, 139-40 (1956) (Black, J., dissenting).*

In Standard Oil Co. v. Missouri, 224 U.S. 270

(1912), this Court held that a $50,000 “fine” imposed

against a corporation under a “‘quo warranto statute

did not violate the Due Process Clause despite the

absence of any statute “fixing the maximum penalty

-_ and no rule for measuring damages... .”’ Id., at

285. In addressing the argument that the lack of a

statutory maximum penalty violated due process, the

Court did not discuss the fair notice component of

the Due Process Clause. Rather, the Court assumed

that the “real objection is not so much to the exist-

The due process requirement that a “person of ordinary

intelligence’ have fair notice as to what the law commands or

forbids is equally applicable in civil proceedings. AB. Small Co.

\. American Sugar Ref. Co., 267 U.S. 233, 239 (1929) (‘‘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.”"). See gen-

erally Lanzetta v. New Jersey. 306 U.S. 451, 453 (1939).

26

ence of the power to fix the amount of the fine as

the fact that when exercised by the Supreme Court

of the State, it is not subject to review, and is said

to be unlimited.’ Jd., at 286.

The Court rejected this objection on the grounds

that the power to fix punishment “‘is limited ... by

the obligation to administer justice and to no more

assess excessive damages than to impose excessive

fines.’’ Jd. (citation omitted). The Court cited for this

proposition Waters-Pierce Oil Co. v. Teras, 212 U.S.

86, 111 (1909), in which it had expressed the view

that civil fines and damages imposed by a State vi-

olate the federal constitution if they ‘‘are so grossly

excessive aS to amount to a deprivation of property

without due process of law.’’ This essentially sub-

stantive due process analysis slides by the fundamen-

tal procedural objection to the imposition of punitive

damages in the complete absence of statutory limits.

As the many punitive damages cases that have come

to this Court in recent years amply demonstrate, post-

judgment review of punitive damage awards is man-

ifestly inadequate to protect against the infliction of

arbitrary and excessive monetary punishments in the

absence of a statutory range of penalties. Moreover,

‘adicia] review to determine whether a particular pu-

nitive damage verdict is excessive or disproportionate

after the fact is not likely to cure the threshold flaw

of the punitive damage system—the lack of advance

notice of the amount of punishment that can be in-

flicted.

As Justice Marshall has observed, ‘‘fuJnlike criminal!

penalties,...punitive damages are not awarded

within discernible limits but can be awarded in almost

any amount....[T]hese damages are the direct prod-

uct of the ancient theory of unlimited jury discre-

tion.... The manner in which unlimited discretion

may be exercised is plainly unpredictable.’ Rosen-

bloom v. Metromedia, Inc., 403 U.S. 29, 82-83 (1971)

(Marshall, J., dissenting); see, e.g., Silkwood v. Kerr-

McGee Corp., 464 U.S. 238, 276 n.3 (1984) (Powell,

J., dissenting). ‘{A]lmost from the outset,” Miller v.

Florida, 482 U.S., at 430, this Court recognized that

the Ex Post Facto Clause, Art. I, § 10, Cl. 1, is con-

cerned with ‘“‘the lack of fair notice’’ when a State

“creatfes]’ or “‘increas[es]’’ a penalty “after the fact.

Weaver v. Graham, 450 U.S. 24, 28 & n.9 (1981);

Miller. 482 U.S., at 430; Calder v. Bull, 3 Dall., at

397 (Paterson, J.) (‘‘the enhancement 0! a crime, or

penalty, seems to come within the same mischief as

the creation of a crime or penalty” after the conduct

at issue has occurred). If a state iemsm@ture ts barred

by the Ex Post Facto Clause from creating a new

penalty “after the fact,” “it must follow that a State

Supreme Court is barred by the Due Process Clause

from achieving precisely the same result through a

common law punishment scheme. See Bours v. City

of Columbia, 378 U.S. 347, 354 (1964).

CONCLUSION

In order to cause conduct within its borders to

conform to ill-defined and unlimiting standards, the

State of Alabama has authorized ad hoc civil juries

to inflict punishment in whatever amount may satisfy

a particular jury’s concept of retribution and deter-

rence in a particular case. Those potentially subject

to the consequences of this system cannot ascertain

in advance the precise nature of the conduct that is

prohibited or the level of punishment that will be

inflicted for particular antisocial acts. Such an un-

predictable, bizarre, capricious and destructive system

is the very antithesis of the due process guaranteed

by the Fourteenth Amendment.

T

June 1, 1990

Or Counsel:

ARTHUR A. PALMUNEN

AETNA LIFE INSURANCE

COMPANY

151 Farmington Avenue

Hartford, Connecticut 06156

JOHN B. REINIERS

ALLSTATE INSURANCE

COMPANY

Allstate Plaza, Bldg. 7

Northbrook. I]linois 60062

ROBERT R. SHEEHAN

BaNKERS LIFE AND CASUALTY

COMPANY

West Lawrence Avenue

Illinois 60630

4444

Chicago,

JOHN H. REHM, JR.

THE OHIO CASUALTY

INSURANCE COMPANY

136 North Third Street

Hamilton, Ohio 45025

GEORGE R. KATosk

RESERVE LIFE INSURANCI

COMPANY

P.O. Box 660254

Dallas. Texas 75266

Respectfully submitted,

*THEODORE B. OLSON

LARRY L. SIMMS

GIBSON, DUNN & CRUTCHER

1050 Connecticut Avenue, N.W.

Washington, D.C. 20036

(202) 955-8500

Attorneys for Amici Curiae

*Counsel of Record

OF Counsel:

THEODORE J. BouTrous, JR.

GIBSON, DUNN & CRUTCHER

1950 Connecticut Avenue, N.W.

Washington, D.C. 20036

APPENDIX

la

APPENDIX

At the time of ratification of the Fourteenth

Amendment, most States had enacted comprehensive

codifications describing the conduct which could be

subjected to punishment and the maximum punish-

-ment that could be administered. See Ark. Stat. ch.

42 (1874) (general codification of crimes); see id. at

§§ 1357, 1364, 1381, 1386, 1388 (imposing maximum

fines for a variety of offenses); see Cal. Stat. ch. 99

(1850) (general codification of crimes); see id. ch. 99

§§ 61, 63, 69, 86, 87; see Conn. Gen. Stat. tit. 12

(1866) (general codification of crimes); see id. §§ 90-

92, 160-166, 180-181 (imposing maximum fines for a

variety of offenses); see Del. Rev. Stat. chs. 126-133

(1852) (general codification of crimes); see id. ch. 128,

§§ 3-6, 8-19, ch.-129, §§ 1-5 ch. 130, §§ 1-5, (imposing

maximum fines for a variety of offenses); see Fla.

Stat. chs. 42-56 (1872) (general codification of crimes);

see id., ch. 44 §§ 5, 9, 17, 18, 49, ch. 45 § 6, 8, 9;

see Ga. Code §§ 4286-4336 (1861) (general codification

of crimes); see id. §§ 48382, 4468, 4470, 4480, 4482

(imposing maximum fines for a variety of offenses);

see Digest of the Crim. Laws of Ill. (1868) (general

codification of crimes); see id. division 7 §§ 8&6, 91.

95, 100, division 8 § 119; see Ind. Stat. chs. 6-7 (1862)

(general codification of crimes); see id. ch. 6 §§ 36,

37, 39, 43, 46; see lowa Code tit. 24 (1873) (general

codification of crimes); see id. ch. 3 §§ 3885-3886,

3889-3890, 3898 (imposing maximum fines for a va-

riety of offenses); see Kan. Gen. Stat. ch. 31 (1876)

(general codification of crimes); see id. ch. 31 §§ 80,

109, 113, 146 (imposing maximum fines for a variety

of offenses); see Ky. Rev. Stat. Ann. ch. 28, arts. 1-

26 (1867) (punishing full range of offenses. including

2a

offenses against the person, forgery, larceny, embez-

zlement, and trespass); see id. ch. 28, art. 14 § 6.

art. 15 §§ 4, 7, art. 16 §§ 2, 5, art. 17 8§ 1-2, 6-8,

10, 12-20, 22-25, art. 18 §§ 4-5, art. 19 §§ 1-3, art.

20 § 2, art. 21 §§ 1-5, art. 22 § 8, art. 23 §§ 1-3:

art. 24 §§ 2, 5, art. 25 §§ 2-5, 7-10 (imposing max-

imum fines for a variety of offenses); see La. Rev.

Stat. §§ 784-975 (1870) (general codification of crimes);

see id. §§ 811, 815-819, 821-822, 824-826 (imposing

maximum fines for a variety of offenses); see Me. Rev.

Stat. chs. 117-139 (1871) (general codification of

crimes); see id. ch. 120 §§ 1-4, 6. 8. ch. 12] §§ 3, 6

(imposing maximum fines for a variety of offenses):

see Md. Code art. 30 (1860) (general codification of

crimes); see id art. 30 §§ 19-20, 34, 38: see Mass.

Gen. Stat. chs. 161-164 (1860) (general codification of

crimes); see id. ch. 161 §§ 43, 44, 46, 48. 54-56, 91

(imposing maximum fines for a variety of offenses):

see Minn. Stat. ch. 54 (1873) (general codification of

crimes); see id. tit. 4 §§ 82, 84, 87, 96-97, 102-103.

105 (imposing maximum fines for a variety of offen-

ses); see Miss. Rev. Code ch. 58 (1871) (general cod-

ification of crimes); see id. §§ 2547, 2569. 2597, 2653,

2656-2657 (imposing maximum fines for a variety of

offenses); see Mo. Stat. ch. 42 (1870) (general codi-

fication of crimes); see id. art. 3 §§ 27, 31, 59, 65-

66, 68-69 (imposing maximum fines for a variety of

offenses); see Nev. Laws ch. 54 (1873) (general cod-

ification of crimes); see id. §§ 2368-2369. 2379, 2386-

2587 (imposing maximum fines for a variety of of-

fenses), see N.H. Gen. Laws chs. 269-284 (1878) (gen-

eral codification of crimes); see id. ch. 275 §§ 1-4, 7,

s. 10, 11 (imposing maximum fines for a variety of

offenses); see N.Y. Stat., ck. 1. tits. 1-7 (1869) (general

codification of crimes); see id. ch. 1. tit. 3 §§ 69, 71,

3a

ch. 1, tit. 4 §§ 9-13 (imposing maximum fines for a

variety of offenses); see N.C. Rev. Code. ch. 34 (1855)

(general codification of crimes); see id. ch. 34 §§ 49,

65, 68-70, 83-88, 91-92 (imposing maximum fines for

a variety of offenses); see Ohio Crim. Code (1878)

(general codification of crimes); see id. ch. 3 §§ 6-7,

16, 20, 22 (imposing maximum fines for a variety of

offenses); see Or. Stat. chs. 3-12 (1855) (general cod-

ification of crimes); see id. ch. 4 §§ 12-18, 16-17, 31-

32, 34-40 (imposing maximum fines for a variety of

offenses); see Pa. Rev. Penal Code (1860) (general

codification of crimes); see id. §§ 100-106, 111-112,

119-12], 125-130, 134, 155-162, 164-165 (imposing

maximum fines for a variety of offenses); see R.I.

Stat. tit. 30 (1857) (general codification of crimes);

see id. tit. 80, ch. 214 §§ 10, 14, 16-20, 22, 24-28

(imposing maximum fines for a variety of offenses):

see S.C. Rev. Stat. tit. 2 (1894) (general codification

of crimes); see id. §§ 276-282, 288-295 (imposing max-

imum fines for a variety of offenses); see Tex. Laws

arts. 355-572 (1850) (general codification of crimes):

see id. arts. 380-382, 386, 389, 391, 393 (imposing

maximum fines for a variety of offenses); see Vt. Stat.

tit. 38 (1851) (general codification of crimes); see id.

ch. 104 §§ 2-10, 15, 19-22, 26-28 (imposing maximum

fines for a variety of offenses); see Va. Code tit. 54

(1860) (general codification of crimes); see id. ch. 192

§§ 18, 24, 27, 30, 32; see W.Va. Code chs. 143-152

(1870) (general codification cf crimes); see id. ch. 144

$§ 9-ll, ch. 145 §§ 5-8, 23 (imposing maximum fines

for a variety of offenses); see Wis. Stat. tit. 27 (1871)

(general codification of crimes); see id. ch. 164 §§ 23,

29, 31-32, 38, 42, 45, ch. 165 §§ 16-18, 23 (imposing

maximum fines for a variety of offenses).