Opposition Brief — Alley v. Gubser Development Co.

Supreme Court, U.S.

™ BILED

(2) OCT gg 1986

No. 86-314 JOSEPH F. SPANIOL, JR.

<STERK oe

In The

Supreme Court of the United States

October Term, 1986

ty.

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BARBARA ANN ALLEY and W. H. ALLEY,

Petitioners,

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GUBSER DEVELOPMENT COMPANY,

NATIONAL GYPSUM COMPANY, and

WEYERHAEUSER COMPANY,

Respondents.

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ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

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RESPONDENTS’ BRIEF IN OPPOSITION

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Hue Q. GorrscHaLK

(Counsel of Record)

Anne J. CastTLe

Houuann & Hart

555 17th Street

Suite 2900

Denver, Colorado 80202

(303) 295-8000

Counsel for Respondents

Gubser Development Company

and National Gypsum Company

October 24, 1986

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

or call collect (402) 342-2831

QUESTION PRESENTED FOR REVIEW

Did the Tenth Circuit Court of Appeals correctly hold

that the petitioners were precluded from appealing the

district court’s judgment because of their acceptance of

a remittitur in order to avoid a new trial?

il

LIST OF PARTIES

All parties to the proceeding in the United States

Court of Appeals for the Tenth Circuit are identified in

the caption. Gubser Development Company has no parent,

subsidiary, or affiliate companies. Aancor Holdings, Inc.,

a Delaware corporation, is the parent company of National

Gypsum Company. National Gypsum Company has no

subsidiaries other than wholly owned subsidiaries. The

affiliates of National Gypsum Company are: Yeso Santa

Rosalia, S.A. de C.V.; Lafarge Coppee, S.A.; CJC Group;

Goldman Sachs & Co.; and Joseph A. Hardy, Sr.

TABLE OF CONTENTS

Page

QUESTION PRESENTED FOR REVIEW Ww. i

Nee ass sasnnssnetanicentnencnnsnensnstnen il

cp Ny 808 > iv

RESPONDENTS’ BRIEF IN OPPOSITION WW. 1

Sees ee tee CAS 2

ARGUMENT: REASONS FOR DENYING THE

ES ES et 3

I. The Issue Raised Is Squarely Governed By

This Court’s Decision In Donovan v. Penn

Shipping Co. Which Was Correctly Applied

rn en Se 4

II. There Is No Conflict Among the Circuit

Courts Regarding The Effect Of Acceptance

Ea 6

Neen nncneeetenannenneienenterintn 11

TABLE OF AUTHORITIES

Page

CasFs

Aaro v. Daewoo International (America) Corp.,

FO a ROO CECE CI, BO iret. 7

Alley v. Gubser Development Co., 785 F.2d 849

Es Re. Sat ae os Rarer arenes rer eRe eee 1

Allied Chemical Corp. v. Daiflon, Inc., 449 U.S.

= iA ek etelipicest notre atl Et* fal oe gerne cede Gar ea 8

Arkansas Valley Land & Cattle Co. v. Mann, 130

re I sciatic aya aie sas sie CWE 6

Arnold v. Eastern Air Lines, Inc., 681 F.2d 186

(4th Cir. 1982), cert. denied, 460 U.S. 1102 (1983) 10

Baltezore v. Concordia Parish Sheriff’s Dept.,

767 F.2d 202 (5th Cir. 1985), cert. denied, 106

FE er NEE eel arte a = RS eo PO 7

Blunt v. Little, 3 Mason, 102 (1822) cece 5

Call Carl, Inc. v. BP Oil Corp., 554 F.2d 623 (4th

Cir.), cert. denied, 434 U.S. 923 (1977) 0. 6, 7, 10

Chesbrough v. Woodworth, 244 U.S. 72 (1917) .............. §

Consumers Power Co. v. Curtiss-Wright Corp.,

Tour on 4000 (3d Cir. 1986) 2. 5

Dimick v. Schiedt, 293 U.S. 474 (1935) —W.......... 6

Donovan v. Penn Shipping Co., 429 U.S. 648

LL ge Nee ee © ee ee

Douglass v. Hustler Magazine, Inc., 769 F.2d

1128 (7th Cir. 1985), cert. denied, 106 S. Ct.

on Ee a RR ER IRA RBI eat URE DE Wee ke 5

Fiacco v. City of Rensselaer, New York, 783 F.2d

319 (2d Cir. 1986) 5)

G.M. Brod & Co. v. U.S. Home Corp., 759 F.2d

1526 (11th Cir. 1985)

TABLE OF AUTHORITIES—Continued

Page

Kennon v. Gilmer, 131 U.S. 22 (1889) nce escssssssesssee me 9

Koenigsberger v. Richmond Silver Mining Co.,

Se er > ei a 5, 9

Lewis v. Wilson, 151 U.S. 581 (1894) nn ccseceseesee 9

Northern Pacific Railroad Co. v. Herbert, 116

cm at a Na ae 6

Ohio-Sealy Mattress Manufacturing Co. v. Sealy,

Inc., 585 F.2d 821 (7th Cir. 1978), cert. denied,

ee By 2 Rei Sapien ea ame Oiecnsere a es ae ee er rN 7

Richards v. Allstate Insurance Co., 693 F.2d 502

8 5 Ae) MERE OM eects Mb Ra ol i eee Fa 5

United Staies v. American Railway Express Co.,

OR Re cei a ean 10

Woodworth v. Chesbrough, 244 U.S. 79 (1917) ......... 4,5, 8,9

999 v. CI.T. Corp., 776 F.2d 866 (9th Cir. 1985) 5

STATUTES

Magnuson-Moss Warranty Act, 15 U.S.C.

§§ 2301-2312 (1982) _................. ETE ot en NOI A 2, 3, 8, 9

OtrHER AUTHORITIES

FO ee cA ect taesneecace creep maacanabiaemgieiclgtntades 9

Note, Appealability of Judgments Entered Pur-

suant to Remittiturs in Federal Courts,

1975 Duke L.J. 1150 00... PO ER ARN 9

No. 86-314

ty.

Vv

In The

Supreme Court of the United States

October Term, 1986

ray

Vv

BARBARA ANN ALLEY and W. H. ALLEY,

Petitioners,

vV.

GUBSER DEVELOPMENT COMPANY,

NATIONAL GYPSUM COMPANY, and

WEYERHAEUSER COMPANY,

Respondents.

ra

Vv

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

ft).

Vv

RESPONDENTS’ BRIEF IN OPPOSITION

Respondents Gubser Development Company and Nat-

ional Gypsum Company respectfully request this Court

to deny the petition for writ of certiorari of Barbara Ann

Alley and W. H. Alley seeking review of the decision of

the Tenth Circuit Court of Appeals that the petitioners’

acceptance of the remittitur ordered by the district court

precluded any appeal by the petitioners. That opinion

is reported at 785 F.2d 849 (10th Cir. 1986).

2

STATEMENT OF THE CASE

Respondents disagree with petitioners’ Statement of

the Case in several respects and adopt instead the Tenth

Circuit’s discussion of Facts, Trial, Motions For Directed

Verdict, and Post-Trial Motions in the opinion below

which is included in Appendix B filed by the petitioners.

There are, in addition, certain inaccuracies and omissions

in petitioners’ Statement of the Case which are particular-

ly relevant to the determination of whether the petition

for writ of certiorari should be granted.

Petitioners, who were the plaintiffs in the trial court,

assert that the district court dismissed their claim for

attorneys’ fees under the Magnuson-Moss Warranty Act

prior to trial. Pet. 8. On the contrary, a verdict was di-

rected against the plaintiffs on this claim after the close

of their case, based on the district court’s finding that

no evidence of property damage or direct damage had

been presented. App. B at 14; R. Vol. XXII at 1450.

Furthermore, the plaintiffs have neglected to men-

tion that the remittitur of punitive damages ordered by

the district court was an alternative offered as a means

for the plaintiffs to avoid the new trial which otherwise

would have been ordered. The district ccurt made clear

in its order that should the plaintiffs choose to reject the

remittitur of punitive damages, ‘‘a new trial will be or-

dered on all issues, because a trial on the issue of punitive

damages alone would create undue confusion.’’ App. A at

17-18 (emphasis added). The plaintiffs chose to accept

the remittitur and obtain the benefits of the remitted

judgment rather than relitigating in a new trial issues

which they felt had been incorrectly decided by the dis-

trict court. App. B at 21, 33. The Tenth Circuit explained

that because the district court’s remittitur order ‘‘em-

braced all issues considered in the case,’’ the plaintiffs’

acceptance of the remitted judgment waived their right

to appeal any of those issues, including the remittitur it-

self, the Magnuson-Moss Warranty Act claim, and the

denial of prejudgment interest. App. B at 30-33.

1°)

ARGUMENT:

REASONS FOR DENYING THE WRIT

The Tenth Cireuit Court of Appeals held that the

plaintiffs could not appeal various rulings made by the

district court because they had accepted the district court’s

remittitur order. The decision was based on the partic-

ular facts involved and on binding precedent from this

Court. Far from presenting a case which necessitates an

exercise of this Court’s power of supervision over courts

of appeals, the Tenth Cireuit’s decision was required by

this Court’s holding in Donovan v. Peun Shipping Co., 429

U.S. 648 (1977). Moreover, claimed conflicts among the

varions courts of appeals which have addressed this ques-

tion arise entirely from the differing types of fact sit-

uations which their opinions have considered. The de-

cision below simply does not present important legal prin-

ciples which warrant the exercise of this Court’s juris-

diction en writ of certiorari.

+

I. The Issue Raised Is Squarely Governed By

This Court’s Decision In Donovan v. Penn

Shipping Co. Which Was Correctly Applied

By The Tenth Circuit.

It is an established precept of federal procedural law

that ‘‘a plaintiff in federal court ... may not appeal from

a remittitur order he has aecepted.’’ Donovan v. Penn

Shipping Co., 429 U.S. 648, 650 (1977). This unequivocal

authority was recognized by the Tenth Cireuit and cor-

rectly apnlied in its decision in this ease. App. B at 31-33.

Although the plaintiffs are attempting to carve out ex-

ceptions to this procedural rule, the Donovan decision

admits no such tinkering. The preclusion of appeals by

plaintiffs who have accepted a remittitur applies without

distinction to all issues encompassed by the remittitur

order.

It is clear beyond cavil that the plaintiffs’ acceptance

‘‘under protest”’ of the remittitur of punitive damages has

no legal significance and did not reserve their right to

appeal. Donovan, 429 U.S. at 649. Moreover, the prohibi-

tion against appeals by a plaintiff after acceptance of a

remittitur is equally applicable to attempted cross appeals

as direct appeals. Although the Donovan opinion ad-

dressed an attempted direct appeal by a plaintiff, the de-

cision expressly reaffirms previous Supreme Court au-

thority on remittitur practice including at least one case

in which a cross appeal was barred. Donovan, 429 U.S.

at 649-50.

For example, in Woodworth v. Chesbrough, 244 U.S.

79 (1917), a plaintiff who had accepted a remittitur in

the lower court attempted to prosecute a ‘‘cross writ of

error’’ after the defendant appealed. This Court, reason-

*s

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ing that the plaintiff should not be permitted to retract

his consent to the remittitur and yet appeal the judgment

which was entered only because of that consent, held that

the cross writ must be dismissed. 244 U.S. at 82. The

Donovan reaffirmation of Woodworth v. Chesbrough

makes it crystal clear that the general procedural rule

applies to cross appeals by accepting plaintiffs as well as

direct appeals. Donovan, 423 U.S. at 649-50. Additionally,

the circuit courts of appeals which have considered this

question subsequent to the Donovan decision have uni-

formly agreed that no cross appeals can be permitted. See

Fiacco v. City of Rensselaer, New York, 783 F.2d 319, 333

(2d Cir. 1986); Consumers Power Co. v. Curtiss-Wright

Corp., 780 F.2d 1093, 1099-1100 (3d Cir. 1986); Douglass

v. Hustler Magazine, Inc., 769 F.2d 1128, 1145 (7th Cir.

1985), cert. denied, 106 S. Ct. 1489 (1986); 999 v. CLI.T.

Corp., 776 F.2d 866, 873 (9th Cir. 1985); G.M. Brod & Co.

v. U.S. Home Corp., 759 F.2d 1526, 1541 (11th Cir. 1985) ;

Richards v. Allstate Insurance Co., 693 F.2d 502, 506 (5th

Cir. 1982). Thus, the plaintiffs’ argument that the pro-

hibition against direct appeals does not extend to cross

appeals simply does not hold water.'

Similarly, the plaintiffs’ futile attack on the general

practice of remittitur comes over one hundred and sixty

years too late. The propriety of remittitur was officially

recognized by Justice Story in Blunt v. Little, 3 Mason,

' Respondents note that plaintiffs have based their argu-

ment on the erroneous assertion that at one time neither plain-

tiffs nor defendants could appeal after a remittitur had been

accepted. Previous decisions of this court indicate that defen-

dants’ appeals have always been heard. Chesbrough v. Wood-

worth, 244 U.S. 72 (1917); Koenigsberger v. Richmond Silver

Mining Co., 158 U.S. 41 (1895).

\

102, 107 (1822) and the use of this device to remedy gross-

ly excessive damages awards has been reaffirmed in de-

cision after decision, culminating with the Donovan opin-

ion in 1977. See Donovan v. Penn Shipping Co., 429 U.S.

648 (1977) and cases cited therein; Northern Pacific Rail-

road Co. v. Herbert, 116 U.S. 642, 647 (1886); Arkansas

Valley Land & Cattle Co. v. Mann, 130 U.S. 69, 73 (1889).

See also Dimick v. Schiedt, 293 U.S. 474, 482-85 (1935).

Given this solid history, the plaintiffs’ assertion that re-

mittitur practice is based on ‘‘shaky precedents,’’ Pet. 19,

is utterly mystifying.

Accordingly, the decision of the court below that the

plaintiffs’ attempted appeals would not be heard was

mandated by the unwavering decisions on the issue from

this Court. The granting of the petition for writ of cer-

tiorari would not enlarge the body of legal knowledge as

the issue raised has previously been decided.

II. There Is No Conflict Among The Circuit

Courts Regarding The Effect Of Acceptance

Of A Remittitur Order.

Plaintiffs contend that this Court should grant the

petition for writ of certiorari because of the existence

of a conflict among the circuit courts regarding appeals

from accepted remittitur orders. Essentially, plaintiffs

point to Call Carl, Inc. v. BP Oil Corp., 554 F.2d 623 (4th

Cir.), cert. denied, 434 U.S. 923 (1977), and argue that

this and other circuit court decisions have permitted an

appeal by a plaintiff who has accepted a remittitur. How-

ever, Call Carl and the other decisions cited by plaintiffs

are clearly distinguishable from the instant case and do

not establish a conflict among the circuits.

ama at el lll a DAE eS tales aan

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Each of the circuit court decisions cited by the plain-

tiffs involves a factual situation in which the district

court ordered a new trial solely on the issue of damages

unless the plaintiffs consented to a remittitur of the jury

verdict. See Call Carl, Inc. v. BP Oil Corp., 554 F.2d 623,

625 (4th Cir.), cert. denied, 434 U.S. 923 (1977); Balte-

zore v. Concordia Parish Sheriff’s Dept., 767 F.2d 202,

208 (5th Cir. 1985), cert. denied, 106 S. Ct. 817 (1986);

Aaro v. Daewoo International (America) Corp., 755 F.2d

1398, 1406 (11th Cir. 1985); G.M. Brod & Co. v. U.S. Home

Corp., 759 F.2d 1526, 1541 (11th Cir. 1985). See also Ohio-

Sealy Mattress Manufacturing Co. v. Sealy, Inc., 585 F.2d

821 (7th Cir. 1978), cert. denied, 440 U.S. 930 (1979)

(Plaintiff allowed to appeal ruling on equitable relief en-

tered after a remitted jury verdict on damages had been

accepted in order to avoid a new trial solely on the dam-

ages claim). In these cases, if the plaintiffs had rejected

the remittitur and forced a new trial, they still would

not have had the opportunity to relitigate the other issues

ihey were appealing because the scope of the new trial

would have been strictly limited to the amount of damages

available on the claims on which the previous jury had

decided in their favor. Claims which had been dismissed

by the district court or on which directed verdicts had

been entered could not be addressed in the second trial.

Thus, the plaintiffs’ acceptance of the remittitur was un-

derstandably not construed as their consent to the pre-

vious resolutions of separate issues and a waiver of their

right to appeal those issues. Aaro, Inc. v. Daewoo Inter-

national (America) Corp., 755 F.2d at 1401.

The facts presented in the instant case differ on this

crucial point from the cases relied upon by the plaintiffs.

Here, the district court’s remittitur order specifically re-

quired a new trial on all issues considered in the case

because a new trial on punitive damages only would have

been too confusing. App. A at 17-18. If the plaintiffs had

chosen to reject the remittitur, both the Magnuson-Moss

Warranty Act claim and the issue of prejudgment inter-

est would have been presented again to the district court

for decision. New evidence on each of these issues could

have been offered and additional arguments made to the

ecourt.2, In choosing the remittitur to avoid a new trial

which would have included these issues, the plaintiffs

took the benefit of the remitted judgment and gave up

their right to appeal.

This distinction among the various cireuit court de-

cisions is clearly supported by the rationale of Donovan

and other Supreme Court decisions. This rationale was

first discussed in Woodworth v. Chesbrough, 244 US.

79 (1917), one of the cases reaffirmed in the Donovan

opinion. In that case, this Court characterized the ac-

ceptance of a remittitur as the condition through which

the district court’s final judgment was obtained. 244 U.S.

at 82. A rejection of the remittitur by the plaintiff on the

other hand would necessarily have foreed a new trial

and it is well established that ‘‘[a]n order granting a

new trial is interlocutory in nature and therefore not im-

mediately appealable.’? Allied Chemical Corp. v. Daiflon,

Inc., 449 U.S. 33, 34 (1980). Only the plaintiff’s accept-

2 As noted in Respondents’ Statement of the Case, it was

the district court’s finding that no evidence of property or

direct damage had been presented which led to the directed

verdict against the plaintiffs on their Magnuson-Moss Warranty

Act claim.

a an Tg a OOM eB

9

ance of the remittitur creates a judgment and an appeal-

able order. Woodworth v. Chesbrough, 244 U.S. at 82. A

plaintiff’s attempt to contest the remittitur order on ap-

peal after acceptance is seen as a withdrawal of consent

to the remittitur, thus vitiating the judgment itself and

returning the proceedings in the lower court to an unap-

pealable status. /d. See also Note, Appealab’lity of Judg-

ments Entered Pursuant to Remittiturs in Federal Courts,

1975 Duke L..J. 1150, 1155-57; Kennon v. Gilmer, 131 U.S.

22, 29-30 (1889); Lewis v. Wilson, 151 U.S. 551, 554-55

(1894); Koenigsherger v. Richmond Silver Mining Co.,

158 U.S. 41, 52 (1895).

The district court’s remittitur order in this case re-

quired a new trial on all issues. The plaintiffs’ accept-

ance of the remittitur, therefore, must be viewed as their

consent to the judgment as entered on all issues.2 These

issues include the district court’s directed verdict against

the plaintiffs on their Magnuson-Moss Warranty Act

claim because of the lack of evidence of property or direct

damage, as well as the court’s ruling that prejudgment

interest would not be added to the judgment because of

the plaintiffs’ previous failnre to request it as required

by Colorado law. An attempt to appeal the district court’s

decision on any of those issues is, therefore, a withdrawal

of consent to the remittitur which invalidates the judg-

ment itself and precludes any appeal. The Tenth Circuit

decision correctly recognized that the rationale of Dono-

7 Contrary to plaintiffs’ assertions, a new trial does not nec-

essarily include relitigation of all issues. See Pet. 15. Rule 59

of the Federal Rules of Civil Procedure expressly permits a fed-

eral district judge to grant a new trial on all or any part of the

issues previously considered.

10

van and its predecessors prohibited the plaintiffs’ ap-

peals because of the all-inclusive scope of the remittitur

order.

The theory espoused by the plaintiffs, that separate

and distinct controversies can be appealed after accept-

ance of a remittitur, is addressed only in Call Car¥, Inc.

v. BP Oil Corp., 554 F.2d 623 (4th Cir.), cert. denied, 434

U.S. 923 (1977). But, as explained above, that decision

considered a ease in which a new trial had been ordered

on damages only unless the plaintiff accepted a remittitur.

Moreover, recent case law from the Fourth Cir-

cuit has apparently invalidated the decision in Call Carl.

In Arnold v. Eastern Air Lines, Inc., 681 F.2d 186, 205

(4th Cir. 1982), cert. denied, 460 U.S. 1102 (1983), the

court of appeals held that a plaintiff who had accepted

a remittitur could not challenge the district court’s de-

cisions or rulings which had preceded the jury verdict.

The Arnold court reasoned that allowing such a cross

appeal of an earlier ruling, such as a ruling on a motion

for directed verdict, would permit direct circumvention

‘‘of the Donovan prohibition against remitting-plaintiff

appellate challenges.’’ 681 F.2d at 205 n.19. The court

held that, in such a situation, the remitting plaintiff ‘‘is

limited as appellee to defending .. . the judgment as en-

tered and may not seek to enlarge her rights under it.’’

Id. at 205. A contrary result would permit plaintiffs to

attempt to enlarge their rights under the remitted judg-

ment in spite of the long-standing prohibition against such

a practice. See United States v. American Railway Ex-

press Co., 265 U.S. 425, 435 (1924). Thus, the continuing

viaibity of Call Carl even within the Fourth Cireuit is

subject to considerable doubt. A grant of certiorari to

}

\ 11

review an alleged conflict based on mere factual distine-

tions and in which the petitioners’ leading case has been

effectively overruled would be an exercise in futility.

>)

CONCLUSION

The previous Supreme Court authority on the ques-

tion raised by the plaintiffs has provided adequate guid-

ance to the courts of appeals in determining the correct

result in the individual cases which have been presented

to them. The differences in the cirenit court decisions

stem from the different types of factual situations in-

volved. Properly rejected by the court of appeals in this

case, the plaintiffs’ theory does not merit this Court’s

consideration.

Respectfully submitted,

Hueu Q. GottscHaLK

(Counsel of Record)

ANNE J. CASTLE

Houtuanp & Harr

55) 17th Street

Suite 2900

Denver, Colorado 80202

(303) 295-8000

Counsel for Respondents

Gubser Development Company

and National Gypsum Company