# Brief for the Respondent in Opposition — Rockwell-Standard Corp. v. Scaife Co.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Brief for the Respondent in Opposition
- **Published:** January 1, 1972
- **Citation:** 407 U.S. 920

## Text

IN THE

Supreme Court of the United States

October Term, 1972.

No. 71-1367.

ROCKWELL- STANDARD CORPORATION,
Petitioner,

Vv.

2

SCAIFE COMPANY,

On Petition for Writ of Certiorari to the Supreme Court
of the Commonwealth of Pennsylvania.

‘BRIEF FOR RESPONDENT IN OPPOSITION
3 AND APPENDIX.

Pair H. Strusine,
Epitu G. Laver, ‘

Preprer, Hamitton & Scneerz,
123 South Broad Street,
Philadelphia, Pa. 19109

Morris M. Bercer, -
C. Wituram ‘Bercer,
Bercer & Kapetan,

,508 Law & Finance Building,
Pittsburgh, Pa. 15219

MicuaEL Hanatyak,.
403 Commonwealth Building,
Pittsburgh, Pa. 15222
Attorneys for Respondent,
Scaife Company.

International, 711 So. 50th St., Phila., Pa. 19143—Tel. SA 7-8711 Area Code 215

Respondent.

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2. The Question Was Not Timely Raised Below ......

3. The Decision Below Is Clearly Correct ............

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Aprexpix—- Pages 34-39 of Scaife Company's Brief as Appe!-
lant in the Supreme Court of Pennsylvania .........

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TABLE OF CASES AND
OTHER AUTHORITIES CITED.

Cases:
American Surety Co. v. Baldwin, 287 U.S. 156 (1932) .....
Beal v. Reading Company, 370 Pa. 45 (1952) ....-.

‘ Bowe v. Scott, 233 U.S. G38 (1914) _...........
Brotherhood of Locomotive Engineers v. Chicago, Rock Island
& Pacific Railroad Co.. 382 US. 423 (1966) .........

coy oe A RE a
ee ‘Merk Island & Pacific Kaiway Company v. Cole, 251

I ie fag wa os bbs d buena coe one. a
Pian v. United States. 344 LS. 350 (1960)...
Craig v. Kline, 65 Pa. 399 (1870; _.... Sn Si Daten
Hanson v. Denckla, 357 U.S. 235 (1958)...
Herndon v. Georgia, 295 U.S. 441 +1935) ay eee
Herron v. Southern Pacific Company, 283 U.S. 91 (1931) ..
Hilliard v. Anderson, 440 Pa 625 (1970) ........
National Labor Relations Board \ Metropoljtan Life Insurance

Ce. 30 U.S. 438 (1965) ...............:..........
Radio Station WOW, Inc. v. Johnsan, 326 U.S. 120 (1945)
Secretary of Agriculture y United States, 347 U.S. 645 (1954)
Spangler v. Helm’s New York-Pittsturgh Motor Express.

396 Pa. 482 (1959,

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Constitutions:

United States Constitution, Amendment XIV. Section 1 _...
Pennsylvania Constitution, Article I, Section 9.0
Rules:

Rule 19% 1) (4) of the Supreme Court Rules

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OPINION BELOW.

The Opinion of the Supreme Court of Pennsylvania is
reported at 446 Pa. 280,285 A. 2d 451.

JURISDICTION.

The jurisdictional requisites are adequately set forth
in the Petition.

QUESTION PRESENTED.

When, pursuant to its long-standing and well-known
procedure for review of a trial court’s ruling that a jury’s
verdict is excessive, the highest court of a State determines,
after review of the record, that the jury’s verdict was
supported by the evidence and orders reinstatement of that
verdict, has the defendant been denied due process of law?

STATUTE INVOLVED.

The pertinent provision of the United States Constitu-
tion is set forth in the Petition.

1 Brief for Respondent in Opposition

STATEMENT OF THE CASE.

The procedural history of Scaife Company's appeal is
adequately set forth in the Petition. Response to peti-
lioner’s argumentative characterization, at page 5 of the
Petition, of the Pennsylvania Supreme Court’s decision
appears at Sections 1 and 3, infra. Response to petitioner's
contention at page 5 of the Petition that its federal due.
process claim was timely raised below appears at Section 2,
infra, .

Brief for Respondent in Opposition 3

REASONS FOR DENYING THE WRIT.

1. There Are No Special or Important Reasons for Granting
the Writ. ;

A properly instructed jury, which had ample oppor-
tunity to assess the-credibility of eve ‘ry witness whose tes-
timony related to damages, found that petitioner’s frau-
dulent misrepresentations in the course of selling a busi-
ness to respondent caused economic damage to respondent
in the amount of $1,200,000.28. Afier concluding without
explanation that the damages found by the jury were
excessive, the trial court ex banc ordered a new trial on
damages unless respondent accepted a substantial redue-
tion in the damages found by the jury.

When respondent appealed froni that order, the Penn-
sylvania Supreme Court was forced to review the entire
record because the lower court had not elaborated its rea-
sons for concluding that the jury’s findings were wrong.
The Pennsylvania Supreme Court did so, and held:

‘*It is our opinion that the jury’s verdict is fully sup-

ported by the evidence and should be reinstated.”

(App., Petition. p. 45a).

In order to avoid the necessity of reviewing an entire ree-
ord in future cases, the Court also instructed lower courts
that in the future they should explain fully why they be-
lieve a jury’s verdict is excessive (App., Petition, pp. 42a-
43a). ;
Petitioner now contends that the Pennsylvania Su-
preme Court denied it due process because it did not re-
mand the instant case to the lower court for such an ex-
planation. But the Pennsylvania Supreme Court is the
final judge of the sufficiency of evidence pertaining to dam-
ages. It has already reviewed the record and found that
the evidence fully supported the jury’s verdict. To require

4 Brief for Respondent in Opposition

that this case be remanded to the court ex banc for an
explanation, and that the record then be returned to the
Pennsylvania Supreme Court for another review of the
record, would sanction an exercise in futility not required
by the principles of due process.

Furthermore, the Pennsylvania Supreme Court’s deci-
‘sion Was made in an action which involves only the deter-
mination of the instant parties’ rights under Pennsylvania
common law principles governing a defendant's liability
for fraudulent imisrepresentations made in the sale of a
business. The order requiring reinstatement of the verdict
Was one of a number of similar orders by which the Penn-
<Vivania Supreme Court has enforced Pennsylvania rules
setting forth the proper roles of judge and jury in trials in
‘its courts. E.g., Spangler v. Helm’s New York-Pittsburgh
Motor Express, 396 Pa. 482 (1959).

The Pennsylvania Supreme Court’s decision rested.
solely on matters of state law. That Court construed no
federal statute and ruled on no other federal claims. In
short, there is no special and important reason that that
Court’s decision should be reviewed by this Court, and the
Writ should therefore be denicd. See, e.g., Rule 19(1)(a)
of the Supreme Court Rules,

2. The Question Was Not Timely Raised Below.

In its appeal from the trial court’s determination that
the jury’s verdict was excessive and from its award of a
new trial on the question of damages, Scaife Company
clearly and unequivocally requested the Pennsylvania
Supreme Court ‘‘to reinstate the verdict of the jury’,
and cited in its Brief as -Appellant the Pennsylvania
authorities im support of that relief. (App., Brief in
Opposition, la-Ga.) The question whether such relief would
violate the principles of due process thus became an issue

Brief for Respondent in Opposition 5)

at the outset of the proceedings on Scaife Company’s
appeal.

Furthermore, the relief requested was not novel:
Seaife Company simply asked the Pennsylvania Supreme
Court to follow its standard procedure for correcting a
trial court’s erroneous cancellation of 2 jury’s ¥erdict on
the ground that it is excessive.

Petitioner thus had ample warning that if the Penn-
sylvania Supreme Court decided that the trial court had
erred in finding the jury’s verdict excessive, the apropriate
relief would be to order reinstatement of the jury’s verdict.
It had ample opportunity to raise its claim that such relief
would violate due process in the Briefs and Oral Argument
it submitted to the Pennsylvania Supreme Court as Appel-
lee. Nonetheless, petitioner did not raise its due process
claim until after the Pennsylvania Supreme Court -had
granted Scaife Company the relief requested.

By virtue of its decision to defer presenting its due
process claim until after the Pennsylvania Supreme Court
had decided Scaife Company’s appeal, petitioner failed to
preserve that point for review by this Court, and the Writ
should be denied. /lanson v. Denckla, 357 U. S. 235, 243-
244 (1958); Radio Station WOW, Inc. v. Johnson, 326 U. S.
120, 128 (1945) ; Herndon v. Georgia, 295 U.S. 441 (1935) ;
American Surety Co. v. Baldwin, 287 U. S. 156, 162-164
(1937). |
Moreover, in its Petition for Reargument to the Penn-
sylvania Supreme Court petitioner merely asserted that
reinstatement of the jury’s verdict by that Court ‘‘must
be considered violative of the Due Process Clause’’ (App.,
Petition, p. 52a). By failing to specify whether its claim
was based on the Due Process Clause of the Fourteenth
Amendment to the United States Constitution or on the
Due Process Clause of the Constitution of the Common-
wealth of Pennsylvania (Art. I, Section 9, Pennsylvania

0) Brief for Respondent in Opposition

Constitution), petitioner failed to present adequately to the
Pennsylvania Supreme Court the federal due process claim
it attempts to raise now. For this reason alone the Writ
should be denied. Bowe «. Scott, 285 U.S. 658, 664-665
(1914).

3. The Decision Below Is Clearly Correct.

It is true, as petitioner urges, that in common with the
federal system Pennsylvania law grants its trial judges
‘the power to set aside or reduce a jury's verdict on grounds
that it is exeessive. But it has long been clear that in civil
actions to enforee claims arising solely under state law,
the United States Constitution permits a state to limit or

even to eliminate altogether its trial Judges’ powers over

a jury’s decision. F.g., Chicago, Rock Island & Pacific Rail-
way Company v. Cole, 251 U. S. 54 (1919). See, eg,
Herron v. Southern Pacific Company, 283 U.S. 91, 98
(1931).* .

In Pennsylvania, the circumstances under which a trial
judge may set aside or reduce a jury's verdict are narrowly
circumseribed. And when the trial court interferes with
a jury's verdict in the absence of those circumstances, his
decision is subject to review and correction by the Pennsyl-
vania Supreme Court. we, Beal vr. Reading Company, 370
Pa. 45. 49 (1952). In the instant case the Pennsstvanuia
Supreme Court, after reviewing the record, found that the
jury’s verdict was fully supported by the evidence, and
that none of the conditions whieh under Pennsylvania law

1. See, Craig v. Kline, 65 Pa. 399, 413 C1870).

2. For this reason, none of the cases cited by petitioner m See-
tion 1 of its Petition support granting the Writ. In each of the cases
cited by petitioner this Court was cither discussing the powers of
federal judges over a jury’s decision or determining the appropricte
role of state judges in actions to enforce claim- arising under tederal
statutes?

Brief for Respondent in Opposition 7

authorize interference with a jiry’s verdict were present.
Accordingly, it ordered reinstatement of the verdict. In so
doing it simply followed its well known procedure for dis-
posing of such a case. .

As had been stated by the Pennsylvania Supreme Court
many times prior to its decision in the instant case, when
the trial court’s cancellation of a jury’s verdict is chal-
lenged on appeal, the Pennsylvania Supreme Court must
‘*review the record to determine whether the cancellation
of a jury’s verdict is warranted under all the circumstances
of the ease.’ Spangler v. Helm’s New York-Pitts-
burgh Motor Express, 396 Pa. 482, 488 (1959). After such
review, if the Supreme Court determines that cancellation
of the jury’s verdict was unwarranted, the appropriate dis-
position is to remand with imstructions to reinstate the
jury’s verdict. E.g., Spangler v. Helm’s New York-Pitts-
burgh Motor Express, supra; Hilliard v. Anderson, 440 Pa.
625 (1970).

In the present case the Pennsylvania Supreme Court,
after review of the reeord, determined that the jury’s
verdict was well within the amount of damages established
by evidence of the economic effects of the petitioner's fraud.
This was obviously a décision within the competence and
power of that Court. That Court's order requiring rein-

3. Every case on Which petitioner bases its assertion to the con-
trary arose in circumstances far different than those presented here.
The Pennsylvania Supreme Court was not. ior example reviewing
the unexplained decision of a Federal Administrative agency charged
with the interpretation and application of a Federal Statute. Nor
was it reviewing the decision of a lower Federal Court applying a
Federal Statute in which the stated ground for decision was held by

- the United States Supreme Court to be-an erroneous application of

the statute. Under such circumstances, as the cases on which Peti-
tioner relies make clear, this Court will frequently remand such a
decision to the pertanent Federal agency for explanation of its chal-
lenged decision. Secretary of Agriculture v. United States, 347
U.S. 645 (1954); National Labor Relations Board v. Metropolitan
Life Insurance Co., 380 U.S. 438 (1905): Burlington Truck Lines,
Inc. v. United States. 371 U.S. 156 (1962). Or it will remand to
the’lower Court for further proceedings applying the statute as inter-

S Brief for Respondent in Opposition

statement of the verdict, returned by’a properly instructed
jury which had ample opportunity to weigh any credibility
problems even arguably presented by the evidence pertain-
ing to damages, in no way Violates the principles. of the
Due Process Clause of the Federal Constitution.

CONCLUSION.

For the foregoing reasons respondent, Seaife Com-
pany, respectfully requests that the Petition for Writ of;
Certiorari to the Supreme Court of the Commonwealth of
Pennsylvania be denied.

Respéetfully submitted,

Puitie H. SrruBinc,
Epirn Laver, |
Pepper, Hamitton & SCHEETZ,
128 South Broad Street,
Philadelphia, Pa. 19109
Morris M. Brercer,
(', Witt1amM BERGER,
Bercer & KapetAnN,
508 Law & Finance Building,
Pittsburgh, Pa. 15219
MicuarL HAHALYAK,
408 Commonwealth Building, .
Pittsburgh, Pa. 15222
Attorneys for Respondent,

Scaife Company.

3. (Cont'd. )

preted by this Court. Chaunt v. United States, 304 US. 350
(1960); Brotherhood of Locomotive Engineers «7. Chicago, Rock
Island & Pacific Railroad Co., 382 U. S. 423 (1906). Actually,
these decisions are not based on the requirements of the Due Process
Clause of the United States Constitution. They are, tastead, based
on this Court’s role in enforcing the administrative and judicial pro-
cedures established by Congress for the application of federal statu-
tory policies.

Brief for Respondent in Opposition — 9

Certificate of Service.

I hereby certify that on this 25th day of May, 1972,
three copies of the Brief of Respondent in Opposition and
Appendix were mailed, postage prepaid, to Gilbert J.
Helwig, Reed, Smith, Shaw & McClay, Union Trust Build-
ing, Pittsburgh, Pennsylvania 15230, Counsel for Petitioner.
I further certify that all parties required to be served have
been served.

/s/ Puitie H. Strusine,
Pepper, Hamitton & ScHEETz,
123 South Broad Street,
Philadelphia, Pa. 19109

May 25, 1972

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Appendix.

EXCERPT FROM BRIEF OF APPELLANT,
SCAIFE COMPANY, IN THE SUPREME

COURT OF PENNSYLVANIA.

C. The Lower Court's Substitution of Its Opinion
‘of the Damage Suffered by Scaife for That of
the Jury Without Any Explanation and Its
Order That the Plaintiff Re-litigate the Ques.
tion of Damages Unless Plaintiff Accept a
Reduction of That Verdict Was Arbitrary and

a Clear Abuse of Discretion.

The court en bow after a careful analysi-

trial padge’s charge ruled that he correctly inst:
the gary about every element of damages recov
by Seaife (11Ma- 1508, Opimion). The court rake

ther that the formula the jury was instructed to
was 4 correct statement of the damawe« recovers
a victim of fraud. Included in the trial judwe
nitha, and expressly approved Vn the lower eourt,
(1) the amount paid for equipment and in
transferred le«« actual value; (19080. Opinion)
lox~ cats] inn the effert of the defertive wax f
on the reputation and «<ale« of the Timken Silent
matic product lime: (150fia, Oprwiow) (2) the ar
expended by Seaife in it< effert« te correct th
and te reluee or reverse the low<e< can<cd bys
feet: (100%7a. Opinion) (4) orterest tyeon such
thy claim a= the jury found was certain, to be
lated from the time the amount awandead wa.
by the jury to have been a sum certain

Opinion).

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2a Appendix

The lower court further acknowledged that be-
cause the amount of damages were not capable of de-
termination with **mathematiceal exactness**, the final
decision on these elements was a matter for the jury
(1506a-1507Ta, Opinion). VParenthetically, it is. impor-
tant to note that in this case the jary was given precise
figures setting out clearly the outer limits of damage~
flowing from Rockwell's fraud. The jury was not re-
quired to construct from whole cloth a value for such
intangible damage te a plaintiff a< ‘pain and <uffer-
img." The jory here was giten beth dollar amounts
and testimony and deeumentary evidence establishing
the hasi< on whieh the jury could determine that some,
and even all, the dellar< lost were the direet result of
Rockwell’« fraud. That the jury conscientiou-ly (and
conservatively) applied the formula given by the judge
te the evidence submitted te it ix apparent. It< dam-
ages verdict, SS10,.811.00, i< well within the maxinium
amount of lex«< proved by plaintiff: #1.798.208,00. That
was the amount of the eperating low<e« <affered by
plaintiff in operating the Divi<ien during the period it
wax attempting to market the Divi<ien"< product line
amd te correct the defective gas furnace-.

Against thix background, the action of the lower
court in setting aside the jury's verdict and requiring
relitication of damage= cannot be <ustained. The court
did not explain in what re<peet it felt the jury’. ver-
diet was defective. While trial courts are allowed sig-
nifieant powers and dixeretion by thix court, their di--
eretion is net unlimited. The lower court's failure to
explain th what way or ways it felt the jury’< verdict
to be unsati«<factory alone violated the clear mandate
of this court. Bellettiere +. Philadelphia. 267 Pa. 638,

Appendix 3a

644 (1951); Beal +. Reading Company, 370 Pa. 45, 49
(1952). The lower court’s failure to specify how the
jury’s verdict was wrong imposes on this court the
duty ‘*to review the record to determine whether the
cancellation of a jury’s verdict is warranted under all
the circumstances of this case.’’ Spangler v. Helms
New York—Pittshurgh Motor Express, 396 Pa. 482,
487-488 (1959). in Spangter, this Court reversed the
trial court’s grant of a new trial because of an exces-
sive verdict and ruled that the jury's verdict was not,
in fact, excessive,

Having ruled that no error was made in the admis-
sion of evidence justifying an award of $1,738,203,
there was no basis for the courts statement that ‘‘it is
conceivable that plaintiff suffered -a legally compen-
sable harm in excess of the verdict but it has failed to
produce competent evidence to prove this.’ (1508a
Opmon) The court’s subsequent statement that
“*[bjased on the record which we have before us we
are of the opinion that the jury's verdict is excessive’
(150Sa, Opinion), is not explained by it, and finds no
support from the record.

By overturning the jury ‘s verdict without explana-
tion the court in effeet was acting as a jury. In so
doing, it plainly abused its powers as a court en banc.
whose function is to correct errors in the conduct of a
trial. This court’s recent analysis of its rele on review
is equally applicable to the role of the trial court:

“It is net the function of an appellate court to
pass upon the credibility of witnesses or to act as
the trier of facts, and we will not substitute our
judgment for that of the fact-finding jury, if there

ta Appendix

is sufficient evidence of record to support the
jury’s findings of facet [Citations]. Even though
we might be of the opinion that had we been the
trier of fact we would have reached a contrary re-
sult, nevertheless, we will not set aside the findings
of fact of a jury implicit in its verdict which are
evidentiarily supported of record and where there
Was no abuse of discretion and where no error of
law has been committed [Citations]... Burbage r.
Boiler Engineering d& Supply Company, Tuc., 433
Pa, 319, 323-324 11965) | Affirming denial of new
trial. ]

Of course, a trial court has both the power and the
duty to revise verdicts so clearly excessive that the
jury must have been swayed by ** passion, partiality,
prejudice or corruption.“" See, ¢.g.. dmey vr. Erb, 296
Pa. 561, 567 (1929). But in the instant cease, the lower
court did not and could not tind such a basis for the
jury's verdict. The wrong done Seaife was an eco-
nomic wrong, the damages measurable by non-emotive
economic effects proved by substantial competent evi-
dence.

A trial court also must correet verdicts excessive
because the jury was improperly instructed as to the
— measure of damages and may effect such correction by
reducing the verdict by the excess awarded pursuant
to the erroneous portion of the charge: Skoda vr. West
Penn Power Compang, 411 Pa. 323, 333-338 ( 1963). Or
it may, on this ground, require re-litigation of the
question of damages. Tilghman +. Dollenberg, 418 Va.
604 (1965) | Clain based on fraud, affirming award of
a new trial on damages because of improper jury
charge on the measuring of damages]; Mahkn vr. An.

A ppendis . Da

drews, 182 Pa. Super. 338 (1956) | Breach of contract,
ordering re-litigation of damages question because
trial court erroneously excluded evidence relating to
lost profits.]. But the lower court expressly did not_
‘ind indeed, could not base its decision on this ground.

It is also clear that when the measure of damages
can be stated with precision to the jury and when the
evidence clearly establishes the maximum amount
which plaintiff can be entitled to recover, the trial
court may revise a verdict obviously in excess of the
maximum so established, and for that reason mani-
festly against the weight of the evidence. Swart: r:
Smokowit:, 400 Pa. 109, 112 (1960) [Affirming new
trial on damages in wrongful death and survival aec-
tion] ; See, Eisert r. Jones, 408 Pa. 3. 78 (1962) [Denial
of new trial affirmed because, inter alia. record did not
disclose ‘‘capricious disregard by the jury of persua-
sive testimony.**]. But this power is necessarily very
narrowly ¢ireumseribed and cannot be exercised unless
the verdict ix so out of proportion to the amount
proved that it is apparent that the jury miseonceived
the law or the evidence. Spangler +. Helm'’s New
York-Pittshurah Motor Express, 396 Pa. 482 (1959)
[| Reversing grant of new trial based on execessiveness
of the verdict. |

Since none of the conditions authorizing a court to
revise a jury’s verdict and to require re-litigation of
damages have been met in the instant case, the lower
court's award of a new trial on damages was erroneous
and must -be reversed.

Ha A ppendix
VI. CONCLUSION.

For the foregoing reasons, Scaife Company re-
spectfully requests this Honorable Court to reverse
the Lower Court’s grant of a new trial on the question
of damages and to reinstate the verdict of the jury.

Respectfully submitted,

Pimp H. Srrusine,

Evitu G. Laver,

Peprer, Hamitton & Scueerz,
125 South Broad Street,
Philadelphia, Penn. 19109,

Morris M. Bercer,

C, Winuiam BERGER,

Bercer & Kaperan,
508 Law & Finance Building,
Pittsburgh, Penn. 15219,

Micnakn. Hanatyak,
403 Commonwealth Building,
Pittsburgh, Penn, 15222,
Attorneys for Appellant,
Scaife Company.

---

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