Amicus Curiae Brief — Daniel Measurement Measurement Services Services, Inc. v. Eagle Research Research Research Corp. (No. 07-384)

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MOTION FILED

OCT 22 2007 Ez)

No. 07-384

IN THE

Supreme Court of the United States

DANIEL MEASUREMENT SERVICES, INC.,

Petitioner,

v.

EAGLE RESEARCH CORP.,

Respondent.

On Petition for a Writ of Certiorari

To the Circuit Court

Of Putnam County, West Virginia

MOTION FOR LEAVE TO FILE BRIEF AND BRIEF OF

AMICI CURIAE NATIONAL ASSOCIATION OF

MANUFACTURERS, CHAMBER OF COMMERCE OF

THE UNITED STATES OF AMERICA, AMERICAN

TORT REFORM ASSOCIATION, AND AMERICAN

CHEMISTRY COUNCIL

IN SUPPORT OF PETITIONER

Victor E. Schwartz

Cary Silverman

(Counsel of Record)

Shook, Hardy & Bacon L.L.P.

600 14% Street, N.W., Suite 800

Washington, D.C. 20005

(202) 783-8400

Attorneys for Curiae

Additicaial Counsel Listed on Inside Cover

Of Counsel

Jan S. Amundson

Quentin Riegel

NATIONAL ASSOCIATION OF MANUFACTURERS

1331 Pennsylvania Avenue, N.W.

Suite 600

Washington, D.C. 20004

(202) 637-3055

Robin S. Conrad

NATIONAL CHAMBER LITIGATION CENTER, INC.

1615 H Street, N.W.

Washington, D.C. 20062

(202) 463-5337

Sherman Joyce

AMERICAN TORT REFORM ASSOCIATION

1850 M Street, N.W.

Suite 1095

Washington, D.C. 20036

(202) 682-1163

Donald D. Evans

AMERICAN CHEMISTRY COUNCIL

1300 Wilson Boulevard

Arlington, Virginia 22209

(703) 741-5000

IN THE

SUPREME COURT OF THE UNITED STATES

- No. 07-384

DANIEL MEASUREMENT SERVICES, INC.,

Petitioner,

v.

EAGLE RESEARCH CORP.,

Respondent.

On Petition for a Writ of Certiorari

To the Circuit Court

Of Putnam County, West Virginia

MOTION FOR LEAVE TO FILE BRIEF OF AMICI

CURIAE NATIONAL ASSOCIATION OF

MANUFACTURERS, CHAMBER OF COMMERCE

OF THE UNITED STATES OF AMERICA,

AMERICAN TORT REFORM ASSOCIATION, AND

AMERICAN CHEMISTRY COUNCIL

IN SUPPORT OF PETITIONER

Pursuant to Rule 37 of the Rules of this Court,

amici curiae request leave to file the accompanying

brief in support of the Petition for a Writ of Certio-

rari.}

Respondents’ counsel did not consent to the filing of an

amici curiae brief in this action. Counsel of record for all par-

The National Association of Manufacturers

(“NAM”) is the nation’s largest industrial trade asso-

ciation, representing small and large manufacturers

in every industrial sector and in all 50 states. NAM’s

mission is to enhance the competitiveness of manu-

facturers and improve American living standards by

shaping a legislative and regulatory environment

conducive to U.S. economic growth and to increase

understanding among policymakers, the media, and

the general public about the importance of manufac-

turing to America’s economic strength.

The Chamber of Commerce of the United States

of America (“the Chamber”) is the world’s largest

business federation, representing an underlying

membeship of more than three million companies

and professional organizations of all sizes and in all

industries. The Chamber advocates the interests of

its members in matters before the courts, Congress,

and the Executive Branch. To that end, the Cham-

ber regularly files amicus briefs in cases that raise

issues of vital concern to the nation’s business com-

munity.

Founded in 1986, the American Tort Reform As-

sociation (“ATRA”) is a broad-based coalition of more

than 300 businesses, corporations, municipalities,

associations, and professional firms that have pooled

their resources to promote reform of the civil justice

system with the goal of ensuring fairness, balance,

ties received notice at least ten days prior to the due date of

amici curiae’s intention to file this brief. In accordance with

Rule 37.6, amici curiae state that no counsel for a party has

authored this brief in whole or in part, and that no person or

entity, other than the amici, its members, or its counsel have

made a monetary contribution to its preparation or submission.

and predictability in civil litigation. For more than a

decade, ATRA has filed amicus curiae briefs in cases

before federal and state courts that have addressed

important liability issues.

The American Chemistry Council (“ACC”) repre-

sents the leading companies engaged in the business

of chemistry. The business of chemistry is a key

element of the nation’s economy, accounting for ten

cents out of every dollar in U.S. exports. Chemistry

companies invest more in research and development

than any other business sector.

Amici seek leave to file a brief in this case be-

cause the issue of whether procedures employed by a

court to sustain a compensatory damage award meet

the minimum requirements of the Due Process

Clause is of importance to each and every business in

this country. If state courts are permitted to enter

awards that are completely unsupported by the evi-

dence, then businesses will be placed at substantial

risk of arbitrary deprivations of their property. This

risk is magnified, where, as here, summary judgment

is routinely denied, post-trial review is nominal at

best, and appellate review is unavailable.

The proposed amici curiae brief does not repeat

the Petitioner’s arguments. Rather, the brief begins

by considering the public policy underlying the his-

tory and development this Court’s due process juris-

prudence and the principle that this tradition does

not permit arbitrary compensatory damage awards.

The brief then considers other instances in which

this Court and others have, on the basis of proce-

dural due process, found that a state cannot deprive

an individual of life, liberty, or property in absence of

supporting evidence. Finally, the brief addresses

and seeks to alleviate any potential concern of this

Court that its intervention in this case could disturb

the basic judicial structure of states that lack an in-

termediate appellate court or appellate review as a

matter of right. The brief also explains why granting

certiorari in this case will not place this Court in the

position of acting as a court of last resort for every

alleged excessive compensatory damage award.

Accordingly, amici request that the Court grant

this motion.

Respectfully submitted,

Victor E. Schwartz

Cary Silverman

(Counsel of Record)

SHOOK, HARDY & BACON L.L.P.

600 14 Street, N.W., Suite 800

Washington, D.C. 20005

(202) 783-8400

Attorneys for Amici Curiae

Jan S. Amundson

Quentin Riegel

NATIONAL ASSOCIATION OF

MANUFACTURERS

1331 Pennsylvania Avenue, N.W.

Suite 600

Washington, D.C. 20004

(202) 637-3055

Robin S. Conrad

NATIONAL CHAMBER LITIGATION

CENTER, INC.

1615 H Street, N.W.

Washington, D.C. 20062

(202) 463-5337

Sherman Joyce

AMERICAN TORT REFORM

ASSOCIATION

1850 M Street, N.W.

Suite 1095

Washington, D.C. 20036

(202) 682-1163

Donald D. Evans

AMERICAN CHEMISTRY COUNCIL

1300 Wilson Boulevard

Arlington, Virginia 22209

(703) 741-5000

Of Counsel

Dated: October 22, 2007

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES..................cesesseseseeees iv

INTEREST OF AMICI CURIAE .................0s0e0000s 1

STATEMENT OF THE CASE ............ccccccccsseeeeeees 2

SUMMARY OF ARGUMENT ..............cceseeseeees 2

SITE cis vcintvksotnaciiindencehesenntinicinietpnsinteneteays 6

I. THIS COURT'S DUE PROCESS

JURISPRUDENCE REQUIRES SOME

MINIMUM LEVEL OF PRE- AND POST-TRIAL

REVIEW, AND EVIDENTIARY SUPPORT,

TO SUSTAIN A DAMAGE AWARD ............... 6

A. History and Development of Due Process.. 6

B. Procedural Due Process Does Not

Permit Unsupported Compensatory

cian reiasenstuensianede 11

II. ADAMAGE AWARD WITHOUT

EVIDENTIARY FOUNDATION IS

INCONSISTENT WITH DUE PROCESSG....... 14

III.WHAT DECIDING THIS CASE WILL AND

NE BE aidlsenniscrtiniperakaspanstinetesebeniviicetars 17

A. This Case Presents the Opportunity to

Clarify and Reaffirm That Due Process

Does Not Permit Arbitrary Awards. ........... 17

il

B. This Case Will Not Unduly Interfere With

State Judicial Sovereignty or Make This

Court a Final Arbiter of Every Excessive

Compensatory Damage Award................... 18

COIN a ae esti tain ei rrettccserevesesevseevecevecasseeee 20

ili

TABLE OF AUTHORITIES

Page(s)

CASES

Biggs v. Village of Dupo,

892 F.2d 1298 (7th Cir. 1990).................... 15

Brown v. Mississippi, 297 U.S. 278 (1936)..... 17

Burnham v. Superior Court of Cal.,

Marin County, 495 U.S. 604 (1990)........... 10

Carey v. Pipus, 435 U.S. 247 (1978)................ 15

Cooper Indus., Inc., v. Leatherman Tool

Group, Inc., 582 U.S. 424 (2001) ............... 13

Crookston v. Fire Ins. Exchange,

GL7 F.BG TOD CURR TBST) .ccocceccccccescosceveses 12

Ducker v. Wood, 99 Eng. Rep. 1092 (K.B. 1786) 11

Douglas v. Buder, 412 U.S. 430 (1973)........... 15

Duncan v. Louisiana, 391 U.S. 145 (1968)..... 7

Federal Trade Comm’n v. Kuykendall,

312 F.3d 1329 (10th Cir. 2002), vacated on

reh’g en banc, 371 F.3d 745 (2004)........... 16

Gasperini v. Center for Humanities,

i) Bis M2. | Eee oe nnn 12

Goldberg v. Kelly, 397 U.S. 254 (1970)........... i)

Hetzel v. County of Prince William,

89 F.3d 169 (4th Cir. 1996)..........0000000000. 15

iV

Honda Motor Co. v. Oberg,

GIS US. 415 CIGGS) 2..0ccecccoceccceseses 5, 10, 11,17

Hurtado v. California, 110 U.S. 516 (1884).... 8

In re Murchison, 349 U.S. 133 (1955)............. 2

In re Oliver, 333 U.S. 257 (1948) ..............e. 17

In re Winship, 397 U.S. 358 (1970)................ 17,18

Malloy v. Hogan, 378 U.S. 1 (1964) ................ 8

Mathews v. Eldridge, 424 U.S. 319 (1976) ..... 9

Morrissey v. Brewer, 408 U.S. 471 (1972)....... 9

Murray’s Lessee, v. Hoboken Land &

Improvement Co., 59 U.S. 272 (1855)........ 7

Pacific Mut. Life. Ins. Co. v. Haslip,

RETR an cED 0 tO ee ONE 10, 13

Palko v. Connecticut, 302 U.S. 319 (1937),

overruled by Benton v. Maryland,

RE, SID sh cisncnsnvevovncscenssesescnasenvives 8

Price v. City of Charlotte,

93 F.3d 1241 (4th Cir. 1996)................00000 15

Ramsey v. American Air Filter Co.,

772 F.2d 1303 (7th Cir. 1985).................... 15

Schware v. Board of Bar Examiners of the State

of New Mexico, 353 U.S. 232 (1957)........... 14

Snyder v. Commonwealth of Massachusetts,

291 U.S. 97 (1934), overruled on other grounds,

Malloy v. Hogan, 378 U.S. 1 (1964)........... 8

Spence v. Board of Educ. of Christina Sch. Dist.,

806 F.2d 1198 (3d Cir. 1986)..............cccc0 15

Sun Oil Co. v. Wortman, 486 U.S. 717 (1988) 10

Superintendent, Massachusetts Correctional

Institution, Walpole v. Hill,

ee rae RN cavsbavinndccteveconcnsestncnprsiine 15

Tumey v. Ohio, 273 U.S. 510 (1927) ............... 17

TXO Production Corp. v. Alliance Resources

Corp., 509 U.S. 443 (1993) ........ccscceeees 11, 13-14

United States v. Betsy, 8 U.S. 443 (1808) ....... 7-8

CONSTITUTIONAL AND STATUTORY

PROVISIONS

Bee EP MRI. W evnnensnenassscsicccedarstecsosesosens 6

Bree SE, TAIT, TEE oD conecercoccccssevecensscese 6

Magna Carta ch. 39 (Eng. 1215)..................... 7

Be Be Oe wikeisccnterspeesenscassatenrscevsane 7

OTHER REFERENCES AND AUTHORITIES

Paul DeCamp, Beyond State Farm:

Due Process Constraints on Noneconomic

Compensatory Damages,

27 Harv. J. L. & Pub. Pol’y 231 (2003)...... 13

vi

Edward J. Eberle, Procedural Due Process:

The Original Understanding,

4 Const. Comment. 339 (1987)................... 6

Robert Riggs, Constitutionalizing Punitive

Damages: The Limits of Due Process,

52 Ohio St. L.J. 859 (1991)............ sees 13

Edward L. Rubin, Due Process and the

Administrative State,

72 Cal. L. Rev. 1044 (1984)..............cccseeeee 6

Stephen Williams, ‘Liberty’ In the Due Process

Clauses of the Fifth and Fourteenth

Amendments: The Framers’ Intentions,

53 U. Colo. L. Rev. 117 (1981) ..............0+0+. 7

National Center for State Courts, State Court

Caseload Statistics, 2005: State Court Structure

Charts (2006), available at

http://www.ncsconline.org/D_Research/csp/2005_fi

les/State%20Court%20Caseload%20Statistics%20

IE kcieicnctniaicncociuasiccenilanvdbimnedildiimbbasames 18-19

INTEREST OF AMICI CURIAE'

The National Association of Manufacturers

(“NAM”) is the nation’s largest industrial trade

association, representing small and _ large

manufacturers in every industrial sector and in all

50 states. NAM’s mission is to enhance the

competitiveness of manufacturers and improve

American living standards by shaping a legislative

and regulatory environment conducive to US.

economic growth and to increase understanding

among policymakers, the media, and the general

public about the importance of manufacturing to

America’s economic strength.

The Chamber of Commerce of the United States

of America (“the Chamber”) is the world’s largest

business federation, representing an underlying

membership of more than three million companies

and professional organizations of all sizes and in all

industries. The Chamber advocates the interests of

its members in matters before the courts, Congress,

and the Executive Branch. To that end, the Cham-

ber regularly files amicus briefs in cases that raise

issues of vital concern to the nation’s business com-

munity.

Founded in 1986, the American Tort Reform

Association (“ATRA”) is a broad-based coalition of

; Respondents’ counsel did not consent to the filing of an

amici curiae brief in this action. Counsel of record for all par-

ties received notice at least ten days prior to the due date of

amici curiae’s intention to file this brief. In accordance with

Rule 37.6, amici curiae state that no counsel for a party has

authored this brief in whole or in part, and that no person or

entity, other than the amici, its members, or its counsel have

made a monetary contribution to its preparation or submission.

more than 300 __—i businesses, corporations,

municipalities, associations, and professional firms

that have pooled their resources to promote reform of

the civil justice system with the goal of ensuring

fairness, balance, and predictability in civil

litigation. For more than a decade, ATRA has filed

amicus curiae briefs in cases before federal and state

courts that have addressed important liability issues.

The American Chemistry Council (“ACC”) repre-

sents the leading companies engaged in the business

of chemistry. The business of chemistry is a key

element of the nation’s economy, accounting for ten

cents out of every dollar in U.S. exports. Chemistry

companies invest more in research and development

than any other business sector.

STATEMENT OF THE CASE

Amici adopt and incorporate Petitioner’s state-

ment of the case.

SUMMARY OF ARGUMENT

This case presents an important constitutional is-

sue of procedural due process: whether a court may

deprive a defendant of property by allowing a com-

pensatory damage award that has no basis in the

evidence to stand with no more than cursory pre- and

post-trial procedures and no appellate review.

“A fair trial in a fair tribunal is a basic require-

ment of due process.” In re Murchison, 349 U.S. 133,

136 (1955). Here, the trial court’s actions and inac-

tion exemplify the complete lack of the most basic,

fundamental procedures to ensure due process. Two

statements of the trial court judge demonstrate how

a jury reached a multimillion dollar compensatory

damage award, without evidence that the plaintiff

experienced an actual loss, for an alleged breach of

an oral contract and disclosure of trade secrets, and

why that award was permitted to stand.

Early in the case, the trial court took a troubling

approach in deciding a defendant’s motion for sum-

mary judgment:

[If} you’ve done your homework on me and

you'll know what my reversal rate is. And I

will tell you in the field of civil law, civil liti-

gation, the only time I’ve been reversed in

14 years is when I grant summary judgment.

There’s one thing I have learned in the State

of West Virginia the hard way, this ain’t

Texas, this ain’t Kansas, this is West Vir-

ginia, and we don’t give summary judgment.

Every time I do, I get reversed. Not every

time literally, but that’s where it is. Our

system favors taking it to ajury. And I’m go-

ing to allow all of these to go to ajury. Plain

and simple. All of your’s, all of the plain-

tiffs. Even the individual one against Mr.

Butch. I don’t know how you are going to ar-

gue all of this and present it to a jury. That

will be your problem.

App. at 47a. In other words, the trial court ex-

pressed a blanket policy against summary judgment,

even when it had concern that the facts accepted in

the light most favorably to the plaintiff might not

support a claim.

The court continued this hands-off approach fol-

lowing the trial in deciding whether to order a new

trial on damages. Although the court noted that it

was “most troubled” by and “struggling with” the

measure of damages in the case, the court concluded

that “I'm not going to reduce it, though I am con-

cerned with it.” App. at 10a, 12a. The court ex-

pressed bewilderment at the $10.5 million in conse-

quential damages for breach of a confidentiality

agreement, noting that “I did not instruct the jury

that they could take [the defendants] profits away

from them. Maybe that was what the law allowed,

maybe that was a proper way, but I didn’t instruct

the jury that way.” App. at 12a-13a. The court went

on to conclude:

And [ll be frank with you, I cannot recall now

whether the plaintiffs at that time said

“Judge, this is a wrong instruction, you ought

to be instructing the jury that they can base

the measure of damages on the lost — based on

taking away profits.” I don’t have a memory of

that. I don’t think you did, I’m not sure. I

can’t wade through them all at this stage, and

so I’m going to leave that as it is. I’m going to

deny the defense motion in regard to that as

well.

App. at 13a. This type of lackadaisical deliberation

and abrogation of responsibility, at both the pre- and

post-trial phases, raises serious questions under the

Due Process Clause for the consideration of this

Court. The combined import of these two actions

posed an unacceptable risk of a standardless depri-

vation of property.

Moreover, both the trial court’s approach to sum-

mary judgment and the damage award seemed prem-

ised on the availability of appellate review. Yet,

West Virginia has a single appellate court in which

review is discretionary. Indeed, the West Virginia

Supreme Court of Appeals denied the defendant’s pe-

tition for appeal in this case. App. at 27a-28a. This

further underscores the need for adequate procedural

safeguards at the trial court level to comport with

the minimum requirements of the Due Process

Clause.

The line of jurisprudence that formed the under-

lying basis of this Court’s conclusion in Honda Motor

Co. v. Oberg that procedural due process requires the

amount of a punitive damages award to be subject to

“meaningful and adequate” post-verdict or appellate

review was not confined to punitive damage awards.

512 U.S. 415, 442 (1993) (invalidating an Oregon law

that precluded judicial review of the amount of puni-

tive damage awards). In fact, this Court specifically

recognized in Oberg, “Since there is no suggestion

that different standards of judicial review were ap-

plied for punitive and compensatory damages before

the 20th century, no effort has been made to sepa-

rate out the two classes of cases.” Id. at 442 n.2. The

case at bar provides an important opportunity for

this Court to reaffirm and clarify the constitutional

principle that the Due Process Clause requires some

meaningful level of pre- and post-trial review as a

safeguard against arbitrary or excessive compensa-

tory damage awards. These are fundamentals of our

system of jurisprudence that must be preserved.

ARGUMENT

I. THIS COURT’S DUE PROCESS JURISPRUDENCE

REQUIRES SOME MINIMUM LEVEL OF PRE- AND

POST-TRIAL REVIEW, AND EVIDENTIARY SUP-

PORT, TO SUSTAIN A DAMAGE AWARD

The Fifth and Fourteenth Amendments to the

Constitution of the United States protect against the

unfair deprivation of “life, liberty, or property, with-

out due process of law.” U.S. CONST. AMENDS. V, XIV.

§ 1. The words “due process” have developed over

time to incorporate safeguards on both procedural

and substantive elements—assuring fair notice and

opportunity to be heard and proceedings that are

neither conducted in an arbitrary manner nor lead to

an arbitrary result. Exactly what procedures fulfill

this constitutional right is the product of a complex

history and tradition, and one that has proven essen-

tial to the analysis of the scope of the protection. To-

day, this Court is asked to consider whether that his-

tory and tradition constitutionally protects a defen-

dant from an arbitrary compensatory damage award

that has no basis in the evidence or jury instructions,

that was not subject to even the most rudimentary

post-trial review, and that received no appellate re-

view.

A. History and Development of Due Process

Due process is the “oldest of our civil rights.”

Edward L. Rubin, Due Process and the Administra-

tive State, 72 Cal. L. Rev. 1044, 1044 (1984). This

necessity of fair and impartial process derives from

two sources of English law. See Edward J. Eberle,

Procedural Due Process: The Original Understand-

ing, 4 Const. Comment. 339, 340 (1987). One is

Chapter 39 of the Magna Carta, which established

that “No free man shall be taken, outlawed, ban-

ished, or in any way destroyed, nor will We proceed

against or prosecute him, except by the lawful judg-

ment of his peers and by the law of the land.” Magna

Carta ch. 39 (Eng. 1215) (emphasis added); see also

Duncan v. Louisiana, 391 U.S. 145, 169 (1968). The

second source, employing the words “due process,”

comes from an English statute of 1354 which pro-

vided “[tJhat no Man of what Estate or Condition

that he be, shall be put out of Land or Tenement, nor

taken nor imprisoned, nor disinherited, nor put to

death, without being brought in Answer by due Proc-

ess of the Law.” 28 Edw. 3 ch. 3 (1354).

From these beginnings, the concept of a guaran-

teed right of due process gradually became embedded

in American legal culture and tradition. Although

the Fifth Amendment’s due process clause passed

with little recorded debate on the issue, it prompted

several of the early states, none of which had a state

constitutional due process provision, to adopt similar

language. See Stephen Williams, ‘Liberty’ In the Due

Process Clauses of the Fifth and Fourteenth Amend-

ments: The Framers’ Intentions, 53 U. Colo. L. Rev.

117, 121-24 (1981). Prior to the adoption of the

Fourteenth Amendment, however, due process was a

right that existed, but one that was rarely discussed.

This Court only addressed the meaning of due proc-

ess on a few occasions, holding that the challenged

process must either conflict with the text of another

constitutional provision or with “those settled usages

and modes of proceeding existing in the common and

statute law of England.” Murray’s Lessee v. Hoboken

Land & Improvement Co., 59 U.S. 272, 277 (1855);

see also United States v. Betsy, 8 U.S. 443, 451 (18608)

(stating that the Fifth Amendment due process

clause “means by due process of the common law”)

(emphasis in original).

Extension of due process to state action under the

Fourteenth Amendment has led to considerable in-

crease in the scope and use of the protection, and

greater refinement in its meaning. See Hurtado v.

California, 110 U.S. 516, 532 (1884) (“[T]hese broad

and general maxims of liberty and justice held in our

system a different place and performed a different

function from their position and office in English

constitutional history and law, they would receive

and justify. .. more comprehensive interpretation.”).

Until the 1960’s, the history and tradition of chal-

lenged procedures generally determined their consti-

tutional adequacy. See, eg., Palko v. Connecticut,

302 U.S. 319, 328 (1937) (holding history and tradi-

tion could permit a state to deny protection against

double jeopardy), overruled by Benton v. Maryland,

395 U.S. 784 (1969). While a state is “free to regu-

late the procedure of its courts in accordance with its

own conception of policy and fairness,” it may not do

so if “it offends some principle of justice so rooted in

the traditions or conscience of our people as to be

ranked as fundamental.” Snyder v. Commonwealth

of Massachusetts, 291 U.S. 97, 105 (1934) (Cardozo,

J.), overruled on other grounds, Malloy v. Hogan, 378

U.S. 1 (1964).

During the 1960’s and 1970’s, the Court moved

toward a more expansive understanding of due proc-

ess. See, e.g., Malloy v. Hogan, 378 U.S. 1, 15 (1964)

(“(CJontinuing re-examination of the constitutional

conception of Fourteenth Amendment ‘due process’ of

law is required, and that development of the com-

munity’s sense of justice may in time lead to expan-

sion of the protection which due process affords.”).

“Fundamental fairness” emerged as the analytical

tool to guide alleged due process deprivations and

expand its reach. See Goldberg v. Kelly, 397 U.S.

254, 261 (1970) (requiring evidentiary hearing before

termination of benefits by welfare authorities). This

Court has made clear that due process requires state

actors deciding whether to deprive a litigant of his or

her property to meet minimum procedural safe-

guards demanded by rudimentary due process, which

include affording the recipient the opportunity to

confront and cross-examine witnesses, to retain an

attorney, and to present oral evidence to an impar-

tial decision maker, whose conclusion must rest

solely on the legal rules and evidence adduced at the

hearing. See id. at 270-71.

The modern test for determining the adequacy of

the process used recognizes that “(D]ue process is

flexible and calls for such procedural protections as

the particular situation demands.” Mathews v. El-

dridge, 424 U.S. 319, 334 (1976) (quoting Morrissey

v. Brewer, 408 U.S. 471, 481 (1972)). This Court has

recognized three distinct factors that guide the ex-

tent of the necessary procedures: (1) the private in-

terest that will be affected by the official action;

(2) the risk of an erroneous deprivation of such inter-

est through the procedures used; and the probable

value, if any, of additional or substitute procedural

safeguards; and (3) the Government's interest, in-

cluding the function involved and the fiscal and ad-

ministrative burdens that the additional or substi-

tute procedural requirement would entail. Jd. at

335. The Court requires this balancing of the public

10

and private interests “[tlo assure fairness.” Id. at

348.

The once dispositive role of history and tradition

in analyzing procedural due process claims, however,

has not been supplanted. See Pacific Mut. Life. Ins.

Co. v. Haslip, 499 U.S. 1, 36 (1991) (Scalia, J., con-

curring) (criticizing Mathews and other due process

opinions for “indiscriminately appl{ying] balancing

analysis to determine ‘fundamental fairness” with-

out regard for historical practice). Other recent ju-

risprudence suggests the resurgence of history and

tradition as primary factors in procedural due proc-

ess review. See, e.g., Honda Motor Co. Ltd. v. Oberg,

512 U.S. 415, 421 (1994) (examining deviation from

common law procedures in the awarding of excessive

punitive damages). Burnham v. Superior Court of

Cal., Marin County, 495 U.S. 604, 619 (1990) (hold-

ing that “jurisdiction based on physical presence

alone constitutes due process because it is one of the

continuing traditions of our legal system that define

the due process standard of traditional notions of fair

play and substantial justice”) (internal quotations

omitted); Sun Oil Co. v. Wortman, 486 U.S. 717, 729-

30 (1988) (considering tradition and history to reaf-

firm that Due Process Clause does not bar applica-

tion of the forum state's statute of limitations to

claims that in their substance are and must be gov-

erned by the law of a different state). It is against

this backdrop that history, tradition and principles of

fundamental fairness give rise to a constitutionally

protected right to some minimum level of trial court

procedures, sufficient evidence in the record, and

post-trial review to guard against arbitrary awards

of damages.

li

B. Procedural Due Process Does Not

Permit Unsupported Compensatory

Damage Awards

Judicial review of damage awards is a firmly em-

bedded common law practice throughout this country

and has its roots in English law and tradition. As

Justice O’Connor stated plainly when this Court ap-

plied due process guarantees to a punitive damage

award in TXO Production Corp. v. Alliance Resources

Corp., “courts at common law in England tradition-

ally would strike any [damages] award that ap-

peared so grossly disproportionate as to evidence ca-

price, passion, or bias.” 509 U.S. 443, 476 (1993)

(O'Connor, J., dissenting) (footnote omitted). Lord

Mansfield was also led to comment that “there was

no doubt but that the Court had the power of taking

the opinion of a second jury in any case where the

damages were excessive.” Ducker v. Wood, 99 Eng.

Rep. 1092 (K.B. 1786). This was true in cases involv-

ing both compensatory and punitive awards.

In Oberg, where this Court struck down an exces-

sive punitive damages award on procedural due

process grounds, Justice Stevens noted that “[a]s in

many early cases, it is unclear whether this case spe-

cifically concerns punitive damages or merely ordi-

nary compensatory damages,” and “[s]ince there is no

suggestion that different standards of judicial review

were applied for punitive and compensatory damages

before the 20th century, no effort has been made to

separate out the two classes of cases.” 512 U.S. at

423 n.2. Given the long, and seemingly undisputed,

history in which compensatory and punitive damages

were reviewed for excessiveness, and that no attempt

at differentiation was made at common law to ele-

12

vate one type of recovery for the purpose of establish-

ing a unique constitutional right, there is no basis for

separate treatment under due process. Such a dis-

tinction in the type of damages covered is unneces-

sary and improper for purposes of analyzing the ade-

quacy of procedures under the Due Process Clause.

That this Court has not squarely addressed the

issue of procedural due process with regard to com-

pensatory damages should not suggest it does not

apply. Indeed, the meaning of “due process of law”

was sparsely discussed for the first hundred years

following passage of the Fifth Amendment. Fur-

thermore, lower courts, realizing the common law

authority to overturn excessive awards, traditionally

used remittitur to accomplish this same objective.

See e.g., Crookston v. Fire Ins. Exchange, 817 P.2d

789, 802 (Utah 1991) (“After a jury returns a damage

award in a civil case, the most common way for the

losing party to challenge the amount of the award is

to move for a new trial or remittitur....”). This

Court has also stated that district courts’ “discretion

includes overturning verdicts for excessiveness and

ordering a new trial without qualification, or condi-

tioned on the verdict winner’s refusal to agree to a

reduction (remittitur).” Gasperini v. Center for Hu-

manities, 518 U.S. 415, 433 (1996) (holding that New

York’s law controlling compensatory awards for ex-

cessiveness or inadequacy can be given effect without

violating the Seventh Amendment).

The traditional review process of remittitur illus-

trates a court’s power to review the procedures used

in awarding compensatory damages, and that this

review must be protected under due process. The

fact that remittitur is used to reduce both compensa-

13

tory and punitive damages awards further undercuts

any distinction that would warrant separate consti-

tutional treatment. Similarities in how courts’ de-

termine amounts for punitive damages and non-

economic compensatory damages such as pain and

suffering also demonstrate a need for constitutional

safeguards. See Paul DeCamp, Beyond State Farm:

Due Process Constraints on Noneconomic Compensa-

tory Damages, 27 Harv. J. L. & Pub. Pol’y 231, 258-

61 (2003) (arguing that the arbitrary nature of non-

economic damages awards demand constitutional

due process protections); see also Robert Riggs, Con-

stitutionalizing Punitive Damages: The Limits of Due

Process, 52 Ohio St. L.J. 859, 907-08 (1991) (arguing

that non-economic compensatory damages and puni-

tive damages are so similar that they “cannot be ana-

lytically distinguished”). Where procedures for

awarding punitive damages parallel those for com-

pensatory recovery, there is simply no reason to cre-

ate a constitutional distinction. See Cooper Indus.,

Inc., v. Leatherman Tool Group, Inc., 532 U.S. 424,

446-47 (2001) (Ginsburg, J., dissenting) (“One million

dollars’ worth of pain and suffering does not exist as

a ‘fact’ in the world any more or less than one million

dollars’ worth of moral outrage.”).

Moreover, as this Court expressed in Haslip, the

level of discretion allowed in determining punitive

damages “is no greater than that pursued in many

familiar areas of the law as, for example, deciding...

appropriate compensation for pain and suffering or

mental anguish. As long as the discretion is exer-

cised within reasonable constraints, due process is

satisfied.” 499 U.S. at 20 (footnote omitted). Justice

Scalia, in TXO Production Corp., more directly con-

cluded this essential point: “Procedural due process

14

also requires, I am certain, judicial review of the suf-

ficiency of the evidence to sustain a civil jury verdict,

and judicial review of the reasonablenes. of jury-

awarded compensatory damages (including damages

for pain and suffering).” 509 U.S. at 471 (Scalia, J.,

concurring).

History, tradition, fundamental fairness and the

past decisions of this Court all support the conclusion

that due process requires courts to provide adequate

procedural safeguards against the risk of erroneous

deprivation of property through a compensatory

damage award inconsistent with the evidence. This

Court should, therefore, grant certiorari and remove

any doubts as to this important constitutional right.

II. ADAMAGE AWARD WITHOUT

EVIDENTIARY FOUNDATION IS

INCONSISTENT WITH DUE PROCESS.

“(T]he Due Process Clause does not permit a

State to classify arbitrariness as a virtue.” Haslip,

499 U.S. at 59. For this reason, this Court has rec-

ognized that a state may not reach decisions on mat-

ters of life, liberty or property without a basis for its

action in the evidence.

For example, in Schware v. Board of Bar Examin-

ers of the State of New Mexico, the Court found that a

state bar could not deny an applicant the opportunity

to take the bar examination when all of the evidence

produced at trial showed him to be of good moral

character, while the Board “called no witnesses and

introduced no evidence” and there was “nothing in

the record which suggests that [the applicant] has

engaged in any conduct during the past 15 years

which reflects adversely on his character.” 353 U.S.

15

232, 236, 239 (1957). This Court has also found that

a state may not imprison an individual for violating

the conditions of his probation where the record “was

so totally devoid of evidentiary support as to be inva-

lid under the Due Process Clause of the Fourteenth

Amendment.” Douglas v. Buder, 412 U.S. 430, 432

(1973) ( per curiam ); see also Superintendent, Mas-

sachusetts Correctional Institution, Walpole v. Hill,

472 U.S. 445, 455 (1985) (finding that revocation of

“good time credits” must be supported by “some evi-

dence” in order to satisfy the minimum requirements

of procedural due process).

In some instances, federal courts have reversed

compensatory damage awards purely on the basis

that the evidence was insufficient to support them,

without invoking the Due Process Clause. For ex-

ample, several courts have invalidated awards for

emotional distress stemming from alleged constitu-

tional violations when the evidence was vague and

conclusory, and did not show the need for medicine,

physical symptoms, psychological disturbance or

counseling, loss of income or pecuniary expense, or

other corroborative evidence. See Price v. City of

Charlotte, 93 F.3d 1241, 1255-56 (4% Cir. 1996) (cit-

ing Carey v. Piphus, 435 U.S. 247, 262-63 (1978);

Ramsey v. American Air Filter Co., 772 F.2d 1303,

1313 (7 Cir. 1985); Hetzel v. County of Prince Wil-

liam, 89 F.3d 169, 171-72 (4% Cir. 1996); Biggs v. Vil-

lage of Dupo, 892 F.2d 1298, 1304 (7% Cir. 1990);

Spence v. Board of Educ. of Christina Sch. Dist., 806

F.2d 1198, 1201 (3d Cir. 1986)).

Indeed, this case is reminiscent of a lack of basic

procedural rights that led the Tenth Circuit to re-

verse a district court decision upholding multi-

16

million dollar sanctions imposed by the Federal

Trade Commission. (FTC). See Federal Trade

Comm’n v. Kuykendall, 312 F.3d 1329 (10% Cir.

2002), vacated on reh’g en banc, 371 F.3d 745, 763

(2004) (agreeing with the panel that the district

court failed to set forth an adequate basis for arriv-

ing at its $39 million figure). Before the corporations

at issue presented their defense, the district court

stated that it “sees no reason why we cannot be con-

cluded with this matter by the close of business to-

day,” a statement the Tenth Circuit characterized as

“strong medicine.” Jd. at 1340. Noting the complete

lack of evidence in the record to support a $39 mil-

lion compensatory award intended for consumer re-

dress, the court stated:

Such a casual finding of millions of dollars

without one iota of explanation does not meet

the fact-finding requirement of Rule 52. The

court supplied absolutely no indication how it

arrived at this amount—no formula, no set of

guidelines, no explanation, not even the most

rudimentary reckoning of cause and effect to

demonstrate the extent and the manner in

which the consumers had been damaged. Ab-

sent any explanation whatsoever, such an

award is arbitrary and capricious.

Id. at 1342. Such a timeline and approach, the

Tenth Circuit held, “exceeds the limits of permissible

discretion and dangerously approaches a complete

violation of procedural due process.” Id.

17

Ill. WHAT DECIDING THIS CASE

WILL AND WILL NOT DO

A. This Case Presents the Opportunity to

Clarify and Reaffirm That Due Process

Does Not Permit Arbitrary Awards

If this case is permitted to stand, then it will send

a message that trial courts can act arbitrarily in

their decision making without any significant pre-

trial, post-trial, or appellate review. For example,

courts could conduct trials without instructions, al-

low only one side of a case to be heard, or permit a

$12 million award based on $12 worth of evidence or

no evidence at all as was the case here.

Where, as here, a trial court has taken a “let it all

go to the jury” approach and subsequently failed to

conduct a thorough post-trial review to identify sup-

port, or the lack thereof, for the resulting multimil-

lion-dollar award, due process requires appellate

consideration. If the West Virginia Supreme Court

of Appeals does not exercise its authority in such a

case, then it falls to this Court, as the highest au-

thority, to consider whether such an award comports

with the principles of the Due Process Clause.

“When the absent procedures would have pro-

vided protection against arbitrary and inaccurate ad-

judication, this Court has not hesitated to find the

proceedings violative of due process.” Oberg, 512

U.S. at 420 (citing Tumey v. Ohio, 273 U.S. 510

(1927); Brown v. Mississippi, 297 U.S. 278 (1936); In

re Oliver, 333 US. 257 (1948); In re Winship, 397

U.S. 358 (1970)). While this Court has found that

“[plunitive damages pose an acute danger of arbi-

trary deprivation of property” due to a jury’s wide

18

discretion in choosing amounts and the potential for

bias against big businesses, id. at 432, adequate pre-

and post-trial review equally provides procedural

safeguards against the danger of arbitrary compen-

satory damage awards.” Here, where such meaning-

ful review was not present, this Court has an oppor-

tunity to clarify that fundamental principles of due

process apply equally in such a context.

B. This Case Will Not Unduly Interfere With

State Judicial Sovereignty or Make This

Court a Final Arbiter of Every Excessive

Compensatory Damage Award

This Court may be concerned that granting cer-

tiorari in this case might result in a decision that ef-

fectively requires states that do not have an inter-

mediate appellate court to change their basic judicial

structure or renders this Court the final arbiter of

excessive compensatory damage awards. For the

reasons noted below, the Court need not fear either

result.

In addition to West Virginia, seven states, Mon-

tana, New Hampshire, Nevada, Rhode Island, South

Dakota, Vermont, and Wyoming, as well as the Dis-

trict of Columbia, have only a single appellate court

or lack an appellate division. See National Center

for State Courts, State Court Caseload Statistics,

2005: State Court Structure Charts (2006), available

at http://www.ncsconline.org/D_Research/csp/

2005_files/State%20Court%20Caseload%20Statistics

%202005.pdf (providing state court structure charts,

? Moreover, application of procedural due process princi-

ples to punitive damages would have little effect if punitive

damages are allowed to bleed into compensatory damages.

19

including a summary of each court’s jurisdiction).

According to the National Center for State Courts, of

these eight jurisdictions, only West Virginia and

New Hampshire do not provide their sole appellate

court with mandatory jurisdiction over most civil

cases. See id. While several other state supreme

courts have purely discretionary review of civil cases,

such as Tennessee, Texas, and, Wisconsin, in those

states, there is an appeal as of right in the interme-

diate appellate court. See id. In other words, West

Virginia is only one of two states in the nation in

which there is a high risk that an excessive verdict

resulting from a lack of procedural safeguards may

face absolutely no appellate scrutiny.

Nevertheless, it is not amici’s contention that

this Court needs to or should uproot West Virginia’s

appellate structure and intrude upon its sovereign

prerogative to design its judiciary. Rather, the lack

of appellate review in West Virginia underscores the

importance, indeed essential nature, of adequate

procedures at the trial court level to guard against

awards that are not tied to the evidence. Here, the

trial court’s abrogation of its role in considering the

appropriateness of summary judgment and its deci-

sion to allow a multimillion dollar award to stand,

despite expressing its concerns, demonstrates a vio-

lation of due process.

Finally, a decision in this case finding that the

West Virginia Circuit Court’s procedures were in-

adequate to satisfy due process will not place this

Court in the position of acting as a state appellate

court of last resort for excessive compensatory dam-

age awards. This is not simply a case of an excessive

compensatory award that a state court can address

20

through remittitur or other traditional means. This

is a case of a court that went against its own clearly

stated better judgment (even when there was ulti-

mately no appellate review) and permitted an award

to stand without any evidence supporting it. It pre-

sents an ideal vehicle for this Court to instruct that

the Due Process Clause requires state judiciaries to

provide meaningful procedures to guard against

awards that are not supported by the evidence.

CONCLUSION

For the foregoing reasons, amici curiae request

that this Court grant the Petition for a Writ of Cer-

tiorari in this action.

Respectfully submitted,

Victor E. Schwartz

Cary Silverman

Counsel of Record

SHOOK, HARDY & BACON L.L.P.

600 14 Street, N.W., Suite 800

Washington, D.C. 20005

(202) 783-8400

Attorneys for Amici Curiae

21

Jan S. Amundson

Quentin Riegel

NATIONAL ASSOCIATION OF

MANUFACTURERS

1331 Pennsylvania Avenue, N.W.

Suite 600

Washington, D.C. 20004

(202) 637-3055

Robin S. Conrad

NATIONAL CHAMBER LITIGATION

CENTER, INC.

1615 H Street, N.W.

Washington, D.C. 20062

(202) 463-5337

Sherman Joyce

AMERICAN TORT REFORM

ASSOCIATION

1850 M Street, N.W.

Suite 1095

Washington, D.C. 20036

(202) 682-1163

Donald D. Evans

AMERICAN CHEMISTRY COUNCIL

1300 Wilson Boulevard

Arlington, Virginia 22209

(703) 741-5000

Of Counsel

Dated: October 22, 2007