Petition for Writ of Certiorari — Consol Pennsylvania Coal Co. v. Hughes
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Supreme Court, U.S.
ca FILED
G& ke 1324 :
—fEB-1 4 1992
IN THE GARCE OF THE CLERK
Supreme Court of the United States
OcTOBER TERM, 1991
CONSOL PENNSYLVANIA COAL COMPANY, et al.,
Petitioners,
VS.
JAMES E. HUGHES, et al.,
Respondents.
PETITION FOR A WRIT OF CERTIORARI TO THE UNITED
STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
PETITION FOR A WRIT OF CERTIORARI TO
THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
JosEPH D. BECKER
Counsel of Record
BECKER, GLYNN, MELAMED &
MUFFLY
299 Park Avenue
New York, New York 1017]
(212) 888-3033
JosePpH A. KATARINCIC
KATARINCIC & SALMON
2600 CNG Tower
Pittsburgh, Pennsylvania 15222
(412) 338-2900
Attorneys for Petitioners
February 14, 1992
Questions Presented
1. Did not the Third Circuit violate the rules of Haslip!
adopted under the Due Process Clause to fortify judicial
control over excessive awards of punitive damages, and
misapply the abuse of discretion standard of review, when
it vacated a second jury’s punitive award of $674,000, and
reinstated the first jury’s punitive award of $5,500,000,
which the District Court had set aside on the ground that
the compensatory and punitive awards were “obscenely
excessive’?
bo
Does not the great disparity between two awards of
punitive damages in the same case, on the same evidence,
and on relevantly similar instructions to two juries, and
the uncertainty in the Courts of Appeals about the rela-
tion to federal procedure of Alabama rules approved in
Haslip, require that the standards of Haslip be refined
to satisfy the Due Process Clause?
3. Did not the Third Circuit fail to pay sufficient deference
to the district judge’s order setting aside the first jury's
award of compensatory damages under the federal abuse
of discretion standard of review?
4. In relation to the second jury’s award of punitive damages,
did not the District Court abuse its discretion as a mat-
ter of law, and deny due process to petitioners, in refus-
ing to charge the second jury, as required by Pennsylvania
law, that petitioners’ conduct must be found “outrageous”
as a prerequisite to an award of punitive damages?
' Pacific Mutual Life Ins. Co. v. Haslip, 111 S.Ct. 1032 (1991).
Parties to the Proceeding
The petitioners joining in this petition are: Consol Penn-
sylvania Coal Company; Greenon Coal Company (formerly
called Rheinbraun U.S. Corporation); The Monongahela Rail-
way Company; Consolidation Coal Company; Consol Land
Development Company; Maria Theresia Bergbaugesellschaft
mbH; and Rheinbraun A.G.
Other petitioners are: William Reese; David Boggs; Ewing
Pollock; Pollock, Pollock and Thomas; The Upshur Agency, Inc.?
The respondents are: James E. Hughes; Linda L. Hughes;
Dorothy Loughman; Paul H. Kent; Mabel Kent; James C. McIn-
tyre; Glenna McIntyre; Larry Levine; Dan Levine; Morris
Levine; Edward Levine; Morris Levine Enterprises, Inc.; Levine
Iron & Metal Inc.; John W. Yesenosky Jr.; Linda M. Yesenosky;
Thomas J. Allen and Estate of John T. Throckmorton; Mark
E. Headlee; and Charlotte B. Headlee.
* Pursuant to Rule 29.1, we advise the Court that the corporate petitioners
are owned as follows:
Consol Pennsylvania Coa! Company is a subsidiary of Consolidation Coal
Company.
Greenon Coal Company is a subsidiary of Consol Energy, Inc. The latter
is a subsidiary of Du Pont Energy Company, Rheinbraun A.G., and Rhein-
braun U.S. GmbH.
Du Pont Energy Company is a subsidiary of E.I. Du Pont De Nemours and
Company.
Consolidation Coal Company is a subsidiary of Consol Energy Inc. Conso
Land Development Company was merged into Consolidation Coal Company
in 1987.
Rheinbraun A.G. and Rheinbraun U.S. GmbH are subsidiaries of RWE AG
Maria Theresia Bergbaugesellschaft is subsidiary of Rheinbraun AG
The Monongahela Railway Company is a subsidiary of Consolidated Rail
Corporation
The Upshur Agency, Inc., does not have a parent corporation
TABLE OF CONTENTS
Page
Table of Authorities Vil
Opinions Below 2
Jurisdiction . 2
Constitutional Provision Involved 3
STATEMENT OF THE CASE 3
Preliminary Statement .... | 3
Proceedings in the District Court 4
a. The Factual Background 4
b. The First Trial 4
c. The Second Trial 7
Proceedings in the Third Circuit §
REASONS FOR GRANTING THE WRIT 10
Summary of Argument 10
I. THE THIRD CIRCUIT DENIED TO
PETITIONERS PROCEDURAL
SAFEGUARDS OF THE DUE PROCESS
CLAUSE WHEN IT REINSTATED THE
FIRST JURY'S EXORBITANT AWARD OF
PUNITIVE DAMAGES 1]
A. The Third Circuit Misapprehended the
Reinforcing Effect of Haslip on Judge
Teitelbaum’s Order 1]
II.
III.
iv
B. Judge Teitelbaum’s Order Was Entitled to
the Greatest Deference From the Court of
PNG. ca tes anes eee ey ec e enn |
C. Haslip Must Be Refined to Avoid
Unconstitutional Vagueness of Instructions
to Juries on Punitive Damages and to
Integrate Haslip Into Federal Procedure ..
THE THIRD CIRCUIT MISAPPLIED THE
ABUSE OF DISCRETION STANDARD TO
JUDGE TEITELBAUM’S ORDER OF A
NEW TRIAL OF COMPENSATORY
SINE 3c ps fate el ee sy 6
AT THE SECOND TRIAL THE DISTRICT
COURT ABUSED ITS DISCRETION AS A
MATTER OF LAW, AND DENIED DUE
PROCESS TO PETITIONERS, WHEN THE
COURT REFUSED TO INSTRUCT THE
JURY THAT IT MUST FIND PETITIONERS’
CONDUCT “OUTRAGEOUS” IN ORDER
TO AWARD PUNITIVE DAMAGES.......
STI 6 oo ey Cee es
RENO os ee ea Vereen
Amended Opinion of the United States Court
of Appeals for the Third Circuit, December
20, 1991 (vacating second damage award and
peinstmine TEE)... 2. se oi sins
Order of the United States Court of Appeals
for the Third Circuit. December 20. 1991
(amending Opinion of the Court filed on
September 20, 1991)
Page
13
14
16
A-]
A-65
Amended Judgment of the United States Court
of Appeals for the Third Circuit, December
20, 1991 (vacating second damage award and
sobotbatinn Geel)... s 2.55 656 509 Riek sees
Sur Petition for Rehearing of the United States
Court of Appeals for the Third Circuit,
December 20, 1991 (denial of Petition for
Rehearing filed by Respondents) ............
Memorandum Order of the United States
District Court for the Western District of
Pennsylvania, June 18, 1990 (denying post-
trial motions after second trial) .............
Memorandum Opinion of the United States
District Court for the Western District of
Pennsylvania, October 22, 1987 (ordering
partial mew tial) ...... 0.0665. es ese.
Extract from Judge Smith’s Charge to the
jury, Apell &, WOOO «0... oc. ses ioe ae
Extract from Judge Teitelbaum’s Charge to
the Jury, February 20, 1987 ..............
Page
vi
TABLE OF AUTHORITIES
Cases
American Employers Insurance Co. Southern
Seeding Services, Inc., 931 F.2d 1453 (11th
Cir. 1991) g.
Anderson v. Bessemer City, 470 U.S. 564 (1985)
Browning-Ferris Industries of Vermont, Inc. v.
Kelco Disposal, Inc., 492 U.S. 257 (1989) 13,
Cone v. West Virginia Pulp & Paper Co., 330
U.S. 212 (1947) .
Cooter & Gell v. Hartmarx Corp., 110 S. Ct.
2447 (1990)
Eichenseer v. Reserve Life Insurance Co., 934
F.2d 1377 (5th Cir. 1991)
Emerick v. United States Suzuki Motor Corp.,
750 F.2d 19 (3d Cir. 1984)
Feld v. Merriam, 506 Pa. 383, 485 A.2d 742
(1984)
George v. Intl Soc. for Krishna Consciousness of
Cal., No. DO07153 (Cal. Ct. App. Jan. 30,
1992)
H.J. Inc. v. Northwestern Bell Telephone Co.,
492 U.S. 229 (1989)
Johnson v. Hugo’s Skateway, 949 F.2d 1338 (4th
Cir. 1991)
Kirkbride vt. Lisbon Contractors, Inc., 521 Pa
97, 555 A.2d 800 (1989)
Loughman v. Consolidated - Pennsylvania Coal
Co., 740 F. Supp. 1114 (W.D. Pa. 1990)
Page
~]
1]
19
Vill
Cases Pave
Mason vt. Texaco. Inc.. O48 F.2d 1546 (lOth Cir.
1991) 19
Molzof vt. United States, 112 S.Ct. 711 (1992) 19
Pacific Mutual Life Insurance Co. v. Haslip, 11)
S. Ct. 1032 (1991) 3, 40-15
Rizzo vt. Haines, 520 Pa. 484, 555 A.2d 58 (1989) 19
Robertson Oil Co. Inc. v. Phillips Petroleum Co.,
930 F.2d 1342 (8th Cir. 1991) 13, 15
Salve Regina College v. Russell, 111 S. Ct. 1217
(1991) 17, 20
Semper cv. Santos, 845 F.2d 1233 (3d Cir. 19858) 16
Shanno v. Magee Industrial Enterprises, Inc... 856
F.2d 562 (3d Cir. 1988) 16
Tunis Bros. Co. Inc. v. Ford Motor Co., No.
90-1797 (3d Cir. Dec. 27, 1991) 15
United States v. United States Gypsum Co., 333
U.S. 364 (1948) 17
Constitution, Statutes and Rules
U.S. Const. amend. V . 3
Racketeer Influenced and Corrupt Organizations
Act, 18 U.S.C. §8§1961-68 (1985 & Supp. 1989) .
265 U.S.C. §1254(1) (1988) 3
28 U.S.C. §1291 (1988) 2
26 U.S.C. §1331 (1988)
to
1X
Fed. R. Civ. P. 52
Fed. R. Civ. P. 59 1]
Miscellaneous
Henry J. Friendly, Indiscretion About Discretion,
31 Emory L.J. 747, 759 (1982)
6A James Moore, Jo Lucas, & George Grotheer,
Moore's Federal Practice 959.08(6] (2d ed
1989)
Page
17
ee
Sag
16
No.
IN THE
Supreme Court of the United States
OctToBer TERM, 199]
CONSOL PENNSYLVANIA COAL COMPANY, et al.,
Petitioners,
VS.
JAMES E. HUGHES, et al.,
Respondents.
PETITION FOR A WRIT OF CERTIORARI TO THE UNITED
STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
PETITION FOR A WRIT OF CERTIORARI TO
THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
The petitioners joining in this petition respectfully pray that
a writ of certiorari issue to review the amended judgment and
opinion of the United States Court of Appeals for the Third
Circuit entered in this action on December 20, 1991.
Opinions Below
There have been three relevant opinions below, two by the
United States District Court for the Western District of Penn-
sylvania and one, amended and restated opinion by the United
States Court of Appeals for the Third Circuit:
1. Loughman v. Consol - Pennsylvania Coal Co., No. 83-921
(U.S.D.C.W.D.Pa., Oct. 22, 1987) (Teitelbaum, D.J.) (ordering
partial new trial) (unreported) (A-97);°
2. Loughman v. Consol - Pennsylvania Coal Co., 740
F.Supp. 1114 (W.D. Pa. 1990) (Smith, D.J.) (denying post-trial
motions after second trial) (A-75); and
3. Hughes v. Consol - Pennsylvania Coal Co., No. 90-3466
(3d Cir. Dec. 20, 1991) (Nygaard, C.J.) (vacating second damages
award and reinstating first) (amended and restated opinion)
(A-1).*
Jurisdiction
These were eight consolidated actions for fraud and conspiracy
under the Racketeer Influenced and Corrupt Organizations Act,
18 U.S.C. §§1961-1968 (1988 & Supp. 1989) (“RICO”), and at
common law. The District Court had subject-matter jurisdic-
tion under 28 U.S.C. §1331 (1988) and, as to the state law claims,
on principles of pendent jurisdiction. The Court of Appeals had
jurisdiction to hear the appeal from the final judgment of the
District Court under 28 U.S.C. §1291 (1988). The original opinion
of the Court of Appeals issued September 20, 1991, and” is
reported at 945 F.2d 594. Timely petitions for rehearing with
suggestions of rehearing en banc were filed by petitioners and
respondents. Petitioners’ petition was denied on October 23,
1991. Respondents’ petition was denied on December 20. 1991.
The amended and restated opinion and judgment of the Court
’ References to pages of the appendix are in the form “(A___”).
* The original opinion of the Third Circuit is reported at 945 F.2d 594. The
opinion of December 20, 1991, amends and restates the original opimon in
its entirety (A-1).
of Appeals were entered December 20, 1991. This petition for
a writ of certiorari was filed within 90 days of that date. Sup.
Ct. R. 13.1. This Court’s jurisdiction is invoked under 28 U.S.C.
§1254(1) (1988).
Constitutional Provision Involved
The Fifth Amendment to the United States Constitution pro-
vides in pertinent part that “[n]o person shall be. . .deprived
of life, liberty, or property, without due process of law; ....”
STATEMENT OF THE CASE
Preliminary Statement
These cases present for review, in the context of the Due Proc-
ess Clause, the failure of a United States Court of Appeals to
apply rules established by this Court for judicial supervision of
jury awards of punitive damages. Pacific Mutual Life Ins. Co.
v. Haslip, 111 S.Ct. 1032 (1991). The Courts of Appeals, generally,
have been uncertain about the application to federal procedure
of the Alabama rules approved in Haslip, and guidance by this
Court is required. See infra p. 15.
The cases also concern the misapplication by the Court of
Appeals of the “abuse of discretion” standard to the review of
a District Court’s order of a partial new trial to redetermine
damages, compensatory and punitive. The partial new trial was
granted by a highly experienced district judge because, on the
“overwhelming evidence”, the damages awarded by the first jury
were (in his extraordinary, condemnatory phrase) “obscenely ex-
cessive”. (A-98). On appeal from the judgment on the second
jury’s verdict the Court of Appeals vacated the second jury's
lesser award of damages, compensatory and punitive, and
reinstated the enormous award of compensatory and punitive
damages of the first jury.
With particular reference to punitive damages, the first jury
awarded $5,500,000. On the retrial, the second jury awarded
less than 13% of that sum, i.e., $674,000. The Third Circuit
disregarded due process requirements when it overrode the trial
judge's constitutionally-grounded authority over exorbitant
awards of punitive damages. Moreover, the remarkable
discrepancy between the two punitive awards, in the same case,
on the same evidence, and on relevantly similar instructions to
the jury, confirms that the Haslip rules must be refined.
Proceedings in the District Court
a. The Factual Background‘
In 1981, petitioners Consolidation Coal Company (“Consol”),
a coal producer based in Pittsburgh, Pennsylvania, and Rhein-
braun A.G., a coal producer of Cologne, Germany, and affiliates
(collectively, the “Consol Petitioners”), formed a joint venture
to develop coal reserves near Waynesburg, Pennsylvania. The
mine was to be located near the junction of a railroad operated
by The Monongahela Railway Company (“Monongahela”). Con-
struction of a spur on a right-of-way running from the mine to
the junction was necessary. As planned, the right-of-way would
run over largely vacant, rural parcels of land. By October 1983,
all parcels necessary for the right-of-way were purchased by the
Consol Petitioners.
In early 1983, of more than 50 selling landowners, respondents
filed eight actions in the United States District Court for the
Western District of Pennsylvania (Pittsburgh) against the Consol
Petitioners, the Monongahela, and others. The respondents alleg-
ed fraud and conspiracy under the RICO statute, 18 U.S.C.
§ §1961-68 (1988 & Supp. 1989), and at common law, perpetrated
by petitioners during negotiations for the purchase of their parcels.
The frauds alleged included false statements that only the
Monongahela, and not Consol, was involved in the purchases,
and that fiart of the purchase price would be tax-free to the sellers.
Respondents demanded compensatory and punitive damages.
b. The First Trial
The cases were consolidated and tried to a jury in early 1987.
Judge Hubert I. Teitelbaum, a judge of long experience in the
Pittsburgh federal district, presided. The trial included a jury
view of the parcels sold by each respondent, in which Judge
Teitelbaum participated.
* Summary of facts as stated by the Court of Appeals. (A-40).
~~ 7
5
With respect to respondents’ claims for punitive damages the
judge charged the first jury that if the conduct of petitioners
was found to be “outrageous” the jury could award punitive
damages “in order to punish said defendants [petitioners] for
their conduct and to deter the defendants [petitioners] and others
from the commission of like acts”. (A-127). To determine the
amount of punitive damages for which each of the petitioners
might be liable, the judge charged that the jury could consider
the character of each petitioner's act, the harm to the respon-
dent, and the “wealth” of each petitioner in order “to punish
him and deter him and others from like conduct in the future”.
(A-128). The judge added that “(t]he amount you assess as
punitive damages must bear a reasonable relationship to the
amount you choose to award as compensatory damages.” (A-128).
The first jury found most of the petitioners, including the Con-
sol Petitioners, liable on one or more claims, and awarded com-
pensatory damages aggregating $5,360,500. The jury also award-
ed punitive damages aggregating $5,500,000 against specific
petitioners, including Consol and the Monongahela.
On October 22, 1987, however, Judge Teitelbaum granted
petitioners’ motion for judgment n.ov. on the RICO claims and,
in respect of the pendent state law claims, ordered a partial new
trial of the damages issue (after respondents refused a remit-
titur), characterizing the jury’s award, twice, as “obscenely ex-
cessive.” (A-98 and A-113). He explained that the “overwhelm-
ing evidence” indicated that respondents’ properties (which the
judge himself had viewed) were worth far less than the values
found by the jury (A-110):
For example, the jury awarded the Hughes’ (Civil Ac-
tion No. 876-1678) $122,000 in damages, even though
they had purchased that same property some four
vears earlier for a mere $9,500. Dorothy Loughman
(Civil Action No. 83-921) had sold ten acres of her
property for only $800 per acre approximately six
years prior to the sale of another portion of the same
property to defendants. The jury, however, awarded
her damages amounting to approximately $100,000
per acre for the portion of her property she sold to
defendants. The Yesenoskys had listed their property
as being for sale in 1980 for $40,000. The jury awarded
the Yesenoskys $435,000 in damages for the sale of
their property to defendants less than two years later.
Judge Teitelbaum also held that respondents’ witness on real
estate valuation, Mr. Bodnar, adopted an untenable theory of
valuation. Bodnar’s method was to value the respondents’ parcels
on the basis of the enormous prices paid to the last three of 50
sellers in a linear series of parcels, purchased by the Consoi Peti-
tioners as they rushed to complete their mining project. The
judge said (A-111) that the jury
obviously relied heavily on the testimony of Mr. Bod-
nar, who explained on cross-examination that his
figures were based largely on the prices paid to three
(out of some fifty) landowners who were the last to
sell their properties for the railroad right-of-way:
Grover Phillipi ($146,670 per acre), John Culp
($75,216 per acre); and Sarah Closser ($240,108 per
acre). All other sales, except for these three, were ig-
nored by Mr. Bodnar in ascertaining the fair market
value of plaintiffs’ properties. *** Jt defies reason to
infer that these three sales, all of them by “hold-outs”,
are indicative in any way of the fair market values> ©
of the properties of those who were among the earliest
to sell. It is far more reasonable to infer that the prices
paid to Phillipi, Culp, and Closser for their proper-
ties were far in excess of their true market values -
because the defendants were operating under severe
time constraints - than it is to infer that the fair market
values of plaintiffs’ properties can be based on the
prices paid to Phillipi, Culp, and Closser. (emphasis
supplied).
The trial judge's analysis was thus founded in reason and on
inferences from the evidence that he was specially qualified to
OOOO
“I
make. As Pennsylvania law precluded an award of punitive
damages absent an award of compensatory damages, and as any
award of punitive damages could not have borne a “reasonable
relationship” to an incompetent award of compensatory
damages, the judge set aside the entire award. See infra p. Il,
n. 9.
The judge's dismissal of respondents’ RICO claims was sus-
tained in due course.°
c. The Second Trial
On March 6, 1990, a second jury trial commenced before
Judge D. Brooks Smith. The same evidence relevant to peti-
tioners’ supposed misconduct was heard by the second jury. In
his charge to the second jury on punitive damages, Judge Smith,
like Judge Teitelbaum, instructed that the purpose of an award
of punitive damages was to punish and deter, and that the jury
might take into account the wealth of petitioners (A-125). Bu’
Judge Smith refused to charge the jury that petitioners’ con-
duct must be found “outrageous” to justify punitive damages;
in his mistaken view the issue had been decided at the first trial
(see infra p. 19).’
* Judge Teitelbaum initially held that the evidence did not prove ongoing
misconduct. Respondents moved to reconsider in light of more recent Third
Circuit authority and Judge Teitelbaum vacated the RICO dismissal. After
this Court decided H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S.
229 (1989), however, the district court (Smith, D.J.) reinstated the dismissal
of the RICO claims. Loughman v. Consol Pennsylvania Coal Co., 740 F.Supp.
1114 (W.D. Pa. 1990), affd in relevant part sub. nom. Hughes v. Consol
Pennsylvania Coal Co., No. 90-3466 (3d Cir. Dec. 20, 1991) (amended opin-
ion) (A-l).
’ Judge Smith also omitted to charge that there must be a reasonable
relationship between compensatory and punitive damages (A-75). Pennsylvania
law had changed on the point between the date of Judge Teitelbaum’s charge
and Judge Smith's. See Loughman, 740 F.Supp. at 1124, citing Kirkbride v.
Lisbon Contractors, Inc., 521 Pa. 97, 555 A.2d 800 (1989) (changing former
rule) (A-86).
On April 6, 1990, on these instructions and on the same
evidence of misconduct, the second jury awarded punitive
damages of only $674,000, or less than 13% of the first jury’s
award. Compensatory damages of $4,262,677 were also awarded,
about $1.1 million less than the amount awarded by the first jury.
At the close of the second trial, petitioners moved on April
20, 1990, for judgment n.ov. and for a new trial on the ground
(among others) that they were denied due process because Penn-
sylvania law did not provide the jury with adequate standards
for awarding punitive damages.* The motion was denied by
Judge Smith. (A-88).
Proceedings in the Third Circuit
Petitioners and respondents appealed to the Third Circuit.
Petitioners contended that the awards of compensatory and
punitive damages by the second jury were unsupported by com-
petent evidence and violated the Due Process Clause.
The Court of Appeals (per Nygaard, C.J.) disregarded the
results of the second trial. Purporting to apply an “abuse of
discretion” standard of review to Judge Teitelbaum’s original
order of October 22, 1987, granting a new trial of damages, the
Third Circuit held that Judge Teitelbaum erred in setting aside
the first jury’s award of damages. The Circuit simply vacated
the second jury’s award in its entirety and reinstated the first
award, including its immense award of punitive damages.
Hughes v. Consol Pennsylvania Coal Co., No. 90-3466 (3d Cir.
Dec. 20, 1991) (amended opinion) (A-67).
With respect to the first jury’s award of compensatory
damages, the panel rejected Judge Teitelbaum’s assessment of
* Petitioners’ motion stated: “The law of Pennsylvania did not provide the jury
with sufficient guidance in determining whether to award punitive damages
(and, if so. how much) so that the jury’s award of punitive damages in this
case was purely arbitrary and violated the Defendants’ rights of due process
under the United States Constitution, as would any award of punitive damages
under the prevailing statutory scheme in Pennsylvania’. Motion of Defendant
for Judgment Notwithstanding the Verdict and for a New Trial, April 20, 1990,
at 6
the “overwhelming evidence”, and his inferences therefrom,
relating to the value of respondents’ parcels. Ignoring the trial
judge's direct knowledge of the terrain and his specification of
the trivial prices at which several of the parcels had been bought
and sold shortly before the sales to the Consol Petitioners, and
solely on the basis of a contrary inference from Bodnar’s
testimony, Judge Nygaard reinstated the first jury’s award in
the teeth of Judge Teitelbaum’s castigating repudiation of it
(A-60):
Though the district court correctly characterized
Closser, Culp and Phillipi as “hold-outs”, it neglected
to consider that plaintiffs would have demanded more
money had they known what Closser, Culp and
Phillips knew - that Consol was involved and that
Monongahela could not have condemned their prop-
erties for fixed prices. . .The district court abused its
discretion by discounting Bodnar’s testimony and set-
ting aside the first damage award.
Judge Nygaard’s assertion that the respondents would have
demanded more money had they known what the holdouts knew
was speculation unsupported by the record and contrary to fin-
dings and inferences of the trial judge based on the “overwhelm-
ing evidence”. Under the abuse of discretion standard as applied
to issues of fact a Court of Appeals may not engage in such
speculation. See infra pp. 16-17.
With respect to the punitive damages award, the Court of
Appeals also reinstated the first jury’s award of $5,500,000. For
the same conduct the second jury had awarded punitive damages
of only $674,000, less than one-eighth the first award.
The Court of Appeals did not reinstate the first jury's award
of compensatory damages and affirm the second jury’s award
of punitive damages; nor did it order a remittitur of compen-
satory or punitive damages by respondents; nor did it order a
new trial of all damages issues. Cf. American Employers Ins.
Co. v. Southern Seeding Services, Inc., 931 F.2d 1453, 1458 (11th
Cir. 1991) (affirming compensatory award but remanding
punitive award to reflect Haslip standards on record).
10
REASONS FOR GRANTING THE WRIT
Summary of Argument
These cases involve recurring issues of compelling importance
to the administration of federal justice.
First, the Court’s requirement, expressed as a matter of due
process, that there must be “scrutiny” of punitive jury awards
by the trial judge to ensure “meaningful and adequate” review,
was flouted by the Court of Appeals when it reinstated the first
jury’s colossal award of compensatory and punitive damages,
set aside by the trial judge, and disregarded the greatly reduced
award made by the second jury. The purpose of such judicial
scrutiny, after all, is to reduce the jury’s excesses. Pacific Mutual
Life Ins. Co. v. Haslip, 111 S.Ct. 1032, 1044 (1991).
Second, a Court of Appeals must ordinarily review a District
Court’s factually-grounded order of a new trial of damages under
an extremely deferential “abuse of discretion” standard. In rela-
tion to punitive damages that familiar standard is affected by
the Due Process Clause and means that when a District Court
orders a new trial of punitive damages after a fact-intensive in-
quiry, the district judge must be sustained unless wrong beyond
all question. Here, the Third Circuit ignored the principle.
Third, the Court’s resolution in Haslip of the conflict between
the old remedy of punitive damages and evolving standards of
due process must be refined. The instructions given to both juries
were relevantly similar but yielded, on the same evidence, grossly
disparate punitive awards. The disparity confirms that Penn-
sylvania jury instructions respecting punitive damages, typical
of many, are too vague to comport with procedural due proc-
ess. Further, recent, perplexed attempts by several Courts of Ap-
peals to incorporate the Alabama rules of Haslip into federal
procedure show that guidance from this Court is required.
Fourth, in relation to the first jury’s award of compensatory
damages, the Third Circuit misapplied the usual federal abuse
of discretion standard to Judge Teitelbaum’s order of a new trial,
for that order was based on a fact-intensive inquiry and should
have been paid the greatest deference.
1]
Finally, under established federal practice the second jury’s
award was flawed. The judge refused to instruct the second jury
that it must find petitioners’ conduct “outrageous” if punitive
damages were to be awarded. That failure violated Pennsylvania
law and the judge's federal duty to apply that law to the case.
I
THE THIRD CIRCUIT DENIED TO PETITIONERS
PROCEDURAL SAFEGUARDS OF THE DUE PROC.
ESS CLAUSE WHEN IT REINSTATED THE FIRST
JURY’S EXORBITANT AWARD OF PUNITIVE
DAMAGES.
A. The Third Circuit Misapprehended the Reinforc-
ing Effect of Haslip on Judge Teitelbaum’s Order.
In Haslip, 111 S.Ct. 1032, the Court held that an award of
punitive damages entails the infliction of punishment and
therefore implicates the Due Process Clause, but that due proc-
ess was observed by an Alabama state court jury’s award of
punitive damages in these circumstances:
1. Trial Judge Scrutiny: Alabama had established post-trial
procedures for scrutinizing punitive awards by the trial judge.
The trial judge was required to reevaluate the “culpability of
the defendant's conduct” and other factors to ensure that the
award was not excessive. Id. at 1044.
Here, Judge Teitelbaum, proceeding (before Haslip) under the
more general federal standard applicable to motions for a new
trial, Fed. R. Civ. P. 59, scrutinized the jury’s award of com-
pensatory damages and found it “obscenely excessive”; it was
automatic, therefore, that he must quash a punitive award at-
tached to an outrageous compensatory award.’ The Third
* Although Judge Teitelbaum did not express the point, it is implicit that the
jury’s award of punitive damages could not stand absent a compensatory
award, Emerick v. United States Suzuki Motor Corp., 750 F.2d 19, 22 (3d
Cir. 1984), and could not bear a “reasonable relationship” to an award of com-
pensatory damages that was a nullity, a relationship then required by Penn-
sylvania law. See Kirkbride v. Lisbon Contractors, Inc., 52] Pa. 97.555 A.2d
800 (1989) (changing former rule).
12
Circuit, without mention of Haslip (decided 10 months earlier),
reinstated the first jury’s award including its punitive compo-
nent and defeated Judge Teitelbaum’s constitutionally authorized
post-trial check on the jury’s extravagance.
2. Appellate Check: In Haslip, the Alabama Supreme Court
was seen to provide “an additional check on the jury’s or trial
court’s discretion” by undertaking a comparative analysis of the
award and then applying the “detailed substantive standards
it has developed for evaluating punitive awards.” Jd. at 1045 (em-
phasis supplied). In Alabama, those substantive standards in-
cluded a seven-point check list designed to ensure reasonable
punitive awards, which resulted in their reduction. /d. at 1045.
Here, by contrast, the Third Circuit, instead of acting as a
constitutional curb on the first jury’s runaway verdict (by ap-
proving or reducing the second jury’s award), gave free rein to
the first jury’s irresponsibility for no better reason than its un-
supported speculation about what respondents would have done.
See supra p. 9. This disrespect for the trial judge's constitutionally
assigned role as a check on excessive punitive awards stands at
opposite poles from Alabama practice approved in Haslip. Haslip
demanded that the second jury’s punitive award be left intact,
reduced, or remanded; it surely precluded the reinstatement of
the enormous award of the first jury.
3. Evidence of Petitioners’ Wealth: In Haslip, the Court, as
a constitutional matter, particularly approved the practice that
“any evidence of Pacific Mutual’s wealth was excluded from the
trial in accord with Alabama law.” 11] S.Ct. at 1044. In the in-
stant cases, however, both juries were instructed, in accord with
Pennsylvania law, that the wealth of the petitioners could be
taken into account by the jury in order to punish petitioners’
appropriately. (A-125 and A-128). It is a fair inference that the
first jury put heavy weight on this element, for respondents’
counsel, in closing argument to that jury on February 19, 1987,
said that “there's $3.9 billion worth of coal up there” and that
“$3.9 billion is being made every day” by the Consoi Petitioners,
an absurd notion. (Tr. 2463, 2486) (emphasis supplied).
13
Unlike the Pacific Mutual Insurance Company, which “had
the benefit of the full panoply of Alabama’s procedural protec-
tions’, 111 S.Ct. at 1046, petitioners here were not only denied
all judicial protection by the Third Circuit but suffered addi-
tional damage at its hands. That was a denial of due process.
B. Judge Teitelbaum’s Order Was Entitled to the
Greatest Deference From the Court of Appeals.
Before Haslip the Court had made it clear that, as a matter
of ordinary federal procedure, it was the duty of the district judge
to review jury awards of punitive damages and determine, by
reference to Fed. R. Civ. P. 59, whether a new trial or remit-
titur should be ordered. “The Court of Appeals should then
review the District Court's determination under an abuse of
discretion standard.” Browning-Ferris Industries of Vermont, Inc.
v. Kelco Disposal, Inc., 492 U.S. 257, 279 (1989).
The effect of Haslip on Browning-Ferris was to add the force
of the Due Process clause to the ordinary abuse of discretion
standard. That is, by requiring the district judge to check the
jury's extravagance as a constitutional matter the Court fortified
the exercise of discretion by a district judge in ordering a new
trial of punitive damages; a Court of Appeals must pay even
greater deference to such an order. If the district judge decides
that the award is excessive on the evidence and orders a new
trial (or remittitur), and appeal is eventually taken, the Court
of Appeals may, under Hasiip, act as a further check on the jury
and again reduce the award. 11] S.Ct. at 1045. But unless the
district court has (as Judge Friendly said in another connection)
“taken leave of its senses”, what the Court of Appeals may not
do under the Constitution is to reinstate the first, higher jury
verdict." See Robertson Oil Co. Inc. v. Phillips Petroleum Co.,
930 F.2d 1342, 1346-47 (8th Cir. 1991) (under Haslip reviewing
court can reduce award). The writ should be granted to establish
that principle.
* See Henry J. Friendly, Indiscretion About Discretws.. 31 Emory L.J. 747,
763 (1982).
14
C. Haslip Must be Refined to Avoid Unconstitutional
Vagueness of Instructions to Juries on Punitive
Damages and to Integrate Haslip Into Federal
Procedure.
Whether or not the rules of Haslip were violated by the Third
Circuit, these cases demonstrate that the Haslip rules require
elaboration to avoid unconstitutional vagueness and to integrate
those Alabama rules into federal procedure.
Jury instructions to determine punitive damages in Alabama
and Pennsylvania do not differ greatly (except that, as noted
above, the wealth of the defendant may not be taken into ac-
count in Alabama). In Alabama, the jury is told that the award
of punitive damages is discretionary, that the award is intended
to punish the defendant, and that the award should protect the
public by deterring the defendant and others from repeating the
wrong. Further, in fixing the amount of the award, an Alabama
jury must consider the character and the degree of the wrong
committed by the defendant. Haslip, 111 S.Ct. at 1037, n.l.
Similar instructions were given here to both Pittsburgh juries
(A-122 and A-127)." Nevertheless, on the same evidence, the sec-
ond jury awarded less than 13% of the amount awarded by the
first jury as punitive damages, i.e., $674,000 as compared with
$5,500,000. Paradoxically, the first jury was told that any
punitive award must bear a reasonable relation to the compen-
satory award but the second jury was not so instructed; the first
jury was told that petitioners’ conduct must be found to be
outrageous but the second jury was told to assume that fact.
" In addition to instructions similar to those given in Alabama, the first Penn-
sv'vania jury was told that punitive damages mav be awarded if petitioners
conduct was outrageous; the second jury was told to assume that petitioners
conduct was outrageous because of the first jury's award, a highly prejudicial
error discussed infra, p. 19. The first jury was told that there must be a
reasonable relationship between compensatory and punitive damages: the
second was not (because of an intermediate change in Pennsylvania law). See
supra p. 7, n. 7). Both Pennsylvania juries were told that they might take iato
account the wealth of petitioners (A-125 and A-128).
15
Yet, the second jury produced a punitive verdict that was a frac-
tion of the prior award.
The gross disparity between the two awards, in the same case,
on the same evidence, on a common denominator of jury in-
structions (but with additional instructions more favorable to
respondents given to the second jury) confirms that procedures
approved in Haslip and used by federal courts in Pennsylvania
(and elsewhere) are too vague to satisfy due process requirements,
as various members of the Court have suggested. See Haslip,
111 S.Ct. at 1056 (O’Connor, J., dissenting); Browning-Ferris,
492 U.S. at 280, 282 (1989) (Brennan and Marshall, JJ., con-
curring; O’Connor and Stevens, JJ., concurring in part and
dissenting in part).
Moreover, Haslip approved the constitutionality of Alabama,
viz., state, court procedures for the supervision by judges of
punitive jury verdicts; the case did not arise in a federal district
court. Although Browning-Ferris, supra at 279, requires district
judges to review punitive jury awards under Fed. R. Civ. P. 59,
the Courts of Appeals, attempting to apply the teachings of
Haslip, have been uncertain about the way in which Alabama’s
procedures should be incorporated into Fed. R. Civ. P. 59 and
federal appellate procedure. See, e.g., Tunis Bros. Co. Inc. v.
Ford Motor Co., No. 90-1797 (3d Cir. Dec. 27, 1991), 1991 U.S.
App. Lexis 30165, at *82-83 (uncertain whether Haslip requires
“reasonable relationship” between compensatory award and
punitive award); Johnson v. Hugo's Skateway, 949 F.2d 1338,
1349-53 (4th Cir. 1991) (uncertain whether Virginia standards
used at trial satisfy Haslip, remanded for district court deter-
mination of issue); American Employers Ins. Co. Southern
Seeding Services, Inc., 931 F.2d 1453, 1456-58 (11th Cir. 1991)
(remanded with instruction that district court reflect on the
record how it applied Haslip standards); Robertson Oil Co. Inc.
v. Phillips Petroleum Co., 930 F.2d 1342, 1347 (8th Cir. 1991)
(same); Eichenseer v. Reserve Life Ins. Co., 934 F.2d 1377,
1384-86 (Sth Cir. 1991) (affirming punitive award because Haslip
purportedly applied but confusing state and federal standards
of review). Indeed, even a state court has found that Haslip “offers
little guidance as to what would be necessary to render a different
16
system [than Alabama’s] unconstitutional.” George v. Int Soc.
for Krishna Consciousness of Cal., No. D007153 (Cal. Ct. App.
Jan. 30, 1992), 1992 Cal. App. Lexis 105, *115 (on remand from
this Court). The writ should be granted so that additional
guidance may be given to lower courts.
II
THE THIRD CIRCUIT MISAPPLIED THE ABUSE
OF DISCRETION STANDARD TO JUDGE
TEITELBAUM’S ORDER OF A NEW TRIAL OF
COMPENSATORY DAMAGES.
In relation to Judge Teitelbaum’s nullification of the first jury’s
award of compensatory damages, the dominant standard of
review in the Courts of Appeals is the abuse of discretion stan-
dard. 6A J. Moore, J. Lucas, & G. Grotheer, Moore’s Federal
Practice 459.08[6], at 59-177 (2d ed. 1989). In the Third Cir-
cuit the standard is plainly in force and means, in respect of
a district judge's disposition of post-trial motions attacking the
sufficiency of the evidence, that “it will not be said that a district
judge has abused its discretion if there is ‘any basis in reason
for [its] conclusions as to the weight of the evidence and injustice
of the verdict. ... ” Shanno v. Magee Industrial Enterprises,
Inc., 856 F.2d 562, 567 (3d Cir. 1988) (Sloviter, C.J., quoting
Hastie, C.J., dissenting, in Lind v. Schenley Indus., 278 F.2d
79, 91 (3d Cir.) (in banc), cert. denied, 364 U.S. 835 (1960)).”
Although the abuse of discretion standard is applied variously
according to the issue at hand, there cannot be disagreement
that, in relation to an order of a district judge founded on fac-
tual elements, the standard requires profound deference by a
Court of Appeals to the judge’s order. A trial judge's order of
a new trial of damages predicated on the judge’s analysis of the
* In the instant cases the Third Circuit flagrantly misdirected itself with respect
to its own standard of review. The only case cited for the standard is Semper
v. Santos, 845 F.2d 1233 (3d Cir. 1988) (A-59). That was an appeal from the
appellate division of the Virgin Islands District Court where the Third Cir-
cuit said that the “usual deference” paid to discretionary rulings of a district
court “is inapplicable when one appellate court reviews another”. /d. at 1235.
ee
17
evidence is such an order, for it is the decision “of the judge who
saw and heard the witnesses and has the feel of the case which
no appellate printed transcript can impart.” Cone v. West
Virginia Pulp & Paper Co., 330 U.S. 212, 216 (1947); see Ander-
son v. Bessemer City, 470 U.S. 564, 580 (1985) (acknowledging
that trial judge “is more closely in touch than the appeals court
with the milieu out of which the controversy before him arises”);
Henry J. Friendly, Indiscretion About Discretion, 31 Emory L.
J. 747, 759 (1982) (“The trial court’s direct contact with the
witnesses places it in a superior position” to determine facts
under the abuse of discretion standard).
The Court has now made it clear that “[w]hen an appellate
court reviews a district court’s factual findings, the abuse of
discretion and clearly erroneous standards are indistinguishable.”
Cooter & Gell v. Hartmarx Corp., 110 S.Ct. 2447, 2458 (1990)
(emphasis supplied). The clearly erroneous standard of Fed. R.
Civ. P. 52, the Court recalled, “requires the appellate court to
uphold any district court determination that falls within a broad
range of permissible conclusions.” Idem; accord Anderson, supra
at 574 (“[w]Jhere there are two permissible views of the evidence.
the factfinder’s choice between them cannot be clearly er-
roneous.”) Further, under the clearly erroneous rule, the trial
judge's inferences of fact are entitled to the same respect as his
factual determinations. Jd. at 580; United States v. United States
Gypsum Co., 333 U.S. 364, 394 (1948). Deference to the trial
judge is especially appropriate where he is better positioned than
the Court of Appeals to decide the issue and the issue is fac-
tually multifarious, i.e., unyielding to useful generalizations by
the appellate court. Cooter v. Gell, 110 S.Ct. at 2459-60; cf. Salve
Regina College v. Russell, 111 S.Ct. 1217, 1222 (1991) (de novo
review proper where district judge not “better positioned” to
decide issue of state law, as opposed to mixed question of law
and fact, and issue not multifarious).
Although Judge Teitelbaum’s order of a new trial of damages
was made under Rule 59, not Rule 52, his order draws strength
from Cooter & Gell. Rule 59 gave the judge broad discretion
to make a fact-intensive inquiry into the evidence of damage
18
to determine whether the award was excessive. Judge Teitelbaum
made such an inquiry, as his opinion shows. See supra pp. 5-6.
His analysis was as “fact-dependent” as a judge's inquiry into
the operative facts of a lawyer’s misconduct. Cooter & Gell, 110
S.Ct. at 2459. A highly experienced judge of the Pittsburgh
district, more in touch with the “milieu” of the controversy than
the Court of Appeals in Philadelphia, Anderson, 470 U.S. at 580,
Judge Teitelbaum heard respondents’ testimony about peti-
tioners’ conduct, saw respondents’ properties during the jury’s
view, heard their testimony as to the prices at which their prop-
erties had recently been purchased and sold, and heard the Bod-
nar theory of value (which the judge plainly thought ridiculous).
He made reasonable inferences from the evidence. See supra p.
6 (“it defies reason . . . it is far more reasonable to infer . . ..”).
Under the clearly erroneous rule his conclusion, on the “over-
whelming evidence,” that the award was “obscenely excessive”
should not have been disturbed by the Court of Appeals mere-
ly on the strength of a contrary inference from the Bodnar
testimony. See supra p. 9.
ITI
AT THE SECOND TRIAL THE DISTRICT COURT
ABUSED ITS DISCRETION AS A MATTER OF LAW,
AND DENIED DUE PROCESS TO PETITIONERS,
WHEN THE COURT REFUSED TO INSTRUCT THE
JURY THAT IT MUST FIND PETITIONERS’ CON.
DUCT “OUTRAGEOUS” IN ORDER TO AWARD
PUNITIVE DAMAGES.
The first jury’s award was rightly set aside by Judge
Teitelbaum. The second jury’s award of punitive damages was
also defective because Judge Smith failed in his federal duty to
charge the second jury that punitive damages may not be
awarded under Pennsylvania law absent “outrageous” conduct.
The Court explained in Browning-Ferris, 492 U.S. at 279, that
as a matter of federal law, a district judge reviewing an award
of punitive damages must ensure that the jury's verdict is “within
the confines set by state law.” That duty commands that the judge
19
charge the jury respecting the standards for awarding punitive
damages as required by state law. Idem. And, as discussed, the
Court held in Haslip that, as a matter of due process, the trial
judge must check the jury’s award of punitive damages for ex-
cess, which requires that he “reflect in the record the reasons
for interfering with a jury verdict, or refusing to do so, on
grounds of excessiveness of the [punitive] damages.” American
Employers Ins. Co. v. Southern Seeding Services, Inc., 931 F.2d
1453, 1457 (11th Cir. 1991) (applying Haslip and quoting rele-
vant decision of Supreme Court of Alabama).
Judge Smith ignored these principles. Pennsylvania law bars
an award of punitive damages unless the jury finds the relevant
conduct “outrageous.” Rizzo v. Haines, 520 Pa. 484, 507, 555
A.2d 58, 69 (1989); Feld v. Merriam, 506 Pa. 383, 395, 485 A.2d
742, 748 (1984). But Judge Smith charged the jury on April 2,
1990, that “you are instructed to consider only the conduct that
has previously been determined as outrageous.” (A-124) (emphasis
added). This reflected his mistaken view (expressed at the sup-
plemental pre-trial conference of March 5, 1990, and objected
to there (Tr. 34-35) and again at the charging conference of
March 29, 1990 (Tr. 2891)) that “a punitive damage claim is an
entirely separate cause of action” and that petitioners’ liability
on that “cause of action” had been determined by the prior jury.
In effect, he mistakenly directed the jury to presume that peti-
tioners’ conduct had been outrageous. See Mason v. Texaco, Inc.,
948 F.2d 1546, 1554 (10th Cir. 1991) (“A punitive damage claim
is not an independent cause of action or issue separate from the
balance of plaintiff's case. It is part and parcel of a liability deter-
mination and does not have any independent being until a jury
has decided . . . that defendant's conduct ... was gross, wilful,
wanton or malicious. . ..”).
But liability for punitive damages in Pennsylvania has always
depended (inter alia) on the “character” of the act of the defend-
ant; that requires a determination of outrageousness. Kirkbride.
521 Pa. at 102, 555 A.2d at 803; see Molzof v. United States,
112 S.Ct. 711, 715-16 (1992) (common law definition of punitive
damages focuses on nature of defendant's conduct). As the first
20
jury’s award of punitive damages had been nullified, any deter-
mination it may have made about the outrageousness of peti-
tioners’ conduct disappeared. Jt fell to the second jury to redeter-
mine the issue. Its determination to award punitive damages
required an evidentiary finding, not a presumption directed by
the judge, of outrageous conduct.
After the second jury awarded $674,000 in punitive damages,
Judge Smith denied petitioners’ motion for a new trial without
comment. In refusing to rectify his erroneous charge Judge Smith
abused his discretion on a point of law, a decision reviewable
de novo and that should have been reversed. Salve Regina Col-
lege, 111 S.Ct. at 1222. By the same token his refusal was a denial
of the due process “check” required by Haslip in that he failed
to express on the record the reasons for the denial. American
Employers, supra, at 1456-58. Although petitioners vigorously
argued the point on their appeal, Brief of Defendants-Appellees,
Nov. 8, 1990, at 66-67, the Third Circuit ignored the matter,
simply holding that respondents “clearly showed outrageous con-
duct” (A-62), as if that after-the-fact “finding” by appellate
judges could cure a jury verdict founded on a materially defec-
tive charge about an intensely factual issue.
The writ should be granted to correct an error in federal pro-
cedure highly prejudicial to petitioners, namely, the failure of
the District Court to ensure that, at the second trial, the “con-
fines” of state law applicable to punitive damages were observed,
and to give effect to the “check” on the jury required by the Due
Process Clause.
21
CONCLUSION
In reinstating the first jury’s punitive award the Third Cir-
cuit failed to appreciate that its powers of review of Judge
Teitelbaum’s order were sharply curtailed by Haslip.
The Court of Appeals also failed to pay sufficient deference
to Judge Teitelbaum’s order setting aside the compensatory
award of the first jury under the abuse of discretion standard.
Finally, Judge Smith, at the second trial, abused his discre-
tion as a matter of law in denying petitioners’ motion for a new
trial.
The writ should be granted to rectify these errors and to settle
recurring problems of federal law.
Respectfully submitted,
JosePH D. BECKER
Counsel of Record
BECKER, GLYNN, MELAMED
& MUuUFFLY
299 Park Avenue
New York, NY 10171
(212) 888-3033
JosePH A. KATARINCIC
KATARINCIC & SALMON
2600 CNG Tower
Pittsburgh, Pa. 15222
(412) 338-2900
Attorneys for Petitioners
February 14, 1992.
APPENDIX
A-1
AMENDED
Filed December 20, 199]
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 90-3466
JAMES E. HUGHES and LINDA L. HUGHES,
Appellant
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
WILLIAM REESE, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC-::
CONSOLIDATED COAL CO.;
CONSOL-LAND DEVELOPMENT Co.
MARIA THERESIA BERGBAUGESELLSCHAFT
MBH &
RHEINISCHE BRAUNKOHLENWERKE
No. 90-3467
DOROTHY LOUGHMAN,
Appellant
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
JAMES LEACH, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.;
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY;
RHEINBRAUN VERKAUFSGESELLSCHAFT, MBLT.
AND MARIA THERESE
VERKAUFSGESELLSCHAFT;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
No. 90-3468
PAUL H. KENT and MABEL KENT,
Appellants
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
——————
A-3
corporation;
JAMES LEACH, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.;
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
No. 90-3469
JAMES C. McINTYRE and GLENNA MCcINTYRE,
Appellants
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
MIKE WILSON, an individual;
JAMES LEACH, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS:
THE UPSHUR AGENCY, INC-.:;
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY;
Ad
RHEINBRAUN VERKAUFSGESELLSCHAFT, MBLT
and
MARIA THERESE VERKAUFSGESELLSCHAFT;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
No. 90-3470
LARRY LEVINE, DAN LEVINE, MORRIS LEVINE,
EDWARD LEVINE, individuals; and
MORRIS LEVINE ENTERPRISES, INC., a
corporation;
and LEVINE IRON AND METAL, INC., a
corporation,
Appellants
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
JAMES LEACH, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.;
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY;
RHEINBRAUN VERKAUFSGESELLSCHAFT, MBLT
and
re
A-5
MARIA THERESE VERKAUFSGESELLSCHAFT;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
HEINISCHE BRAUNKOHLENWERKE
No. 90-3471
DOROTHY LOUGHMAN
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation; _
JAMES LEACH, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.;
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY;
RHEINBRAUN VERKAUFSGESELLSCHAFT, MBLT
and
MARIA THERESE VERKAUFSGESELLSCHAFT;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Consol-Pennsylvania Coal Company,
Consolidated Coal Co.,
Consol-Land Development Company, and
The Monongahela Railway Company,
Appellants
No. 90-3472
DOROTHY LOUGHMAN
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
JAMES LEACH, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.;
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY;
RHEINBRAUN VERKAUFSGESELLSCHAFT, MBLT
and
MARIA THERESE VERKAUFSGESELLSCHAFT;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Rhein Braun U.S., a corporation,
Maria Theresia Bergbaugesellschaft MBH, and
Rheinische Braunkohlenwerke,
Appellants
A-7
No. 91-3473
DOROTHY LOUGHMAN
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
WILLIAM REESE, an individual;
MIKE WILSON, an individual;
JAMES LEACH, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.;
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY:
RHEINBRAUN VERKAUFSGESELLSCHAFT, MBLT
and
MARIA THERESE VERKAUFSGESELLSCHAFT;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
David Boggs, an individual,
The Upshur Agency, Inc.,
William Reese, an individual,
Mike Wilson, an individual,
Appellants
No. 90-3474
JOHN W. YESENOSKY, JR. and LINDA M.
YESENOSKY
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
WILLIAM REESE, an individual;
JAMES LEACH, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.;
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY;
RHEINBRAUN VERKAUFSGESELLSCHAFT, MBLT
and
MARIA THERESE VERKAUFSGESELLSCHAFT;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Consol-Pennsylvania Coal Company,
Consolidated Coal Company.
Consol-Land Development Company. and the
Monongahela Railway Company,
Appellants
No. 90-3475
JOHN W. YESENOSKY, JR. and LINDA M.
YESENOSKY
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
WILLIAM REESE, an individual;
JAMES LEACH, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC:;
CONSOLIDATED COAL COMPANY:
CONSOL-LAND DEVELOPMENT COMPANY:
RHEINBRAUN VERKAUFSGESELLSCHAFT, MBLT
and
MARIA THERESE VERKAUFSGESELLSCHAFT:
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Rhein Braun U.S., a corporation,
Maria Theresia Bergbaugesellschaft, MBH, and
Rheinische Braunkohlenwerke,
Appellants
A-10
No. 90-3476
PAUL H. KENT and MABEL KENT
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
JAMES LEACH, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.;
CONSOLIDATED COAL COMPANY:
CONSOL-LAND DEVELOPMENT COMPANY;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Consol-Pennsylvania Coal Company, a
corporation,
Monongahela Railway Company, a corporation,
Consolidated Coal Company,
Consol-Land Development Company,
Appellants
A-11
No. 90-3477
PAUL H. KENT and MABEL KENT
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
JAMES LEACH, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC-.;
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Rhein Braun U.S., a corporation,
Maria Theresia Bergbaugesellschaft MBH,
Rheinische Braunkohlenwerke,
Appellants
No. 90-3478
JAMES C. McINTYRE and GLENNA McINTYRE
A-12
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
MIKE WILSON, an individual;
JAMES LEACH, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.:;
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY;
RHEINBRAUN VERKAUFSGESELLSCHAFT, MBLT
and
MARIA THERESE VERKAUFSGESELLSCHAFT;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Consol-Pennsylvania Coal Company, a
corporation,
Monongahela Railway Company, a corporation,
Consolidated Coal Company,
Consol-Land Development Company,
Appellants
No. 90-3479
JAMES C. MciINTYRE and GLENNA McINTYRE
V.
7 . |
A-13
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
MIKE WILSON, an individual;
JAMES LEACH, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.;
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY;
RHEINBRAUN VERKAUFSGESELLSCHAFT, MBLT
and
MARIA THERESE VERKAUFSGESELLSCHAFT;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Rhein Braun U.S., a corporation,
Maria Theresia Bergbaugeselischaft MBH,
Rheinische Braunkohlenwerke,
Appellants
No. 90-3480
LARRY LEVINE; DAN LEVINE; MORRIS LEVINE;
EDWARD LEVINE; MORRIS LEVINE
ENTERPRISES; LEVINE IRON & METAL
wi.
A-14
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
JAMES LEACH, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.;
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY;
RHEINBRAUN VERKAUFSGESELLSCHAFT, MBLT
‘and
MARIA THERESE VERKAUFSGESELLSCHAFT;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Consol-Pennsylvania Coal Company, a
corporation,
Monongahela Railway Company,
Consolidated Coal Company,
Consol-Land Development Company,
Appellants
No. 90-3481
LARRY LEVINE; DAN LEVINE; MORRIS
LEVINE; EDWARD LEVINE; MORRIS LEVINE
ENTERPRISES; LEVINE IRON & METAL
‘V.
ata alia i i
A-15
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
JAMES LEACH, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.;
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Rhein Braun U.S., a corporation,
Maria Theresia Bergbaugesellschaft MBH,
Rheinische Braunkohlenwerke,
Appellants
No. 90-3482
JAMES HUGHES and LINDA HUGHES
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
WILLIAM REESE, an individual;
DAVID BOGGS, an individual;
A-16
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.;
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Consol-Pennsylvania Coal Company, a
corporation,
Monongahela Railway Company,
Consolidated Coal Company,
Consol-Land Development Company,
Appellants
No. 90-3483
JAMES HUGHES and LINDA HUGHES
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
WILLIAM REESE, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.;
CONSOLIDATED COAL COMPANY;
A-17
CONSOL-LAND DEVELOPMENT COMPANY;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Rhein Braun U.S., a corporation,
Maria Theresia Bergbaugesellschaft MBH,
Rheinische Braunkohlenwerke,
Appellants
No. 90-3484
THOMAS J. ALLEN
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
JAMES LEACH, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.;:
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY:
RHEINBRAUN VERKAUFSGESELLSCHAFT, MBLT
and
MARIA THERESE VERKAUFSGESELLSCHAFT;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
_eee——ee—ee——e—e——ee—eEeEeEeEeEeEe——EeEeEeEeEEeEE—eEE
A-18
Consol-Pennsylvania Coal Company, a
corporation,
Monongahela Railway Company,
Consolidated Coal Company,
Consol-Land Development Company,
Appellants
No. 96-3485
THOMAS J. ALLEN
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
JAMES LEACH, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.;
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY;
RHEINBRAUN VERKAUFSGESELLSCHAFT, MBLT
and
MARIA THERESE VERKAUFSGESELLSCHAFT;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
A-19
Rhein Braun U.S., a corporation
Maria Theresia Bergbaugesellschaft MBH.
Rheinische Braunkohlenwerke,
Appellants
No. 90-3494
DOROTHY LOUGHMAN
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation:
MONONGAHELA RAILWAY COMPANY, a
corporation;
DAVID BOGGS, an individual:
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS; |
THE UPSHUR AGENCY, INC.:
CONSOLIDATED COAL COMPANY:
CONSOL-LAND DEVELOPMENT COMPANY:
RHEINBRAUN VERKAUFSGESELLSCHAFT, MBLT
and
MARIA THERESE VERKAUFSGESELLSCHAFT:
MARIA THERESIA BERGBAUGESELLSCHAFT.
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Ewing Pollock, and Pollock, Pollock and Thomas.
Appellants
A-20
No. 90-3495
JOHN W. YESENOSKY, JR. and LINDA M.
YESENOSKY,
Appellants
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
WILLIAM REESE, an individual;
JAMES LEACH, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.:;
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY;
RHEINBRAUN VERKAUFSGESELLSCHAFT, MBLT
and
MARIA THERESE VERKAUFSGESELLSCHAFT;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
A-21
No. 90-3496
JOHN W. YESENOSKY, JR. and LINDA M.
YESENOSKY
V.
CONSOL-PENNSYLVANIA COAL COMPANY. a
corporation;
RHEIN BRAUN U.S., a corporation:
MONONGAHELA RAILWAY COMPANY. a
corporation;
WILLIAM REESE, an individual:
JAMES LEACH, an individual:
DAVID BOGGS, an individual:
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.:
CONSOLIDATED COAL COMPANY:
CONSOL-LAND DEVELOPMENT COMPANY:
RHEINBRAUN VERKAUFSGESELLSCHAFT. MBLT
and
MARIA THERESE VERKAUFSGESELLSCHAFT:
MARIA THERESIA BERGBAUGESELLSCHAFT.
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Ewing Pollock, and Pollock, Pollock and
Thomas,
Appellants
No. 90-3497
JOHN W. YESENOSKY, JR. and LINDA M.
YESENOSKY
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
MIKE WILSON, an individual;
WILLIAM REESE, an individual;
JAMES LEACH, an individual:
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.;
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY;
RHEINBRAUN VERKAUFSGESELLSCHAFT, MBLT
and
MARIA THERESE VERKAUFSGESELLSCHAFT;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Mike Wilson, Wiiliam Reese, David Boggs,
The Upshur Agency, Inc.,
Appellants
A-23
No. 90-3498
PAUL H. KENT and MABEL KENT
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN USS., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
JAMES LEACH, an individual:
DAVID BOGGS, an individual:
EWING POLLOCK, an individual, and
the law firm of POLLOCK. POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.:
CONSOLIDATED COAL COMPANY:
CONSOL-LAND DEVELOPMENT COMPANY:
MARIA THERESIA BERGBAUGESELLSCHAFT.
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Ewing Pollock, and Pollock. Pollock and Thomas.
Appellants
No. 90-3499
PAUL H. KENT and MABEL KENT
V.
A-24
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
MIKE WILSON, an individual;
WILLIAM REESE, an individual;
JAMES LEACH, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC-.;
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Mike Wilson, William Reese, David Boggs,
The Upshur Agency, Inc.,
Appellants
No. 90-3500
JAMES C. McINTYRE and GLENNA McINTYRE
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
MIKE WILSON, an individual;
A-25
JAMES LEACH, an individual:
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC-.:
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY;
RHEINBRAUN VERKAUFSGESELLSCHAFT, MBLT
and
MARIA THERESE VERKAUFSGESELLSCHAFT:
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Ewing Pollock, and Pollock, Pollock and Thomas,
Appellants
No. 90-3501
JAMES C. McINTYRE and GLENNA McINTYRE
7s
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation:
MONONGAHELA RAILWAY COMPANY, a
corporation;
MIKE WILSON, an individual:
WILLIAM REESE, an individual;
JAMES LEACH, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
A-26
THOMAS;
THE UPSHUR AGENCY, INC.;
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY;
RHEINBRAUN VERKAUFSGESELLSCHAFT, MBLT
and
MARIA THERESE VERKAUFSGESELLSCHAFT;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Mike Wilson, William Reese, David Boggs,
The Upshur Agency, Inc.,
Appellants
No. 90-3502
LARRY LEVINE; DAN LEVINE; MORRIS LEVINE;
EDWARD LEVINE; MORRIS LEVINE
ENTERPRISES; LEVINE IRON & METAL
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
JAMES LEACH, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individuai, and
the law firm of POLLOCK, POLLOCK AND
THOMAS:
THE UPSHUR AGENCY, INC.::
———
A-27
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY;
RHEINBRAUN VERKAUFSGESELLSCHAFT, MBLT
and
MARIA THERESE VERKAUFSGESELLSCHAFT;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Ewing Pollock, and Pollock, Pollock and
Thomas,
Appellants
No. 90-3503
LARRY LEVINE; DAN LEVINE; MORRIS LEVINE;
EDWARD LEVINE; MORRIS LEVINE
ENTERPRISES; LEVINE IRON & METAL
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
MIKE WILSON, an individual:
WILLIAM REESE, an individual;
JAMES LEACH, an individual:
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC-.:;
CONSOLIDATED COAL COMPANY;
A-28
CONSOL-LAND DEVELOPMENT COMPANY;
RHEINBRAUN VERKAUFSGESELLSCHAFT, MBLT
and
MARIA THERESE VERKAUFSGESELLSCHAFT;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Mike Wilson, William Reese, David Boggs,
The Upshur Agency, Inc.,
Appellants
No. 90-3504
JAMES HUGHES and LINDA HUGHES
7.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
WILLIAM REESE, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.;
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
A-29
Ewing Pollock, and Pollock, Pollock and Thomas,
Appellants
No. 90-3505
JAMES HUGHES and LINDA HUGHES
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
MIKE WILSON, an individual:
WILLIAM REESE, an individual:
DAVID BOGGS, an individual:
EWING POLLOCK, an individual. and
the law firm of POLLOCK, POLLOCK AN
THOMAS; |
THE UPSHUR AGENCY, INC.:
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Mike Wilson, William Reese, David Boggs,
The Upshur Agency, Inc.,
Appellants
A-30
No. 90-3506
MARK E. HEADLEE and CHARLOTTE B.
HEADLEE,
Appellants
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
JAMES LEACH, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.;
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY;
RHEINBRAUN VERKAUFSGESELLSCHAFT, MBLT
and
MARIA THERESE VERKAUFSGESELLSCHAFT;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
A-31
No. 90-3507
MARK E. HEADLEE and CHARLOTTE B.
HEADLEE
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
JAMES LEACH, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.;
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY:
RHEINBRAUN VERKAUFSGESELLSCHAFT. MBLT
and
MARIA THERESE VERKAUFSGESELLSCHAFT:
MARIA THERESIA BERGBAUGESELLSCHAFT.
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Consol-Pennsylvania Coa] Company, a
corporation,
Monongahela Railway Company,
Consolidated Coal Company,
Consol-Land Development Company,
Appellants
A-32
No. 90-3508
MARK E. HEADLEE and CHARLOTTE B.
HEADLEE
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
JAMES LEACH, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.;
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY;
RHEINBRAUN VERKAUFSGESELLSCHAFT, MBLT
and
MARIA THERESE VERKAUFSGESELLSCHAFT;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Rhein Braun U.S., a corporation,
Maria Theresia Bergbaugesellischaft MBH,
Rheinische Braunkohlenwerke,
Appellants
A-33
No. 90-3509
MARK E. HEADLEE and CHARLOTTE B.
HEADLEE
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY. a
corporation;
JAMES LEACH, an individual:
DAVID BOGGS, an individual:
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.:
CONSOLIDATED COAL COMPANY:
CONSOL-LAND DEVELOPMENT COMPANY;
RHEINBRAUN VERKAUFSGESELLSCHAFT, MBLT
and
MARIA THERESE VERKAUFSGESELLSCHAPFT:
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Ewing Pollock, and Pollock, Pollock and Thomas,
Appellants
A-34
No. 90-3510
MARK E. HEADLEE and CHARLOTTE B.
HEADLEE
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
MIKE WILSON, an individual;
WILLIAM REESE, an individual;
JAMES LEACH, an individuai;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.;
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY;
RHEINBRAUN VERKAUFSGESELLSCHAFT, MBLT
» and
MARIA THERESE VERKAUFSGESELLSCHAFT;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Mike Wilson, William Reese, David Boggs,
The Upshur Agency, Inc.,
_ Appellants
A-35
No. 90-3511
THOMAS J. ALLEN, Esquire, Personal
Representative of the Estate of JOHN T.
THROCKMORTON,
Appellants
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S.. a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
JAMES LEACH, an individual:
DAVID BOGGS, an individual:
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.:
CONSOLIDATED COAL COMPANY:
CONSOL-LAND DEVELOPMENT COMPANY;
RHEINBRAUN VERKAUFSGESELLSCHAFT, MBLT
and
MARIA THERESE VERKAUFSGESELLSCHAFT:
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
A-36
No. 90-3512
THOMAS J. ALLEN, Esquire, Personal
Representative of the Estate of JOHN T.
THROCKMORTON
V.
CONSOL-PENNSYLVANIA COAL COMPANY, a
corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
JAMES LEACH, an individual;
DAVID BOGGS, an individual;
EWING POLLOCK, an individual, and
the law firm of POLLOCK, POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.;
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY;
RHEINBRAUN VERKAUFSGESELLSCHAFT, MBLT
and
MARIA THERESE VERKAUFSGESELLSCHAFT;
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Ewing Pollock, and Pollock, Pollock and
Thomas,
Appellants
A-37
No. 90-3513
THOMAS J. ALLEN, Esquire, Personal
Representative of the Estate of JOHN T.
THROCKMORTON
¥,
CONSOL-PENNSYLVANIA COAL COMPANY, a
: corporation;
RHEIN BRAUN U.S., a corporation;
MONONGAHELA RAILWAY COMPANY, a
corporation;
MIKE WILSON, an individual:
WILLIAM REESE, an individual;
JAMES LEACH, an individual:
DAVID BOGGS, an individual:
EWING POLLOCK, an individual, and
the law firm of POLLOCK. POLLOCK AND
THOMAS;
THE UPSHUR AGENCY, INC.;
CONSOLIDATED COAL COMPANY;
CONSOL-LAND DEVELOPMENT COMPANY;
RHEINBRAUN VERKAUFSGESELLSCHAFT. MBLT
and
MARIA THERESE VERKAUFSGESELLSCHAFT:
MARIA THERESIA BERGBAUGESELLSCHAFT,
MBH &
RHEINISCHE BRAUNKOHLENWERKE
Mike Wilson, William Reese, David Boggs,
The Upshur Agency, Inc.,
Appellants
A-38
ON APPEAL FROM THE UNITED STATES DISTRICT
COURT FOR THE WESTERN DISTRICT
OF PENNSYLVANIA
(D.C. Civil Action Nos. 83-00921, 83-01674,
83-01675, 83-01676, 83-01677, 83-01678,
83-01679, 83-01754)
Argued January 28, 1991
Before: SLOVITER, Chief Judge; NYGAARD,
Circuit Judge and KATZ, District Judge*
~ (Opinion Filed December 20, 1991)
LOUIS M. TARASI, JR., ESQUIRE (argued)
JOSEPH J. HINCHLIFFE, ESQUIRE
Tarasi & Johnson
510 Third Avenue
Pittsburgh, PA 15219
DAVID C. HOOK, ESQUIRE
Hook & Hook
P.O. Box 792
Waynesburg, PA 15370
Attorneys for Appellants in
Nos. 90-3466, 90-3467, 90-3468,
90-3469, 90-3470, 90-3495,
90-3506, 90-3511
JOSEPH A. KATARINCIC, ESQUIRE (argued)
Katarincic & Salmon
625 Liberty Avenue
2600 CNG Tower
* Honorable Marvin Katz, United States District Judge for
the Eastern District of Pennsylvania, sitting by designation.
A-39
Pittsburgh, PA 15222
Attorney for Appeilants in
Nos. 90-3471, 90-3474, 90-3476
90-3478, 90-3480, 90-3482,
90-3484, 90-3507
JOSEPH D. BECKER, ESQUIRE (argued)
Becker, Glynn & Melamed
299 Park Avenue
New York, NY 10171
Attorney for Appellants in
Nos. 90-3472, 90-3475, 90-3477
90-3479, 90-3481, 90-3483
90-3485, 90-3508
JAMES F. MANLEY, ESQUIRE (argued)
Burns, Manley & Little
2922 Gulf Tower
Pittsburgh, PA 15219
Attorney for Appellants in
Nos. 90-3473, 90-3497, 90-3499
90-3501, 90-3503, 90-3505,
90-3510, 90-3513
KATHRYN L.SIMPSON, ESQUIRE (argued)
VINCENT J. GROGAN, ESQUIRE
Grogan, Graffam, McGinley
& Lucchino
Three Gateway Center
22nd Floor
Pittsburgh, PA 15222
Attorney for Appellants in
Nos. 90-3494, 90-3496, 90-3498
90-3500, 90-3502, 90-3504,
A-40
90-3509, 90-3512
OPINION OF THE COURT
NYGAARD, Circuit Judge.
These consolidated appeals arise from a series
of complaints filed by plaintiffs after Monongahela
Railway Company acquired their properties and
rights-of-way in trust for Consolidated Coal
Company, for it to construct and operate a 14.5
mile track from a coal mine to Monongahela’s main
line. Plaintiffs allege that defendants, Monongahela
and Consolidated Coal, among others, fraudulently
misrepresented facts to obtain favorable prices.
They sought lost profits on theories of civil
conspiracy, common law fraud, and violations of
the Racketeer Influenced and Corrupt
Organizations Act (RICO), 18 U.S.C. § 1961 et seq.
Il. FACTS AND PROCEDURE
Consolidated Coal Company (Consol) acquired
the Nineveh and Manor coai reserves located in
Greene County, Pennsylvania. To exploit these
reserves, it meeded railroad rights-of-way. In
December 1980, Consol signed a letter of intent
with Rheinische Braunkohlenwerke A.G. (RBW) to
form a joint venture to develop these mining
reserves. On June 30, 1981, their affiliates,
Consol-Pennsylvania Coal Company (Consol-PA)
and Rheinbraun U.S. Corporation, signed an
“Operating Joint Venture Agreement”. On October
29, 1981, Consol and Maria Theresia
Bergbaugesellshaft (MTB), a RBW _ subsidiary,
formed Conrhein Coal Company, a partnership.
Aad
Conrhein subleased the reserves to the joint
venture of Consol-PA and Rheinbraun U.S. These
affiliates held the reserves as tenants in common.
The coal reserves are located about 14.5 miles
from Monongahela Railroad Company's
September 30, 1981, Consol and Monongahela
Signed a “Property Acquisition Agreement”. They
agreed that Monongahela would use the railroad's
eminent domain power to acquire more than fifty
parcels of land owned by plaintiffs and other
landowners in the “Areas of Interest”. Monongahela
would hold any land it acquired in trust for
estate broker. Upshur agreed to negotiate with
plaintiffs for the needed rights-of-way.
The Rheinbraun Corporations were concerned
that Consol would be unable to purchase the
needed rights-of-way to transport the coal to the
various markets. Consequently, addenda were
year that passed before Consol obtained the
rights-of-way. If the rights-of-way were not
Purchased after five years, Rheinbraun could
withdraw enurely from the venture.
Time was crucial. The scheme to defraud
Plaintiffs unfolded as follows. Upshur agents
acquired the properties from plaintiffs “in the
name of ‘Monongahela Railroad Corporation,”
concealing the identity of the true acquirer Consol]
(which lacked condemnation power). App. at
1160A. Upshur told plaintiffs that if they refused
A-42
to sell Monongahela would exercise its power of
eminent domain and give a fixed price per acre
upon condemnation.
Following this scheme, Upshur agents
approached plaintiffs and negotiated for the
needed rights-of-way. Plaintiffs sold parcels to
Monongahela. When some plaintiffs initially
refused or hesitated, Upshur agents made
thinly-veiled threats to induce them to sell. For
example, an Upshur agent threatened to bring
condemnation proceedings against James and
Linda Hughes. The Hughes sold their 1.5 acre land
for $90,000. An Upshur agent threatened to
condemn Mark and Charlotte Headlee’s property
for $700 per acre. The Headlees sold their 26 acre
land for $168,000. An Upshur agent threatened
John and Linda Yesenosky, whose son was
afflicted with acute asthma, that trains could be
parked across their driveway. The Yesenoskys sold
their 3.6 acre land for $67,000. In some of these
instances, either Upshur agents or defendant
attorneys told plaintiffs that part of the purchase
price would be tax free.
Among the landowners, five — Grover and
Imogene Phillippi, John and Sharon Culp, and
Sarah Closser — either discovered Consol's
undisclosed role or were land speculators. Upon
the advice of their attorneys, they refused to
accept Upshur’'s original purchase offers. Because
these landowners were fully informed and on equal
footing with the defendants, Upshur agents were
forced to pay _ substantially higher prices.
Specifically, the Phillippis sold 5.2 acres for
$600,000 plus the installation of railroad siding.
The Culps sold 13.3 acres for $1 million. And
Closser sold 1.9 acres for $445,000.
A-43
On April 19, 1983, nine plaintiffs filed eight
complaints against Consol, Consol-PA, Consol
Land Development Company, Monongahela, RBW,
MTB, Ewing Pollock, Esq., his law firm, Upshur,
and Upshur agents David Boggs, William Reese
and Mike Wilson. Plaintiffs alleged violations of
RICO, civil conspiracy, and common law fraud.
One plaintiff, Dorothy Loughman, also alleged
attorney malpractice against Pollock. All eight
complaints were consolidated for trial purposes.
Defendants moved for partial summary judgment
on plaintiffs’ claim that Upshur _ agents
misrepresented Monongahela’s power of eminent
domain. They contended Monongahela had the
power to condemn plaintiffs’ properties. On August
6, 1986, the district court granted defendants’
motion, but sent the remaining claims of
fraudulent misrepresentation, RICO violations, and
civil conspiracy to the jury. Finding most of the
defendants liable, the jury awarded $5,360,500 in
compensatory damages, trebled under RICO. See
18 U.S.C. § 1964(c). It also awarded $5,500,000
in punitive damage because it found defendants
acted outrageously.
The district court believed the jury based its
compensatory award on the testimony of plaintiffs’
land valuation expert, Mr. Gary Bodnar. Bodnar
opined that the highest and best use as railroad
rights-of-way determines market value of the
properties. Because a railroad right-of-way is
commercial or industrial property, Bodnar
calculated the market value by comparing the
properties with purchase prices of other
commercial and industrial properties as well as
prices eventually obtained by Closser, the
Phillippis, and the Culps.
A-44
Defendants moved for judgment n.o.v. on all
claims. On October 22, 1987, the district court
granted defendants’ motion for the RICO claims for
it concluded plaintiffs failed to satisfy RICO’'s
“continuity” requirement. Supp. App. at 127-28. It
also set aside the compensatory damage award
because the award was “obscenely excessive.” Id.
at 123. The court suggested remittitur, but when
the parties disagreed on the amount of damages
to remit it ordered a new damages trial. Plaintiffs
moved for reconsideration of the district court's
orders. On May 17, 1988, the court reinstated the
RICO verdicts, vacating in part its October 22,
1987 grant of judgment n.o.v. On June 9, 1988,
it decided not to submit the issue of punitive
damages to a second jury.
On November 20, 1989, before the start of the
second trial, defendants moved to vacate the May
17 1988 order that vacated the judgment n.o.v. of
October 22, 1987 and reinstated the RICO claim.
On March 1, 1990, the court granted defendants’
motion to vacate the May 17, 1988 _ order,
reinstated the October 22, 1987 grant of judgment
n.o.v. on the RICO claim, and ordered retrial of
the punitive damages issue.
In the- second trial on damages, the jury award
plaintiffs $4,262,677 in compensatory damages
and $674,000 in punitive damages. The defendants
moved for judgment n.o.v., new trial, and
reargument. The _ district court denied these
motions. Plaintiffs and defendants filed timely
appeals, alleging errors at both trial.
We address these issues raised by plaintiffs: (1)
whether plaintiffs satisfied the continuity
requirement under RICO; (2) whether Upshur
agents misrepresented Monongahela’s
A-45
condemnation power; (3) whether the district court
abused its discretion by setting aside the first
damage award; (4) whether plaintiffs should be
entitled to prejudgment interest and delay
damages; and (5) whether the district court erred
by granting judgment n.o.v. on plaintiff Dorothy
Loughman’'s legal malpractice claim.
We address these issues raised by defendants:
(1) whether sufficient evidence existed to support
the first jury award of punitive damages; (2)
whether the district court erred by instructing the
jury that a misrepresentation is actionable
regardless of materiality if the misrepresentation
was made knowingly; (3) whether plaintiffs
Justiflably relied on the Upshur agents’ staternents
concerning the tax free nature of the property
transactions; and (4) whether certain comments
made by the judge in the first trial deprived
defendants of a fair trial.
II. RICO CLAIM
The district court granted defendants’ motion for
Judgment n.o.v. on the federal RICO claims
because plaintiffs failed to prove the continuity
prong of RICO’s “pattern of racketeering activity”
requirement. Memorandum Opinion of March 1,
1990 at 15 (Smith, J.). See 18 U.S.C. § 1962(c).
We will affirm.
When reviewing a judgment n.o.v. we must
construe the evidence in a light most favorable to
the non-movant and search the record for the
minimum quantum of evidence to support the jury
verdict. Burke v. Maassen, 904 F.2d 178, 18] (3c
Cir. 1990). Here we cannot find the minimum
quantum of evidence to support continuity.
A-46
We begin our analysis with the statute. RICO,
the Racketeer Influenced Corrupt Organization Act,
18 U.S.C. §§ 1961-68 (1984 & Supp. 1990),
authorizes civil suits by “[a]ny person injured in
his business or property by reason of a violation
of [18 U.S.C. § 1962].” Id. § 1964(c). To prove that
defendants violated section 1962, one must show
“a pattern of racketeering activity.” This requires
commission of “at least two acts of racketeering
activity.” Id. § 1961(5). These predicate acts
include violating federal mail and wire fraud
statutes. 18 U.S.C. §§ 1341, 1343. Section 1961's
two act requirement does not define a pattern of
racketeering activity so much as it sets a minimum
condition for such patterns to exist. HJ. Inc. v.
Northwestern Tel. Co., 492 U.S. 229, 237 (1989).
The statute does not define such a pattern.
In HJ. Inc., the Supreme Court held that a
pattern of racketeering activity requires. the
predicate acts be “related, and that they pose a
threat of continued criminal activity.” 492 U.S. at
239 (emphasis in original). Predicate acts are
related when they have “the same or similar
purposes, results, participants, victims, or
methods of commission, or otherwise _ are
interrelated by distinguishing characteristics and
are not isolated events.” Id., 492 U.S. at 240.
Because the district court granted judgment n.o.v.
on continuity grounds we will assume relatedness
and analyze continuity only. The HJ. Inc. Court
described continuity but fell short of defining it.
Continuity is a temporal concept. It is “both a
closed- and open-ended concept, referring either to
a closed period of repeated conduct, or to past
conduct that by its nature projects into the future
with a threat of repetition.” JId., 492 U.S. at 241.
A-47
If a plaintiff alleges a RICO violation over a closed
period (“closed-ended” scheme), she must prove a
series of related predicates lasting a “substantial
period of time.” Id. at 242. If, however, she alleges
a RICO violation before continuity is established
(“open-ended” scheme), she must prove a “threat
of continuity.” Id. A threat of continuity exists
when the predicate acts are a part of defendant's
“regular way of doing business.” Jd. That is,
defendant operates a “long-term association that
exists for criminal purposes.” Id.
Though the Court provides the basic structure
to analyze continuity, continuity depends
ultimately on the “specific facts of each case.” Id.
The Court openly invites lower courts to define it.
Id. at 243 (“development of these concepts must
await future cases”).
In Marshall-Siluer Constr. Co. v. Mendel. plaintiff
alleged acts of mail fraud and extortion lasting
seven months related to a scheme to force a single
business entity bankrupt. 894 F.2d 593 (3d Cir.
1990). We held that the span of seven months
showed “neither ‘long-term’ criminal conduct nor
the threat thereof.” Id. at 598.
In Banks v. Wolk, plaintiff alleged that two of
the defendants, Wolk and Weiner. misrepresented
facts to defraud him of his interest tn a single
piece of real estate. 918 F.2d 418 (3d Cir. 1990).
The injury occurred within an eight month period
and there was no threat of “future misconduct by
Wolk or Weiner.” Id. at 423. As -to this
closed-ended scheme, we held eight months was
insufficient to show conunuity. See Kehr Packages,
Inc. v. Fidelcor, 926 F.2d 1406, 1418 (3d Cir. 1991)
(“eight-month period of fraudulent activity directed
at a single entity does not constitute a pattern,
A-48
absent a threat of future criminal acts”); Hindes
v. Castle, 937 F.2d 868, 875 (3d Cir. 1991) (eight
month period failed to satisfy continuity).
Contrasting Marshall-Silver, Banks, Kehr, and
Hindes, we note that in H.J. Inc. the Court found
that violations lasting six years were sufficient to
show “substantial period of time” in a closed-ended
scheme or, alternatively, to show regular way of
doing business in an open-ended one. 492 U.S. at
250. In other circuits, only a period of years
appears substantial. See Fleet Credit Corp. v. Sion,
893 F.2d 441, 447 (1st Cir. 1990) (over four years);
Walk v. Baltimore & Ohio R.R., 890 F.2d 688, 690
(4th Cir. 1989) (ten years); Jacobson v. Cooper, 882
F.2d 717, 720 (2d cir. 1989) (unspecified “matter
of years”); Dana Corp. v. Blue Cross & Blue Shield
Mut. of N. Ohio, 900 F.2d 882, 887 (6th Cir. 1990)
(seventeen years).
After H.J. Inc., we found continuity in two cases.
Both were of the open-ended kind. That is, they
involved a future threat of RICO violations. In
Swistock v. Jones, we held that because plaintiffs
alleged future violations as to “other potential
transactions” plaintiff sufficiently raised the issue
of whether fraud was the defendant's regular way
of doing business (though the predicate acts lasted
only fourteen months). 884 F.2d 755 (3d Cir.
1989). And in Banks, we found that some of the
defendants, the Cohen brothers, used fraud as a
regular way of doing business. 918 F.2d at 424.
Thus as to the Cohen brothers, but not Wolk or
Weiner, we found continuity.
Plaintiffs identified the RICO violation as
“fraudulent misrepresentations, threats and
omissions . . . [that resulted in plaintiffs selling]
their property well below its true value.” App. at
A-49
59 (Kent's Amended Complaint, 1 45.) They alleged
violations of federal mail and wire fraud statutes,
18 U.S.C. §§ 1341, 1343, as the predicate acts
underlying RICO violations. See 18 U.S.C.
§ 1961(1). We will examine the evidence with
respect to both open- and closed-ended schemes.
As to open-ended scheme, we find no evidence
that defendants used fraud as a regular way of
doing business or formed an on-going criminal
association. Upshur threatened plaintiffs to obtain
specific parcels of property. Plaintiffs each had but
one property to sell; defendants had but one area
to acquire. There were no “potential” areas of
interest. Once defendants obtained the property,
they posed no future threat to plaintiffs or society.
The defendants’ fraud was not akin to the type
where hoodlums sell “insurance” to storekeepers
to cover them against breakage of their windows.
telling their victims they would return each month
to collect their “premiums”. H.J. Inc., 492 U.S. at
242. Theirs was akin to a one time racket to obtain
a specific bounty. We find no continuity under an
open-ended scheme.
As to closed-ended scheme, we find no evidence
of a substantial period of time. In the first trial,
Judge Teitelbaum first found no continuity and
then reversed himself. In’ the second trial, on
March 1, 1990, Judge Smith held that there was
no continuity. We agree that there was no
continuity.
Reviewing the record, Judge Teitelbaum made
the correct factual finding: Defendants’ scheme
‘lasted from July 1981 until sometime in
early-1982."” Memorandum Opinion of May 17,
1988 at 7 (Teitelbaum, J.). More precisely, Judge
Smith found the scheme lasted from June 1981 to
A-50
June 1982. Memorandum Opinion of March 1,
1990 at 13 (Smith, J.). In fact plaintiffs testified
that contacts with Upshur agents — the source of
these actions — started about September 1981
and ended in June 1982, a ten month period.
Loughman v. Consol-Pennsylvania Coal Co., 740 F.
Supp. 1114, 1120 (W.D. Pa. 1990).
All the evidence points to a short term operation.
The Property Acquisition Agreement between
Consol and Monongahela shows they anticipated
needing Upshur for only 120 days. When all the
property in the “Areas of Interest” were acquired,
Upshur was to be discharged. The agreement
shows no intent to acquire more land than
originally contemplated. It specifically links the
existing spur to all mines in the area and does
not mention the need for more construction of
spurs or taking of private property. When the
defendants acquired all the property in the areas
of interest, the fraud was complete. In _ short,
defendants worked a single-scheme, single-victim
(albeit a class of victims) operation that lasted one
year at most.
Because “duration is the sine qua non of
continuity” in a closed-ended scheme, the issue
then is whether twelve months is a substantial
period of time. Hindes, 937 F.2d at 873. In Hindes
we hinted that one year is not a substantial period
of time. Jd. at 875 (“we will not hold that although
eight months is not enough [to be a substantial
period of time], a year is”). We hold that twelve
months is not a substantial period of time.
We note that cases finding substantial period,
including H.J. Inc., dealt with fraudulent conduct
lasting years, sometimes over a decade. Such
findings of substantial time periods are consistent
A-51
with Congress’ intent to combat “long-term
criminal conduct.” HJ. Inc., 492 U.S. at 242.
Recently, we noted that “[a]lthough RICO has not
been limited to organized crime activity, we must
not overlook that it was occasioned by Congress’
perception of the danger posed by organized
crime-type offenses, which are almost by definition
continuing.” Hindes, 937 F.2d at 874.
The time period of this case belongs with those
of Marshall-Silver (seven months), Banks (eight
months), Kehr (eight months), and Hindes (eight
months). We therefore find no continuity under a
closed-ended scheme. In Hindes we declined to set
forth a “litmus test” to measure duration. Id. at
875. We still decline. We conclude only that there
is no qualitative difference between eight and
twelve months for the purposes of RICO continuity.
Ill. FRAUD UNDER PENNSYLVANIA LAW
A.
MONONGAHELA’S CONDEMNATION POWERS
Plaintiffs claimed that when seeking to acquire
the railroad rights-of-way defendants fraudulently
misrepresented, among other things, that
Monongahela had power to condemn private
Property. The district court found this
representation to be true, holding that as a matter
of law Monongahela had eminent domain powers.
It granted partial summary judgment for
defendants as to that representation, but sent
other alleged misrepresentations to the jury.
Plaintiffs appeal this grant of partial summary
Judgment. We have plenary review and will affirm.
Plaintiffs asserts that Monongahela did not have
eminent domain power for three reasons: (1)
A-52
because it lacked the Interstate Commerce
Commission's (ICC) approval to construct the new
track; (2) because there was no public use to
justify condemnation; and (3) because the track
was outside Monongahela’s chartered area.
First, we disagree with plaintiffs as to their first
reason. To begin, we note that ICC approval is
required when a rail carrier seeks to construct,
operate or acquire an additional line or extension.
49 U.S.C. § 10901(1). It, however, is not required
when a rail carrier seeks to construct, operate, or
acquire an intra-state spur. 49 U.S.C.
§ 10907(b)(1). Whether a track is a “spur” or
“extension” is a mixed question of law and fact.
United States v. Idaho, 298 U.S. 105, 109 (1936).
If the proposed track is designed to transport
goods between different points of shipment or to
invade the territory occupied by another railroad,
that track is an extension. See Texas & Pac. Ry.
v. Gulf, Colo. & Santa Fe Ry., 270 U.S. 266, 278
(1926); Nicholson v. ICC, 711 F.2d 364, 368 (D.C.
Cir. 1983), cert. denied, 464 U.S. 1056 (1984). If,
however, the track is “designed and used for
loading, unloading, switching, and other purposes
connected with, and incidental to, but not actually
and directly used for [transporting goods between
two different points of shipment],” that tract is a
spur and lies outside ICC jurisdiction. Nicholson,
711 F.2d at 367-368. Among other factors to be
considered in determining whether it is a spur are
the length of the addition; whether the proposed
addition will serve only a single customer; and
whether the carrier had been requested by the
customer to provide service. See Pennsylvania R.R.
Co. v. Reading Co., 132 F. Supp. 616, 621-22 (E.D.
Pa. 1958).
A-53
The district court correctly found that the
proposed track was a _ spur. Though a track's
designation itself does not determine its character
(extension or spur), the track in question is
sufficiently local to preclude ICC jurisdiction.
Nicholson, 711 F.2d at 368, n.12. The track runs
from the Bailey Mine in Grand Enon,
Pennsylvania, to Waynesburg. It runs only 14.5
miles.’ It is located wholly intra-state. It functions
as a route to unload and transfer shipments from
the Waynesburg line. It does not invade the
territory of another railroad. Only Monongahela
uses it. And it serves only Consol. In short. none
of its features evokes “national concern.” Texas &
Pacific, 270 U.S. at 277. The district court was
correct; ICC approval was unnecessary.
Second, we disagree with plaintiffs as to the
second reason. Plaintiffs contend that
Monongahela can only condemn for “public use.”
See U.S. Const. amends. V:; Pa. Const.. art. I,
§ 10; Id, art. X, § 4. The proposed use, they
contend, is private.
When determining what constitutes “public use,”
the Supreme Court defers to legislative decisions.
Hawati Fiousing Auth. v. Midkiff, 467 U.S. 229. 241
(1983) (Court will defer to legislative decision
regarding public use unless that decision is
unreasonable). That property is taken by eminent
1. The landowners cite Central of Georgia Ratlway, 336 I.C.C.
623 (1970) for the proposition that a 14.5 mile track could
not be a spur. In Central of Georgia Rallway, the ICC
concluded that a 14.45 mile track costing more than $3 million
was an extension. The decision was based on the length of
the track and the cost alone. We refuse to adopt this reasoning
since, a track's designation depends on Its use. not the length
and cost alone.
A-54
domain and is transferred to a private party can
still fall within the gambit of public use. This is
so even when the motive for taking is to give to a
private party. Id., 467 U.S. at 243-44. Thus, under
the United States Constitution “public use” is a
broad concept.
Pennsylvania law is much the same. A
condemning authority may only take for public
use. The legislature may not grant the condemnor
the right to take private property for private use.
See Philadelphia Clay Co. v. York Clay Co., 241
Pa. 305, 309-310, 88 A. 481, 482 (1913); Borough
of Big Run v. Shaw, 16 Pa. Commw. 623, 626,
330 A.2d 315, 317 (1975). Notwithstanding, a
taking retains its public character even when a
portion of it benefits a private party. In re Franklin
Town Project-Philadelphia, 19 Pa. Commw. 272,
280-81, 339 A.2d 885, 889, cert. denied, 423 U.S.
992 (1975). See Doman ov. Philadelphia Hous.
Auth, 331 Pa. 209, 200 A. 834 (1938).
In Pioneer Coal Co. v. Chernytree & Dixonville
R.R., the Pennsylvania Supreme Court reasoned
that public use should be broadly defined when
the use benefits the Commonwealth. 272 Pa. 43,
116 A. 45 (1922). When defendant railroad
condemned property to extend its track to reach
a coal mine, the Court found public use because
“the life, happiness and prosperity of the people of
Pennsylvania depend to a very large degree upon
getting the coal supply of the state out of the
mines, on its way to the consumer.” Id., 272 Pa.
at 52, 116 A. at 48. See Philadelphia, Wilmington
& Baltimore R.R. v. Williams, 54 Pa. 103 (1867)
(prosperity of city depended on transporting coal
by rail).
A-55
Here, the district court found public use. We
agree. The district court noted: “[Manor Reserve, |
once at full production, will produce 3,000,000
tons of coal per year and will employ 350 people.
The coal extracted from the mine has an average
sulfur content of 1.7%, a low and desirable level
that complies with emission standards generally
applicable in the United States and Europe.” Supp.
App. at 115-116. The Manor Reserve mine and the
track running to it benefit the Commonwealth's
coal mining industry and the public. That the mine
serves a private coal company does not diminish
the public value. Constructing a spur will tap vital
coal resource, provide fuel for the Commonwealth,
create jobs, and better the environment.
Last, we disagree with plaintiffs as to their third
reason. They contend that because the Manor
track runs outside Monongahela’s charter area
Monongahela lacked the power to condemn
property outside of its franchise without first
obtaining a certificate from the Commonwealth's
Public Utility Commission (PUC). See 66 Pa. Cons.
Stat. Ann. § 1104.
We need not consider this contention in light of
what happened at trial. Judge Teitelbaum
instructed the jury that “[y]ou will reach the issue
of damages only if you find that the plaintiffs have
established all of the elements of any of their
claims.” Supp. App. 218. This instruction reflects
the correct assumption that since plaintiffs had
but one property each they could have suffered as
a result of the misrepresentations only once,
regardless of the number of misrepresentations
committed. The jury found that fraud was
committed and awarded damages to plaintiffs.
—————————
A-56
Thus even if this additional misrepresentation was
made, it is irrelevant.
In sum, the district court properly granted
partial summary judgment on plaintiffs’ claim that
Upshur agents misrepresented Monongahela’s
condemnation powers.
B.
JURY INSTRUCTIONS ON FRAUDULENT
MISREPRESENTATION
The district court instructed the jury, “[i]f it is
shown that a misrepresentation was made
knowingly, then the misrepresentation need not be
material.” Supp. App. at 216. Defendants argue
that when the district court gave this instruction
it erred as a matter of law. We disagree and will
affirm. Our review of this legal issue is plenary.
Under Pennsylvania law a fraud ciaim requires
plaintiff to prov either a knowing
misrepresentation or nonprivileged failure to
disclose some existing fact. If, however, “the
misrepresentation is innocently made, then it ts
actionable only if it relates to a matter material to
the transaction involved.” Smith v. Renault, 387
Pa. Super. 29S, 305-06, 564 A.2d 188, 192 (1989)
(quoting Shane v. Hoffman, 227 Pa. Super. 176,
181-82, 324 A.2d 532, 536 (1974)), overruled on
other grounds, Alello v. Ed Saxe Real Estate, Inc.,
508 Pa. 553, 560-61, 499 A.2d 282, 286 (1985).
Thus, materiality becomes important only when
the misrepresentation was innocently made or
when it involved a privileged failure to disclose.
The district court's. instructions adequately
reflected this distinction.
A-57
Even if we held all the misrepresentations were
innocently made and materiality became a
concern, the “error” is harmless. Upshur's
misrepresentations were most material. The gross
disparity between the prices obtained by the
plaintiffs and those who knew of Consol's role
(Closser, the Phillippis, and the Culps) bespeaks
materiality. Moreover, while defendants correctly
point out that Upshur had no duty to disclose
Consol's role, they neglect to mention that Upshur
agents affirmatively misrepresented that
Monongahela was the sole principal. See Chiarella
v. United States, 445 U.S. 222, 227-228 (1980).
This representation constituted more than “mere
Silence"; it constituted active concealment. It
amounted to common law fraud. Renaut, 387 Pa.
Super. at 306, 564 A.2d at 199.
C.
JUSTIFIABLE RELIANCE ON TAX
REPRESENTATIONS
The defendants moved for Judgment n.o.v. as to
the liability based on the representation of the tax
free nature of the transactions. They claim there
was insufficient evidence for the jury to conclude
that plaintiffs justifiably relied on defendants’
representation. Because they are not tax experts,
defendants _ argue, plaintiffs should have
independently investigated the tax matter. The
district court denied the motion. We will affirm.
The same standard of review applies to this
denial of a judgment n.o.v. as it did for the denial
of the RICO judgment n.o.v.. Supra. See Kinnel v.
Mid-Atlantic Mausoleums, Inc., 850 F.2d 958, 961
(3d Cir. 1988).
A-58
Justifiable reliance on a misrepresentation is an
element of common law fraud. Klemow v. Time,
Inc., 466 Pa. 189, 197 n.17, 252 A.2d 12, 16 n.17,
cert. denied, 429 U.S. 828 (1976). Moreover,
“[w]here the means of obtaining information are
not equal the positive representations of the
person who is supposed to possess superior means
of information may be relied on.” Siskin v. Cohen,
363 Pa. 580, 70 A.2d 293 (1950) (quotation
omitted).
The Upshur agent approached plaintiff
landowners, told them that he _ represented
Monongahela, denied involvement of Consol,
offered a purchase price, threaten plaintiffs that
they would receive a lower fixed condemnation
price if they refused to accept the agent's offer,
and stated that part of the purchase price paid
would be tax free. Upshur agents possessed
superior access to information, initiated the sales
of property, and presented themselves as land
experts. Under’ these’ circumstances, the
negotiating parties did not stand on equal footing
and plaintiffs justifiably relied on the Upshur
agent's statements concerning the tax
consequences of a _ sale without making an
independent investigation.
Justiflable reliance is even more evident in the
cases where defendants’ attorneys told plaintiffs of
the tax free consequences of the sale. A lay person
may justifiably rely on a lawyer's statement of fact
or opinion of law though he knows the lawyer is
representing a client whose interest is adverse to
his own. Restatement (Second) of Torts, § 545,
comment d.
A-59
IV. DAMAGES
A.
COMPENSATORY DAMAGE AWARD
Plaintiffs contend that the district court erred by
granting a new damages trial. We agree and will
reverse. We review for an abuse of discretion.
Semper v. Santos, 845 F.2d 1233, 1236 (3d Cir.
1988).
Under Pennsylvania law, the measure of
damages for a fraud claim is the actual loss that
the fraud inflicts. Savitz v. Weinstein, 395 Pa. 173.
178 & n.2, 149 A.2d 110, 113 & n2 (1959); Peters
v. Stroudsburg Trust Co., 348 Pa. 451, 35 A.2d
341, 343 (1944): Delahanty v. First Pa. Bank, N.A.,
318 Pa. Super. 90, 117-18, 464 A.2d 1243, 1257
(1983). Actual loss equals the fair market value of
the property when sold minus the fraudulently
paid price. Stroudsburg Trust, 348 Pa. at 454, 35
A.2d at 343; Bishoff v. Valley Dairy Co., 302 Pa.
125, 153 A. 133 (1931).? The issue is whether the
actual loss should be based on the properties’ use
as agricultural lands or the highest and best use
as railroad rights-of-way.
At trial, plaintiffs’ expert, Bodnar, testified that
he valued the properties by assumting the highest
and best use parameter: that is, value as a
railroad right-of-way. To determine this value, he
considered the selling prices of the Closser, Culp,
and Phillippi parcels.
2. The defendants claim that the landowners are only entitled
to out-of-pocket losses rather than tie benefit of the bargain.
The cases cited, however, concern fraudulent
misrepresentations by a seller to a purchaser Here, we are
faced with the converse Situation.
A-60
The district court rejected Bodnar’s testimony.
Because it believed that the jury relied on Bodnar's
testimony to compute the damages, the court
rejected the jury award. It characterized Closser,
the Culps, and Phillippis as “hold-outs.” Since
prices paid to hold-outs far exceed true market
value, the court reasoned that Bodnar's valuations
do not reflect the fair market value.
Under Pennsylvania law, a property owner can
show her property's special and potential use as
a railroad’ right-of-way when she faces
condemnation. See North Shore RR. ov.
Pennsylvania Co., 251 Pa. 445, 96 A. 990 (1916);
Commonwealth Dep't of General Servs. v. Fake, 45
Pa. Commw. 46, 405 A.2d 971 (1979). To prove
highest and best use, a condemnee must show the
land is adaptable to such use and a market need
existed for such use at the time of the
condemnation. Fake, 45 Pa. Commw. at 50-51,
405 A.2d at 974. See United States v. 46,672.96
Acres of Land, 521 F.2d 13, 15 (10th Cir. 1975).
Contrary to the district court's conclusions,
Bodnar properly referred to the prices paid to the
“hold-outs.” A railroad right-of-way existed across
many of the plaintiffs’ properties long before
Upshur agents approached them. The year before
the Upshur agents offered to buy the property,
Consol approached some plaintiffs to see if they
were interested in_ selling. Thus plaintiffs’
properties were adaptable for use as railroad
rights-of-way and Bodnar properly calculated this
potential into the value.
As to fair market value, the prices paid to the
hold-outs reflect the market value. Consol needed
each and every piece of property to construct their
track. Though the district court correctly
A-61
characterized Closser. Culp and Phillippi as
“hold-outs”, it neglected to consider that plaintiffs
would have demanded more money had _ they
known what Closser. Culp and Phillippi knew —
that Consol was involved and that Monongahela
could not have condemned their properties for
fixed prices. But for the defendants’ scheme
misrepresenting the circumstances surrounding
Monongahela’s property acquisitions, plaintiffs
would have commanded higher prices. And these
prices more accurately reflect fair market value.
The district court abused its discretion by
discounting Bodnar's testimony and setting aside
the first damage award.
B.
PUNITIVE DAMAGE AWARD
The defendants contend that there was
insufficient evidence to Support the jury’ award of
punitive damages against some of the defendants.
We disagree and will affirm.
“Fraud, alone, is not sufficient” to justify an
award of punitive damages. Golomb v. Korus. 261
Pa. Super. 344, 348, 396 A.2d 430, 432 (1978).
The conduct must be outrageous for a jury to
award punitive damages. Rizzo v. Haines. 520 Pa.
484, 507, 555 A.2d 58. 69 (1989); Pittsburgh
Outdoor Adv. Co. v. Virginia Manor Apts., Inc., 436
Pa. 350, 353, 260 A.2d 801, 803 (1970). Where
the defendants are agent and principal, the agent's
conduct must be “clearly outrageous to justify the
vicarious imposition of exemplary damages upon
the principal.” Delahanty, 318 Pa. Super. at 132,
464 A.2d at 1264 (quoting Skeels v. Universal
C.I.T. Credit Corp., 335 F.2d 846, 851-52 (3d Cir.
A-62
1964)). Plaintiffs must show outrageous conduct
by a preponderance of the evidence. See Martin v.
Johns-Manwville Corp., 508 Pa. 154, 494 A.2d 1088,
1098 (1985).
Plaintiffs clearly showed outrageous conduct.
Upshur agent Boggs told the Hughes that they
would have to be out of their house within two
months though they had no interest in selling
their property. He told the Headlees: “[Y]ou forget
Consol. You are dealing with Mon railway system
now.” App. at 116A. When the Headlees expressed
concern about the proximity of the track to their
house and children, Boggs stated that if the
right-of-way were condemned, the railroad could
place the tracks within 10 feet of their home and
is under no duty to fence the track or to otherwise
provide for the safety of the Headlees’ children. We
hold that the jury could reasonably conclude that
defendants acted outrageously when they obtained
property by fraud, economic coercion, and
thinly-veiled personal threats.
i.
DELAY DAMAGES AND PREJUDGMENT
INTEREST
The district court awarded delay damages under
Pa. R. Civ. P. 238. We have plenary review and
will reverse. Rule 238 allows for interest on
compensation awards arising from “bodily injury,
death or property damage.” Because this case
involves lost profits the district court erred by
allowing them.
As for prejudgment interest, the district court
refused to award it. We agree and will affirm.
When deciding whether to award prejudgment
A-63
interest to a party, a court must consider “whether
countervailing equitable considerations militate
against such a Surcharge.” See American Mut.
Liab. Ins. Co. uv. Kosan, 635 F. Supp. 341, 346
(W.D. Pa. 1986), affd, 817 F.2d 751 (3d Cir.
1987).
In Arkla Exploration Co. vy. Boren, the court of
appeals refused to award prejudgment interest
where the plaintiff did not preserve the issue
under Fed. R. Civ. P. 5] at the time the district
court instructed the jury on the amount of
damages to be entered Should they choose to
return a liability verdict. 41] F.2d 879, 883-884
(8th Cir. 1969).
Likewise plaintiffs failed to preserve the issue
here. Plaintiffs first moved for prejudgment interest
in June 1990, seven years after filing this action
in federal court. This was too late. Plaintiffs
explain this delay by noting that the district court
awarded them delay damages under Pa. R. Civ. P.
238. Since American Enka Co. v. Wicaco Mach.
Corp. prevents a party from obtaining both delay
damages and prejudgment interest. plaintiffs argue
that they were forced to rely on the court's award
of delay damages and _ could not request
prejudgment interest. 686 F.2d 1050, 1057 (3d
Cir. 1982). This decision was imprudent. Plaintiffs
Should have moved for both remedies at the outset
and let the court decide which to grant. We hold
that plaintiffs’ untimely request for prejudgment
interest constitutes a countervailing equitable
consideration militating against such a surcharge.
V. LEGAL MALPRACTICE
Plaintiff Dorothy Loughman claims that the
district court erred when it granted Attorney Ewing
? we
A-64
Pollock judgment n.o.v. on her legal malpractice
action. We agree and will reverse.
To establish legal maipractice under
Pennsylvania law, plaintiffs must show three
elements: (1) employment of the attorney or other
basis for a duty owed to the client; (2) failure of
the attorney to exercise ordinary skill and
knowledge; and (3) the attorney's negligence
proximately caused damage to the client. Rizzo,
520 Pa. at 499, 555 A.2d at 65 (quoting Schenkel
v. Monheit, 266 Pa. Super. 396, 405 A.2d 493, 494
(1977)). Viewing the evidence in a light most
favorable to Loughman, we conclude that the
evidence was sufficient to support a finding of legal
malpractice.
Loughman owned 50.79 acres of land in the area
of interest. An Upshur agent approached her and
claimed that he represented Monongahela. He
offered to purchase her property for $60,000.
Loughman rejected the offer. The agent threatened
that Monongahela would use its condemnation
authority to take a 13 acre right-of-way for $1000
per acre. If Monongahela condemned the 13 acres,
most of Loughman’s property would be rendered
inaccessible.
The same day Loughman telephoned her
attorney Pollock. She had known Pollock for about
forty-two years, and he had handled legal matters
for her and her family. At that time Pollock was
working for Monongahela, unbeknownst to
Loughman. Loughman explained the situation, and
Pollock told her not to worry because Monongahela
would be fair. He also told her she did not need
an attorney to negotiate with the Upshur agent.
Under these’ circumstances, we _ conclude
sufficient evidence exists to find an attorney-client
A-65
relationship, lack of ordinary care, and proximate
cause. When Loughman called Pollock. an
attorney-client relationship was formed. She called
him to seek his legal advice. He accepted this offer
and readily gave advice. That Pollock previously
represented her only furthers this conclusion.
When Pollock told her that Monongahela would be
fair without knowing what price had been offered.
and when he failed to tell her Consol was involved
and he represented Consol, Pollock failed to
exercise ordinary skill and knowledge. Since
Loughman testified that she agreed to sell only
after she had consulted with Pollock, his advice
and representations proximately caused her lost
profits. Therefore the district court erred by failing
to uphold the jury verdict on malpractice?
VI. DISTRICT COURTS REMARKS
Upshur agents contend the district court
deprived them of a fair trial by calling them liars.
Specifically, they complain about the district
court's remarks that they “lied” if they represented
3. The defendant attorneys argue that there is no evidence
that Pollock fraudulently misrepresented Monongahela’s
condemnation powers to Dorothy Loughman, made any
misrepresentations concerning the role of Consol or any other
defendant in the transaction. or told her that a portion of the
purchase price would be tax free.
Notwithstanding these arguments, the requisite minimum
quantum of evidence supports the Jury verdict against Attorney
Pollock. Pollock told Loughman that Monongahela would treat
her fairly without knowing the offered price for her parcel.
Furthermore, he failed to disclose his representation of the
defendants although he had a duty to do so. This evidence
adequately supports a jury finding that Pollock committed
fraud in his dealings with Loughman.
A-66
that property could be condemned for a fixed price.
We disagree and will affirm.
In American Home _ Assur. v. Sunshine
Supermarket, we stated:
A federal judge is permitted to summarize and
comment upon the evidence . . . . The court's
comments, however, may not confuse or mislead
the jury, or become so one-sided as to assume
an advocate’s position.
753 F.2d 321, 327 (3d Cir. 1985). Here, the district
court merely characterized the great weight of the
testimony and drew a correct conclusion. If the
district court's comments confused or misled the
jury, we still find no prejudicial error for the judge
cured any error. He instructed the jury that only
its decision counts and that it does not “have to
be influenced” by anything he thinks or says.
VII. CONCLUSION
We conclude that the district court erred by
setting aside the first damage award; the first
award of punitive damages was. adequately
supported by the record; plaintiff landowners are
not entitled to either prejudgment interest or delay
damages; the district court properly granted
judgment n.o.v. on the RICO claim since the
continuity requirement was not satisfied; the
Upshur agents’ representation of Monongahela’s
condemnation power was a true statement; the
district court properly instructed the jury as ‘o the
law of misrepresentation; the plaintiffs could have
justifiably relied on the Upshur agents’ statements
concerning the tax free nature of the property
transactions; the district court erred by granting
judgment n.o.v. on landowner Loughman’s legal
ft
A-67
malpractice claim; and the district court's remark
did not deprive defendants of a fair trial. We will
vacate the second damage award and reinstate the
first award returned by the jury.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
Jor the Third Circutt
- A-68
Dated: December 20, 199]
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Nos. 90-3466, 90-3467, 90-3468, 90-3469,
90-3470, 90-3471, 90-3472, 90-3473, 90-3474,
90-3475, 90-3476, 90-3477, 90-3478, 90-3479,
90-3480, 90-3481, 90-3482, 90-3483, 90-3484,
90-3485, 90-3494, 90-3495, 90-3496, 90-3497,
90-3498, 90-3499, 90-3500, 90-3501, 90-3502,
90-3503, 90-3504, 90-3505, 90-3506, 90-3507,
90-3508, 90-3509, 90-3510, 90-3511, 90-3512.
90-3513,
JAMES E. HUGHES, ET AL,
Appellant
¥,
CONSOL-PENNSYLVANIA COAL COMPANY,
ETC., ET AL
ON APPEAL FROM THE UNITED STATES DISTRICT
COURT FOR THE WESTERN DISTRICT
OF PENNSYLVANIA
(D.C. Civil Action Nos. 83-00921, 83-01674.,
83-01675, 83-01676, 83-01677, 83-01678,
83-01679, 83-01754)
‘Argued January 28, 199]
|.
A-69
Before: SLOVITER, Chief Judge; NYGAARD.
Circuit Judge and KATZ, District Judge*
ORDER
The Opinion of the Court filed on the 20th day
of September, 1991, is amended as reflected in the
attached Opinion.
/s/ Richard L. Nygaard
Circuit J udge
* Honorable Marvin Katz, United States District Judge for the
Eastern District of Pennsylvania, sitting by designation.
A-70
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 90-3466
JAMES E. HUGHES and LINDA L. HUGHES,
Appellant
Vv.
CONSOL~- PENNSYLVANIA COAL COMPANY , @t al.
(OTHER CAPTIONS OMITTED]
ON APPEAL FROM THE UNITED STATES
DISTRICT COURT FOR THE WESTERN
DISTRICT OF PENNSYLVANIA
(D.C. Civil Action Nos. 83-00921,
83-01674, 83-01675, 83-01676, 83-01677
83-01678, 83-01679, 83-01754)
Present: Sloviter, Chief Judge, aard
Circuit Judge, and Katz, District Judge
AMENDED JUDGMENT
Honorable Marvin Katz, United
States District Judge for the
Eastern District of
Pennsylvania, sitting by
designation.
A-71
These causes came on to be
heard on the records from the United
States District Court for the Western
District of Pennsylvania and were argued
by counsel January 28, 1991.
; On consideration whereof, this
Court hereby holds that the said
District Court erred by setting aside
the first damage award; the first award
of punitive damages was adequately
Supported by the record; plaintiff
landowners are not entitled to either
prejudgment interest or delay damages;
the district court Properly granted
judgment n.o.v. on the RICO claim since
the continuity requirement was not
Satisfied; the Upshur agents!
representation of Monongahela's
condemnation power was a true statement;
the district court properly instructed
the jury as to the law of
A-72
misrepresentation; the plaintiffs could
have justifiably relied on the Upshur
agents' statements concerning the tax
free nature of the property
transactions; the district erred by
granting judgment n.o.v. on landowner
Loughinan's legal malpractice claim; and
the district court's remark did not
deprive defendants of a fair trial.
Accordingly, it is now here ordered and
adjudged that the judgments of the said
District Court appealed here are vacated
as to the second damage award and the
causes are remanded to the said District
Court with instruction to reinstate the
first awards returned by the jury. All
of the above in accordance with the
opinion of this Court.
ATTEST:
CLERK
Dated: December 20, 1991
A-73
Dated: December 20, 199]
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Nos. 90-3466, 90-3467, 90-3468. 90-3469,
90-3470,
90-3475,
90-3480,
90-3485,
90-3498,
90-3503,
90-3508,
90-3471,
90-3476,
90-3481,
90-3494,
90-3499,
90-3504,
90-3509,
90-3472,
90-3477,
90-3482,
90-3495,
90-3500,
90-3505,
90-3510,
90-3513,
90-3473,
90-3478,
90-3483,
90-3496,
90-3501,
90-3506,
90-3511,
90-3474,
90-3479,
90-3484,
90-3497,
90-3502,
90-3507,
90-3512,
V.
JAMES E. HUGHES, ET AL.
Appellant
CONSOL-PENNSYLVANIA COAL COMPANY,
ZIC., ET AL
BEFORE: SLOVITER, Chief Judge, NYGAARD.,
Circult Judge and KATZ, District Judge*
SUR PETITION FOR REHEARING
The
petition
for
panel
rehearing
appellants/cross-appellees in the above-entitle
filed
* Honorable Marvin Katz, United States District Judge for the
Eastern District of Pennsylvania, sitting by designation.
A-74
case having been submitted to the judges who
participated in the decision of this court and no
judge who concurred in the decision having asked
for rehearing, the petition for panel rehearing is
denied, but the opinion is amended as reflected in
the attached.
By the Court,
/s/ Richard L. Nygaard
Circuit Judge
Dated: December 20. 199]
A-75
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
DOROTHY LOUGHMAN, et al.,
Plaintiffs,
Vv.
CONSOL-PENNSYLVANIA COAL CO., et al.,
Defendants.
Civil Action Nos. 83-921, 83-
1674, 83-1675, 83-1676, 83-
1677, 83-1678, 83-1679, & 83-
1754.
MEMORANDUM ORDER
This court conducted a new
trial in these consolidated cases, on
damages only, in March, 1990. The par=-
ties have filed various’ post-trial
motions, which we address here seriatinm.
As a preliminary matter, however, plain-
tiffs have moved to strike defendants’
post-trial motions as exceeding the
A-76
scope of the retrial or for having been
waived by defendants. We have addressed
only motions relevant to the second
trial. In that regard, we find that
defendants adequately have preserved
these points at trial, with one excep-
tion noted below. The motion to strike
is denied.
eo Defendants’ Motions for JNOV
and New Trial
Defendants Consol Pennsylvania
Coal Company, Consolidation Coal
Company, Consol Land Development
Company, The Monongahela Railway
Company, Rheinbraun U.S. Corporation,
Rheinische Braunkohlenwerke A.G., and
Marie Theresa Bergbaugesellschaft MBH
(the "Coal Company defendants") move for
a judgment notwithstanding the verdict
on grounds that plaintiffs introduced
A-77
insufficient evidence at trial to sup-
port a finding of any damages, compensa-
tory or punitive. The standard for
evaluating a judgment notwithstanding
the verdict is whether the evidence and
justifiable inferences most favorable to
the prevailing party afford any rational
basis for the verdict. Bhaya_v.
Westinghouse Elec. Corp., 832 F.2d 258,
259 (3d Cir.1987) cert. denied, 109
S.Ct. 782 (1989). Where the evidence is
contradictory, a judgment notwithstand-
ing the verdict is inappropriate.
Bonjorno v. Kaiser Aluminum & Chemical
Corp., 752 F.2d 802 (3d Cir. 1984),
cert. denied, 477 U.S. 908 (1986) .°
The Third Circuit has explained
the JNOV standard as follows:
([SJince the credibility of
witnesses is peculiarly for
the jury, it is an invasion
Footnote cont’d. on next page
A-78
In these cases, plaintiffs
presented expert testimony concerning
the fair market value of their proper-
ties which would support the jury’s
Footnote cont’d. from preceding page
of the jury’s province to
grant a new trial merely be-
cause the evidence was
sharply in conflict. The
trial judge, exercising a
mature judicial discretion,
should view the verdict in
the overall setting of the
trial; consider the character
of the evidence and the conm-
plexity or simplicity of the
legal principles which the
jury was bound to apply to
the facts, and abstain from
interfering with the verdict
unless it is quite clear that
the jury has reached a seri-
ously erroneous result. The
judge’s duty is essentially
to see that there is no mis-
carriage of justice. If con-
vinced that there has been,
then it is his duty to set
the verdict aside; otherwise
not.
Lind v. Schenley Industries, Inc.,
278 F.2d 79, 89 (3d Cir.), cert.
denied, 364 U.S. 835 (1960).
A-79
verdict. Therefore, we deny the motion
for JNOV.
The Coal Company defendants
also seek a new trial on several
grounds. First, defendants claim that
the amount of damages set by the jury is
SO excessive as to warrant a remittitur
or, in the alternative, a new trial. An
order directing plaintiffs to remit a
portion of the verdict in excess of the
maximum amount Supportable by the evi-
dence or, if remittitur is refused, to
Submit to a new trial is the proper
procedure in situations where no clear
Judicial error or “pernicious influence"
can be identified but where the verdict
is so large as to Shock the conscience
of the court. Kazan v. Wolinski, 721
F.2d 911, 914 (2a Cir. 1983). In light
of the evidence presented at trial, we
cannot say the size of the verdict here
is shocking.
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Next, defendants allege that
certain evidentiary errors by this court
necessitate a new trial. In particular,
defendants attack the court’s decision
to admit into evidence the testimony of
plaintiffs’ real estate experts and the
testimony of David Hook, an attorney
involved in negotiations with defendants
on behalf of some other property sell-
ers, not plaintiffs. We already have
addressed the admissibility of plain-
tiffs’ experts’ testimony by denying
defendants’ motions in limine. See
Loughman v. Consol. Pa. Coal Co., et al,
No. 83-921, slip op. at 7-9 (W.D. Pa.
January 31, 1990). We reiterate only
that the Federal Rules of Evidence es-
tablish a liberal policy of permitting
expert testimony. In that defendants
did not challenge the qualifications of
plaintiffs’ experts and had ample oppor-
A-81
tunity to introduce their own experts on
the issue of fair market value, we see
no error in our decision to admit the
testimony of plaintiffs’ experts.
Likewise, we see no error in
allowing David Hook to testify about
certain conduct of defendants which was
consistent with or similar to the con-
duct of defendants vis-a-vis the plain-
tiffs in this case, such information
being relevant to plaintiffs’ fraud
Claims. Testimony by Mr. Hook outside
the scope of similar or consistent con-
duct was merely cumulative in nature and
created no prejudice to defendants.
Defendants allege that plaint-
iffs’ counsel’s closing argument was so
inflammatory as to support the need for
anew trial. In that regard, defendants
allege that counsel made references to
evidence not of record, that he made
inappropriate references to some of
A-82
defendants’ nationalities, and that he
improperly argued the finding of liabil-
ity by the previous jury. After plain-
tiffs’ counsel’s closing and upon objec-
tions of defendants, this court deliv-
ered a curative instruction to the jury.
A new trial may be ordered
where counsel engages in improper con-
duct having a prejudicial effect on the
jury. Whether there is_ prejudice
depends on whether there is a reasonable
probability that the jury’s verdict was
influenced by the conduct in question.
Northeast Women’s Center, Trice . ¥.
McMonagle, 689 F.Supp. 465, 471 (E.D.
Pa. 1988), aff’d in relevant part, re-
manded on other grounds, 868 F.2d 1342
(3d Cir. 1989). In light of the cura-
tive instruction delivered to the jury,
we find no reasonable probability that
the jury was influenced improperly by
counsel’s comments.
A-83
Defendants have challenged the
sufficiency of the jury charge, con-
plaining that it lacked an appropriate
instruction concerning nominal damages
and vicarious liability and alleging
that it was generally confusing to the
jury. As for the lack of an instruction
On nominal damages, there was never a
request concerning such a charge and
therefore we find any objection now to
its absence to be untimely. Concerning
the jury instruction on agency and
vicarious liability, the court included
Sufficiently clear instructions on these
legal issues and we find defendants
Suffered no prejudice on this point.
Finally, we detected no confusion gener-
ally on the jury’s part, nor did counsel
complain that the charge was potentially
confusing, even though counsel were
presented with a copy of the charge well
A-84
before it was delivered orally to the
jury.
Finally, defendants have
raised two due process arguments’ in
support of their new trial motion.
First, they complain that with regard to
the claims for punitive damages the
retrial improperly bifurcated the
liability and amount of damages issues.
At the first trial, the jury found by
special interrogatory that defendants’
conduct was outrageous, and that defen-
dants were liable for punitives.
Because a RICO claim remained in the
case at that time, Judge Teitelbaum’s
order vacating the damage amounts did
not expressly address punitives, the
Court having determined that the treble
damage provision of RICO precluded the
punitives. At the time of retrial, the
RICO claims having been dismissed by our
Order of March 1, 1990, we determined
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that Judge Teitelbaum’s Order directing
that the first jury’s calculation of
damages was excessive required a retrial
Of all damages issues. We see no error
in retrying the amount Of punitives
again, and in particular, we find that
no prejudice to defendants resulted
Since the collective Sum of punitives
assessed at the second tria] represented
more than a four million dollar reduc-
tion from the amount assessed at the
first trial.
Defendants’ second due process
argument is that Pennsylvania law pro-
vides insufficient guidance to juries in
calculating punitive damage awards. We
do not recollect defendants previously
raising this objection, either in formal
motions or in the conferences concerning
the jury instructions. Although defen-
dants have not expounded on the legal
A-86
basis for this argument in the form of a
memorandum or in the motion itself, we
presume that defendants are in effect
challenging the Pennsylvania Supreme
Court’s recent holding that the amount
of punitive damages need not bear a
reasonable relationship to compensatory
damages awarded in a particular case.
Kirkbride v. Lisbon Contractors, Inc.,
521 Pa. 97, 555 A.2d 800 (1989).
Kirkbride may have eliminated one stan-
dard for evaluating punitive damages;
however, we find that juries in
Pennsylvania still have’ sufficient
guidelines by which .to calculate the
amount of punitive damages to be
assessed, if any. The relevant factors,
set forth in the Restatement of Torts
(Second), have been adopted by the
Pennsylvania courts and were included in
this court’s jury instructions in the
instant cases:
A-87
In assessing punitive damages,
the trier of fact can properly
consider the character of the
defendant’s act, the nature
and extent of the harm to
plaintiff that the defendant
caused or intended to cause
and the wealth of the defendant.
Restatement (Second) of Torts
§908 (2) (1979). Accord Kirkbride, 521
Pa. at 100, 555 A.2d at 802; Chuy v.
Phil. Eagles Footbal] Club, 595 F.2a
1265, 1277 (3d Cir. 1979). Where the
amount of punitive damages is so dispro-
portionate in light of these factors
that it shocks the court’s sense of
Justice, the court may, in its discre-
tion, remit the damages to a more rea-
sonable amount. Kirkbride, 521 Pa. at
104, 555 A.2d at 803-04.
In light of the circumstances
in the trial of these Cases, we find
that defendants’ due process rights were
adequately protected.
A-88
For the foregoing reasons, the
post-trial motions filed by the Coal
Company defendants are denied.
Defendants Ewing Pollock,
Pollock Pollock & Thomas, the Upshur
Agency, Inc., David Boggs, Mike Wilson
and William Reese have also filed post-
trial motions for judgment notwithstand-
ing the verdict and for a new trial.
These motions present us with nothing
substantially different from the argu-
ments made by the coal company defen-
dants; therefore, we also will deny the
other defendants’ motions for JNOV and
for a new trial.
A-89
II. Plaintiffs’ Motion to Impose Pre-
judgment Interest and To Impose
Delay Damages
Plaintiffs have requested both
statutory delay damages and common law
prejudgment interest. The result of
granting both kinds of interest would be
duplication of damages, which
Pennsylvania law prohibits. Dean Witter
Reynolds, Inc. v. Genteel, 346 Pa.
Super. 336, 499 A.2d 637 (1985), alloca-
tur denied, 514 Pa. 635, 522 A.2da 1105
(1987) and 514 Pa. 639, 523 A.2da 346
(1987); American Enka Co. v. Wicaco
Mach. Corp., 686 F.2d 1050, 1057 (3d
Cir. 1982). Whether plaintiffs are
entitled to one or the other type of
interest is discussed below.
A-90
A. Delay Damages
Plaintiffs seek delay damages
under Rule 238 of the Pennsylvania Rules
of Civil Procedure. Contrary to plain-
tiffs’ interpretation of the record,
this Court has not ruled on this issue
previously. In addressing the post-
trial motions from the first trial,
Judge Teitelbaum held that delay damages
were appropriate. Loughman v. Consol
Pa. Coal Co. et al., No. 83-921 slip op.
at 4 (W.D. Pa. October 22, 1987). Our
analysis of the case law leads us to the
opposite conclusion and we will deny
plaintiffs’ motion for delay damages.
Rule 238 provides for
mandatory interest on compensatory dam-
age awards arising from bodily injury,
death or property damage, which interest
is to be calculated from the date of the
complaint. Plaintiffs’ damages do not
A-91
arise from bodily injury, death or prop-
erty damage. These cases do not present
the kind of damage to tangible property
anticipated by Rule 238. They arise
from fraud in the making of contracts.
We find them to be tort cases and Simi-
lar to an action for tortious interfer-
ence with a contract in that they allege
lost profits from the sale of property.
Rule 238 does not apply to cases involv-
ing lost profits or income. Butler v.
Flo-Ron Vending Co., 383 Pa. Super. 633,
655, 557 A.2a 730, 741 (1989), allocatur
denied, Pa. » 567 A.2da 650
(1989); Temporaries Inc. v. Krane, 325
Pa. Super. 103, 115, 472 A.2d 668, 674
(1984); Contractor Utility Sales Cos. Vv.
Certain-Teed Corp., 748 F.2d Ba51,. 1157
(7th Cir. 1984) (applying Pennsylvania
law) (Dumbauld, J.), cert. denied, 470
U.S. 1029 (1985). Plaintiffs’ motion
for delay damages is denied.
A-92
B. Prejudgment Interest
Plaintiffs also seek common
law prejudgment interest.
Common law pre-judgment
interest is based on the prin-
ciple of compensation and the
understanding that a plaintiff
wrongfully deprived of a sum of
money is not made whole unless the
delay in recovery is accounted for.
* * *
. . « in Pennsylvania common
law damages for delay are re-~-
coverable in tort actions when
the amount is liquidated or
capable of mathematical ascer-
tainment.
American Enka Co. v. Wicaco Mach. Corp.,
686 F.2d at 1056, 1057. Prejudgment
interest could be appropriate in these
cases because the amount of plaintiffs’
damage was ascertainable by reference to
the fair market value of the properties
sold.
A-93
The decision to award damages
in delay and the rate of interest is in
the discretion of the trial court. Sack
v. Feinman, 495 Pa. 100, 432 A.2da 971
(1981); Ambromovage v. United Mine
Workers of America, 726 F.2d 972, 981
(3d Cir. 1984). Accord Levy v. First
Pennsylvania Bank, N.A., 338 Pa. Super.
73, 84, 487 A.2da 857, 863 (1985) .°
There are four factors to consider when
contemplating an award of prejudgment
interest:
1) whether the claimant has been
less than diligent in prose-
cuting the action;
Contrary to defendants’ posi-
tion that only the jury can
grant prejudgment interest,
we are satisfied that the
trial court may mold the ver-
dict to include it. Verner
v. Shaffer, 347 Pa. Super.
206, 211, 500 A.2da 479, 482
(1985).
A-94
2) whether the defendant has been
unjustly enriched;
3) whether an award would be com-
pensatory; and
4) whether countervailing equita-
ble considerations militate
against such a surcharge.
American Mut. Liability Ins. Co. Vv.
Kosan, 635 F.Supp. 341, 346 (W.D. Pa.
1986) (Weber, J.), aff’d w/O Op., $17 F.
2a 751 (3d Cir. 1987); Pension Benefit
Guaranty Corp. v. Greene, 570 F. Supp.
1483, 1503 (W.D. Pa. 1983), aff’d w/o
op., 727 F.2d 1100 (3€4 Cir.}), G@xrt.
denied, 469 U.S. 820 (1984).
Plaintiffs have been diligent
in pressing their claims, having filed
them within a year of the last land
transaction in question. Given both
juries’ determinations concerning lia-
bility and damages, the second and third
factors favor a grant of prejudgment
interest.
A-95
With respect to the fourth
factor, defendants have raised the issue
of waiver by contending that plaintiffs
did not seek common law prejudgment
interest prior to the post-trial motion
Stage of this litigation. Our review of
the record indicates that plaintiffs did
not seek common law prejudgment interest
in their complaints (including original
and amended complaints), in their pre-
trial calculations of damages or even in
their post-trial motions filed after the
first trial in 1985.°
Having failed to preserve this
issue during seven years of litigation,
we find that plaintiffs’ request for
Plaintiffs sought Rule 238
delay damages after the first
trial, which request was
originally denied but then
was granted upon reconsidera-
tion.
EE
A-96
prejudgment interest at this juncture is
untimely. Arkla Exploration Co. v.
Boren, 411 F.2d 879, 883-84 (8th Cir.
1969) (no entitlement to prejudgment
interest where plaintiff did not pre-
serve issue). The equities clearly
militate against granting interest, and
plaintiffs’ motion for common law pre-
judgment interest is denied.
For the foregoing reasons, all
post-trial motions filed by defendants
and plaintiffs are denied.
BY THE COURT,
/s/ D. Brooks Smith
D. Brooks Smith
United States District
Judge
DATE: June 18, 1990
cc: All Counsel of Record
A-97
IN THE UNITED STATES DISTRICT COURT FOR
THE WESTERN DISTRICT OF PENNSYLVANIA
CIVIL ACTION NO.
83-921
DOROTHY LOUGHMAN, Plaintiff,
Vv.
CONSOL~ PENNSYLVANIA COAL CO., et al.,
Defendants.
(CTHER CAPTIONS OMITTED]
MEMORANDUM OPINION
Judgment previously was
entered in favor of Plaintiffs and
against defendants in each of the above-
Captioned cases after completion of a
jury trial.
Several motions presently are
before the Court.
All defendants have filed
motions for judgment notwithstanding the
verdict (JNOV) or, in the alternative,
for a new trial. JNovV will be granted
A-98
for all defendants with respect to the
claims that they violated 18 U.S.C. §§
1962(c) and (qd). JNOV will not be
granted, howver, with respect to the
claims for common law fraud -= and
conspiracy to defraud. In addition,
because the Court finds that the damages
awarded to plaintiffs are obscenely
excessive and contrary to the great
weight of the evidence concerning
damages, unless plaintiffs agree to a
remittitur defendants will be granted a
new trial limited to the issue of
damages to be awarded to plaintiffs.
This Court previously had
denied plaintiffs' motion for an award
of delay damages pursuant to Pa.R.C.P.
238, 42 Pa.C.S.A. (Purdon's 1987).
Plaintiffs have filed a motion for
reconsideration. The Court has
reconsidered and now finds that
plaintiffs are entitled to delay
A-99
damages. In the event that plaintiffs
do agree to a remittitur, delay damages
are to be included in that amount.
Defendants have argued that
Civil Action No. 83-1754 should be
dismissed because the plaintiffs named
therein - Carolyn Schultz, Coleen Abel,
and Beth Meighen - are not the real
parties in interest in that case.
Defendants are correct in maintaining
that these individuals are not the real
parties in interest. Even so, Civil
Action No. 83-1754 will not be
dismissed. Rather, Plaintiffs will be
given ninety (90) days in which to
substitute the real party in interest.
Defendant Upshur Agency, Inc.
has filed a motion to compel plaintiffs
to satisfy any judgment against it. The
motion will be denied.
Finally, plaintiffs have
petitioned for an award of attorney's
A-100
fees, costs, and expenses. The motion
will be denied in light of the granting
of JNOV for the defendants with respect
to 18 U.S.C. §§ 1962(c) and (d).
I.
The standard to be applied
when considering a motion for JNOV is a
familiar one. Such a motion may be
granted only when, without considering
the credibility of the evidence, there
can be but one reasonable conclusion as
to the proper judgment. JNOV may not be
granted, however, when there is
conflicting evidence, or even
insufficient evidence, to conclusively
establish the movant's case. See 5A J.
Moore and J. Desha Lucas, Moore's
Federal Practice 4 50.07[2] (2d ed.
1986).
A-101
Plaintiffs Claimed, among
other things, that defendants had
violated 18 U.S.c. §§ 1962(c) and (qd).
18 U.S.C. § 1962(c) provides
that
It shall be unlawful for any
person employed by or
associated with any enterprise
engaged in, or the activities
Of which affect, interstate or
foreign commerce, to conduct
Or participate, directly or
indirectly, in the conduct of
such enterprise's affairs
through a pattern of
racketeering activity
Proof of a violation of ae. U.8.6.4-%
1962 (c) requires a showing of (1)
conduct (2) of an enterprise (3) through
a pattern (4) of racketeering activity.
see Sedima S.P.L.R. vy. Imrex Co.,
v8. , 87 L.Ed.2a 346, 358-59
(1985).
18 U.S.C. § 1961(1) defines
"racketeering activity" as including a
long list of specified state and federal]
criminal offenses, including mail fraud
A-102
(18 U.S.C. § 1341) and wire fraud (18
U.S.C. § 1343).
A "pattern" of racketeering
activity is defined at 18 U.S.C. §
1961(5) as requiring "at least two acts
of racketeering activity" within a
specified period of time. Beyond this,
however, the statute itself says nothing
concerning whether anything further is
required for a "pattern" of rackeeting
activity.
Although certain comments in
Sedima unquestionably are dicta, they
very strongly suggest that something
more than just two racketeering acts is
required for a "pattern" of racketeering
activity for purposes of RICO. The
Court noted that the above definition of
"pattern":
requires at least two acts of
racketeering activity...not
that it "means" two such acts.
The implication is that while
two such acts are necessary,
A-103
they may not be sufficient.
Indeed, in common parlance two
of anything do not generally
form a pattern.
Sedima, ¥.8. at » Mn. 14, 87
L.Ed.2d at 358, nm. 14.
The Court then considered the
legislative history of RICO to ascertain
what else is required for a "pattern" of
racketeering activity:
The legislative history
Supports the view that two
isolated acts of racketeering
activity do not constitute a
pattern. As the Senate Report
explained: "The target of
(RICO) is thus not sporadic
activity. The infiltration of
legitimate business normally
requires more than one
‘racketeering activity' and
the threat of continuing
activity to be effective. It
is this factor of ccentinuity
plus relationship which
combines to produce a
pattern." S.Rep.No. 91-617,
p. 158 (1969) (emphasis
added). Similarly, the
sponsor of the Senate bill,
after quoting this portion of
the Report, pointed out to his
colleagues that "([t)he term
‘pattern' requires the showing
of a relationship... So,
therefore, proof of two acts
A-104
of racketeering activity,
without more, does not
establish a pattern...." 116
Cong.Rec. 18940 (1970)
(Statement of Sen. McClellan).
See also id., at 35193
(statement of Rep. Poff) (RICO
"not aimed at the isolated
offender") ; House Hearings, at
665.
Sedingn, ._ U.S. Ot —. BM. 16, OF
L.Ed.2d at 358-359, n. 14.
Finally, the Court looked to
another provision of the same bill for
further illumination:
Significantly, in defining
"pattern" ina later provision
of the same, bill Congress was
more enlightening: "criminal
conduct forms a pattern if it
embraces criminal acts that
have the same or. similar
purposes, results,
participants, victims, or
methods of commission, or
otherwise are interrelated by
distinguishing characteristics
and are not isolated events."
18 U.S.C. § 3575(e). This
language may be useful in
interpreting other sections of
the Act.
Cf. Janelli v. United States,
420 U.S. 770, 789, 95
S.Ct. 1284, 1295, 43 L.Ed.2d
616 (1975).
A-105
Many courts that have been
confronted with questions concerning
whether more than just two predicate
acts are required for a "pattern" of
racketeering activity have Capitalized
on the above remarks in Sedima that
proof of a "pattern" also requires a
showing that the racketeering acts were
continuous and related. See, e.g.,
Superior Oil Co. v. Fulmer, 785 F.2d
252, 257 (8th Cir. 1986); also Torwest
DBC, Inc. v. Dick, 810 F.2d 925, 928
(10th Cir. 1987).
Unfortunately (and not
surprisingly), Sedima does not indicate
how this additional requirement of
"continuity plus relationship" is to be
understood. In particular, the
continuity requirement has caused
considerable difficulty. Those courts
that have attempted to capitalize on the
remarks in Sedima are in general
A-106
agreement that a plaintiff must
demonstrate some facts from which at
least the threat of "ongoing illegal
conduct" may be inferred. A scheme to
achieve a single, discrete objective,
without more, does not create a threat
of ongoing activity because the scheme
will terminate when that objective has
been achieved. See Towest DBC, 810 F.2d
at 928-929." Put another way, a scheme
must be "open-ended" in some
demonstrable way - e.g., in time, or in
those whom it will victimize, or in the
means employed to further the objectives
of the scheme - in order for it to be
continuous.
JNOV will be granted for all
defendants and against all plaintiffs
But see United States v.
Ianello, 808 F.2d 184, 189-
193 (2d Cir. 1986) fora
contrary view.
a
A-107
with respect to 18 U.S.C. § 1962(c)
because plaintiffs failed to offer any
proof from which it reasonably could be
inferred that defendants engaged in a
"pattern" of racketeering activity for
RICO purposes, as that term just has
been construed. More precisely,
plaintiffs have not offered any evidence
which could be taken as showing that the
alleged scheme in which defendants were
engaged was continuous - FP ongoing.
The evidence presented by
Plaintiffs at most showed only that the
So-called "schemé" of the defendants had
but a single, discrete objective --
namely, to purchase the right-of-way
needed to build a rail line. Such a
scheme was not open-ended. It had a
discrete temporal ending-point. The
Scheme was completed and Came to an end
once the necessary properties were
acquired. The scheme also was self-
areca cece areata
A-108
limiting in its scope. It involved only
a discrete number of properties
necessary to complete the right-of-way.
Such self-imposed limitations were
inherent to the scheme as depicted by
plaintiffs.
Il.
As was noted previously,
plaintiffs also claimed that defendants
had violated 18 U.S.C. § 1962(d), which
provides that:
It shall be unlawful for any
person to conspire to violate
any of the provisions of
subsections (a), (b), or (c)
of this section.
The object of a RICO
conspiracy must be to violate a
substantive RICO provision. See United
States v. Hampton, 786 F.2d 977, 978
(10th Cir. 1986). Proof that a
defendant violated 18 U.S.C. § 1962(d)
by conspiring to violate 18 U.S.C. §
A-109
1962(c) requires more than proof that
the defendant merely conspired to commit
the predicate offenses necessary to
establish a "pattern." Rather, it must
be shown that the defendant conspired to
"participate...in the conduct of such
enterprise's affairs through a pattern
of racketeering activity." United
States v. Elliott, 571 F.2d 880, 903
(Sth Cir. 1978); also Medallion Tv
Enterprises v. SELECTV, ine., 627 F.
Supp. 1290, 1301 (C.D. Cal. 1986).
Not only did plaintiffs fail
to produce evidence which could support
the inference that defendants engaged in
a "pattern" of racketeering activity,
they also failed to produce evidence
which could support the inference that
defendants conspired to participate in
the conduct of the affairs of an
enterprise through a atte of
racketeering activity. JINOV therefore
A-110
also will be granted for all defendants
and against all plaintiffs with respect
to 18 U.S.C. § 1962(d).
JNOV will not, however, be
granted with respect to plaintiffs'
remaining claims that defendants
committed common law fraud and conspired
to commit common law fraud. fThere is
evidence which could support’ these
claims.
The overwhelming evidence
indicates that plaintiffs' properties
were worth far less than those values
awarded by the jury. For example, the
jury awarded the Hughes' (Civil Action
No. 876-1678) $122,000 in damages, even
though they had purchased that same
property some four years earlier for a
mere $9,500. Dorothy Loughman (Civil
Action No. 83-921) had sold ten acres of
her property for only $800 per acre
approximately six years prior to the
A-111
Sale of another portion of the same
property to defendants. The jury,
however, awarded her damages amounting
to approximately $100,000 per acre for
the portion of her property she sold to
defendants. The Yesenoskys had listed
their property as being for sale in 1980
for $40,000. The jury awarded the
Yesenoskys $435,000 in damages for the
Sale of their property to defendants
less than two years later.
The problem is not confined
Only to the damages awarded to these
particular plaintiffs. As was pointed
out, the jury obviously relied heavily
on the testimony of mr. Bodnar, who
explained on cross-examination that his
figures were based largely on the prices
paid to three (out of some fifty)
landowners who were the last to sell
their properties for the railroad right-
Of-way: Grover Phillipi ($146,670 per
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acre); John Culp ($75,216 per acre); and
Sarah Closser ($240,108 per acre). All
other sales, except for these three,
were ignored by Mr. Bodnar in
ascertaining the fair market value of
plaintiffs' properties.
Iii.
A new trial may be ordered
should the trial court find that the
damages awarded by the jury are grossly
excessive. See 6A J. Desha_ Lucas,
Moore's Federal Practice § 59.08[6] (3d
ed. 1987).
The jury awarded the following
compensatory damages: to Dorothy
Loughman (Civil Action No. 83-921) it
awarded $1,450,000; to John and Linda
Yesonosky (Civil Action No. 83-1674) it
awarded $435,000; to Paul and Mabel Kent
(Civil Action No. 83-1675) it awarded
$747,500; to James and Glenna McIntyre
A-113
(Civil Action 83-1676) it awarded
$48,000; to Morris Levine Enterprises it
awarded $775,000 and to Levine Iron and
Metal (Civil Action No. 83-1677) it
awarded $438,000; to James and Linda
Hughes (Civil Action No. 83-1678) it
awarded $122,000; to Mark and Charlotte
Headlee (Civil Action No. 83-1679) it
awarded $895,000; and to Carolyn
Schultz, Colleen Abel, and Beth Meighen,
the heirs of John T. Throckmorton (Civil
Action No. 83-1754), it awarded
$450,000. Such damages are obscenely
excessive and are against the great
weight of the’ evidence concerning
damages.
For all practical purposes,
the sole evidence concerning the fair
market values of plaintiffs' properties
came from Mr. Gary Bodnar, plaintiffs'
expert witness. A comparison of the
damages awarded with those figures
A-114
propounded by Mr. Bodnar leaves one with
the inescapable impression that the jury
relied almost entirely on his testimony
in determining damages.
It defies reason to infer that
these three sales, all of them by "hold-
outs", are indicative in any way of the
fair market values of the properties of
those who were among the earliest to
sell. It is far more reasonable to
infer that the prices paid to Phillipi,
Culp, and Closser for their properties
were far in excess of their true market
values - because the defendants were
operating under severe time constraints
- than it is to infer that the fair
market values of plaintiffs' properties
can be based on the prices paid to
Phillipi, Culp, and Closser.
A court is not required to
order a new trial when it finds that th
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