Reply Brief — Honda Motor Co. v. Oberg

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No. 94-1890

In the Supreme Court of the United-States—----——

OCTOBER TERM, 1994

HONDA MoToR Co., LTD.; HONDA R & D Co., LTD.;

AND AMERICAN HONDA MOTOR Co., INC., Petitioners

Vv.

KARL L. OBERG, Respondent

On Petition for a Writ of Certiorari

to the Supreme Court of Oregon

REPLY BRIEF FOR THE PETITIONERS

JAMES H. GIDLEY ANDREW L. FREY*

THOMAS W. BROWN CHARLES A. ROTHFELD

Cosgrave, Vergeer & EVAN M. TAGER

Kester Mayer, Brown & Platt

Thirteenth Floor 2000 Pennsylvania Ave., N. W.

Bank of America Financial Washington, D.C. 20006

_ 121 SW Morrison Street (202) 778-0602

Portland, Oregon’ 97204 |

(S03) 323-9000

JEFFREY R. BROOKE

PAUL G. CEREGHINI

Bowman & Brook

Suite 2100

100 West Clarendon

Phoenix Townehouse

Phoenix, Arizona 85103

(602) 248-0899

Counsel for Petitioners

*Counsel of Record

TABLE OF CONTENTS

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TABLE OF AUTHORITIES

Cases oe

BMW of North America, Inc. v. Gore,

ee er rrr ee ea 3, 4,7

Exxon Corp. v. Eagerton, 462 U.S. 176

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Harris v. Reed, 489 U.S. 255 (1989) ............ 6

Michigan v. Long, 463 U.S. 1032

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Orr v. Orr, 440 U.S. 268 (1979) ........... sce

Pacific Mutual Life Ins. Co. v. Haslip,

Se U.S. 1 CR) « bets wee 2,4

Raley v. Ohio, 360 U.S. 423 (1959)............. 2

TXO Production Corp. v. Alliance

Resources Corp., 113 S. Ct. 2711 (1993) ......... 2

Miscellaneous

R. Stern, E. Gressman, S. Shapiro, &

K. Geller, Supreme Court Practice

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In the Supreme Court of the Gnited States

OCTOBER TERM, 1994

~ No. 94-1890

HONDA MOTOR Co., LTD.; HONDA R & D Co., LTD.;

AND AMERICAN HONDA MOTOR Co., INC., Petitioners

Vv.

KARL L. OBERG, Respondent

On Petition for a Writ of Certiorari

to the Supreme Court of Oregon

REPLY BRIEF FOR THE PETITIONERS

In opposing the petition for certiorari, Oberg makes

virtually no attempt to demonstrate that the issues presented

do not warrant review. Instead, he largely confines himself

to the improbable contention that none of the federal

constitutional questions raised in the petition were preserved

below. While Oberg deserves exceptional grades for

creativity, his contention dismally flunks the more important

test of accuracy.

1. Entirely apart from any arguments made below by

Honda, it is beyond dispute that on remand from this Court

the Oregon Supreme Court expressly considered and in fact

decided the question whether the punitive damages award in

this case is so large as to violate the substantive component

of the Fourteenth Amendment’s Due Process Clause. Oberg

pointedly does not contend otherwise.

The court below thus explained that punitive awards are

subject to review “to ensure that [they are] within the

permissible range of damages (which is limited by substantive

due process concerns).” Pet. App. 7a. Relying on Pacific

Mutual Life Ins. Co. v. Haslip, 499 U.S. 1 (1991), and TXO

Production Corp. v. Alliance Resources Corp., 113 S. Ct.

2711 (1993), the Oregon Supreme Court proceeded to inquire

whether the judgment here is consistent with the “substantive

limit on the size of punitive damages awards” established by

“the Due Process Clause of the Fourteenth Amendment.”

Pet. App. 12a. The court upheld the award because “it is

neither unreasonable nor grossly excessive in light of * * *

the awards upheld against federal due process challenges in

Haslip and TXO Production.” Id. at 13a. That is enough to

dispose of respondent’s claim of waiver regarding the punitive

award; it is of course settled that “[t]here can be no question

as to the proper presentation of a federal claim when the

highest state court passes on it.” Raley v. Ohio, 360 U.S.

423, 436-437 (1959). See, e.g., Orr v. Orr, 440 U.S. 268,

274-275 (1979); R. Stern, E. Gressman, S. Shapiro, & K.

Geller, Supreme Court Practice 131 (7th ed. 1993).'

2. There can be no doubt — and Oberg does not deny

— that the jury sanctioned Honda for injuries suffered by

other ATV users who may themselves be entitled to seek

punitive damages; he hardly could contend otherwise when

his counsel expressly urged the jury to punish Honda “on

behalf of hundreds, maybe thousands of other victims.” Tr.

' Not surprisingly, it may be added that Oberg is wrong in

contending (at Br. in Opp. 8-9) that petitioners did not raise their

federal constitutional claim in the court below. Petitioners

described at considerable length the substantive limits on punitive

awards that are compelled by both “constitutional and common law

principles” (Honda’s First Supp. Br. on Remand 30; see id. at 30-

39) before demonstrating that the punitive award in this case is

excessive. See id. at 45-47.

)

24:2760. See Pet. 10. In this setting, Oberg’s contention

| that “[t]here is no ‘multiple punitives’ issue in this case”

| because “there had been no previous punitive awards against

| Honda based on its misconduct” (Br. in Opp. 10) simply

misses our point. As we explain in the petition (at 11-12),

the unfairness of punishing a defendant for injuries caused to

others is especially apparent when the actions causing those

injuries have themselves been held not to warrant punishment.

Oberg makes no response to this argument, and does not deny

that this very issue is now before the Court in BMW of North

America, Inc. v. Gore, No. 94-896.

3. Oberg is wrong for similar reasons in contending (at

Br. in Opp. 11-13) that there is no issue of extraterritorial

punishment in this case. In fact, it is plain that such

punishment was imposed by the jury, which was urged to

sanction Honda “on behalf” of other ATV users, most of

whom live outside Oregon. Oberg therefore is incorrect in

stating that this is a case where the jury considered evidence

of other injuries simply “‘in assessing the reprehensibility of

the misconduct at issue’” (Br. in Opp. 13 (citation omitted));

instead, Oberg’s counsel expressly asked the jury to punish

Honda “on behalf” of other (principally out-of-state) victims.

And as Oberg acknowledges, this issue — the propriety of

such “‘direct extraterritorial punishment’” (Br. in Opp. 13

(citation omitted)) — also is before the Court in Gore.

4. Oberg is wrong in contending (Br. in Opp. 14) that

Honda’s argument regarding excessiveness here “does not

bear any relationship to the issues presented in Gore” because

“the punitive award here was imposed and reviewed

according to a detailed legislative scheme.” In fact, the

Oregon legislative scheme is substantially similar to the

common-law Green Oil test used by the Alabama Supreme

Court to review the punitive award in Gore. Compare Pet.

App. 9a-10a with Haslip, 499 U.S. at 21-22 (describing

Green Oil test) and Gore Pet. App. 8a-2la. The Court’s

resolution of the excessiveness argument in Gore therefore is

sure to have a significant bearing on this case.”

5. Oberg does not deny that the question whether due

process principles require judicial excessiveness review of

compensatory damage awards is an important one that

warrants review. Instead, he confines himself to the

argument that Honda’s contentions regarding the

excessiveness of the compensatory award were neither

presented to nor passed upon by the courts below. Br. in

Opp. 6-7. This contention is plainly wrong.

On remand from this Court, Honda argued expressly and

at length that “the federal Constitution requires such

excessiveness review [of compensatory awards]” (Honda’s

First Supp. Br. on Remand 42-43; see id. at 42-45) and that

the compensatory award here is in fact excessive (see id. at

47-48). In rejecting the first of these arguments, the court

below did not, as Oberg would have it, “refus[e] to address

any federal issues involving compensatory damages.” Br. in

> Oberg misrepresents the proceedings below when he contends

(Br. in Opp. 14; see also id. at 8) that Honda “insisted before the

Oregon Supreme Court that the appellate record was too sketchy to

serve as a good vehicle for appellate review.” Honda never said

that the record was sketchy; instead, it suggested, as a matter of

sound judicial administration, that the Oregon Supreme Court first

“set[] out the principles that are to govern future excessiveness

review in Oregon” and then “remand the case to the trial court so

that it may make the initial determination regarding excessiveness.”

Honda First Supp. Br. on Remand 48. Honda made this suggestion

because “there are neither findings by the lower courts nor full

briefing before [the Oregon Supreme Court] on the relevant

issues.” Honda Reply Supp. Br. on Remand 14. As the Oregon

Supreme Court rejected Honda’s suggestion and itself made the

requisite findings in resolving the excessiveness question, there is

nothing about the record or decisions below that would handicap

this Court in its review of that judgment.

Opp. 7. And that court did not mention the word waiver.

Instead, the Oregon Supreme Court, after stating that awards

of punitive damages are reviewable for rationality, declared

that “[t}his holding is limited to awards of punitive damages

and does not extend to compensatory damages.” Pet. App.

4a n.6. This declaration makes sense only as a statement that

compensatory awards simply are not reviewable under any

standard.* That conclusion is confirmed by the Oregon

Supreme Court’s denial without comment of Honda’s petition

seeking reconsideration of the “holding that the amount of

compensatory damages remains unreviewable in Oregon.”

Reh’g Pet. 2 n.2.

The decisions cited by Oberg at Br. in Opp. 7-8 are

wholly off the point. Those holdings stand for the

proposition that a state court’s failure to say anything about

a federal claim will be (rebuttably) presumed “due to want of

proper presentation in the State courts.” Exxon Corp. v.

Eagerton, 462 U.S. 176, 181 n.3 (1993) (citation and internal

quotation marks omitted). Here, in contrast, the state court

expressly did address and reject the federal claim.‘

* The court below could hardly have meant by this, as Oberg

suggests (at Br. in Opp. 6 (emphasis added)), that it simply

“elected not to explicate the standard of review for compensatory

damages.” The minimal rationality review embraced by the

Oregon Supreme Court for the assessment of punitive damages is

the lowest level of scrutiny that is consistent with the Due Process

Clause; the court below therefore could not have meant to suggest

that the excessiveness review of compensatory damages might

proceed under some /Jower standard. And so far as we are aware,

no court has ever made the counter-intuitive suggestion that

compensatory judgments should be subjected to more intensive

scrutiny than that applied to punitive awards. Oberg’s reading of

the opinion below therefore is nonsensical.

* If there is any ambiguity here, this case — where the state

court expressly mentioned the federal claim — calls for application

Moreover, this Court already has rejected Oberg’s related

contention (see Br. in Opp. 6-7) that in the first round of

proceedings in this case, Honda waived its claim regarding

reviewability of compensatory damages. Honda’s first

petition for certiorari presented the question “[w]hether

Oregon’s denial of any judicial review of compensatory and

punitive damages verdicts for excessiveness violates the Due

Process Clause of the Fourteenth Amendment.” No. 93-644,

Pet. i (emphasis added). Opposing review, Oberg maintained

that Honda had waived its argument concerning compensatory

damages. In its reply, Honda demonstrated that the argument

had not been waived (No. 93-644, Pet. Rep. Br. on Cert. 8

& n.9), although Honda also noted that if Oberg were correct

the Court could “limit[] the grant of review to the punitive

component of the judgment” (id. at 7). This Court

subsequently granted review without limitation, an action that

must have been based on the determination that the arguments

regarding compensatory damages had not been waived.

Against that background, Oberg necessarily is wrong in

contending the Oregon Supreme Court’s failure to review the

compensatory award on remand rested on a finding of waiver.

CONCLUSION

For the foregoing reasons and those stated in the petition,

the petition for a writ of certiorari should be granted.

of a very different presumption: federal jurisdiction is presumed

to exist “when it is not clear from the opinion itself that the state

court relied upon an adequate and independent state ground and

when it fairly appears that the state court rested its decision

primarily on federal law.” Michigan v. Long, 463 U.S. 1032,

1042 (1983). As the Court has explained, “[t]he Long ‘plain

statement’ rule applies regardless of whether the disputed state-law

ground is substantive * * * or procedural * * *. Thus, the mere

fact that a federal claimant failed to abide by a state procedural rule

does not, in and of itself, prevent this Court from reaching the

federal claim.” Harris v. Reed, 489 U.S. 255, 261 (1989).

Alternatively, the Court should hold the petition pending

disposition of BMW of North America, Inc. v. Gore, No. 94-

896, and should dispose of this case as appropriate in light of

the decision in Gore.

Respectfully submitted.

JAMES H. GIDLEY ANDREW L. FREY*

THOMAS W. BROWN CHARLES A. ROTHFELD

Cosgrave, Vergeer & EVAN M. TAGER

Kester Mayer, Brown & Platt

Thirteenth Floor 2000 Pennsylvania Ave., N. W.

Bank of America Financial Washington, D.C. 20006

121 SW Morrison Street (202) 778-0602

Portland, Oregon 97204

(503) 323-9000