Opposition Brief — Stroud v. Blount

Supreme Court, US

we 2 | | jin

In The OFFICE OF 11 OF THE CLERK”

Supreme Court of the Anited States

JOSEPH STROUD and

JOVON BROADCASTING, WJYS-TV 62/34,

Petitioners,

JERRI BLOUNT,

Respondent

$$. $$ 2

On Petition For Writ Of Certiorari

To The Illinois Appellate Court

— —— ——_ ¢@ Ee —————————

BRIEF IN OPPOSITION

— -- @—-—__ —— =

ROBIN B. POTTER

{OBIN POTTER & ASSoc., P.C

111 East Wacker Drive

Suite 2600

Chicago, [L 60601

) 861-1800

MARTIN A. DOLAN

DOLAN LAW OFFICES, P.C

10 South LaSalle Street

Suite 3712

Chicago, IL 60603

(312) 676-7600

[;RIC SCHNAPPER’

School of Law

University of Washington

P.O. Box 353020

Seattle, WA 98195

(206) 616-3167

schnapp@u.washington.edu

Coun: l for Respondent

‘Counsel of Record

YCKLE LAW BRIEF PRINTING CO (800) 225-6964

OR CALL COLLECT (402) 342-2831

The Lower Court’s Appro

rive Damage Award DYay

iew by This Court

In The Proceedin; Below Petit

Did Not Raise A Constitutional!

enge lo Consideration of Counsel Fe

Whether \ Puinit

TABLE OF AUTHORITIE

Action Marine. Inc. v. Continental Carl /)

181 F.3d 1302 (11th Cir. 2007

Baker v. National State Ban} SO] A.Yd ]]

(N.J. Super.2002)

r> ’ , ' j . ; »T) r

Bh ®& K ( onstruction Cu Vi ae: On t

516 (2002) |

Izlount ( Stroud. 232 11] 2a 302 4009

BMW of North America, [) (70) roi’ tl

N09 (1996)

Brandt 1 Super

1985

ampbell v. Slate Kkarm M

P3d 408 (Utah 2004) 14, 16

hasan ' karmer Grou ,OOY

333034] (Ariz. App. Div. 1]

Coker kKquipment Co \

'

29 (9th Cir.2010)

s 7) j } f

nlinental ‘rend Resource i} OX)

Inc., 101 F.3d 634 (10th Cir.199¢

STATEMENT OF THE CASI

compound the allegations of racism and sex-

ism underlying the case and raise it to a lev-

el of conduct warranting a_= significar

amount of punitive dama

(Pet. App. 78a; see Pet. App. 28a). The court noted

that Stroud had repeatedly threatened Blount

. a } 1 ) ee } .

Stroud ... threatened Blount, informing her

that he could cause her to “cease to exist”

and that she “didn’t know who she was fuck-

ing with.” Blount understood these com

ments to be threats of physical harm or

1

threats on her life

Pet. App. 75a-76a). Stroud also sought to exploit the

financial vulnerabili

Blount was a financially vulnerable single

mother of two. Stroud knew this and soug

to use her position as the sole provider for

her children to persuade her to not support

Fouts. Stroud told her that “Bonnie [Fouts]

didn’t pay your bills,” that he did, and that

she should do what he said so that she and

her children did not “go over a cliff” finan-

clally.

D+ yf TY 7 +t . 1 ~ nat thal] ’ t+ hh

ret. App oa). Che petition qgoes nat challengs Lnis

ae : ‘

aspect of the decision below.

Second, the court compared the punitive award

to awards in comparable cases. It noted that punitive

awards of $2.6 million had been upheld in several

other section 1981 cases. (Pet App. S8la-82a). This

portion of the Appellate Court decision is not chal-

lenged in the certiorari petition.

Third, the court compared the amount of the

punitive award with the amount of “actual harm”

sustained by the plaintiff. When the punitive award

was compared with the combined back pay and

damages, the ratio was approximately 10 to 1. (Pet.

App. 79a). The court reasoned that in assessing the

harm sustained by the plaintiff, it could also consider

the amount of the counsel fee that had been awarded.

When that fee was taken into account, the ratio was

only 1.8 to 1, “well within the permissible guideline.”

(Pet. App. 80a). The certiorari petition relates only to

this third aspect of the decision below.

(4) The Appellate Court rejected defendants’

contention that it was unconstitutional to admit

evidence of their efforts to persuade government

officials to prosecute Blount. The defendants did not,

+

of course, contend that the alleged retaliatory dismis-

sal of Blount was itself constitutionally protected.

Defendants argued, rather, that they had a constitu-

tional right to attempt to have Blount prosecuted,

and that the First Amendment barred plaintiff from

relying on evidence about those attempts in order to

prove that her dismissal was itself the result of an

unlawful purpose. The Appellate Court held that the

Noerr-Pennington doctrine does not preclude use of

evidence regarding protected activity to prove “the

purpose ... of the [other] transactions under scrutiny.”

(Pet. App. 85a (quoting Pennington, 381 U.S. at 670

n.3).

Oo) The defendants filed a petition for rehear

ing, asking the Appellate Court to reconsider its

initial decision. The Appellate Court subsequently

issued a modified opinion, which significantly ex-

panded its discussion of the punitive damage award

and the Noerr-Pennington issue. (Pet. App. la-49a).

The defendants then filed with the Illinois Su-

preme Court a petition for leave to appeal. The state

Supreme Court denied that motion. (Pet. App. 92a)

Finally, defendants filed in the Illinois Supreme

Court a motion for leave to move for reconsideration

of the denial of leave to appeal. That motion too was

denied. (Pet. App. 93a).

I THE LOWER COURT’S APPROVAL OF

THE PUNITIVE DAMAGE AWARD DOES

NOT WARRANT REVIEW BY THIS

COURT

A. In The Proceedings Below Petitioners

Did Not Raise A Constitutional Chal-

lenge To Consideration of Counsel

Fees In Assessing Whether A Punitive

Damage Award Is Excessive

Rule 14(g)q) of this Court requires, when review

is sought of a state-court judgment, that a petitioner

specif[y] ... when the federal questions

sought to be reviewed were raised; the meth-

od or manner of raising them ... with specific

reference to the places in the record where

the matter appears ... , so as to show that the

federal question was timely and properly

raised.

Petitioners did not raise in the courts below the

constitutional question which they now urge this

Court to consider

The issue of whether counsel fees should bi

considered in assessing the reasonableness of the

punitive damage award arose as a result of post-trial

legal developments. The Illinois Appellate Court, in

its initial June 24, 2009 opinion, held that the

amount of counsel fees that had been awarded to the

plaintiff “may be taken into account when assessing

the propriety of a punitive award.” (Pet. App. 79a).

This issue was limited to seven sentences in the

The Appellate Court relied in part on International l

~f Operating Engineers, Local 150 v. Lowe Excavating Co., 228

Ill. 2d 459, 490 (2006). In Lowe the plaintiff had not been

awarded counsel fees. The Illinois Supreme Court held that

where a plaintiff had expended funds to pay counsel, but had not

received an award of counsel fees, that expenditure could b

considered in deciding how much in punitive damages should b

awarded

We recognize that the $50,000 awarded here [in puni

tive damages] does not come close to covering the at

torney fees and costs which were incurred throughout

the duration of this protracted litigation. While attor

ney fees can be considered when awarding punitive

damages, it is not within the purview of this court to

award such fees outright, nor should they be awarded

under the guise of a punitive damages award

225 Ill. 2d at 491. Lowe did not address how the courts should

deal with a situation in which, as here, there had been such a

counsel fee award

Appellate Court’s lengthy analysis of the punitive

damage award. (Pet. App. 79a-80a).

Defendants filed a Petition for Rehearing in the

[llinois Appellate Court. That petition, however, did

not argue that it would be unconstitutional to consid-

er counsel fees in assessing the excessiveness of a

punitive award. Rather, it argued only that the Appel-

late Court’s decision rested on a misinterpretation of

the particular provision of federal law, 42 U.S.C.

§ 1988, under which counsel fees had been awarded

in this case.

The Court included attorneys’ fees as com-

pensatory damages in the Gore-Campbell ra-

tio, overlooking the clearly established law

that attorneys’ fees awarded pursuant to 42

U.S.C. § 1988 are not compensatory damag-

es. This Court’s holding is directly contrary

to the plain language of Section 1988 and es-

tablished precedent, both of which provide

that Section 1988 attorney’s fees are costs of

litigation and not compensatory damages.’

The section of defendants’ Petition for Rehearing

devoted to this issue was headed “Attorneys’ Fees

Awarded Pursuant to Section 1988 Are Not Compen-

satory Damages For Purposes Of The Proportionality

Ratio.” Defendants’ argument concerned the proper

construction of section 1988, and relied primarily on

4

Appellants’ Petition for Rehearing, at 1: see id. at 4

Id at 4

LO

decisions interpreting section 1988 as well as “the

plain language of the statute and ... congressional

intent.” Correctly understood, defendants argued, an

award of counsel fees under section 1988 was actually

“a component of punitive damages.... [A]ttorneys’ fees

should have been added to the punitive side, not

the compensatory side .... [which] would result in a

ratio of 16:1.”

The Appellate Court in its initial decision had

relied in part on the Third Circuit decision in Willow

Inn, Inc. v. Public Serv. Mut. Ins. Co., 399 F.3d 224

(3d Cir.2005), which had considered an attorneys’ fee

award under a Pennsylvania statute in upholding the

punitive award in that case. (Pet. App. 79a). Defend-

ants did not assert that the reasoning in Willow Inn

was constitutionally unsound, but instead distin-

guished Willow Inn on the ground that the counsel fee

statute in that case was different than section 1988.

|[T|he Third Circuit agreed to include attor-

neys’ fees awarded pursuant to Section 837]

of the Pennsylvania Code as part of the com-

pensatory damages in the Gore-Campbell ra-

tio because Pennsylvania courts had held the

statute made the fee award a portion of com-

pensatory damages, as a matter of state

law.... In contrast to the fees awarded under

the Pennsylvania statute in Willow Inn, fees

* Id. at 6

Id. at 8.

warded under n 198s

atory

a T " ,

NOthing in the Petition for Rehearing suggested

defendants now contend, that any inclusion of coun

aa : . | 4

l€@s in an excessiveness analysis would be constitu

LuOnally impermissible

In response to the Petition for Rehearin

Appellate Court issued a modified opinion on Octob

6, 2009: that opinion included a substantially mors

detailed discussion of the relevance of counsel fee

(Pest App. 3la-34a). The new portions of the tate

Our OpInion were dare sed LO the

coMmstitutional arguments that had been raised in tl

petition. First, the Appellate Court rejected defend

ants suggestion that counsel fee awards under se

C1OIn lbelele muld b or ited horny ( PuUTLIVI

In their pevlvion for rehearing. defendant

contend that attorney fees shot 1 have be

counted in the punitive side of the Gore con

pensatory-punitive damage ratio. They a

ert that this is because the purpose |

attorney fees under section 1988 1s to punish

defendants for wrongful conduct. We disa

gree. Contrary to defendants’ assertions, se

tion 1988 is “remedial” in nature: it is n

punitive

(Pet. App. 3la). Second, the Appellate Court refused

PI} Pp]

to distinguish the Third Circuit decision in Willou

Inm., reasoning that the Penn ylvania counsel fe

statute at issue 1n that case served “similar goals” t

>

the purposes of section 1988. (Pet. App. 31la-32a)

Defendants filed a Petition for Leave to Appeal

with the Supreme Court of Illinois. The issue which

defendants asked the state Supreme Court to decide

was whether “(t]he appellate court’s decision ignored

the language of 42 U.S.C. § 1988, which explicitly

provides that attorneys’ fees are costs of litigation.”

This petition argued that a counsel fee award under

section 1988 “should have been” treated as punitive

damages. Defendants insisted that Willow Inn wa:

distinguishable because the Pennsylvania counsel fee

statute in that case had been held to be “compensato

ry damages as a matter of state Jaw,” an argument

which necessarily assumed that how counsel fee

should be considered turned on the construction of

the statute authorizing such awards. The asserted

defect in the Appellate Court’s analysis, defendant

insisted, was that it wa ‘Tcjontrary to the clear

congressional mandate” in enacting section 1988

After leave to appeal was denied, defendants filed a

Motion for Reconsideration, raising the same no!

constitutional argument regarding the Interpretation

of section 1988. “|I]t was error to treat attorney

fees awarded under Section 198% as compensatory

|

| Of JOSCDI Lroud ind

Petition for Leave to Appea

Broadcasting, WJYS-T'V 62/34, at 4

ld. &

ld. atl2r

gamave Heclio! 1930 pro\

f

LIO! | 1d easonal

ittorney ee a part of the ¢ Cr 12 | ‘

1988(b) (empha idded

I . ( val NA 4 p .

if) April ZU10 If) VIOLILOI recall ind

, ay Nn F : r ] ~ ] ‘

uance of Mandate filed in the ippellate (oul

defendant described the federal Question 1t intended

LO ralse 1n } the 1 contemplated ertvuor I

Lhe ime LaLtule pecilic tern

' rT cer

ij UU LIU) ‘

. Wo WO« ‘ .

iward of 9% 1,1] Ame Wg iLLOorne Let

Orr pe rT) wory dam 1f7 lO! purpo ( | )

proce analy ] Conti ry LO Line Oul

| cy t } ryi } +7 y ¥ 1 1g .

uns Lne plall muave Ol I 1}

ear | il nable aLLOrN« cer

; | (] }

}&) , ry io ‘ j ,

‘ LD 1¢ ; ) i | '

| | (Lourt ADI ; { rCre yl Tt) } ryé

| lang i { 1 I ) ( i¢ lf) PUit

‘ j

'

Vv)

onsiaderatl Ti | (J

\ppeadl, al t ( ‘

Motion to Re wd

letermination of Petition | (

ite Iprem {(,ourt {

Inc., 613 F.Supp.2d 504 (D. Del. 2009), but they cited

that decision as important because (unlike, for exam-

ple, Willow Run), it was “decided under Section

1981."" Disavowing the statute-specific approach

which they took in the lower courts, defendants no

longer distinguish the Third Circuit Willow Run as an

interpretation of a different counsel fee statute, but

now denounce Willow Run as constitutionally un

sound. (Pet. 20, 22)

The constitutional issue which defendants seek

to raise in this Court was not aired in the courts

below. In this Court defendants insist that the deci-

sion below “directly conflicts with decisions of ... this

Court” (Pet. 19) (emphasis in original), quoting

assertedly controlling passages in BMW of North

America Ine. v. Gore, 517 US. 559, 582 (1996), and

State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S

408, 426 (2003). (Pet. 17-18). Because defendants

failed to advance this argument in the courts below,

the state courts had no opportunity to address it

Defendants contend in this Court that if counsel fees

could be considered in assessing the excessiveness of

punitive awards, there would be a grave danger of

manipulation (Pet. 10, 15); because that argument

was not made in the courts below. the Illinois courts

Appellants’ Petition for Rehearing, at 9 n.3. Laymon 1

actually a Title VII sexual harassment case, not a section 1981

+

case. The relevant portion of the opinion refers to the damages

provision of Title VII, which is codified win 42 U.S.C

S$ 198la(b\(2). 613 F.Supp.2d at 515

am \

had no opportunity to assess that contention in light

of their own practical experience, or to consider what

safeguards might be fashioned to address any such

problems. Defendants insist that the circumstances of

the instant case are an example of the type of “artrf.-

cially inflated” counsel fee award that was concocted

to provide support for extravagant punitive awards

(Pet. 15-16 n.7). Again, however, the lower courts

never were asked to consider that fact-bound conten

+

=| YT)

4 lon

B. This Case Does Not Present A Conflict

Warranting Review by This Court

his case does not present the sort of clear, well

established and fully aired conflict that warrants

review by this Court. A close reading of the cases

relied on by petitioners makes clear that they do not

concern a single constitutional issue, but instead

involve a number of different non-constitutional and

constitutional questions, each of which has so far

arisen in only a handful of cases. The decisions relied

on by petitioners present a range of different ques

tions, not as petitioners suggest an “array of ap

proaches” to a single constitutional issue. (Pet. 22)

Ll) Petitioners contend that the decision in the

instant ease conflicts with the Utah decision in

U. State Farm Mut. Auto. Ins. eS QS P3d

109 (Utah 2004), on remand from this Court’s deci

7

i

i

Campodell

’ v 1t> Y T mi }

*y , + ? « r ) } ry IT) ff . = ‘ yy )

sion in State Farm. But Campbell is too opaque and

isolated to establish the sort of conflict that would

}

A

warrant review by this Court

}

Campbell did not offer any analysis of the consti

tutional issue raised by the petition; it merely con

strued this Court’s mandate in State Farm itself to

require the lower courts on remand in that particular

case to use as the denominator in the BMW/State

Farm analysis the particular jury award in that

case. The six-year old decision in Campbell remains

an isolated result which apparently has not been

apphed even in Utah. Campbell's discussion of coun-

sel fees and punitive damages appears to have been

cited on only a single occasion, in an unreported

a 7 | 1} ~ . _ } } = es

Arizona decision which actually rejected the per Seé

Finally, we turn to the Campbells’ claim that costs

and attorneys fees incurred in this action, as well as

the excess portion of the verdict. not covered by insur-

anee, should be included as part of the denominator in

calculating a ratio between compensatory and puni

tive damages. We disagree

We believe that fairly read, the Supreme Court’s opin

ion forecloses consideration of a compensatory damag

es number other than the $1,000,000 awarded by the

jury.... [T]he considerable attention given by the Su

preme Court to the methodology for arriving at a

constitutionally permissible ratio of compensatory to

punitive damages convinces us that we would not. be

at liberty to consider a substitute denominator

> 1

Paragraph numbering omitted). Petitioners do not claim that

the exclusion of the excess portion of the verdict not covered by

insurance, although arguably dictated the mandate of this

\ + . 1] : — ]

Court, Was constitutionally required

Petitioners do not assert that such intractable admin

istrative problems have in fact arisen; the absence to

, > } . }° }

date of such judicial experience counsels against

addressing this issue at this point

Petitioners also identify two unpublished district

court decisions which have disapproved consideration

of counsel fees in evaluating the excessiveness of

punitive awards. (Pet. 18-19 n.8). District court

decisions, of course, do not provide the sort of inter

circuit conflict that might warrant review by this

Court. The cursory nature of those decisions, moreo

ver, illustrates the need for far more consideration o

this issue by the lower courts

Petitioners’ Amicus asserts that the Eighth

Circuit decision in Quigley v. Winter, 598 F.3d 938

(8th Cir.2010), held “that attorneys’ fees cannot bs

included as compensatory damages for purposes of

calculating the ratio.”" That is not correct. The opin

ion in Quigley never discussed whether as a matter of

constitutional law such fees can be regarded as

form of compensation in the BMW/State Farm analy

sis. The brief for the plaintiff in Quigley

In Parexel Intl Corp. v. Feliciano, 2008 WL 5101642 * 6

(E.D. Pa.), for example, the entire discussion is nine words long

“(T]he Court disagrees with the Plaintiff's use of attorney

Bnef of Amicus Curiae The National Association of B

Owned Broadcasters, Inc., at 3

9 m . “rn — =e ‘

he amicus elsewhere asserts only that “[if] the Eighth (¢

+

uit had included attorneys’ fees as compensatory damages rt

Continued on following page)

argue that the counsel fee in that case should be

considered in assessing the excessiveness of t

punitive award.

(2) A number of the cases which petitioners

describe as adopting per se rules for, or against,

consideration of counsel fee awards in fact turn on

interpretations of particular statutes, and decided

only whether a counsel fee awarded under a specific

statute should be deemed compensatory in nature.

Many of those opinions do not undertake to decide

any distinct question of constitutional law

Baker v. National State Bank, 801 A.2d 1158

(N.J. Super.2002), declined to consider a particular

fee award because the New Jersey Law Against

Discrimination “specifically includes attorneys fees

under a separate section |from the damages provi-

sion].” 801 A.2d at 1168 (citing N.J.S.A. 10:5-27.1)

ymon v. Lobby House, Inc., 613 F.Supp.2d 504 (D

Del. 2009), reasoned that it would be improper to

consider fee awards in assessing a punitive damage

award under Title VII because of the particular

definition of compensatory damages provided in a

Title VII case. 613 F.Supp.2d at 515 (citing 42 U.S.C.

S 198la(b)(2)). Neither of these cases held that, had

would have reinstated the entire ... punitive damages awarded.”

Id. at 6. But the Eighth Circuit did not consider counsel fees in

this regard, not because it found such consideration would be

unconstitutional, but because the plaintiff never asked the court

}

to do so

Brief of Appellant-Cross-Appellee, 2009 WL 462577

7

—

the statutes authorized treating fee awards as part of

compensatory damages, it would have been unconsti-

tutional to do so.

Conversely, the Third Circuit decision in Willow

Inn, Ine. v. Public Service Mut. Ins. Co., 399 F.3d

224 (3d Cir.2005), does not hold that it is always

proper to consider counsel fee awards when assessing

the excessiveness of a punitive award. Rather, Wi//ow

Inn determined only that such consideration was

permissible under a particular Pennsylvania statute

regarding bad faith denials of insurance benefits. 399

F.3d at 229 (citing 42 Pa. Cons. St. § 8371), 235

(relying on purpose and language of section 837!

Willow Inn relied heavily on a Pennsylvania state

court decision which had held that Ҥ 8371 attorneys

fees and costs awards are to be considered compensa-

tory damages.” 399 F.3d at 421. Gallatin Fuels, Inc. v.

Westchester Fire Ins. Co., 244 Fed.Appx. 424, 437 (3d

Cir.2007), is based on an interpretation of the same

Pennsylvania statute. Action Marine, Inc. v. Contt-

nental Carbon, Inc., 481 F.3d 1302 (llth Cir.2007

considered the counsel fee award in that particular

case in the BMW/State Farm comparison because

[iin Georgia, awards of attorney fees in tort

cases involving bad faith are compensatory

in nature. See O.G.C.A. §13-6-11 (2006

Supp.), City of Warner Robbins v. Holt, 220

Ga. App. 794, 470 S.E.2d 238, 240 (1996)

(holding that the purpose of an award of at-

torney fees and litigation expenses “is to

compensate an injured party....”)

481 F.3d at 1321 (footnote omitted). None of th

opinions purports to decide any constitutional qu

tion raised by applying the statutes at issue in th

manner.

These two groups of decisions do not confli

they simply involved interpretations of differe

statutes. Laymon, for example, did not disagree wit

the decisions in Willow Inn and Gallatin Fuels, b

eo . ; |

distinguished them on the ground that they involve

a different statute than the provision of Title VII th

was the basis of the fee award in Lav7non itse

Gallatin Fuels and Willow Inn Involve

breach of contract and bad faith clain

against insurers under 42 Pa.C.S.A. § 8

Petitioners Amicus describes the Nintt ! t ce

Coker Equip? ent Cre { Wittig 166 Ked Ap] . Ane, ,

Cir.2010), as holding that attorneys’ fees and

“included as compensatory damages for purposi

the ratio.” Brief of Amicus Curiae The Natior A

Black Owned Broadcasters, Inc., at 4

But the defendant in Coker did not ar it

unconstitutional to consider couns fer

excessiveness of a punitive award. The defendant’ mew!

cursory brief on this issue simply assumed that under Nevad

law, which governed that diversity case, counsel fees in an abu

of process case would not be treated as damages. Appell

Coker Equipment Co., Inc’s Jpening Brief, 2008 WL 5070038

*28-*30. The Ninth Circuit construed Nevada law to treat fi

and costs as part of compensatory damages in an abuse

process case. 366 Fed.Appx. at 733. The defendant in Coker

never argued that a Nevada law treating fees and costs in tl

manner could not constitutionally be applied in assessing tl}

excessiveness of a punitive damage award

and not Title VII.... The holdings in Willow

Inn and Gallatin Fuels do not address dam.

ages 1n cases of intentional discrimination in

employment

613 F. Supp.2d at 515

In the instant case the Appellate Court concluded

that counsel fee awards under the statute at issue

here section 1988 should (like the statutes in

Willow Inn and Action Marine) be considered in the

BMW/State Farm calculus. Petitioners do not suggest

that there is an inter-circuit conflict regarding the

interpretation of section 1988, and do not contend

that certiorari would be warranted merely to construe

that particular statutory provision.

3) Other cases cited by petitioners do not

nvolve court awarded fees at all

In some states the compensatory damages

awarded for certain torts may include an amount for

counsel fees. That typically occurs where the underly

ing tort by its nature :s likely to cause the plaintiff to

incur counsel fees, and counsel fees are regarded as a

foreseeable item of damages just as medical fees

would be in a personal injury case.

This is true in actions for false arrest and

malicious prosecution, where damages may

include attorney’s fees incurred to obtain re-

lease from confinement or dismissal of the

unjustified charges ... or to defend the prior

SULT

ory

Brandt v. Superior Court, 37 Cal. 3d 813, 818 (1985).

Where the damage award in such cases includes

counsel fees, the lower courts unsurprisingly have

assumed that the entire damage award should be

considered in the BMW/State Farm analysis. Major v.

Western Home Ins. Co., 169 Cal. App. 4th 1197, 1224

(2009). (See Pet. 21). That issue, of course, is not

resented by the instant case.”

In Continental Trend Resources, Inc. v. OXY

USA, Inc., 101 F.3d 634 (10th Cir.1996), the Tenth

Circuit considered yet another issue, whether in a

case in which neither the jury nor the judge has

awarded counsel fees, a plaintiff’s uncompensated

legal expenses can be considered in the BMW analy-

sis.

[Pjlaintiffs’ legal costs no doubt exceeded

their compensatory damages award. Nothing

in BMW would appear to prohibit considera-

tion of the cost of those legal proceedings in

determining the constitutionally permissible

limits on the punitive damages award.

101 F.3d at 642. That constitutional issue, whatever

its merits, also is not presented by the instant case,

because here — unlike Continental Trend — there was

in fact a counsel fee award.

Petitioners correctly note that the issue in this case is

limited to the constitutionality of “inclu[ding] ... court-awarded

attorneys’ fees as compensatory damages for purposes of calcu-

lating the ratio of punitive to compensatory relief.” (Pet. 9)

St. Luke Evangelical Lutheran Church, Inc. v.

Smith, 318 Md. 337, 568 A.2d 35 (Ct. App. Md. 1988),

which predates both BMW and State Farm, involved

a distinct non-constitutional issue. (See Pet. 22).

There was no counsel fee award in that case at all,

and the punitive award was actually smaller than the

award of compensatory damages. The question decid-

ed in St. Luke was whether under Maryland law, with

regard to a claim for which an award of counsel fees

was not permitted, a jury in determining the size of a

punitive award could consider evidence regarding

non-reimbursed legal expenses incurred by the plain-

tiff. That circumstance obviously is not presented

here, because in the instant case there was a counsel

fee award and because evidence of the plaintiff’s

legal expenses was never presented to the jury.

(4) Petitioners argue that the decision below

conflicts with this Court’s decisions in BMW and

State Farm, and is inconsistent as well with a num

ber of other decisions of this Court. That is not coi

FGCt.

Petitioners rely on a passage in BMW in which

the Court “compared the punitive damages award to

the amount of ‘actual harm as determined by the jury.’

BMW, 517 U.S. at 582 (emphasis added).” (Pet. 17).

But if this standard, in isolation, established the

constitutional standard, it would preclude considera

tion of compensatory damages awarded by a judge

after a bench trial, a result that would effectively bar

punitive damages except when a case was tried before

a jury. Obviously BMW did not establish such a rule,

just as it did not resolve whether and when fe

awards could be treated as compensatory for purpo:

es of the BMW/State Farm analysis, because neither

of those issues was before the Court in BMW.

Petitioners also rely on a passage in State Farm

noting that “courts must ensure that the measure of

punishment is both reasonable and proportionate to

the amount of harm to the plaintiff and to the general

damages recovered.” (Pet. 17, quoting State Farm, 538

U.S. at 426) (emphasis added by petition). But State

Farm does not address, for example, whether the

“harm to the plaintiff” could include money actually

expended by a plaintiff to hire an attorney and pay

costs (or a debt incurred by the plaintiff to an attor

ney). If the BMW/State Farm analysis was limited to

“the general damages recovered,” it would not include

special damages, (see Fed. Rule Civ. Pro. 9(g)), or

compensatory damages that a plaintiff had been

awarded but was unable to collect. This Court

decision in State Farm cannot fairly be read as en

compassing either such constitutional rule

Petitioners also contend that

Alttorneys’ fees may properly be viewed

punitive in nature. In examining statute

that shift a prevailing party’s fees such a

the one at issue here, the Court has observed

Chere ] no indication in tne PINIO! Or tn (Lourt I

upreme Court of Alabama that

warded in thi

that “the underlying rationale of ‘fee shifting

is, of course, punitive.” Hall v. Cole, 412 U.S

1, 5 (1973); see also, e.g., Hutto v. Finney, 437

U.S. 678, 691 & n.17 (1978)

(Pet. i7). That is not an accurate description of the

decisions in /lall and Hutto. Hall emphatically did

not involve a counsel fee statute, and it did not hold

that fee shifting under such statutes is punitive in

purpose. The quoted passage actually refers only to

non-statutory counsel fees awarded because of the

misconduct of a party

[FJederal courts in the exercise of their equi

table powers ... may award attorneys’ fee:

when the interest of justice so require

Thus, it is unquestioned that a federal court

may award counsel fees to a successful party

where his opponent has acted “in bad faith,

vexatiously, wantonly, or for oppressive rea

sons.” 6 J. Moore, Federal Practice 54.77(2).

p. 1709 (2d ed. 1972).... In this class of cases

the underlying rationale of “fee shifting” 1:

of course, punitive, and the essential element

in triggering the award of fees is therefore

the existence of “bad faith” on the part of the

unsuccessful litigant

412 U.S. at 4-5. Petitioners’ quotation from Hall

omits the key qualifying words “liJn this class of

cases, which refer to (as punitive) only the limited

class of cases in which fees are awarded to punish

bad faith or vexatious litigation tactics. Similarly, the

a | award referred LQ) |] Hutto A

1

mm any Latute

ettled rule that

i nol pased

tather, that decision applied “Une

a losing litigant bad taith

may

iustify an allowance of fees to the

prevailing’ party

Le al 68%Y (footnote omitted ) 57 ¢ 1:37 | 5 al HUI

award of attorney ta QO?! i

i CERTIORARI IS NOT WARRANTED TO

ADDRESS ANY OF THE NOERR-

PENNINGTON ISSUES RAISED BY THE

PETITION

1) The Noerr™-Penni

Lually litigated in the

been resolved by this Court decision in United Mune

| f j

Worker 4] America Pennington

| OF ‘ . 1] “7 { {

JODO), NO COMPCHIngeg re. ON ¢ Sl I i

{ | i

nat fici Deen ettled law 1Or cle id

ne DOrvION Ol flutt reieri }

iward of $20. 000 ba ed on mi mauct Db ic

elin the district court 1:37 | t 649-9

eparatle portion olf Hutto ran

| VAT,

munsel fee for work done in the court of pope i] | ita i!

| made under 42 =.4 1%J i not based nm tad fait

ind was not characterized by the Court a punitive nature

[ ) it 695-700. Thi Court 1 th id described yur

e award under section 19% Wy nsat

itigant for the ¢ Kpense oO HY

isis added

} astern [tl

The only cause of action for retaliation asserted

in this case was that the defendants had violated

section 1981 when they dismissed Blount in reprisal

for her having opposed raciaj discrimination. Peti-

tioners do not contend that the dismissal of Blount for

opposing racial discrimination was constitutionally

protected action under the Noerr-Pennington doc-

trine. Nor could they plausibly do so. The dismissal of

a private employee obviously is not a form of petition

ing for redress of grievances.

The actions which petitioners do contend enjoyed

protection under the First Amendment occurred only

after the plaintiff had been dismissed. But plaintiff is

not asserting a cause of action for injuries suffered

when the defendants attempted to persuade state

officials to prosecute her. Blount is not arguing that

those efforts were actionable under any federal or

state law, or constituted some form of common law

tort. The plaintiff did not seek or win any damages

for injuries that she might have suffered as a result of

those post-termination actions by the defendants.

In the trial of her section 1981 retaliation claim,

plaintiff sought to prove that the defendants dis-

missed her in 2000 because she had opposed racial

discrimination against another employee. To support

that allegation that there was such a retaliatory

motive behind her dismissal, Blount claimed that

the defendants remained angry about her opposition

to discrimination even after she was fired, and for

that reason had in 2001 and 2002 attempted to

persuade state officials to prosecute the plaintiff. The

constitutional argument raised by petitioners in the

litigation below was that the Noerr-Pennington

doctrine operates as an absolute bar to use of such

evidence to prove the existence of an unlawful motive

was behind the earlier dismissal.” Pennington itself,

however, addressed that very issue.

It would of course still be within the province

of the trial judge to admit [evidence of pro-

tected activity], if he deemed it probative and

not unduty prejudicial, under the “estab-

lished judicial ruie of evidence that testimo-

ny of prior or subsequent transactions, which

for some reason are barred from forming the

basis for a suit, may nevertheless be intro-

duced if it tends reasonably to show the pur-

pese and character of the particular

transactions under scrutiny.”

United Mine Workers of America v. Pennington, 381

U.S. 657, 670 n.3 (1965) (quoting Federal Trade Comm'n

Cement Institute. 333 U.S. 683. 705 (1948))

Petitioners acknowledge that there is no conflict

among the lower courts regarding whether the Noerr-

Pennington doctrine permits the introduction of such

evidence to establish the motive behind concededly

non-protected action. (Pet. 13) (“this rationale does

not create a conflict of authority”). Petitioners do not

assert that practical experience has demonstrated

that application of the rule in footnote 3 in Penning-

ton has proven unworkable, or that the rule has been

undermined by subsequent decisions of this Court.

Footnote 3 is consistent with well established First

Amendment principles. The First Amendment, for

example, clearly protects the rights of a white super-

visor to join the Ku Klux Klan; but if that same

supervisor were alleged to have discriminated against

a Black, Jewish or Catholic job applicant, his mem-

bership in the Klan would assuredly be admissible

evidence

This case presents a singularly inappropriate

vehicle for revisiting this issue. During the trial

Stroud himself, “during his examination by his own

counsel ... stated that the judge who presided over his

civil eavesdropping suit told him that he should

contact the authorities to bring a criminal claim.”

(Pet. App. 38a). The court below correctly held that

Stroud could not complain about testimony “elicited

by defendants’ counsel.” (Pet. App. 39a). By first

introducing evidence regarding Stroud’s efforts to

have Blount prosecuted, the defendants themselves

opened the door to plaintiff’s subsequent introduction

of additional evidence ~— less favorable to the defend-

ants — about those efforts.

(2) Even if evidence of otherwise protected

activity is not constitutionally inadmissible, petition-

ers now argue, the courts should admit such evidence

“only upon a heightened showing that its probative

value outweighs the chilling effect on constitutional

rights.” (Pet. 34-35) (emphasis added). The decision of

the Appellate Court below, petitioners argue, applied

the “wrong” legal standard when it failed to require

tne courts De!lO

argued that the application

}

showing” requirement was constitutionally required

the contrary, petitioners repeatedly insisted in

iA

that the First Amendment precluded

state courts irom admitting this evidence u

\i

Notwithstanding Rule

T { ] .

Detendan

Judgment

ittitur, at 14

Mr. Stroud’s pursu

pis Seat

Dlaar +; ~ . lL. L, }) . x rn

riaintiti is protected Dy the Petition Clause ot

First Amendment and the Noerr-Pennington doctrine

Accordingly this Court erred in permitting Plainti

+

use these acts to support her claims in this cast

f the Defendant-Appellants

Broadcasting, WJYS-TV 62/34, at 33

Stroud’s pursuit of his legal mghts

is protected conduct under the

st Amendment and the A

Che Circuit Court err

5 *

| Defendant OLrol

Mr. Stroud's pursuit of

Plaintiff is protected

First Amendment

and accordingly,

Plaintiff to sue the

Court, petitioners do not contend that they ever

advanced this “heightened standard” constitutional

argument in the Illinois courts.

sy’

(3) Petitioners insist that the Appellate Court

“ruled that Noerr-Pennington does not apply here

because Stroud’s petitioning of criminal law enforce-

ment authorities had ended before the trial in this

case.” (Pet. 29: see Pet. 9 (“[t]he court ... held that

Noerr-Pennington was inapplicable here because

Stroud’s efforts to obtain redress through the criminal

Petition for Leave to Appeal of Joseph Stroud and Jovon Broad-

casting, WJYS-TV 62/34 at 16

(T]he First Amendment not only guarantees Mr

Stroud’s access to the courts, it guarantees that his

genuine petitioning will not be used against him at a

later date.

Motion of Joseph Stroud and Jovon Broadcasting for Reconsid-

eration of the Order Denying Their Petition for Leave to Appeal,

at 3-5

A citizen cannot be penalized for exercising his or her

First Amendment rights. The appellate court’s deci

sion does just that. Mr. Stroud’s lawful, proper, and

meritorious efforts to obtain redress against Ms

Blount ... were used against him as evidence of retali-

atory intent.... The appellate court thought it relevant

that Ms. Blount did not sue Mr. Stroud directly for his

petitioning activities, but instead used his lawful con-

duct as evidence of intent to retaliate. That is a dis-

tinction without a difference

Motion to Recall and Stay Issuance of Mandate Pending Deter

mination of Petition for Writ of Certiorari by the United States

Supreme Court, at 3-4 (admission of evidence error because the

petitioning activity was “privileged under the First Amend

ment”)

justice system had already ceased at the time of

trial”); Pet. 12 (same)). Petitioners contend that

under the decision below the Noerr-Pennington

doctrine never applies once the petitioning activity

has come to a close.

The petition rests this characterization of the

decision below on several excerpts from that opinion

The court reasoned that Respondent’s intro-

duction of evidence relating to past petition-

ing could not “thwart the right to seek

redress in the court system or through the

criminal justice system” because “the State's

Attorney {had already] decided that there

were no grounds to charge Blount criminal

ly.” Pet. App. 43a.... Indeed, the court stated

(incorrectly) that “(t]he Noerr Pennington

doctrine is usually raised as a defense where

one party seeks to enjoin another from bring-

ing a suit. Thus, when the part to be en-

joined has had his day in court, those

concerns are no longer present.” Jd. at 42a....

(Pet. 29-30). This asserted decision limiting Noerr

Pennington to efforts to interfere with ongoing peti-

tioning, petitioners argue, conflicts with this Court’s

decision in BE & K Construction Co. v. NLRB, 536

U.S. 516 (2002) (Pet. 30), and with lower court deci-

sions that hold that Noerr-Pennington apphes

to “activity that already has come to a close.” (Pet.

30).~

But petitioners’ selective editing of the opinion

below omits the key sentence between these two

quoted excerpts, in which the Appellate Court ex-

pressly does recognize that the Noerr-Pennington

doctrine can indeed apply to completed petitioning,

and which cites BE & K Construction for that very

rule. “[T]he doctrine may also be applied where a

party contends that another party’s completed law-

suit is unlawful. BE & K Construction, 536 U.S. at

527.” (Pet. App. 42a-43a). And the very next (omitted)

sentence after the excerpt quoted by petitioners

explains that the Noerr-Pennington doctrine does not

apply here precisely because “Blount does not claim

that Stroud’s actions in petitioning were unlawful.”

(Pet. App. 43a).

Petitioners assert that several of this Court’s

Noerr-Pennington cases should be characterized as

involving a form of retaliation. (Pet. 26). But the

Illinois Appellate Court recognized that the Noerr-

Pennington doctrine does generally apply in cases

(including retaliation cases) involving labor law or

business and economic interests. (Pet. App. 40a-41a).

Pet. 12:

(T)hat ruling directly conflicts with decisions of this

Court and the courts of appeals, which have repeated-

ly applied Noerr-Pennington to completed acts of peti-

tioning.

28

OP

OO

All of the decisions of this Court relied on by petition-

er fall within the categories to which the court below

would apply the Noerr-Pennington doctrine, and all of

those decisions were cited and accepted by that court.

Nothing tn the decision below suggests that the

Appellate Court would refuse to apply the Noerr

Pennington doctrine in similar cases.

(4) Petitioner objects that under the reasoning

of the court below the Noerr-Pennington doctrine

would not be applied to a state common law retalia-

tion action which (unlike the instant case) sought

damages for petitioning activity that did not involve

labor relations or economic interests. (Pet. App. 42a).

But neither the decision below not petitioners suggest

that there is in fact any such common law action for

retaliation under I[flinois law

The plaintiff did not assert that she had a state

law cause of action arising out of the defendants’

efforts to have her prosecuted. Rather, the only retal-

latory act which plaintiff asserted was unlawful, and

for which she obtained damages, was her dismissal in

violation of section 1981. Defendants have never

claimed that that dismissal was itself protected by

the Noerr-Pennington doctrine. The decision below

properly concludes that the Noerr-Pennington doc-

trine is inapplicable to the retaliatory dismissal of the

plaintiff, which occurred prior to any activity which

the defendants assert is protected by the First

Amendment; petitioners do not dispute the correct-

ness of that holding

The instant case thus does not provide an appro-

priate vehicle for resolving a hypothetical dispute

about the application of dicta in the decision below to

some other situation. Regardless of what types of

retaliatory acts might be protected by the WNoerr-

Pennington doctrine, and regardless of how the

decision below may in the future be construed or

applied in other cases, in this case there is simply no

claim that the retaliatory dismissal of this plaintiff

was itself protected activity under the First Amend-

ment. Certiorari is particularly unwarranted because

the dicta to which petitioners object is in the decision

of an intermediate appellate court, and would thus be

subject to reconsideration by the state Supreme Court

should a case ever arise in which that portion of the

opinion was outcome-determinative

_-¢

CONCLUSION

For the above reasons, thi petition for writ

rtiorari should be denied.

Respectfully submitted

ROBIN B. POTTER

ROBIN POTTER & Assoc., P.C

111 East Wacker Drive

Suite 2600

Chicago, IL 60601]

(312) 861-1800

MARTIN A. DOLAN

DOLAN LAW OFFICES, P.C

10 South LaSalle Street

Suite 3712

Chicago, [L 60603

(312) 676-7600

ERIC SCHNAPPER”

School of Law

University of Washington

P.O. Box 353020

Seattle, WA 98195

(206) 616-3167

;chnapp@u.washington.edu

Counsel for Respondent

¥ 7 . >

(‘ounsel of Record