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Is bad law "no" law? And can we find a principled definition of "too much"?

March 16, 2007 3:02 PM

Haslip: Lemmie Ruffin. The excessive fines issue: Lemmie See. The Due Process analysis by the majority in Haslip: Lemme Attem! But first, let me clarify a side-issue that keeps coming up: the out-of-state impact of punitive damages. I and all MI fans, I'm sure, are convinced by Walter Olson's argument that the interstate impact of punitive damages creates an interstate commerce issue without coming anywhere close to the Wickard frontier, and therefore, Congress can enact tort reform under the Intersate Commerce Clause.

Whether out-of-state impact is relevant to a Due Process analysis of punitive damags, I'm not so sure. The constitutional remedy that tort reformers need may better be found in the "negative commerce power" doctrine, or for those who share Scalia's scepticism about the negative commerce doctrine, then perhaps in Article IV privileges and immunities. Michael's frequent references to out-of-state defendants being turned over and shaken for loose change by state courts suggest that those courts are engaging in a sort of protectionism that would be clearly unconstitutional if done by a state legislature. This should be further explored. (Btw, what prevents defendants in such cases from removing to federal court on diversity grounds? Perhaps because of Erie the advantage of doing so is limited, but at least they might get less biased jury instructions.)

OK now, about the Haslip instruction and verdict. Michael says: "There was, in my opinion, absolutely no law here. Can there be "due process of law" when there is NO law? Do you agree on this theoretical point, David?" I want to, but: the presence of discretion, w/o more, is not lawlessness. Prosecutors have discretion in bringing cases; federal administrative agencies (sometimes) get Chevron deference; the Supreme Court insists (perhaps wrongly) that no unconstutional delegation of lawmaking power has occurred when Congress gives agencies no guidance more specific than "fairness," or when it tells EPA to give us clean air but allows that to mean (re particulate matter) "anything from zero to the London Killer Fog," as Doug Ginsburg memorably put it.

How this applies to punitive damages, and to instructions about them, depends on the state of the law in 1868. Scalia, in his Haslip concurrence (which rejects the majority's reasoning as solidly as Michael does), concedes that punitive damages had their vigorous critics. One notices, moreover, that many of the criticisms Scalia cites are similar to the one Michael makes: that punitive damages belong in the criminal justice system (public ordering) and not in the tort system (private ordering). But he also concludes (and I know nothing to the contrary -- perhaps Michael does) that these critics lost: they were in the minority. "In 1868, therefore, when the Fourteenth Amendment was adopted, punitive damages were undoubtedly an established part of the American common law of torts. It is just as clear that no particular procedures were deemed necessary to circumscribe a jury's discretion regarding the award of such damages, or their amount."

So, back to the question: can there be "due process of law" when there is NO law?" But there was a trial, a judge, a jury, and an appeals process. So I can't agree that there was NO law (as distinct from BAD law, which there assuredly was). Due process of law entitles defendants to those PROCEDURES that are part of the law of the land, and Pacific Mutual got those.

Scalia's critique of the majority opinion in Haslip parallels Michaels: the Court decides only "that Alabama's particular procedures (at least as applied here) are not so 'unreasonable' as to 'cross the line into the area of constitutional impropriety[.]' This jury-like verdict provides no guidance as to whether any other procedures are sufficiently 'reasonable,' and thus perpetuates the uncertainty that our grant of certiorari in this case was intended to resolve." The Court is being coy with millions of dollars and incalculable downstream economic effects at stake. It flutters its eyelids in Haslip over SOME punitive damages being perhaps too much for Due Process. But then the TXO decision comes along and says, nope, 526 x compenatories still doesn't get you to the limit.

It's like the pre-Smith Free Exercise regime: your religiously motivated conduct is protected by the compelling state interest test -- and when we find a state interest that isn't compelling, we'll let you know. Same here with punitive damages: supposedly there's a Due Process limit; somewhere over the rainbow....

I'd say these cases ask the wrong question: How much is too much? To an opponent of substantive due process, the only question is: What part of no don't you understand?

Let me suggest some ways to break the impasse. As Michael has noticed, I for one may be willing to buy the doctrine of the Browning-Ferris dissent. As a medievalist (which I was before I took up law), the appeal of a Magna-Carta-based opinion is undeniable; and when you have a clause (excessive fines) that can be dated back earlier than the tort-crime division, simply announcing the tort-crime division may not be an adequate answer.

But I have another suggestion to make: the Scalia view in Haslip and TXO is heavily grounded in history: "text and tradition." But earlier in this thread, Michael pointed to the historically anomalous nature of modern punitive awards. Could a case be made that there is a principled distinction, and not just a distinction of degree, between the punitive damages that were part of American tort law in 1868, and the kind that debuted only in the 1980s? If it's only a distinction of degree, Scalia won't buy, as his Haslip concurrence shows. But perhaps it's a distinction of kind...? Of course, whether Scalia buys may be irrelevant if a solid majority of the Court now believes there are Due Process limits (w/o regard to the Eighth Amendment) on punitive damages. But a principled answer to "how much is too much" would be desirable for its own sake, and for predictability in tort law.





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Rafael Mangual
Project Manager,
Legal Policy

Katherine Lazarski
Manhattan Institute

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.