A State Justice Criticizes S. Ct.'s Constitutional Punitive Damages Caselaw

From Pennsylvania Supreme Court Justice David Wecht's concurrence yesterday in Bert Co. v. Turk (and see here for Justice Wecht's broader discussion of unenumerated rights):

… While I have significant doubts about much of the jurisprudence that controls the present inquiry and that assigns punitive damage awards a federal "constitutional status," the Majority has correctly and faithfully applied the standards (such as they are) set forth by the Supreme Court of the United States.

I write separately because the current state of Supreme Court precedent forces courts to engage in analytical exercises that lack sufficient clarity. Future litigants would be wise to seek more useful guidance from the Court and perhaps a complete unshackling of punitive damage awards from the artificial constraints placed upon them by that Court's bewildering substantive due process jurisprudence.

The imposition and limitation of punitive damage awards traditionally were considered matters of state law concern, in deference to our common law heritage and to American principles of federalism. Nonetheless, and in derogation of this tradition, in recent decades the Supreme Court has declared that the Due Process Clause of the Fourteenth Amendment to the United States Constitution places "procedural and substantive constitutional limitations on these awards" and "prohibits the imposition of grossly excessive or arbitrary punishments on a tortfeasor."

The analysis that courts are now required to conduct in order to detect the federal constitutional borderline—a line often and erroneously distilled as a 10:1 ratio rule comparing punitive to compensatory damages—is riddled with caveats, qualifiers, and porous "guideposts" which render that analysis nearly incapable of principled application to concrete cases. Moreover, the Supreme Court's jurisprudence has exposed in sharp relief the flaws and fault lines embedded in the underlying doctrine that itself brought punitive damages into the realm of federal constitutional adjudication: the judicially-manufactured doctrine of "substantive due process."

Inasmuch as the substantive due process doctrine currently exists in a state of flux, it is worthwhile to discuss that doctrine generally, to examine its theoretical alternatives, and to consider specifically how well the federal constitutional invalidation of a state punitive damage award, based merely upon its size, fits within the current paradigm. Can "excessive" punitive damages, awarded by a jury after an undisputedly fair trial in state court, deprive a civil defendant of property without federal due process of law? …

Protection from any particular amount of punitive damages has never been recognized as a fundamental right. With the foregoing understanding of the underlying law, I turn to the Supreme Court's decisions that bring us here today. The Majority does an excellent job of summarizing the principles of law that now govern punitive damages, which emanate principally from Pacific Mutual Life Insurance Company v. Haslip, TXO Production Corp. v. Alliance Resources Corp., BMW of North America, Inc. v. Gore, and State Farm Mutual Automobile Insurance Company v. Campbell. I commend the Majority for its effort—because an effort it is—to apply this welter of precedent on its own terms, as we are bound to do in this matter of federal constitutional law. But it is the Supreme Court's handiwork that has led me to this lengthy discussion, and there are features of that Court's punitive damages decisions that illustrate why I find that work untenable. The more time that I spend with Haslip and TXO, Gore and State Farm, the more problematic that I find their rationales, and the more it seems that the best course would be to pull the whole line of cases, root and branch, from the exhausted soil of substantive due process.

Broadly, there are two overarching problems with these decisions, one doctrinal and one practical. Each area of analysis induces headaches.

[A.] It is important that we be clear about what we are discussing, even if the precedent that we analyze is not. The fact that I am skeptical of a due process right to a particular threshold on the amount of punitive damages does not mean that I believe due process plays no role in the matter. Certainly, as in any trial or legal proceeding, there are procedural interests requiring procedural protections as such. Deprivations of due process may lurk here just as they do elsewhere in the law. But generally, I would suggest that a civil defendant's federal due process rights are protected by, for instance, adherence to state law procedures, a fair trial, and a properly instructed jury.

Judicial tinkering with the amount of a jury's award, an award bestowed upon an injured party after full consideration of the facts and following an undisputedly fair trial, is something different—something substantive. Although such a power to reduce jury verdicts is a venerable feature of the common law and has long inhered in state court judges in Pennsylvania and elsewhere, the federal "constitutionalization" of this power is an intrusion that looks little like the application of "due process of law." Or perhaps more accurately, it looks like an application of the Due Process Clause from the Lochner era….

Given the array of due process principles cobbled and mashed up together, this area of the law bears little resemblance to any of the recognizable, and currently recognized, strands of due process jurisprudence. What emerges is an approach that performs a nominal gesture toward "due process of law" while providing little analysis or detail, and in practice ends up focusing more upon what a majority of Supreme Court Justices at the moment might "hunch" to be "too much." Unable as I am to situate the Court's reasoning within the law of due process, its enterprise looks more like an older sort of case. Perhaps unsurprisingly given its precedential origins, the new law of punitive damages bears a resemblance to the "doctrine that prevailed in Lochner … that due process authorizes courts to hold laws unconstitutional when they believe the legislature has acted unwisely." Here, it is the wisdom of juries, long the repository of the moral conscience of the people, that lies exposed to questioning by a disapproving Court….

[B.] Setting aside the doctrinal inadequacies of Haslip (and progeny), and taking the Court's reasoning on its own terms, the application of the standard that the Court has left for us still leaves much to be desired. As Justice Scalia commented in Gore, acidly but not inaccurately: "One might understand the Court's eagerness to enter this field, rather than leave it with the state legislatures, if it had something useful to say." But as the Court attempted to make its analysis more concrete and judicially manageable, the folly of the endeavor became ever more apparent, indeed, unavoidable.

Although a fixture of the Court's decisions has been a refusal to draw any bright lines as to what is "too much," it has attempted to give its amorphous standards some shape. First were the three Gore "guideposts," itself a flexible word. As more concisely summarized in State Farm, these "guideposts" are: "(1) the degree of reprehensibility of the defendant's misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases." Although these "guideposts" were likewise criticized as insufficiently definite, they at least reflected some attempt to articulate a standard reminiscent of other multifactorial inquires or balancing tests, rather than merely invoking the Court's "constitutional sensibilities" and "general concerns of reasonableness" or the like. …

[III.] Can a punitive damage award, merely because of its size rather than any defect of procedure, deprive a civil defendant of due process of law? My understanding of the law of the due process, even its "substantive" formulations, leads me to conclude that the answer is "no."

Protection from the civil consequences of one's actions, following a fair trial, is not a "fundamental right." Imposition of a punitive damage award is not "arbitrary" or "irrational," but rather serves indisputably important interests in punishing reprehensible conduct and deterring similar such conduct in the future. The award is not the product of "vagueness" if the jury is properly instructed, if adequate state law procedures are followed, and if state law places all persons on notice that egregious torts may result in civil liability that includes punitive damages.

In my view, the size of a punitive damages award, by itself, is simply not a concern of the federal Due Process Clause. If the Supreme Court believes that protection from some specific threshold of punitive damages is an unenumerated right guaranteed by the United States Constitution, then it should abandon the erroneous precedent of Haslip and its progeny and ascertain, by whatever standard it deems appropriate, whether such a right emanates from the Ninth Amendment or the Privileges or Immunities Clause. Otherwise, it should leave state courts and legislatures to go about their business. That is the essence of federalism.

Bound as I am by the Supreme Court's pronouncements on this matter of federal constitutional law, I join the Majority Opinion.