|BMW of North America, Inc. v. Gore (94-896), 517 U.S. 559 (1996). |
[ Scalia ]
[ Ginsburg ]
[ Stevens ]
[ Breyer ]
BMW OF NORTH AMERICA, INC., PETITIONER v. IRA
on writ of certiorari to the supreme court of alabama
In earlier cases that were the prelude to this decision, I set forth my view that a state trial procedure that commits the decision whether to impose punitive damages, and the amount, to the discretion of the jury, subject to some judicial review for "reasonableness," furnishes a defendant with all the process that is "due." See TXO Production Corp. v. Alliance Resources Corp., 509 U.S. 443, 470 (1993) (Scalia, J., concurring in judgment); Haslip, supra, at 25-28 (Scalia, J., concurring in judgment); cf. Honda Motor Co. v. Oberg, 512 U. S. ___, ___ (1994) (slip op., at 1-2) (Scalia, J., concurring). I do not regard the Fourteenth Amendment's Due Process Clause as a secret repository of substantive guarantees against "unfairness"--neither the unfairness of an excessive civil compensatory award, nor the unfairness of an "unreasonable" punitive award. What the Fourteenth Amendment's procedural guarantee assures is an opportunity to contest the reasonableness of a damages judgment in state court; but there is no federal guarantee a damages award actually be reasonable. See TXO, supra, at 471 (Scalia, J., concurring in judgment).
This view, which adheres to the text of the Due Process Clause, has not prevailed in our punitive damages cases. See TXO Production Corp. v. Alliance Resources Corp., 509 U. S., at 453-462 (plurality opinion); id., at 478-481 (O'Connor, J., dissenting); Haslip, supra, at 18. When, however, a constitutional doctrine adopted by the Court is not only mistaken but also insusceptible of principled application, I do not feel bound to give it stare decisis effect--indeed, I do not feel justified in doing so. See, e.g., Witte v. United States, 515 U. S. ___, ___ (1995) (Scalia, J., concurring in judgment); Walton v. Arizona, 497 U.S. 639, 673 (1990) (Scalia, J., concurring in judgment in part and dissenting in part). Our punitive damages jurisprudence compels such a response. The Constitution provides no warrant for federalizing yet another aspect of our Nation's legal culture (no matter how much in need of correction it may be), and the application of the Court's new rule of constitutional law is constrained by no principle other than the Justices' subjective assessment of the "reasonableness" of the award in relation to the conduct for which it was assessed.
Because today's judgment represents the first instance of this Court's invalidation of a state court punitive assessment as simply unreasonably large, I think it a proper occasion to discuss these points at some length.
The most significant aspects of today's decision--the identification of a "substantive due process" right against a "grossly excessive" award, and the concomitant assumption of ultimate authority to decide anew a matter of "reasonableness" resolved in lower court proceedings--are of course not new. Haslip and TXO revived the notion, moribund since its appearance in the first years of this century, that the measure of civil punishment poses a question of constitutional dimension to be answered by this Court. Neither of those cases, however, nor any of the precedents upon which they relied, actually took the step of declaring a punitive award unconstitutional simply because it was "too big." At the time of adoption of the Fourteenth Amendment, it was well understood that punitive damages represent the assessment by the jury, as the voice of the community, of the measure of punishment the defendant deserved. See, e.g., Barry v. Edmunds, 116 U.S. 550, 565 (1886); Missouri Pacific R. Co. v. Humes, 115 U.S. 512, 521 (1885); Day v. Woodworth, 13 How. 363, 371 (1852). See generally Haslip, supra, at 25-27 (Scalia, J., concurring in judgment). Today's decision, though dressed up as a legal opinion, is really no more than a disagreement with the community's sense of indignation or outrage expressed in the punitive award of the Alabama jury, as reduced by the State Supreme Court. It reflects not merely, as the concurrence candidly acknowledges, "a judgment about a matter of degree," ante, at 12; but a judgment about the appropriate degree of indignation or outrage, which is hardly an analytical determination.
There is no precedential warrant for giving our judgment priority over the judgment of state courts and juries on this matter. The only support for the Court's position is to be found in a handful of errant federal cases, bunched within a few years of one other, which invented the notion that an unfairly severe civil sanction amounts to a violation of constitutional liberties. These were the decisions upon which the TXO plurality relied in pronouncing that the Due Process Clause "imposes substantive limits `beyond which penalties may not go,' " 509 U. S., at 454 (quoting Seaboard Air Line R. Co. v. Seegers, 207 U.S. 73, 78 (1907)); see also 509 U. S., at 478-481 (O'Connor, J., dissenting); Haslip, 499 U. S., at 18. Although they are our precedents, they are themselves too shallowly rooted to justify the Court's recent undertaking. The only case relied upon in which the Court actually invalidated a civil sanction does not even support constitutional review for excessiveness, since it really concerned the validity, as a matter of procedural due process, of state legislation that imposed a significant penalty on a common carrier which lacked the means of determining the legality of its actions before the penalty was imposed. See Southwestern Telegraph & Telephone Co. v. Danaher, 238 U.S. 482, 489-491 (1915). The amount of the penalty was not a subject of independent scrutiny. As for the remaining cases, while the opinions do consider arguments that statutory penalties can, by reason of their excessiveness, violate due process, not a single one of these judgments invalidates a damages award. See Seaboard, supra, at 78-79; Waters Pierce Oil Co. v. Texas (No. 1), 212 U.S. 86, 111-112 (1909); Standard Oil Co. of Ind. v. Missouri, 224 U.S. 270, 286, 290 (1912); St. Louis, I. M. & S. R. Co. v. Williams, 251 U.S. 63, 66-67 (1919).
More importantly, this latter group of cases--which again are the sole precedential foundation put forward for the rule of constitutional law espoused by today's Court--simply fabricated the "substantive due process" right at issue. Seaboard assigned no precedent to its bald assertion that the Constitution imposes "limits beyond which penalties may not go," 207 U. S., at 78. Waters Pierce cited only Coffey v. County of Harlan, 204 U.S. 659 (1907), a case which inquired into the constitutionality of state procedure, id., at 662-663. Standard Oil simply cited Waters Pierce, and St. Louis, I. M. &S. R. Co. offered in addition to these cases only Collins v. Johnston, 237 U.S. 502 (1915), which said nothing to support the notion of a "substantive due process" right against excessive civil penalties, but to the contrary asserted that the prescribing and imposing of criminal punishment were "functions peculiarly belonging to the several States," id., at 509-510. Thus, the only authority for the Court's position is simply not authoritative. These cases fall far short of what is needed to supplant this country's longstanding practice regarding exemplary awards, see, e.g., Haslip, 499 U. S., at 15-18; id., at 25-28 (Scalia, J., concurring in judgment).
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. In fact, however, its opinion provides virtually no guidance to legislatures, and to state and federal courts, as to what a "constitutionally proper" level of punitive damages might be.
We are instructed at the outset of Part II of the Court's opinion--the beginning of its substantive analysis--that "the federal excessiveness inquiry . . . begins with an identification of the state interests that a punitive award is designed to serve." Ante, at 7. On first reading this, one is faced with the prospect that federal punitive damages law (the new field created by today's decision) will be beset by the sort of "interest analysis" that has laid waste the formerly comprehensible field of conflict of laws. The thought that each assessment of punitive damages, as to each offense, must be examined to determine the precise "state interests" pursued, is most unsettling. Moreover, if those "interests" are the most fundamental determinant of an award, one would think that due process would require the assessing jury to be instructed about them.
It appears, however (and I certainly hope), that all this is a false alarm. As Part II of the Court's opinion unfolds, it turns out to be directed, not to the question "How much punishment is too much?" but rather to the question "Which acts can be punished?" "Alabama does not have the power," the Court says, "to punish BMW for conduct that was lawful where it occurred and that had no impact on Alabama or its residents." Ante, at 12. That may be true, though only in the narrow sense that a person cannot be held liable to be punished on the basis of a lawful act. But if a person has been held subject to punishment because he committed an unlawful act, the degree of his punishment assuredly can be increased on the basis of any other conduct of his that displays his wickedness, unlawful or not. Criminal sentences can be computed, we have said, on the basis of "information concerning every aspect of a defendant's life," Williams v. New York, 337 U.S. 241, 250-252 (1949). The Court at one point seems to acknowledge this, observing that, although a sentencing court "[cannot] properly punish lawful conduct," it may in assessing the penalty "consider . . . lawful conduct that bears on the defendant's character." Ante, at 12, n. 19. That concession is quite incompatible, however, with the later assertion that, since "neither the jury nor the trial court was presented with evidence that any of BMW's out of state conduct was unlawful," the Alabama Supreme Court "therefore properly eschewed reliance on BMW's out of state conduct, . . . and based its remitted award solely on conduct that occurred within Alabama." Ante, at 13. Why could the Supreme Court of Alabama not consider lawful (but disreputable) conduct, both inside and outside Alabama, for the purpose of assessing just how bad an actor BMW was?
The Court follows up its statement that "Alabama does not have the power . . . to punish BMW for conduct that was lawful where it occurred" with the statement: "Nor may Alabama impose sanctions on BMW in order to deter conduct that is lawful in other jurisdictions." Ante, at 12. The Court provides us no citation of authority to support this proposition--other than the barely analogous cases cited earlier in the opinion, see ante, at 10-11--and I know of none.
These significant issues pronounced upon by the Court are not remotely presented for resolution in the present case. There is no basis for believing that Alabama has sought to control conduct elsewhere. The statutes at issue merely permit civil juries to treat conduct such as petitioner's as fraud, and authorize an award of appropriate punitive damages in the event the fraud is found to be "gross, oppressive, or malicious," Ala. Code §6-11-20(b)(1) (1993). To be sure, respondent did invite the jury to consider out of state conduct in its calculation of damages, but any increase in the jury's initial award based on that consideration is not a component of the remitted judgment before us. As the Court several times recognizes, in computing the amount of the remitted award the Alabama Supreme Court--whether it was constitutionally required to or not--"expressly disclaimed any reliance on acts that occurred in other jurisdictions." Ante, at 6 (internal quotation marks omitted); see also ante, at 13. [n.*] Thus, the only question presented by this case is whether that award, limited to petitioner's Alabama conduct and viewed in light of the factors identified as properly informing the inquiry, is excessive. The Court's sweeping (and largely unsupported) statements regarding the relationship of punitive awards to lawful or unlawful out of state conduct are the purest dicta.
In Part III of its opinion, the Court identifies "[t]hree guideposts" that lead it to the conclusion that the award in this case is excessive: degree of reprehensibility, ratio between punitive award and plaintiff's actual harm, and legislative sanctions provided for comparable misconduct. Ante, at 14-25. The legal significance of these "guideposts" is nowhere explored, but their necessary effect is to establish federal standards governing the hitherto exclusively state law of damages. Apparently (though it is by no means clear) all three federal "guideposts" can be overridden if "necessary to deter future misconduct," ante, at 25--a loophole that will encourage state reviewing courts to uphold awards as necessary for the "adequat[e] protect[ion]" of state consumers, ibid. By effectively requiring state reviewing courts to concoct rationalizations--whether within the "guideposts" or through the loophole--to justify the intuitive punitive reactions of state juries, the Court accords neither category of institution the respect it deserves.
Of course it will not be easy for the States to comply with this new federal law of damages, no matter how willing they are to do so. In truth, the "guideposts" mark a road to nowhere; they provide no real guidance at all. As to "degree of reprehensibility" of the defendant's conduct, we learn that " `nonviolent crimes are less serious than crimes marked by violence or the threat of violence,' " ante, at 15 (quoting Solem v. Helm, 463 U.S. 277, 292-293 (1983)), and that " `trickery and deceit' " are "more reprehensible than negligence," ante, at 15. As to the ratio of punitive to compensatory damages, we are told that a " `general concer[n] of reasonableness . . . enter[s] into the constitutional calculus,' " ante, at 23 (quoting TXO, supra, at 458)--though even "a breathtaking 500 to 1" will not necessarily do anything more than " `raise a suspicious judicial eyebrow,' " ante, at 23 (quoting TXO, supra, at 481 (O'Connor, J., dissenting), an opinion which, when confronted with that "breathtaking" ratio, approved it). And as to legislative sanctions provided for comparable misconduct, they should be accorded " `substantial deference,' " ibid. (quoting Browning Ferris Industries of Vt., Inc. v. Kelco Disposal, Inc., 492 U.S. 257, 301 (O'Connor, J., concurring in part and dissenting in part)). One expects the Court to conclude: "To thine own self be true."
These crisscrossing platitudes yield no real answers in no real cases. And it must be noted that the Court nowhere says that these three "guideposts" are the only guideposts; indeed, it makes very clear that they are not--explaining away the earlier opinions that do not really follow these "guideposts" on the basis of additional factors, thereby "reiterat[ing] our rejection of a categorical approach." Ante, at 23. In other words, even these utter platitudes, if they should ever happen to produce an answer, may be overridden by other unnamed considerations. The Court has constructed a framework that does not genuinely constrain, that does not inform state legislatures and lower courts--that does nothing at all except confer an artificial air of doctrinal analysis upon its essentially ad hoc determination that this particular award of punitive damages was not "fair."
The Court distinguishes today's result from Haslip and TXO partly on the ground that "the record in this case discloses no deliberate false statements, acts of affirmative misconduct, or concealment of evidence of improper motive, such as were present in Haslip and TXO." Ante, at 19. This seemingly rejects the findings necessarily made by the jury--that petitioner had committed a fraud that was "gross, oppressive, or malicious," Ala. Code §6-11-20(b)(1) (1996). Perhaps that rejection is intentional; the Court does not say.
The relationship between judicial application of the new "guideposts" and jury findings poses a real problem for the Court, since as a matter of logic there is no more justification for ignoring the jury's determination as to how reprehensible petitioner's conduct was (i.e., how much it deserves to be punished), than there is for ignoring its determination that it was reprehensible at all (i.e., that the wrong was willful and punitive damages are therefore recoverable). That the issue has been framed in terms of a constitutional right against unreasonably excessive awards should not obscure the fact that the logical and necessary consequence of the Court's approach is the recognition of a constitutional right against unreasonably imposed awards as well. The elevation of "fairness" in punishment to a principle of "substantive due process" means that every punitive award unreasonably imposed is unconstitutional; such an award is by definition excessive, since it attaches a penalty to conduct undeserving of punishment. Indeed, if the Court is correct, it must be that every claim that a state jury's award of compensatory damages is "unreasonable" (because not supported by the evidence) amounts to an assertion of constitutional injury. See TXO, supra, at 471 (Scalia, J. concurring in judgment). And the same would be true for determinations of liability. By today's logic, every dispute as to evidentiary sufficiency in a state civil suit poses a question of constitutional moment, subject to review in this Court. That is a stupefying proposition.
For the foregoing reasons, I respectfully dissent.
* The Alabama Supreme Court said:
"[W]e must conclude that the award of punitive damages was based in large part on conduct that happened in other jurisdictions. . . . Although evidence of similar acts in other jurisdictions is admissible as to the issue of `pattern and practice' of such acts, . . . this jury could not use the number of similar acts that a defendant has committed in other jurisdictions as a multiplier when determining the dollar amount of a punitive damages award. Such evidence may not be considered in setting the size of the civil penalty, because neither the jury nor the trial court had evidence before it showing in which states the conduct was wrongful." 646 So. 2d 619, 627 (1994).