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Sam Heldman


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Thursday, December 12, 2002
Blog plug

Be sure to check out Statutory Construction Zone, a new blog dedicated to statutory construction in appellate decisions, including the Supreme Court.

Tuesday, December 10, 2002
No. 01-1289 State Farm Mut. Auto. v. Campbell

The last case of the year has to do with constitutional limits on punitive damages. It began with a personal injury suit. The respondent, Campbell, was passing in the left hand lane when another car swerved to avoid him and hit another car, resulting in two deaths. Campbell was insured by State Farm, which refused to settle the case within the policy limit, and went to trial, where the plaintiff was awarded more than three times Campbell’s policy limit.

Campbell then brought this bad faith action against State Farm. Campbell argued that because he was subject to the possibility financial ruin by State Farm’s failure to settle, he suffered emotional distress, and State Farm should be liable for punitive damages. Somehow, Campbell prevailed on this argument, receiving a jury award of a couple million for emotional distress and a whopping $145 million in punitive damages. The award was reduced but then reinstated by the Utah Supreme Court.

The Utah Supreme Court found that the punitive damages award was based on State Farm’s policies that reward employees for paying claims below targets that are set in advance. That is, employees are encouraged to minimize the amount they pay for claims based not on the merits or circumstances of individual cases, but on predetermined limits. The court thought this conduct was so pernicious as to justify the award.

The question is whether the $145 million violates Due Process. In a single earlier case, BMW v. Gore, 517 U.S. 559 (1996), the Court determined that a punitive damage claim violated Due Process. State Farm would like to see that holding reaffirmed here. In addition, State Farm claims that the award was impermissibly based on its non-Utah conduct, and that Utah courts had no power to punish that conduct.

On the one hand, I think certain members of the Court would be amenable to the extraterritoriality argument, and that certain members are probably tort-reform-minded as a policy preference; however, I do not think that the Justices generally decide cases based on their policy preferences. Even if they did, there is the competing consideration that a judicial limit on punitive damages takes some of the air out of the arguments behind legislative attempts at tort reform. The history of the BMW case has shown that lower courts find it difficult to apply, and why wouldn’t they? Putting a price on injury is tough enough, who can say what the “correct” amount that a company should be punished for its egregious conduct is? Because it is nearly impossible to find a principled basis for overturning punitive damage awards, I predict the Court will actually overrule BMW and AFFIRM the result here.

Note, for scoring purposes, only my result counts. That is, if the Court affirms but doesn’t overrule BMW I am still right.

Two great blogs that blog great together

In the interests of full disclosure, I should probably point out at this time that Goldstein Howe has filed an amicus on behalf of respondents in this case. Why is that relevant? Because starting next week, I will have the privilege of working for that firm, thus putting an end to the long-running “SCOTUSblog vs. feud. This may affect my ability to make unbiased predictions (or any prediction at all) in certain cases. Nevertheless, this is a great opportunity and I cannot wait to get started.

On the other hand

The Court also handed down a decision reversing Howsam v. Dean Witter Reynolds, Inc., just as I (and Sam) predicted.

Finally, the court dismissed as improvidently granted Abdur'Rahman v. Bell, which I predicted it would not dismiss. Sam also predicted the Court would reach the merits. Although we predicted the substantive outcome differently, we both lose under my rules.

    Current Score:

    Ted: 5-2
    Sam: 4-3


The Court's decision in U.S. v. Bean came down today. Contrary to my prediction the Court reversed, 9-0. Sam Heldman also predicted the Court would affirm, so I think that means I'm 4-1 and he's 3-2 (according to my rules).

If you recall, I thought the case was about whether Congress may invalidate a law (allowing an exception to gun posession prohibition on felons) by refusing to fund a decision that an official is required to make (as to whether to grant the exception). In fact, the case was about whether judicial review provided by statute must be preceded by an actual dispositive decision by the decisionmaker (here, ATF). The Court held that it must.

No. 01-1107 Virginia v. Black

This case is a challenge to Virginia’s anti-cross-burning statute. The statute makes cross burning with intent to intimidate someone illegal, and further makes the cross-burning itself prima facie evidence of the intent to intimidate. The Supreme Court of Virginia found that the statute was unconstitutional.

The question in this case, I believe, boils down to whether Virginia’s “intent to intimidate” language is enough like the ordinance in R.A.V. v. City of St. Paul, 505 U.S. 377. In that case, the Court held unconstitutional a statute that banned placing a symbol in a public place “which one knows or has reasonable grounds to know arouses anger, alarm or resentment in others on the basis of race, color, creed, religion or gender.” The Court held that the ordinance was "facially unconstitutional in that it prohibit[ed] otherwise permitted speech solely on the basis of the subjects the speech addresses."

I don’t really see much difference here. Cross burning is a regrettable form of expression, but a form of expression nevertheless. If the hate-speech cases don’t settle this case, then the flag-burning cases do. I predict the Court will AFFIRM.

Did I say I would have more in-depth analysis? Sorry about that. What I meant was that I would do enough of my own research to be more confident that my predictions amount to informed opinions. I haven't really ever given in-depth analysis have I?

Monday, December 09, 2002
No. 01-1243 Borden Ranch Partnership v. United States Army Corps of Engineers

This is an evironmental case involving "deep ripping" in wetlands. "Deep ripping," it appears, is a particularly destructive form of plowing. The U.S. Army Corps of Engineers decided that deep ripping in wetlands constitutes an activity for which one needs a permit under the Clean Water Act. The petitioner here was told that repeatedly but went ahead with the deep ripping activities, even though at one point there was an agreement to cease and desist. The lower court found that the Corps can regulate the deep ripping, found a bunch of violations, and fined the petitioner $1.5 Million or $500 thousand plus restoring four acres of wetlands. Now I don't know how much it costs to restore one acre of wetlands. Maybe it's $250 thousand. It could be, but that was the option the petitioner chose, and I would bet that it was a wise decision. I'm probably skipping some procedure here, but the Ninth Circuit eventually affirmed the award. The dissent argued, essentially, that the Clean Water Act does not prohibit the deep ripping activity. I think the government will win this one and I therefore predict the Court will AFFIRM.

I almost forgot to mention that Justice Kennedy has recused himself from this case, indicating, if one were to place his or her bets based on perceived judicial philosophies, that it might be difficult to find a conservative majority to overturn the decision in favor of the Corps. Thus, my prediction also encompasses the possibility that the case will be affirmed by an equally divided court.

I promise that my analysis will be better for Wednesday's cases.

No. 01-1437 Branch v. Smith

No. 01-1596 Smith v. Branch

The reason I got into this whole Supreme Court prediction game was so that I would have at least a marginally-informed opinion about every case that came before the Court this term. Try as I might, however, I just can't get into this congresssional redistricting case. As I understand it (and I don't really) state legislatures are supposed to redraw their districts after each census. In this case, Mississippi failed to do so. Why? I have no clue, but I would be at least mildly upset at my state legislature if I were a Mississippian. In any case, the failure of the state legislature means people get to battle it out in court. Which people?

Apparantly, a group of voters on one hand, and on the other hand, another group of voters. Anyway, congressional redistricting plans in southern states also involve some sort of review by DOJ to make sure they are avoiding discrimination. So what happened here was that a Mississippi state court took jurisdiction and issued a plan, but then somehow it got to federal court, and the district court stayed the implementation of the state court plan and the people who like the state plan appealed.

There are about ten thousand questions presented (okay I admit its only four), including whether state courts can ever take jurisdiction over redistricting in a case like this, due to the constitutional provision giving state legislatures the power to determine the time and manner of elections, whether the Attorney General have to preclear a redistricting plan that a state court enacts (like it would for state legislatures, I guess); whether the AG "preclears" a plan if it is submitted and not acted on within the statutory time limit, and another one that I can make neither head nor tail of.

I know that both of my readers who come here for in-depth legal analysis are disappointed at this and the Washington/Legal/Foundation2 case, and for that I apologize. Something I read today that has nothing to do with this case attracts me to the argument that the state legislature has to act somehow, although I am also partial to the argument that DOJ can't just sit on a plan that has been submitted for preclearance. I am going to predict . . . scratch that, I'm going to guess that the Court will AFFIRM this case. I just assume the reverse case will come down the other way and be REVERSED.

Sunday, December 08, 2002
No. 01-1325 Washington Legal Foundation v. Legal Foundation of Washington

Although it has been stated many times, I must point out that despite the named parties, this is not a trademark case. The case is about whether states may require that interest paid on lawyers' trust accounts be donated to programs that pay for lawyers for indigent persons. All fifty states have some form of IOLTA (Interest on Lawyers' Trust Accounts) program. Generally it works like this: Lawyers keep their clients' money for all sorts of reasons. For instance, when closing a real estate transaction, the buyer often writes a check to the lawyer, who deposits it to make sure it clears, then distributes the proceeds to the seller, the real estate agent and the prior mortage company as appropriate. Lawyers also will receive settlement payments or payments to satisfy judgment. When lawyers are not keeping the money long enough to justify opening a separate interest-bearing account, they put it in their general account. It is only the interest on these accounts that is at issue. The petitioners here claim that the states are working a taking by requiring the money in the trust accounts, which belongs to clients, to be paid to a charitable organization without any just compensation.

Because I am attending a Christmas party tonight for which I have to get ready, and because I procrastinated making this decision until now, I will do something I haven't done yet and hope not to do again. I'm going with my gut: I don't think this is a taking, so I predict the Court will AFFIRM.