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April 07, 2003

Punitive Punishment? Corporations v. the Poor

Today, the Supreme Court overturned a $145M punitive damage award against State Farm insurance, arguing:

By a 6-3 vote, the high court ruled that a punitive damages award 145 times greater than the actual, or compensatory, damages was "excessive" and violated fundamental constitutional principles of due-process fairness.

"In sum, courts must ensure that the measure of punishment is both reasonable and proportionate to the amount of harm to the plaintiff," Justice Anthony Kennedy said for the majority.

This principle might seem reasonable coming from anybody other than a court that decided a month ago that "three strikes" laws imposing life in prison for minor crimes were completely justified:
On Wednesday the Supreme Court upheld the state's 1994 three-strikes law, the toughest in the nation for repeat offenders, ruling 5-4 that terms of up to life in prison are not too harsh for repeat criminals.

The court also said a term of 50 years to life was not out of bounds for a thief who shoplifted videotapes from Kmart. The tapes, including "Batman Forever" and "Cinderella," were worth $153.

So it's unreasonable to significantly decrease shareholder profits for an insurance company that commits fraud, but it's "reasonable and proportionate" to essentially obliterate a life of someone stealing $153 worth of goods?

My general legal position is pretty much one of judicial restraint-- it's up to the political branches to define the limits of punishment, not the courts who have no greater philosophical wisdom than those enacting either fraud or criminal statutes.

But this kind of contrasting justice for corporations versus the poor in our rightwing-dominated courts just shows the pro-corporate bias that really lies behind all the "judicial restraint" rhetoric from so much of the conservative side.

Although I will note that Scalia and Thomas both took the judicial restraint position on these two cases, ruling both lower court punishments legal. It was specifically Rehnquist, Kennedy, and O'Connor who in the two cases gave the insurance company the interventionist help from the bench, while leaving the poor video tape stealer in jail for the rest of his life.

Posted by Nathan at April 7, 2003 06:28 PM

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You and Sam Heldman have both posted on this obvious (maybe not-so-obvious, I didn't think about it until yesterday) disparity in legal reasoning. I, for one, can think of a justification for the reverse -- allowing high punitives, but striking outrageous sentences. This court, however, shows nothing but contempt for an invdividual rights conception of constitutional law, or for the fundamental dignity of the human -- which both appropriate sentences and high punitives foster. It's a court with a corporate, pro-weath bias, and inconsistent decisions like these demonstrate it oh-so-clearly.

Posted by: Fred at April 8, 2003 10:22 AM

Thoughtful post. I am not a liberal in my views on the proper methods of judging. But I am quite sympathetic to the critique you and Sam Heldman have offered of the inconsistency of the Supreme Court's Ewing/Andrade (8th Amendment) and State Farm (14th Am.) decisions.

You might have added that the _text_ of the 8th Amendment, which prohibits "cruel and unusual punishment," actually does give some support to the notion that federal courts should second-guess the proportionality of prison sentences (though there are also substantial historical arguments that the 8th Amendment does not, in fact, mean that; see Harmelin v. Michigan (1991) (opinion of Scalia, J.)). By contrast, the text of the 14th Amendment does not at all suggest that courts should police the amounts of punitive damage awards. The 14th Amendment just requires that "due process" be followed before damages are imposed in a civil trial. Yet this didn't seem to matter to the Court majority.

What I find important here is that it was the moderate Justices, O'Connor and Kennedy, who "gave the insurance company the interventionist help from the bench, while leaving the poor video tape stealer in jail for the rest of his life."

[However, the defendants in the three-strikes cases were recidivist felons, with numerous past convictions for drug trafficking, burglarizing people's homes, robbery, and the like. Those were the only reason that life sentences were imposed. Also, you didn't mention that the Court had to resolve the videotape thief's case under a tough federal habeas statute that limited its discretion to grant him relief from his sentence.]

By contrast, as you note, the Court's two textualists, Justices "Scalia and Thomas both took the judicial restraint position on these two cases, ruling both lower court punishments legal."
Theirs is a far more sensible stance. It has nothing to do with a "pro-wealth bias," as your other commenter put it. Nor is such a split in the Court uncommon.

With respect, I submit that liberals should keep these differences in mind when criticizing the President's judicial nominees. It's sloppy to describe Scalia and Thomas as "ultra right wing," "arch-conservatives," etc., etc., or to think that originalist would-be judges like them deserve the most opposition from the left. Not so.

The Scalia-Thomas textualist position possesses a principled integrity that saves it from the unattractive incoherences that "pragmatic" Justices like O'Connor often fall into. The left should do more to acknowledge that.

Chief Justice Rehnquist might be described as a substantively conservative Justice. Go after him.

Posted by: Plainsman at April 8, 2003 12:29 PM

This post is why, Mr. Newman, you're the king of blogistan.

Great piece, yet again!

Posted by: The Tooth at April 8, 2003 01:47 PM

Thanks Tooth. And Plainsman, I obviously think the distinctions between conservative Justices are useful or I would not have highlighted them in this case.

However, these cases are the interesting exceptions that deviate from the rather consistent 5-4 decisions on a range of labor, civil rights, environmental and other cases where ideology is clearly marked between the two sides of the court. On speech and certain due process issues, the divide is a bit fuzzier but those are not most of the court docket, so it's as great a mistake to overlook the consistency of the conservative Justices as it would be to completely ignore their occasional differences.

Posted by: Nathan Newman at April 8, 2003 02:31 PM

With regard to Plainsman's comment: after Bush v. Gore I hoped never to see "Scalia-Thomas" and "principled integrity" in the same sentence. Consistent perhaps, but there's no evidence of integrity or principle that I see. Nor after Bush v. Gore should "judicial restraint" ever be attributed to them.

Posted by: markg at April 8, 2003 03:33 PM

Fair enough. Indeed, my exhortation was not really directed at you, for your post was sensitive to the very distinction I was emphasizing.

Still, once you start looking for them, the "interesting exceptions" to the conservative/liberal rule are numerous and significant.

Scalia and Thomas's jurisprudence has led them to join the liberal bloc in many important 5-4 decisions in recent years: Apprendi v. New Jersey (jury trial rights), Ring v. Arizona (death penalty jury trial rights), Kyllo v. U.S. (Fourth Amendment surveillance), Carmell v. Texas (Ex Post Facto Clause protections).

Justice Thomas was also ready to effectively deep-six the whole U.S. Sentencing Guidelines (which, as you know, are very tough on defendants) on constitutional grounds in Harris v. U.S. last year. With one more vote he would have succeeded.

And Justices Thomas and Scalia have joined liberal Justices in dissent in major business cases such as the punitive damages decisions (which you discussed); Gustafson v. Alloyd Corp. (private litigation under the Securities Act); and Browning-Ferris Industries (applicability of the Federal Arbitration Act in state courts).

It adds up.

Posted by: Plainsman at April 8, 2003 03:36 PM

And to MarkG: Sorry, the Bush v. Gore canard won't do here.

It has some force as directed to O'Connor and Kennedy, whose votes rested solely on the questionable Equal Protection argument in the per curiam opinion. (Of course, Justice Souter and Clinton's appointee Justice Breyer also thought Bush's equal protection argument was meritorious.)

But Scalia and Thomas affixed their names to Chief Justice Rehnquist's very plausible -- and, as relevant here, textually grounded -- Article II concurrence. Different argument. Makes a big difference. The reasoning in the Rehnquist concurrence fits well with Scalia and Thomas's announced judicial philosophies, thus rebutting the charge of consistency.

I tend to view Scalia and Thomas's votes on the per curiam EP argument as diplomatic -- since there were five votes for the constitutionally correct result no matter whether they joined O'Connor et al.'s opinion or not, they might as well hold their noses and let the Court speak with a unified voice in that extraordinary case.

That's an institutional misjudgment, but the existence of a separate, correct argument for the same result (viz., Article II) demonstrates that it is not a mortal sin.

What I find so striking is that the calumniators of the Bush v. Gore majority rarely even acknowledge the existence of the Rehnquist concurrence.

For example, there's a remarkable slam piece on Justice Scalia in the usually excellent _Commonweal_ magazine this month that uses Bush v. Gore as its single, solitary exhibit for the obligatory suggestion that Scalia is unprincipled. Yet there is not a breath about the concurrence Scalia joined. Same deal with Martin Garbus's book on the Court. Same deal with lots of others.

That's simply disqualifying.

Posted by: Plainsman at April 8, 2003 03:55 PM

My comment above, end of second paragraph, that should be "rebutting the charge of inconsistency." Pardon me.

Posted by: Plainsman at April 8, 2003 03:58 PM

"poor video tape stealer"...! Mr. Newman, the man is a theif, and if someone commits a crime three times, I think that they have been given enough chances to rethink there moral behavior. Stealing is wrong under any circumstances when you have ample oppurtunity to make a living for yourself. -Respectfully
-Robert S. Morgan

Posted by: Robert S. Morgan at April 8, 2003 10:11 PM

The day the "Bush v. Gore canard won't do" is the day someone plausibly shows that the majority would have reached the same result had it been Gore v. Bush. That day, however, will never come.

Posted by: Markg at April 9, 2003 01:05 AM

Jack Balkin has some interesting things to say on the consistency of Scalia's originalist beliefs here:


Posted by: Royko at April 9, 2003 04:11 AM

For those intersted in the question of Scalia's consistency, I highly recommend not only the Balkin blog referred to above, but the blogger to whom Balkin links who defended Scalia. The dialog between the two of them doesn't take long to read but does contain an unusually high thoughtful argument/ad hominem invective ratio.

I'm on the side that thinks Scalia is not particularly principled in his originalism, though he's not totally unprincipled either, particularly in the criminal procedure area. For those who think Scalia really is restrained in what he does because he is a genuine originalist, I have two words: Eleventh Amendment.

And a few more: Section Five of the Fourteenth Amendment (see the Balkin debate); Brady Bill (see the Prince case); commercial speech.

Posted by: J. J. at April 9, 2003 12:10 PM

Unlike the folks who bring up Bush v. Gore, J.J. has identified the real place where Justice Scalia's commitment to originalism has conspicuously slipped: the Eleventh Amendment.

I concede the force of this point. The Seminole Tribe decision and its progeny are questionable from an originalist or textualist standpoint.

In mitigation, it should be mentioned that the Rehnquist Court didn't invent the current 11th Am. doctrine; they are following past Supreme Court precedent (the 19th-century case of Hans v. Louisiana).

But the doctrine of stare decisis is at its weakest in constitutional cases, as Justice Scalia himself often stresses. It can certainly be argued that Hans was just wrong and should no longer be followed.

Posted by: Plainsman at April 9, 2003 02:13 PM

True enough that Hans v. Louisiana is the original sin in this area. This was followed, as we so often see in court doctrine, by trying to blunt a bad rule by introducing questionable exceptions. What Scalia and co. have been doing has been to introduce unbelievably tenuous exceptions to the questionable exceptions to the bad Hans doctrine.

In particular, the Court at one point took most of the stuffing out of Hans by saying that there was federal-question jurisdiction over the states, and all that was required was a "clear statement" that Congress intended to abrogate the states' immunity under the statute in question. What Florida Seminole did was to say that Congress can't abrogate state immunity after all under most of its enumerated powers, e.g., when passing Commerce Clause legislation. This is a nontextual, nonoriginalist gloss on a nontextual, nonoriginalist abrogation doctrine that was put in to fix a nontextual, nonoriginalist reading of the 11th Amendment in Hans. (Don't get me started on Ex Parte Young!).

So there's plenty of blame and charges of hypocrisy to go around here. I just think Scalia's hyping his "originalism" as something that prevents him from imposing his own policy choices is particularly disingenuous in light of the 11th Amendment cases, but perhaps that's in the eye of the beholder.

Now if you really want to see a mess, check out conservative poster child Edith Jones's recent ADA opinion for the Fifth Circuit, which deals with an exception (where the state didn't know how Florida Seminole would come out) to an exception (Congress's power to condition states' acceptance of federal money on a waiver of 11th Amendment immunity) to the exception to the exception to Hans.

I think someone should take Plainsman's suggestion and just overrule Hans. The doctrine is just getting too complicated and giving me a headache.

Posted by: J. J. at April 9, 2003 04:05 PM

And, of course, the founders would have been completely dumbfounded at the idea that a joint-stock corporation, the legal fiction of a state, should be subject to over-riding federal constitutional protection under due process protections that were plainly intended for human beings.

Posted by: citizen k at April 9, 2003 08:44 PM

On the idea that corporations are "persons" protected by various constitutional clauses, I think Scalia has reasonable cover. The Court has been treating corporations as "persons" for these purposes for a century and a quarter, though there is some dispute about whether they ever really faced the question or just kind of fell into the habit. Unlike the recent "new federalism" jurisprudence, this is a question on which the Court's right wing hasn't broken new ground and on which all nine Justices continue to agree.

I don't know much about the originalist cases for or against treating corporations as "persons," i.e., what the historical evidence is, but Scalia has acknowledged the value of stare decisis and agrees that it is sometimes OK to acquiesce in long-settled doctrines that perhaps he wouldn't have agreed with if writing on a fresh slate.

Posted by: J. J. at April 10, 2003 11:24 AM

Full disclosure first: I work for State Farm. That said, I appreciate your coverage of this story. I am so far removed from this activity that I only heard about it yesterday.

I did want to make on clarification though. A paragraph reads: So it's unreasonable to significantly decrease shareholder profits for an insurance company that commits fraud...

State Farm doesn't have any shareholders. It's a mutual company, so any money that isn't used to run the business is given back to the policyholders (depending on claim rates and many, many other factors that I have little clue about).

State Farm may or may not have questionable legal tactics, but there are many people that go to work each day thinking, "Is what I am doing right now a good use of policyholder dollars?" Really.

And lastly, in a CYA move, the opinions expressed here are my own and are not necessarily the opinions of State Farm (or Major League Baseball for that matter).

Keep up the good work. You may or may not want to pass this clarification along to those who have linked to and quoted from your article.

Posted by: fajalar at April 11, 2003 09:16 PM

Scalia's respect for precedent is arbitrary - and Thomas's is even less, but why are neither willing to even cite this peculiar rule as a violation of their "originalist" and "judicial restraint" theories ? Answer: at least Scalia's legal reasoning is informed more by a kind of reactionary corporatism than by anything in the US constitution.

Posted by: citizen k at April 12, 2003 12:07 AM

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