Greetings Court fans!
The Court issued 2 opinions and an order list today. Before I discuss the day’s events, though, one point of follow-up on yesterday’s update. Apparently, my reference to the soon-to-be-famous footnote 4 in the Moseley (Victoria’s Secret) case suggested to some of you that the footnote in question would appeal to your prurient interests. And apparently some of you found it sorely lacking in that regard. Sorry to disappoint you. I’m afraid that footnote 4 is about as risqué as the Court gets these days.
On to today’s business. The Court granted cert in 4 cases and asked the Solicitor General to weigh in on a 5th case:
1. Lamie v. United States Trustee (02-693): This is a case about attorneys’ fees in bankruptcy proceedings, and asks the Court to decide whether 11 USC 330(a)(1) authorizes a court to award attorneys fees to a Chapter 7 debtor’s attorney.
2. Frew v. Hawkins (02-628): This case presents 2 questions: (1) Whether a state waives sovereign immunity by urging a district court to adopt a consent decree when the decree is based on federal law and specifically provides for district court’s ongoing supervision of the state’s compliance with decree, and (2) Does the 11th Amendment bar the district court from enforcing a consent decree unless plaintiffs show that the decree violation is also a violation of a federal right under Section 1983?
3. Verizon Communications v. Law Offices of Curtis Trinko (02-682): This is a case that addresses the intersection between the antitrust laws and the 1996 Telecommunications Act. Under the 1996 Act, incumbent local exchange carriers have certain obligations to help competitors as they enter the local exchange market. Respondents are telephone service customers who claim that the incumbent local exchange carrier failed to provide competing carriers with reasonable access to its facilities in violation of Section 2 of the Sherman Act. The Second Circuit agreed with respondents, and now the Supreme Court will review that decision.
4. Fellers v. United States (02-6320): In this case, police interviewed Fellers in his home — post-indictment — without administering Miranda warnings, and he made incriminating statements. The police then escorted Fellers to the police station and administered Miranda warnings; Fellers promptly repeated his incriminating statements. The Eighth Circuit held that the post-indictment interview, without Miranda warnings, in the suspect’s home and outside the presence of counsel, did not constitute an interrogation for purposes of the Sixth Amendment, and that the failure to initially administer Miranda warnings does not prevent the admission of the subsequent statements made after Miranda warnings. The Supreme Court will review these decisions.
Finally, the Court asked the Solicitor General to provide the views of the United States in Household Credit Services, Inc. v. Pfenning (02-857). In this case, the Sixth Circuit rejected a Federal Reserve Board regulation interpreting a portion of the Truth in Lending Act as inconsistent with that Act.
On to the opinions. Please note that with the release of these opinions, Ginsburg and Souter are tied in the lead for the Term with 4 majority opinions each.
In Cook County, Illinois v. United States (01-1572), Souter for a unanimous Court held that local governments are “persons” subject to qui tam actions under the False Claims Act (FCA). The cleverly-titled FCA provides for civil penalties against “any person” who makes false claims against the government. FCA suits may be brought by the Attorney General or by a private person in a qui tam action brought in the name of the government. (The private party shares in any recovery from the suit.) In this qui tam action, Dr. Chandler claimed that Cook County Hospital (for all purposes, the County) submitted false claims to obtain grant funds from the National Institute of Drug Abuse. The County claimed that it was not a “person” within the meaning of the FCA, and the Supreme Court took this case to resolve a circuit split on the question.
Souter began by noting that the meaning of the term “person” has remained unchanged since the statute was first enacted in 1863, and that there was no question in 1863 that the term covered corporations, including municipal corporations. Moreover, the fact that the statute allows criminal liability (ordinarily not imposed on municipal corporations) does not undermine this conclusion. A municipal corporation can be held to the same substantive standards of federal law as other “persons” even if it is not subject to the full range of remedies available against other “persons.” Similarly, the fact that municipal corporations were not parties to the original conduct that prompted the passage of the FCA (frauds perpetrated by private contractors during the Civil War) does not help the County because Congress wrote the statute expansively to cover all types of fraud. Finally, the Court rejected the County’s arguments based on a 1986 amendment to the FCA. According to the County, because municipal corporations are generally not subject to punitive damages unless expressly authorized by statute, and because Congress in 1986 raised the penalties under the FCA to a level that the Court has characterized as “punitive,” this change in the penalties must have eliminated municipal liability. As Souter noted, treble damages have a remedial purpose as well as a punitive purpose, and there are good indications from the statute that the treble damages available under the FCA are remedial. Thus, the presumption against punitive damages adds little to the County’s argument. Moreover, the County’s argument runs headlong into the “cardinal rule” that repeals by implication are disfavored. The Court found no plausible reason to believe that Congress silently intended to exempt municipal corporations from liability in the course of amending the FCA to strengthen the statute.
In the second case today, Norfolk & Western Railway Co. v. Ayers (01-963), the Court held (1) that employees who suffered from asbestosis caused by a defendants’ negligent conduct could recover for “fear of cancer” damages under the Federal Employers’ Liability Act, and (2) that FELA allows an employee to recover his entire damages from a railroad whose actions jointly caused an injury, with no reduction to apportion damages to other potential causes of the injury. FELA makes common carrier railroads liable to employees who suffer work-related injuries caused by the railroad’s negligence. In an effort to protect employees, it eliminates several common law tort defenses (contributory negligence, assumption of the risk, etc.), but otherwise does not depart from traditional common law tort principles. In this case, 6 former employees of Norfolk & Western Railway alleged that Norfolk negligently exposed them to asbestos, which caused them to contract asbestosis. As an element of damages, the employees were allowed to recover mental anguish damages based on their fear of developing cancer. Moreover, the trial court refused to instruct the jury to apportion damages between Norfolk and other employers alleged to have contributed to an employee’s disease. The jury returned verdicts for the employees, and Norfolk lost all its appeals through the state court system.
Today, the Supreme Court affirmed the jury verdicts. On the first question, Ginsburg (joined by the odd line-up of Stevens, Scalia, Souter, and Thomas) began by reviewing the line drawn in prior FELA cases: stand-alone emotional distress claims not provoked by any physical injury are severely limited, while emotional distress claims brought on by a physical injury are generally compensable. Moreover, under general principles of tort law, claims for pain and suffering associated with a physical injury are traditionally compensable. And by the time FELA was enacted, the common law included apprehension of future harm as a component of pain and suffering. This principle has been reaffirmed in numerous cases through to the present day. The fact that the claimants might someday be able to recover for cancer-related injuries does not bar them from recovering now for their current injury, i.e., the fear of cancer. In addition, the fact that the pain and suffering damages (fear of cancer) are not directly related to the physical injury (asbestosis) does not help Norfolk. Once a negligent actor is found liable for any bodily harm, it is answerable in damages for emotional distress resulting from the bodily harm or “from the conduct which causes it.” After announcing these principles, the Court imposed only one limit on the recovery of fear-of-cancer damages, namely that a plaintiff claiming such damages must prove that his alleged fear is genuine and serious. The Court noted that the proof on this point was very thin and might not have survived a sufficiency-of-the-evidence objection, but pointed out that Norfolk did not base its arguments (in the lower courts or in the Supreme Court) on that argument. (The lawyers for Norfolk must have cringed as they read this–the Court essentially told them that they would have won if only they had made other arguments.)
Kennedy (joined by Rehnquist, O’Connor and Breyer) dissented on this issue. Kennedy began by noting that in the context of asbestos litigation, where there is a real danger that no compensation will be available for those with severe injuries caused by asbestos, this opinion potentially reduces recovery for actual cancer victims (who might not develop cancer for decades) by increasing current payments based on the mere fear of cancer. Moreover, according to Kennedy, the Court’s rule is not soundly based in the common law because the common law required pain and suffering damages to be the direct consequence of an injury. By declining to impose a similar limit under FELA, Kennedy believes that the Court abdicated its responsibility to develop a workable and sensible federal common law rule of decision. Breyer penned a separate dissent to emphasize his own analysis of the common law.
On the second question (apportionment of damages), Ginsburg wrote for a unanimous Court. Ginsburg noted that nothing in the statutory text suggests that damages should be reduced when the negligence of a third party also contributed to an injury. This reading of the text is consistent with virtually all court precedent, and with the Court’s repeated statement that joint and several liability is the traditional rule.
Ginsburg closed her opinion with a call to Congress — oft-repeated in asbestos cases — for a legislative fix to the morass that is asbestos litigation in the state and federal courts.
That’s all for today. The Court will issue its next orders and/or opinions on March 24. Until then, thanks for reading.
Sandy
From the Appellate Practice Group at Wiggin & Dana.
For more information, contact Mark Kravitz, Jeff Babbin, or Sandy Glover
at 203-498-4400, or visit our website at www.wiggin.com.