City of Newport v. Fact Concerts, Inc.

PETITIONER:City of Newport
RESPONDENT:Fact Concerts, Inc.
LOCATION:New York State Thruway

DOCKET NO.: 80-396
DECIDED BY: Burger Court (1975-1981)
LOWER COURT: United States Court of Appeals for the First Circuit

CITATION: 453 US 247 (1981)
ARGUED: Mar 31, 1981
DECIDED: Jun 26, 1981

ADVOCATES:
Guy J. Wells – on behalf of the Petitioners
Leonard Decof – on behalf of the Respondents

Facts of the case

Question

Audio Transcription for Oral Argument – March 31, 1981 in City of Newport v. Fact Concerts, Inc.

Warren E. Burger:

We’ll hear arguments next in City of Newport v. Fact Concerts.

Mr. Wells, I think you may proceed when you are ready.

Guy J. Wells:

Mr. Chief Justice and may it please the Court:

We are here this afternoon to decide whether municipal governments all across this nation are going to be subjected to a new and potentially ruinous form of damage assessment, a form of damage assessment that clearly was never contemplated by the 42nd Congress.

It clearly is founded in no strong policy purpose.

And it wholly fails to accomplish any of the remedial purposes of Section 1983.

An award of punitive damages against a municipality lacks either a historic or a societal justification.

Now, an affirmative answer to the question presented… that is to say, is a municipality liable for punitive damages in a 1983 case… an affirmative answer to that question, it seems to me, will wreak havoc with the balance of governmental powers in the United States without producing any significant corresponding social purpose, even aside from the questions of division of governmental powers, what logic or reason supports a damage structure which punishes the innocent without deterring the guilty.

Now, going to the historic background of 1983, it is perfectly clear that punitive damage awards against municipalities were wholly beyond the ken of the 42nd Congress.

Up until 1871 no court in this country, with one exception… and that exception was clearly remedied very shortly thereafter… no court of the United States had ever upheld a punitive damage award against a municipality.

And the lawyer members of the 42nd Congress couldn’t have helped but know that.

There was a plethora of authority on that subject at that time.

As a matter of fact, none of the courts of England had ever upheld a punitive damages award against a municipality.

If one wants to look at legislative history as this Court has done in considering the question of compensatory awards against municipalities, one only has to look at the remarks of Congressman Kerr, Congressman Butler, and Congressman Poland.

Now, admittedly, those remarks were directed to debate on the Sherman Amendment, but we must remember that the Sherman Amendment was aimed directly at municipalities, the Sherman Act which passed the Senate and died in the House.

And each of those gentlemen speaking to the question of the impact of the Sherman Act indicated that it was intended, and they believed it was intended, to be entirely remedial.

I believe Representative Blair said, it is not punitive or penal but remedial only.

And I believe that one can read that as representing the thinking of even some of the most radical members of the 42nd Congress.

I suggest that a punitive award would have been totally abhorrent.

Byron R. White:

You wouldn’t suggest that punitive damages would have been improper in just the ordinary case.

It’s just against the municipalities?

Guy J. Wells:

Well, I am limited here to talking because of the–

Byron R. White:

Well, I know, but is your argument that no punitive damages against municipalities because no punitive damages against anyone?

Guy J. Wells:

–No, no, sir.

I am suggesting here that I am talking only about punitive damages against municipalities.

I recognize that this Court–

Byron R. White:

The legislative history you’re citing goes only to, or the case law that you’re citing goes only to municipalities?

Guy J. Wells:

–It does, sir, yes.

Potter Stewart:

And these Congressmen whose views you have cited were proponents of the Sherman Amendment?

Guy J. Wells:

I believe Representative Butler was.

Guy J. Wells:

I think perhaps Representative Kerr was an opponent.

But it’s interesting that they were in complete agreement with respect to the import of that Act.

And of course the Sherman Act was a precursor of 1983.

Now, the reasons why I think that a punitive award against the city was abhorrent to Congress in 1871, the reasons for that are as compelling today as they were then; even perhaps more compelling.

Obviously, an award of punitive damages has an immeasurable impact upon the financial structure of a city and today we have seen, like, for instance, the examples of New York, Cleveland, Boston; we know about them simply because they are matters of national interest and we read about them all the time; but I suggest that they are multiplied a thousandfold in smaller municipalities throughout this country.

And one only has to read the briefs, particularly of the Attorney General and the briefs of the National Institute of Municipal Law Officers, to understand the real menace or the real sword of Damocles that is hanging over the heads of our cities and towns.

Warren E. Burger:

I suppose you’d make an exception of those cities and towns that happen to like rock concerts?

Guy J. Wells:

Well, you see, perhaps that is so.

If they like them I guess they can take their chances.

In this case Newport attempted not to take its chances, but beyond that the scope of 1983 is so broad and I’m sure this Court is aware that today 1983 cases are multiplying like rabbits.

Byron R. White:

But you say that the issue is whether punitive damages would ever be allowed against a municipality?

Guy J. Wells:

That’s true, sir.

Byron R. White:

And that even if there’s a deliberate denial of First Amendment rights or malice or what have you, the normal underpinnings of punitive damages, if they’re all there, nevertheless, no damages like that against a municipality?

Guy J. Wells:

Yes, I say that, sir.

And I say that–

William J. Brennan, Jr.:

And furthermore, Mr. Wells, I gather you say that… I guess you’ve settled that the 1983 liability of a municipality requires the plaintiff to prove that it is a matter of municipal policy?

Guy J. Wells:

–That’s true, sir.

William J. Brennan, Jr.:

Not just accident, but affirmative policy: the municipality has violated the federal constitutional statutory rights of the plaintiff, on purpose, done it on purpose.

Guy J. Wells:

Yes, sir.

William J. Brennan, Jr.:

And notwithstanding all that, you say, no punitive damages?

Guy J. Wells:

No punitive damages against the municipality.

And I say that because what you are doing–

William J. Brennan, Jr.:

Of course, the municipality has no immunity defense either.

Guy J. Wells:

–That’s quite true.

William J. Brennan, Jr.:

After City of Independence.

Guy J. Wells:

That’s quite true, sir.

Potter Stewart:

And the holding that my brother Brennan referred to means you have to prove all of that before you can even get compensatory damages, doesn’t it?

Guy J. Wells:

Yes, sir.

But I suggest that the reason municipalities ought to be immune from an award of punitive damages is that it is clear that the function of punitive damages is to punish someone, and to make an award of punitive damages against a municipality does not punish anyone.

The burden of a punitive damages award against a municipality is a burden borne solely by a taxpayer at the time the additional tax is assessed or by the person whose municipal services are curtailed as a result of having to take out of the budget whatever the punitive damage award is.

Guy J. Wells:

Those people are clearly innocent.

They are not the actors in this drama.

They are simply people who have to come up with the money.

A number of–

Thurgood Marshall:

They are the same people that are on the jury too, aren’t they?

Guy J. Wells:

–Not necessarily, Your Honor.

Because, for instance, this case was tried–

Thurgood Marshall:

Do you mean that there are people on juries in Rhode Island that are not taxpayers?

Guy J. Wells:

–Oh, yes, sir; oh, absolutely.

Thurgood Marshall:

Who are not taxpayers?

Guy J. Wells:

And there are people on juries–

Thurgood Marshall:

In this day and age, who is not a taxpayer?

Guy J. Wells:

–Well, there are people who are not taxpayers on juries, and–

Thurgood Marshall:

How could they be?

Guy J. Wells:

–Well, there may be–

Thurgood Marshall:

Don’t you have sales tax in Rhode Island?

Do you?

Guy J. Wells:

–Well, but they… they don’t go to the municipalities.

The only tax base in Rhode Island in the municipalities is property tax.

Thurgood Marshall:

But they are taxpayers.

Guy J. Wells:

True, but you see, again, in Rhode Island, we will be drawing juries, any jury in our federal court comes from every city and town in the state, so in a trial against the City of Newport, for instance, the plaintiff would excuse, and properly so, all residents of Newport.

So he might have residents of Providence, Warwick, East Providence, sitting in a case to assess punitive damages against the City of Newport.

So the jury’s interests are not necessarily identical with the interests of the people of Newport.

Thurgood Marshall:

I didn’t say identical.

I said they were of interest.

Guy J. Wells:

Yes.

Thurgood Marshall:

That’s all I said.

And all you should have said was “yes”, and you would have saved all of this trouble.

I took it that what you meant was, these aren’t taxpayers who are going to share in the burden of this verdict?

Guy J. Wells:

True.

Guy J. Wells:

And you see, you will have some persons–

Byron R. White:

No insurance?

Guy J. Wells:

–You can’t buy insurance against punitive damages, Your Honor.

Or, I think you cannot buy it… and many states as a matter of public policy do not permit insurance against punitive damages.

William J. Brennan, Jr.:

Is Rhode Island one of them?

Guy J. Wells:

I have never known of a policy issued in Rhode Island that covered punitive damages.

Byron R. White:

Even in auto–

Guy J. Wells:

In automobile cases they’re excluded.

Byron R. White:

–You mean that you can buy it for that?

Guy J. Wells:

Well, under the statutory policy in Rhode Island, that’s excluded.

Punitive damages are excluded.

Byron R. White:

Oh, I see.

So that you don’t get coverage for reckless–

Guy J. Wells:

No, sir.

Well, it would be an automobile assault.

Byron R. White:

–Which would be uninsurable?

Guy J. Wells:

That’s right.

But, you see, further, a number of people who are taxpayers may not have been taxpayers in the city at the time the wrong was committed but who moved to the city before the assessment of taxes was made.

Similarly, a number of taxpayers in the city at the time the wrong was committed may have moved and escaped liability altogether.

So, again, I suggest that the imposition of punitive damages against a municipality serves really no deterrent purpose.

I’d like to address myself to one of the things that the trial judge said in passing on the motion for a new trial and judgment N.O.V. He said, well… and I’m paraphrasing this, now… the imposition of punitive damages on the taxpayers of the city may have an influence, a beneficial influence on the next election: they’ll kick the rascals out.

Now, I think that’s an interesting intrusion, if that is what it is, of the federal court into local or municipal affairs.

But, secondly, it doesn’t make any sense.

And if we take a look at this case, the wrong, such as it was… and I suppose we’re now beyond the point where I can argue that it wasn’t… but the wrong occurred in August of 1975.

Since then we’ve had the ’76 election, we’ve had the ’78 election.

Then we had the trial.

We’ve had the ’80 election.

And, of course, the assessment of damages won’t be made until after a decision on the issue before us today is reached.

William H. Rehnquist:

Mr. Wells, Judge Pettine did grant a remittitur of the punitive damages, didn’t he?

Guy J. Wells:

Yes, he did.

Guy J. Wells:

Yes, what he did in that case, he decided… the original award against the city was $200,000, and against the individual councilmen in varying amounts added up to $75,000.

And Judge Pettine reasoned, and I think correctly, if we are to have an award of punitive damages that the city could not be more guilty than the councilmen who actually committed the act.

What will happen if we’re talking about focusing voter outrage on elected officials, the voter outrage won’t be focused, if assessment of taxes is what will do it, and I suggest that that is the only thing that will do it, the voter outrage won’t be focused until the assessment which will be by a council at least six years away from the act itself, and they may not be the rascals that need to be turned out at all.

So I think the argument that punitive damages ought to be awarded as a deterrent because they’ll focus attention on the malefactors just doesn’t make any sense in the light of practicalities.

Byron R. White:

Could I ask you, for a moment, what your response is now to the argument that this issue isn’t really properly before us in the sense that if there’s an argument like this in this Court, how could it possibly have been plain error?

And that’s what the court of appeals said; it wasn’t plain error, even if it was error.

And you failed to object to the instruction; and do we just sweep that under the rug, or what?

Guy J. Wells:

No, Your Honor.

Byron R. White:

We cannot because the respondent is defending the judgment below on that ground.

Guy J. Wells:

Your Honor, I understand that and I had intended to address it a little later on, but–

Byron R. White:

Excuse me; you take your own time.

Guy J. Wells:

–I should… no, I’ll meet the argument now.

I might say, I did not try that case.

I wasn’t retained until after the verdict.

If there was ever a case, it seems to me, that cries out for the application of the plain error rule or the relaxation of Rule 51, it is this one.

Byron R. White:

You mean, for relaxing the plain error rule?

Guy J. Wells:

Well, yes, sir.

William H. Rehnquist:

Well, Mr. Wells, let me ask you this, if I may, along the lines of Justice White’s question.

On page A-15 of the petition for certiorari which is the last paragraph of the court of appeals’ appendix, where the court of appeals says,

“In short, the present state of the law as to municipal liability is such that we cannot with confidence predict its future course. “

“Where the law is in such a state of flux and there is no appellate decision to the contrary, we would be hard pressed to say that the trial judge’s punitive damages instruction was plain error. “

“See United States v. Petrozziello. “

“Nor is this a case containing such a peculiar circumstance as to warrant noticing error to prevent a clear miscarriage of justice. “

Do you read that as a flat refusal to notice the error?

I thought it was a little bit fuzzy myself, that the court of appeals was not saying in so many words that we will not notice the error.

Guy J. Wells:

Quite true.

I think the court of appeals was troubled, and I think it’s interesting that the court of appeals grappled with the problem when they could have said, it’s Rule 51 and we’re not going to even listen to you.

I think, as I say, they were troubled.

I believe a fair reading of Judge Pettine’s opinion on the motion for a new trial indicates that he was somewhat troubled.

And I suggest again that the Court should relax the rule here for two real reasons.

Guy J. Wells:

First of all… and again, if one looks at the amici briefs, this is a problem that is floating around all over the country.

And sooner or later this Court is going to be faced, perhaps in a better procedural context–

Byron R. White:

Of course, it may be that a good answer to my question is, well, I rely on the grant of certiorari, which is limited to one question.

Guy J. Wells:

–Well, yes, that’s correct, Your Honor.

This Court is going to end up here sooner or later and probably, considering the volume of cases, it’s from the point of view of judicial efficiency, and from the point of view of municipal stability, it might be better to have the question answered as quickly as possible.

William H. Rehnquist:

That could be said with respect to plain and flagrant violations of the rules for preserving errors through the… But we know we didn’t assert it in the trial court or in the court of appeals and we didn’t raise it as a question to be presented on this petition, but it’s a question that needs answering sooner or later so let’s answer it now.

Guy J. Wells:

Well, Mr. Justice Rehnquist, I think this is a little different because of the volume of cases in which the punitive damages issue is a real issue.

And, secondly, because I suppose with the exception of people who live on Indian reservations, for instance, or federal enclaves, every American lives in a city or town, and I doubt that there are many cities or towns in the United States who are not presently having some forms of financial problems, and to settle an issue of this kind early, I think, perhaps stabilizes their relationships with the Government, it gives them an opportunity to assess the kinds of things that they are going to do.

William H. Rehnquist:

Well, when you say, we ought to “relax” the rule as to noticing plain error, are you saving that we should review the court of appeals’ refusal to note plain error, or that in effect the court of appeals did regard this as plain error and, as you say, grappled with it in an entire paragraph rather than just brushing it off and saying, it wasn’t raised?

Guy J. Wells:

I think the court of appeals really believed it was plain error, and that that’s why you find that language you referred to as kind of fuzzy language, in what is apparently close to the last paragraph.

Byron R. White:

Of course, you could say, you could ask us to waive our own rule against considering questions not raised below but presented here.

Guy J. Wells:

Well, the question was raised below.

John Paul Stevens:

May I ask a question about the judgments related to this?

The trial judge reduced the punitive damage award against the city from $200,000 to $75,000, as I remember it.

And was there not also a punitive damage award against other defendants?

Guy J. Wells:

Yes, there were.

John Paul Stevens:

For how much, and is that a joint and several liability, or a separate judgment?

Guy J. Wells:

No, no.

There were five councilmen, and a mayor.

And there were varying awards of punitive damages against them which totaled $75,000.

I believe there were two of $40,000 and a couple of ten and a couple of five, something–

John Paul Stevens:

You’re way over 75 by now.

Guy J. Wells:

–Pardon?

John Paul Stevens:

You’re way over 75 with two over 40 and–

Guy J. Wells:

Well, I don’t have the precise numbers in mind.

John Paul Stevens:

–Well, now, were those… if they collected those, that 75 from the individuals, could they get this 75 from the city in addition?

Guy J. Wells:

Absolutely, and that’s the interesting thing about punitive damages, because, for instance, there was a $72,000 compensatory damage award against the councilmen and against the city.

Now, satisfaction by one of those of the $72,000 satisfies the entire compensatory damage award.

But the punitive damage awards are all cumulative, and again, this is one of the problems.

In Owen you decide that you can collect compensatory damages.

Guy J. Wells:

And that makes the plaintiff whole.

But the punitive damages as to him represent a windfall.

The only justification for them can be punishment, and against a municipality, as I suggest, you’re really punishing the innocent.

John Paul Stevens:

May I ask you if the record tells us whether the city or some insurance company or who will actually pay the punitive damage award against the individuals?

Guy J. Wells:

The record does not disclose that, and I don’t know the answer to that.

I know that it will be satisfied.

William J. Brennan, Jr.:

Mr. Wells, as you’ve been talking deterrents, you’ve been arguing no deterrents, am I wrong?

It seems to me when I was in practice we used to talk about punitive damages as “smart money”.

Guy J. Wells:

Yes, sir, I’ve seen that phrase.

William J. Brennan, Jr.:

That’s a different element from deterrents, isn’t it?

Guy J. Wells:

Well, I’ve never been sure what the adjective “smart” meant, whether it’s “smarts” or–

William J. Brennan, Jr.:

Well, that’s what I understood it to mean.

To make it hurt.

Guy J. Wells:

–Yes.

William J. Brennan, Jr.:

It smarts, and you did it to punish somebody, if you please, for having done the sort of thing that the jury said–

Guy J. Wells:

Precisely, but–

Warren E. Burger:

–Well, it’s another form of exemplary, to make an example, is it not?

Guy J. Wells:

–That’s true.

And the problem is, or it seems to me that the answer is, that… while I know that this Court has never precisely passed on punitive damages in 1983 cases, they’re being assessed against individuals as they were in this case, all the time.

And so, in assessing, for instance, as against the councilmen in this case, you are making an example of them as actors, but in assessing it against a municipality you’re really not making an example of anybody but the poor taxpayer.

I suggest that there is another reason, and perhaps it is more procedural than anything else, that militates against this.

As I have always understood the law to be, the wealth of the actor played a part in the assessment of punitive damages.

If you were a very wealthy man, the jury was entitled to know that, assess a larger amount of damages against you, because they had to do something that would hurt you, that would smart.

Warren E. Burger:

Was there any showing here as to the resources of the individual defendants?

Guy J. Wells:

Absolutely none, and there’s absolutely none against the municipality.

And of course the municipality’s, I suppose, power to tax is limited only by the real property… at least in Rhode Island… within its corporate bounds.

But how do you measure what its wealth is?

It may have long-term commitments, it may be building a school, it may be doing a variety of things, and it seems to me that as an evidentiary point of view you would end up with weeks and weeks of discussions of municipal finances before you ever found out how wealthy the city really was or how poor it really was.

And I suggest that that is another reason why the punitive damages scheme doesn’t fit in with municipalities.

But just to conclude, again, historically–

William J. Brennan, Jr.:

Incidentally, I gather the punitive awards against the individual councilmen have not been appealed?

Guy J. Wells:

–No, Your Honor, they were not.

Again, I say, historically, there’s no reason for anyone to suspect that the Congress intended punitive damages against a municipality; that it serves no societal purpose; and that it really punishes the innocent rather than the guilty actors.

There are remedies against the actors that are imposing; there are criminal sanctions in the appropriate case; there are injunctive relief; there are punitive damages awarded against an individual.

And to suggest that an additional award against a municipality is going to deter that individual from acting just doesn’t make sense.

He’s more worried about his own pocketbook than he is about the city’s pocketbook.

For these reasons, I think the court of appeals for the 1st Circuit should be reversed.

Warren E. Burger:

Mr. Decof.

Leonard Decof:

Mr. Chief Justice, and may it please the Court:

Mr. Wells’ argument is bottomed on the allegation that the innocent taxpayers would be the ones who’ll bear the burden of a punitive damage award.

This argument could be made against every provision of 1983: the innocent taxpayers bearing the burden of a compensatory award, or the innocent taxpayers bearing the burden of injunctive relief.

And I submit to Your Honors that the punitive damage award is the least expensive kind of deterrent that we can buy.

In any given case, injunctive relief provided under 1983 will normally be far more expensive than a given punitive damage award.

Prison reform, for example, goes on for years and years.

It costs all kinds of money, into the millions.

It’s far more intrusive.

Warren E. Burger:

How does that relate to this kind of an award in this setting?

Leonard Decof:

With reference… Mr. Wells was making the argument that the innocent taxpayer carries the burden of the punitive damage award.

That same argument could be made with reference to injunctive relief, or reference to compensatory damages.

I submit that the punitive damage award is necessary under 1983, especially since Carey v. Piphus, because of the reason that Mr. Wells and the City of Newport tried to overlook, the deterrence which this Court has acknowledged to be a primary underlying premise of 1983.

Since Carey v. Piphus, where the courts were struggling to find some grounds in between punitive and compensatory for awarding a substantial sum of money for, I think, what Prosser would refer to as “the petty outrages”.

And the Court there held there could be nothing more than nominal damages for violation of procedural due process or whatever.

There’s a whole spectrum of cases which would support nothing more than nominal damages.

How much is it worth to go to an unsegregated school?

How much is an individual’s voting rights worth?

How much is it worth to deliver a sermon uncontrolled by any censor?

And so on down the line; I don’t have to belabor the obvious.

And I submit, Your Honors, that this leaves a big hole in 1983, because these petty outrages are the easiest inflicted and the most insidious and the most difficult to guard against.

Potter Stewart:

But by hypothesis, the least damaging?

Leonard Decof:

Not necessarily, Your Honor, for this reason.

Leonard Decof:

To the individual, what Your Honor has just stated illustrates–

Potter Stewart:

I thought that was your point, that you can’t compensate them in money because you can’t show damages?

Leonard Decof:

–You can’t show damages.

But they are very damaging, if the Court please, in the sense that they humiliate, that they embarrass; to the individual they are very damaging and they occur repeatedly.

The “nice” person can easily focus on and relate to outrages such as whippings, lynchings, beatings, and the like, but the nice person isn’t so easily offended by the gentleman’s agreement type of discrimination, and this is the kind of thing that is the most difficult to police.

The courts have struggled with years over–

Thurgood Marshall:

What is this?

The right to hear the music or the right to play the music?

Leonard Decof:

–This case… and I would like to go into the facts; I know the facts are not before the Court but they–

Thurgood Marshall:

Before you get to all the facts, answer my question.

Leonard Decof:

–This case was a case where the City of Newport wanted to dictate what kind of music would be played.

Thurgood Marshall:

So the question was the right to hear it or the right to play it?

Leonard Decof:

It’s the right to perform it.

That was the specific question here, but that also relates to the right to hear it by the public, but what they–

Thurgood Marshall:

And that affects a whole lot of people.

Leonard Decof:

–Yes, it does, Your Honor.

Thurgood Marshall:

Yes, it really does.

Is there any analogy between this and the sound truck cases, the right to control sound trucks going up and down the streets in a case some years ago here?

Leonard Decof:

With reference to those cases, Your Honor, we get into the question of public nuisance, public safety.

Public safety was raised here.

The jury found it to be a spurious defense.

If I may, I would like to just touch on the facts because this is a classic example of why nothing but punitive damages will serve to answer the problem.

The councilmen in this case, four of the six councilmen and the mayor, were the very same people who had only the very same year been enjoined by the very same chief judge for a similar violation, for limiting the freedom of expression or the right of free speech.

This was the “Tiger Cage” case where some people wanted to place a tiger cage case in a public park to demonstrate–

Thurgood Marshall:

What’s a tiger case?

Leonard Decof:

–Please, Your Honor?

William J. Brennan, Jr.:

You mean, a cage?

Leonard Decof:

It was a tiger cage; yes.

Yes, the purpose of it was to protest against the Vietnam war, that we were incarcerating Vietnamese prisoners in a tiger cage.

And the City of Newport, this very council, refused to issue the license.

Leonard Decof:

And this very court enjoined them and said, this is a violation of free speech and you must issue this license.

The City Solicitor–

William H. Rehnquist:

What case was that?

Where do we find that?

Leonard Decof:

–That is cited, if the Court please, in the Joint Appendix at page 41 and in the Record Appendix which was filed before the Circuit Court of Appeals at page 305.

William H. Rehnquist:

What was the Joint Appendix cite?

Leonard Decof:

Page 41, Your Honor.

And that was the tiger cage case.

William H. Rehnquist:

Is the Joint Appendix the tan?

Leonard Decof:

Yes, it is, Your Honor.

William H. Rehnquist:

Just glancing at it, page 41, I don’t see a case citation.

Leonard Decof:

It isn’t a case citation.

What this is, Your Honor, is a record of the testimony of the individual who was being cross-examined about that case, having appeared in that case–

William H. Rehnquist:

Oh.

What’s the citation to the case in which this Court enjoined it?

Leonard Decof:

–The case never went further than the restraining order so there is no appellate citation of that case, if the Court please.

William H. Rehnquist:

Well, if it came here and was heard, I–

Leonard Decof:

It did not come here, if the Court please.

William H. Rehnquist:

–I thought you said it was this Court’s case?

Leonard Decof:

No, no.

When I said “this court” I meant–

William H. Rehnquist:

Oh… the district court.

Leonard Decof:

–the district; yes.

Judge Pettine’s court.

And that case occurred within months before this incident occurred.

Warren E. Burger:

Was it not pursued in that court beyond a temporary restraining order?

Leonard Decof:

it was not pursued in that court, Your Honor.

Warren E. Burger:

Well, then, how do we know whether the judge was right or not?

Leonard Decof:

The problem, whether the judge was right or not, if the Court please, the question is a question of knowledge, foreknowledge by this council in going back in again and doing the same thing.

They accepted, or the City Solicitor accepted the judge’s opinion, and the City Solicitor in this case advised the City Council and the mayor that they had no right to do what they intended to do.

Leonard Decof:

In spite of that they went forward and did it.

Because of that they couched their denial and disguised it with a ruse, claiming that a portion of the contract had been violated, and there was a great deal of testimony about this.

And so they went ahead and did what they knew they shouldn’t have done, and then disguised it.

Furthermore, these same councilmen, particularly Councilman West, who was–

William J. Brennan, Jr.:

Now, what they did was deny a permit, was that it?

Leonard Decof:

–No, Your Honor, what they did was, my clients, Facts Concerts, had a license from the City of Newport to promote a musical concert at Fort Adams, and they had lined up the greatest jazz stars in the country, and one of them, outstanding performer Sarah Vaughn, had to cancel out.

And my clients engaged Blood, Sweat and Tears to take her place.

The City of Newport upon finding this out said, if Blood, Sweat and Tears appears on this program, we would cancel your license.

And that’s what set the facts going forward.

William J. Brennan, Jr.:

And did they cancel the license?

Leonard Decof:

They did cancel the license, Your Honor, but on the pretext, which the jury found to be a ruse, of some chairs not having been wired together.

They canceled–

William J. Brennan, Jr.:

Is this the old Newport Jazz Festival of years back or what?

Leonard Decof:

–This is… that was… there’s a jazz festival in Newport every year.

This was… the old Newport Jazz Festival was run by George Wein.

This was run for the first time by my clients who were new promoters.

By the way–

Thurgood Marshall:

The Newport Festival is now in New York City, isn’t it?

Leonard Decof:

–Yes, it is, Your Honor.

Thurgood Marshall:

It isn’t even up there.

Leonard Decof:

That’s correct, Your Honor.

Thurgood Marshall:

And it wasn’t up there this time either, was it?

Leonard Decof:

No, this was… it had a different name.

Thurgood Marshall:

It was riding on the name, yes.

Leonard Decof:

Yes, it was a jazz festival at Newport.

William H. Rehnquist:

Mr. Decof, what do you make of the language in Carey v. Piphus at 256 of 435, where it says that,

“to the extent that Congress intended that awards under Section 1983 should deter the deprivation of constitutional rights, there is no evidence that it meant to establish a deterrent more formidable than that inherent in the award of compensatory damages? “

Leonard Decof:

What I say to that is that Carey v. Piphus, Your Honor, was footnoted to the effect that… I think I paraphrase correctly… this is not to say that we indicate that punitive damages would not be properly awarded in the proper case.

In Carey v. Piphus there was no evidence of punitive damages; there was no set of facts.

In Carey v. Piphus I think it was Footnote 9 stated that we don’t mean to indicate that punitive damages would not be recoverable in the proper case; and then went on to cite a number of lower court cases, circuit court holdings, where punitive damages had been awarded and cert had been denied.

Leonard Decof:

And in Carlson v. Green Mr. Justice Brennan indicated again in dictum that punitive damages would be recoverable on the proper set of facts and cited the footnote in Carey v. Piphus.

So although it was dictum, I would urge this Court that this Court has at least edged toward–

Byron R. White:

Well, do you take issue with the submission that at the time 1983 was adopted the controlling case law was against punitive damages against municipalities?

Leonard Decof:

–I take issue with that for this reason, Your Honor.

In those days, and even today, with every state that has a statute that does not allow punitive damages against a municipality, that state also has respondeat superior, strict liability, liability without fault.

And that was the context in the background of the common law–

Byron R. White:

That may be, but then your answer to me is, no, you do not take issue with the fact that the law as it was at the time of 1983 did not normally contemplate the… for whatever reason–

Leonard Decof:

–Yes, yes, Your Honor.

Byron R. White:

–Did not contemplate the issuance, or the imposing of punitive damages on municipalities.

Leonard Decof:

Yes, Your Honor.

I agree with that.

But I say that it was qualitatively different in the sense that it was liability without fault, and I compare it, even the statutes today, to the workers’ compensation acts where–

Byron R. White:

So, I guess–

Leonard Decof:

–a state said, we will assume liability, but we’ll put a cap on it; this is the trade-off.

Byron R. White:

–In holding that municipalities are subject to 1983, in Monell–

Leonard Decof:

Yes, Your Honor?

Byron R. White:

–We said, but only if it’s municipal policy.

Leonard Decof:

But I think also, Your Honor–

Byron R. White:

And so we did, we apparently, according to your reading of the cases, we construed 1983 not to reflect the common law in that case.

Leonard Decof:

–If the Court please–

Byron R. White:

Because we didn’t permit respondeat superior.

Leonard Decof:

–Yes, this is… you took away respondeat superior and you established municipal liability–

Byron R. White:

And you say that’s why you–

Leonard Decof:

–and to my way of thinking, you narrowed–

Byron R. White:

–should have punitive damages?

This policy?

Leonard Decof:

–Not really because of that.

I say, if the Court please, that this Court historically has not opted for a mechanical adoption of the common law.

They will adopt the common law if it is not in conflict with the purposes of 1983, and a major purpose of 1983 is deterrence and–

William J. Brennan, Jr.:

You say that Monell and such narrowed it–

Leonard Decof:

–Yes, Your Honor.

William J. Brennan, Jr.:

–Abolishing respondeat superior, because it requires now, before a municipality may be liable, proof of policy.

Leonard Decof:

Precisely, Your Honor.

Precisely.

And when the Court came along later… so for now there is no liability without fault.

Now, for us to talk about a situation which would absolve municipalities of the most egregious intentional malicious violations of the Civil Rights Act, I think we’re not talking about an extension of Monell, we’re talking about something that naturally comes before Monell.

I would think this Court would think first, of course, the purposeful act should be punished.

We’ll talk later about taking away the good faith defense, which was done.

William J. Brennan, Jr.:

And I gather your argument also is that policy necessarily means proof of intention?

Leonard Decof:

Exactly, Your Honor.

William J. Brennan, Jr.:

To deny the constitutional or federal statutory–

Leonard Decof:

Exactly, Your Honor; if the taking away of a good faith defense does not mean there will be liability without fault.

Fault must still be proven even though it may be in good faith.

And another corollary to this is, there is a gap between absence of good faith and proof of malice.

One thing that would be accomplished if punitive damages were allowed, not only would good faith be an allowable defense to the punitive damages, but the good faith would be presumed on the part of the defendant municipality because it would be the affirmative burden of the plaintiff to show, to prove malice.

William J. Brennan, Jr.:

–Well, Mr. Decof, what of the situation in this very case, for example?

I suppose it’s possible the jury could have found the municipality liable as having a policy, and yet… but has no immunity defense, and yet the individual councilmen would have had an immunity defense, and the jury might have found them, no cause of action as against them based on an immunity defense–

Leonard Decof:

Exactly, Your Honor.

William J. Brennan, Jr.:

–but a finding of liability on the part of the municipality.

What do you say then about punitive damages?

Leonard Decof:

If… but they would have had to find that the municipality acted maliciously.

Your Honor points up the example, for example, of the statute which is wrongfully and maliciously enacted but carried out in good faith by somebody else, maybe years later down the line.

It’s one reason why we need punitive damages against a municipality.

You may not find the person who enacted that.

And the good faith would be a defense.

Or supposing a police chief said to one of his policemen, go out on the street every night and frisk everybody.

Now, that policeman, if he does it in good faith, will not be held liable.

So there’s a tremendous gap that punitive damages is the only answer to.

And in this case, for example, if I may continue to show how it classically demanded it, the councilmen here, besides changing their stories and going through the rules and having had foreknowledge, stated they would do it again.

Councilman West–

Thurgood Marshall:

But they are not here.

Leonard Decof:

–But they were the city, Your Honor.

Thurgood Marshall:

They are not here, are they?

Leonard Decof:

If Your Honor please–

Thurgood Marshall:

I thought you said you didn’t appeal that?

Leonard Decof:

–They did.

Thurgood Marshall:

They did?

Leonard Decof:

No, no, that’s not before this Court.

It was appealed to the 1st Circuit.

Thurgood Marshall:

The councilmen are not here, are they?

Leonard Decof:

No, but if Your Honor please, the councilmen were the city, because they acted by unanimous vote.

Thurgood Marshall:

About two-thirds of your time you’ve been quoting councilmen, and they’re not here.

Leonard Decof:

Because… that’s correct, Your Honor.

But the point is this, if the city is the recipient, or the target of award, an award for the punitive damages, then that is passed on, the attention is directed to the taxpayer and the taxpayer does something about removing those offending councilmen.

The city can only act through its officers.

Potter Stewart:

Were punitive damages awarded against the councilmen also?

Leonard Decof:

Yes, they were, Your Honor.

Potter Stewart:

In addition to the punitive damages awarded against the city?

Leonard Decof:

Yes, they were, Your Honor.

Yes, they were, Your Honor, in separate amounts.

Potter Stewart:

In cumulative amounts?

Leonard Decof:

Yes, Your Honor.

They totaled $75,000 against the councilmen and the mayor and they totaled $75,000, as reduced, against the city.

Potter Stewart:

Now, $75,000?

Leonard Decof:

Yes, now, Your Honor.

Sir?

Harry A. Blackmun:

Have those damages been collected from the individuals?

Leonard Decof:

No, not a penny has been collected, and there’s–

Harry A. Blackmun:

Is it collectible?

Leonard Decof:

–That’s another question, Your Honor.

Leonard Decof:

This is another reason for the need for the punitive damages against a city.

One of the purposes of 1983 is to encourage injured plaintiffs to bring their actions.

If they can’t recover more than nominal damages, they won’t bring them just to recover attorneys’ fees, and attorneys’ fees are allowable for that purpose, to give incentive.

One of the reasons that, again, they might not bring them is because people on city councils ordinarily cannot respond to a judgment.

Harry A. Blackmun:

I don’t think you’ve answered my question.

Leonard Decof:

I don’t know–

Harry A. Blackmun:

Is it collectible?

Leonard Decof:

–I don’t know if it would be collectible or not.

Harry A. Blackmun:

You’re the attorney, you have a judgment.

Have you gone after it?

Leonard Decof:

The judgments are on appeal, if the Court please.

Was there supersedeas?

Leonard Decof:

There is no supersedeas bond filed in this case.

William H. Rehnquist:

Under Rhode Island law, can’t you go after a judgment debtor if there is no supersedeas bond?

Leonard Decof:

There was… Mr. Wells, I think, inadvertently erred before the Court.

Because of the problem of collecting a judgment against these individuals, a stipulation was filed and an agreement was reached between Mr. Wells and myself that the city, the need for the city to file a supersedeas bond would be waived if the city would indemnify the councilmen for the judgments against them.

And that agreement was entered, so nothing has been collected.

But I think the argument–

Thurgood Marshall:

If you get the punitive damages, would that be easier to collect than these?

Would more damages be easier to collect than less damages?

Leonard Decof:

–If the Court please, the damages would be easier to collect against the municipality than the individuals.

Thurgood Marshall:

So here you want to go against the municipality?

Leonard Decof:

Yes, Your Honor.

And I think that’s a confirmation–

Thurgood Marshall:

And what did the municipality do?

Leonard Decof:

–The municipality, acting through all its councilmen and its mayor–

Thurgood Marshall:

I thought so.

Leonard Decof:

–interfered with the right of free–

Thurgood Marshall:

Do you want the payment… do you want to charge, to use your own words, the innocent taxpayer?

Leonard Decof:

–If the Court please–

Thurgood Marshall:

That’s who you want to collect from.

Leonard Decof:

–If the Court please–

Thurgood Marshall:

The case that you had, you’d be bleeding about this innocent taxpayer and that’s who you want to pay it.

Leonard Decof:

–I don’t think I referred to them, I think Mr. Wells referred to them as innocent taxpayers.

I urge the Court that the government is of the people and the government is the people, and we’re not just concerned with the people of the City of Newport or the State of Rhode Island.

We’re concerned with the people of the United States and it’s to the interest of the people of the United States that these losses be borne by the taxpayers of whatever locality because this is the only way to deter this from happening again in the future.

This is the point I urge on the Court.

Byron R. White:

Why then would you limit compensatory damages to, against a municipality, to instances where it’s municipal policy rather than purely respondeat superior?

Why shouldn’t the municipality, which is the government of the people, be responsible for its actors, its officer actors?

Leonard Decof:

Because we have two different concepts, Your Honor.

That is liability, totally without fault, respondeat superior.

Byron R. White:

For punitive damages, you necessarily have to rely on the mental attitude of the actor officers and their conduct.

Leonard Decof:

Yes, Your Honor.

Byron R. White:

And hence impute that kind of conduct to the municipality, which is making them responsible for the conduct of others.

Leonard Decof:

Yes, Your Honor, but the municipality is at fault; it can only operate through its agents in the same way as a private corporation.

Byron R. White:

Well, then, how about compensatory damages?

Leonard Decof:

As far as… but it operates through its agents, but at least fault must be found.

First, there are these protections.

Number one, it must be an act of the municipality, and number two, there must be fault.

With respondeat superior, if an agent who drives a garbage truck knocks someone down, the municipality can be held at fault, even if it has no fault.

Byron R. White:

Well… not in a 1983 action.

Leonard Decof:

No, not now, Your Honor, but under respondeat superior, although–

Byron R. White:

Yes, exactly.

Even if he did it intentionally.

Leonard Decof:

–Yes, Your Honor.

William H. Rehnquist:

How about the concept of a non-delegable duty?

Can the municipality be held for that when it employs an independent contractor to provide, say, policing for an affair like this and the federal court says, that was a non-delegable duty, you’re liable?

Leonard Decof:

In the context of the fact, if it were a non-delegable duty, the municipality, in my opinion, would be liable.

It has its duties–

William J. Brennan, Jr.:

Under 1983?

Leonard Decof:

–Not under 1983, Your Honor, no.

I–

William H. Rehnquist:

Well, I thought that… I meant under 1983.

Leonard Decof:

–No.

I would say, no, Your Honor.

Warren E. Burger:

Let me go back to a reference you made to a stipulation with your friend.

Leonard Decof:

Yes, Your Honor?

Warren E. Burger:

Did I understand you to say that the judgments which are now firm and unreviewable against the individuals will be paid for by the municipality?

Leonard Decof:

This is the agreement, that the municipality, they are–

Warren E. Burger:

Now?

Leonard Decof:

–No, not paid for, Your Honor; indemnification, which to my mind would mean, if the others don’t pay it, then the municipality will.

Warren E. Burger:

Yes.

So that, even if you do not prevail here, you are going to collect?

Leonard Decof:

Well, not… no.

What’s involved here is $75,000 and a massive principal of punitive damages.

We would collect the remainder of the award, the compensatory and the punitive damages against the individuals The only thing before this Court is a $75,000 award for punitive damages against the City of Newport–

Lewis F. Powell, Jr.:

Mr. Decof, may I ask you a question about this indemnification?

In your opinion, is a city permitted, does it have the authority to indemnify council members whom you say maliciously violated the Constitution of the United States?

Leonard Decof:

–Your Honor has raised a very good question, and–

Lewis F. Powell, Jr.:

Perhaps I should ask the City Attorney.

But you accepted it, did you?

Leonard Decof:

–I am not the City Attorney.

Lewis F. Powell, Jr.:

I understand.

So you accepted it for your client?

Leonard Decof:

Yes, Your Honor.

Lewis F. Powell, Jr.:

And you didn’t consider the power and authority of the city to enter into that sort of an agreement?

Leonard Decof:

I think, in this case, it was my considered judgment to accept this and wrestle with that problem later for this reason: it would have been extremely hard to collect this judgment against the individual councilmen.

One was–

Lewis F. Powell, Jr.:

May I ask this, then.

If cities may indemnify councilmen who deliberately violate the Constitution for any punitive damages assessed against them, what deterrence is there in granting punitive judgments even against the individuals?

Leonard Decof:

–Well, you said, if cities may, but cities don’t always.

And very frequently the individuals who have committed these acts, by the time the case goes to court, someone else is in office and they don’t control the council and maybe then the city wouldn’t vote to indemnify.

But, from my standpoint, the most important deterrent is the deterrent that goes against the city because, as I said, the city is there, it’s permanent, it has some control over its policies, it can do something about these things.

It can see that these things are not done again.

I would like to finally touch on Rule 51.

Finally, these people had all, had indicated that they would do it again if given the chance, and so, in this case, again, when I say councilmen, the city acted through its councilmen, we have a situation where an intentional act was done, it was done with knowledge that it was wrong–

Byron R. White:

Well, the city… you couldn’t say that’s policy?

Leonard Decof:

–Policy is just one area of–

Byron R. White:

Because they couldn’t bind their successors.

Leonard Decof:

–No, it’s true; they couldn’t bind their successors.

But, again, stopping them, an injunction hadn’t deterred them in the past, and the threat of compensatory damages hadn’t deterred them in the past, and maybe the only thing that would deter them would be the threat of punitive damages against the city, so that the city would say, don’t do this anymore.

Finally, on Rule 51, may it please the Court, Mr. Wells’ argument to this is, this is an important question, so let’s blink aside Rule 51.

And I submit, that argument can be made in many, many cases that come before this Court.

Rule 51 is a most important rule for the orderly processing of cases and I think that for this Court to say, this is a question that ought to be decided, we’ll overlook Rule 51, would be an invitation–

Byron R. White:

Well, there have been a good many cases here, even in the few years I’ve been here, in which the Court has dealt with cases which weren’t even raised below, dealt with issues from federal courts that weren’t even raised below, whether plain error or not.

Leonard Decof:

–I understand, but this would have to fall, this issue was raised below.

The attorney for the City of Newport had a great deal of notice all through the trial that this was an issue.

Memoranda were requested by the judge and filed by me and given to him.

He was asked specifically by the judge a number of times for his memorandum on punitive damages.

He was asked specifically at the end of the case, do you have any objection to the charge?

And so they can’t complain that there was no notice, and I submit–

William H. Rehnquist:

Well, Mr. Decof, why then in the court of appeals opinion, in Judge Bownes’ opinion, at page 815, didn’t they simply have a one-sentence statement saying that–

Leonard Decof:

–This is not plain error.

William H. Rehnquist:

–This is not plain error; no objection to the instruction; period.

Leonard Decof:

Well, I don’t know, Your Honor, but I cannot agree with Mr. Wells’ interpretation that they felt it was plain error because the exact language was,

“where the law is in such a state of flux and there is no appellate decision to the contrary, we would be hard pressed to say that the trial judge’s punitive damage instruction was plain error. “

Byron R. White:

Even if error?

Leonard Decof:

No, they didn’t say, “even if error”.

Warren E. Burger:

It’s implicit, isn’t it?

Leonard Decof:

I think they’re saying, Your Honor, that erring on the side of caution they’re saying there’s no way we can say this is plain error because there are no cases to the contrary.

William H. Rehnquist:

To say,

“we’re hard pressed to say it was plain error. “

isn’t the same thing as saying it’s not plain error.

Leonard Decof:

Yes, Your Honor; yes.

William H. Rehnquist:

It’s weaseling a little more.

Leonard Decof:

Yes, but I would interpret this as their saying, this is not plain error.

We would be hard pressed to say this is plain error.

Certainly, it doesn’t indicate the contrary to me.

Byron R. White:

Mr. Decof, I’m curious.

Is this an old Rhode Island word or a phrase, “travel of the case”?

Leonard Decof:

I think that’s an old Harvard Law School case, Your Honor.

Byron R. White:

Oh, is it Harvard?

Since when?

Here’s a fairly young Harvard graduate.

He’s glad to know about that.

Leonard Decof:

On my moot court team in Harvard Law School, Your Honor, we had this in our briefs, and it’s been used–

The travel of the case.

I guess that just means the procedure–

Leonard Decof:

–Yes, Your Honor.

–Just how… that’s an interesting–

Leonard Decof:

Thank you very much.

Warren E. Burger:

Thank you, counsel.

Do you have anything further, Mr. Wells?

Guy J. Wells:

No, Your Honor.

Warren E. Burger:

Thank you, gentlemen.

The case is submitted.