Molzof v. United States – Oral Argument – November 04, 1991

Media for Molzof v. United States

Audio Transcription for Opinion Announcement – January 14, 1992 in Molzof v. United States

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William H. Rehnquist:

We’ll hear argument next in number 90-838, Shirley M. Molzof v. The United States.

You may proceed whenever you’re ready.

Daniel A. Rottier:

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

The case before the Court today in this case relates to the definition of punitive damages as that term is used in the Federal Tort Claim Act.

The basic structure of the Federal Tort Claim Act is premised on three features.

The first is that in these cases the United States is to be treated as would a private individual if it were a defendant in a tort claim.

The second feature is that the law of the State where the tort occurred is to be applied, and the third feature is that certain exceptions are engrafted in the law.

One of those exceptions, namely the punitive damage exception, is the one that the Court is concerned with today.

It is our position that if the Government’s definition of punitive damages is to be accepted as it was by the Seventh Circuit and the Fourth Circuit, it would emasculate the objectives of the Federal Tort Claim Act, because it would result in the Government not being treated as would an individual citizen if the individual citizen were the defendant, and that’s the–

William H. Rehnquist:

Mr. Rottier, do you think that this punitive damages exception to governmental liability under the act is a question of Federal law, which requires uniformity?

Daniel A. Rottier:

–I believe the definition of punitive damages as used in the exclusionary clause is a matter of Federal law.

William H. Rehnquist:

So that does not depend, then, on the law of the particular State which would otherwise govern tort liability?

Daniel A. Rottier:

That’s correct, but I… but I believe the Federal interpretation should bear in mind the other objectives of the act, one of which is to treat the Government as an individual citizen would be treated if it were a defendant.

Antonin Scalia:

Well, except… except it doesn’t.

I mean, you treat the Government as an individual citizen except with respect to punitive damages.

I mean, it seems to me you’re sort of begging the question when you say you have to treat the Government the same way you treat everybody else.

You don’t with respect to punitive damages.

Daniel A. Rottier:

The approach I would suggest is the one used by the this Court in the Neustadt case, where the issue was how to define misrepresentation, since that is also an excluded basis of liability for the Government, and there what the Court did was to look at the commonly accepted definition of misrepresentation as it existed at the time the Federal Tort Claim Act was enacted.

I would suggest that this Court should do the same thing with respect to punitive damages.

And what I believe the Court would find is there was general consensus among the writers and among the courts as to what punitive damages are, and the definition, for example, that was used by this Court in the Milwaukee railroad case going back to 1875 focuses on the nature of the conduct of the defendant as opposed to the effect of the receipt of the damages by the plaintiff.

I think that’s where the Flannery court and the Molzof court deviated from an appropriate approach to this problem.

They focused on the effect of the receipt of the award on the plaintiff, as opposed to focusing on the basis of imposing the award.

In this case, one might ask this question: would Mr. Molzof have been entitled to future medical expenses if the defendant were a private hospital instead of a veterans’ hospital?

The answer is absolutely clear, under Wisconsin law, that, yes, he would have been.

And then, to remain in keeping with the… one of the objectives of the act, the Government should be treated the same, unless… unless the basis for awarding these is the basis on which punitive damages are normally awarded.

William H. Rehnquist:

What principle of Wisconsin law is it that leads you to answer that question the way you did?

Daniel A. Rottier:

Under traditional Wisconsin common law in tort cases, if a plaintiff can show that the negligence of a defendant was a substantial factor contributing to the need for future medical expenses, those are awardable.

In some instances, they’re subrogated to someone who has paid them.

That much is true.

In this case, for example, this entire problem that’s presented could easily be remedied by Congress.

Daniel A. Rottier:

If Congress had approached the Federal Tort Claims Act as strictly a compensation act and defined what elements of compensation were to be included, it would be much more easily applied.

Or, if it wanted to avoid this type of situation, it could have enacted a set-off procedure, just as it did for disability benefits under 38 U.S.C. 351… and the Court I am sure is familiar with that.

If, for example, a veteran is malpracticed upon and it causes an increase in disability benefits, the Government, pursuant to section 351, suspends payment of the previously enacted and previously ordered disability payments so that a double payment does not result.

That is what two of the circuits have recommended to Congress over the years, in the Feeley case in 1964 and in the Ulrich case.

In both of those instances… those are the only two circuit cases before Molzof where this particular issue was presented… both of those circuits said that they were uncomfortable with the potential of a double recovery, but that the resolution of that problem was for Congress, not for the courts.

Antonin Scalia:

Mr. Rottier, I suppose you’re just arguing that this is governed by State law, right, and if a State chose not to allow double recovery, then there wouldn’t be.

Is that so, or not?

Daniel A. Rottier:

That’s correct.

If, for example… and I think it is… this problem can be dealt with through State law, if for example a… under State law a particular type of compensatory damage is deemed to be excessive, then it can be… then it is certainly not awarded.

In… if we took Flannery, for example, which gave rise to this discussion generally, where you had a comatose individual, where $ 1, 300, 000 was awarded for that, the Federal court could merely have addressed that issue on the basis of excessiveness.

If it thought… if the circuit court, the court of appeals, felt that under the State law such damages were awardable, it could have diminished them on the basis of excessiveness.

William H. Rehnquist:

Well, did Judge Shabaz actually award damages here, or did he say these are what you would be entitled to accept for the punitive damages exception?

He was affirmed by the court of appeals, wasn’t he?

Daniel A. Rottier:

That’s… you’re correct on both points.

The judge did not award damages.

The judge made a finding as to what they would be were they not prohibited and did they not fall within the exclusion as being punitive damages, and that was affirmed by the Seventh Circuit.

John Paul Stevens:

May I ask you a question, Mr. Rottier?

You said, if this individual had been in a private hospital rather than a Government hospital, it’s perfectly clear that under Wisconsin law there would have been a recovery for the lost medical expenses, the large amount in dispute.

But it’s not equally clear, is it, as a matter of Wisconsin law, that if this were… case were tried in a Wisconsin court on the present facts, that a Wisconsin court would have awarded this kind of potential double recovery?

Daniel A. Rottier:

To the contrary.

I think it is clear that the finder of fact in such a situation, which would have been a jury, would have had to address the very same questions of duration of Mr. Molzof’s life, and the reasonable amount of the future medical expenses, but they would have been awarded.

John Paul Stevens:

But might they not have given credit for the full amount of the care that the Federal Government is going to give to this individual?

Daniel A. Rottier:

Under Wisconsin law, that would have been viewed as a collateral source, and that would not have been factored in with respect to the award of future damages.

John Paul Stevens:

Well, how can you be so sure it would have been viewed as a collateral source?

This is not an insurance case.

Daniel A. Rottier:

In Wisconsin, and partly from experience, in Wisconsin governmental benefits are viewed as a collateral source.

However, with respect to both State-of-Wisconsin-paid benefits as well as certain Federal benefits there is subrogation for past expenditures, but there is no statutory subrogation for Wisconsin-paid benefits for in the future.

Anthony M. Kennedy:

Well, is there a set-off?

The Government really argues this is a set-off, doesn’t it?

Is there set-off under Wisconsin law?

Daniel A. Rottier:

It does affect eligibility under Wisconsin law.

Anthony M. Kennedy:

Well, suppose the Wisconsin defendant was a hospital, and that hospital had entered into a contract after the injury to give lifetime care.

Would that have been a set-off under Wisconsin law?

Daniel A. Rottier:

I know of no such arrangements.

I do not believe it would have been, because it would compel–

Anthony M. Kennedy:

Because it… because it… it seems to me that’s quite different from a collateral source.

Daniel A. Rottier:

–The way the set-off provisions work in Wisconsin with respect to State-paid benefits is that the receipt of an award for future medical expense affects eligibility.

Antonin Scalia:

But this is not just a State-paid benefit, I think that’s the point that’s being made.

It is State-paid, and yes, that’s a collateral source, but this is a defendant-paid benefit, as well.

That’s the distinctive thing, and you don’t know of any defendant-paid cases.

Daniel A. Rottier:

None that have been reported.

There’s a… there’s an issue that’s starting to arise relating to health maintenance organizations and attempts to subrogate them for future medical expenses, but those have not been reported.

The point I was trying to make, members of the Court, is that this is a problem which is very easily remedied by congressional action or, in fact, by action by the Veterans Administration, because all that needs to be done is that eligibility for future veterans’ benefits is affected by receipt of an award for future medical expense, just as they did with section 351 by affecting eligibility for future disability payments once a veteran has received an award pursuant to the Federal Tort Claims Act.

William H. Rehnquist:

Well, if the suggestions made by my colleagues here are correct, perhaps whatever problem exists could be remedied simply by the fact-finder, the awarder of damages in the Federal Tort Claims Act case, if in fact the collateral source doctrine as applied in Wisconsin doesn’t squarely cover this subject.

Daniel A. Rottier:

I think the deficiency in that approach, Mr. Chief Justice, is that it will require Federal courts to evaluate each and every element of compensatory damages and address the effect of their receipt on the plaintiff, instead of focusing on what I think is the more appropriate question, which is, on what basis is an award being made.

Is it on the basis of negligence which is compensable, or is it on the basis of more egregious conduct which rises to the level of that which would support punitive damages?

It’s an award based on that type of conduct which is prohibited.

William H. Rehnquist:

Well, what I’m suggesting is not that this comes within the punitive damages exception, but that perhaps the district judge sitting in Madison might conclude that although Wisconsin law follows the collateral source doctrine, this is not, strictly speaking, a collateral source question, so perhaps, even without any action from Congress, the plaintiff is not entitled to double recovery.

Daniel A. Rottier:

Some courts in fact have used that approach with respect to medical expenses paid by the Government prior to trial.

Indeed, in this case, no claim was made for past medical expenses incurred prior to trial because of the concern raised in those Federal courts, including the Seventh Circuit in the Green case.

However, the problem with that is that you force the fact-finder… by finding that this is the only source of medical care the plaintiff will use for the balance of his or her life, you essentially force the fact-finder to make that plaintiff a life-long prisoner of that health care provider, whoever it may be.

If we stepped outside of the Veterans Administration for the moment and said this were a private hospital–

Antonin Scalia:

That would be a very bad thing for Wisconsin to do, let’s agree with you.

But if it’s… if it’s… I mean, if it’s State law, it’s State law.

You’re… you’re talking to the wrong… to the wrong–

Daniel A. Rottier:

–Well, I very much agree with you.

If it’s State law, it’s State law, and that’s what I’m asking be applied here.

State law in Wisconsin would allow an award of future medical expense, irrespective of any future obligation on the part of a private insurance company or the Government to make payment for those medical expenses.

John Paul Stevens:

–Well, you don’t have a case that says that, though.

You don’t have a case in which the defendant in the particular case has, before the verdict come in, committed itself to provide all of the… provide the… what would otherwise be paid for–

Daniel A. Rottier:

I have no such case–

John Paul Stevens:

–And it’s certainly not beyond the realm of possibility that the Wisconsin court would say, this is a double recovery, it’s a set-off.

I mean, it seems to me all you should be asking for is to have us send the case back to decide that question as a matter of Wisconsin law.

It has not yet been decided, as I understand the record in this case.

Daniel A. Rottier:

–I know of no case, Your Honor, that… where a defendant… a private defendant has come in–

John Paul Stevens:

And the district judge certainly didn’t decide it in this case.

Daniel A. Rottier:

–Nor does the Government know of any such case, at least as reflected by its brief, and it would strike me–

John Paul Stevens:

But it’s certainly not a frivolous position, when the family seems happy with the Government service it’s getting in the future to say the Government shouldn’t have to pay for it twice.

I mean, it’s… maybe you’re right, as a matter of Wisconsin law, but it certainly is an arguable point, isn’t it?

Daniel A. Rottier:

–I’m not contending it’s a frivolous position.

What I am contending is that this very issue, as serious as it is, was raised in the Feeley and the Ulrich courts, and both of them said, this is a serious problem, Congress should remedy it.

Congress has chosen not to remedy it, even though it took care of the double payment potential with respect to disability benefits, and it took care of it very simply in 38 U.S.C. 351.

Antonin Scalia:

But it’s only a serious problem in those… States that choose to make it a serious problem.

I mean, it is a serious problem where a State would allow the double recovery, and that’s what we don’t know is the situation here.

It may not be a problem in Wisconsin.

What were those other… those other cases, did they involve Wisconsin law, or the law of other States?

Daniel A. Rottier:

It was the law of other States.

One was Pennsylvania and the other New York, and then there are lower court decisions in Connecticut and the Eastern District of Pennsylvania, which followed the same principle.

Byron R. White:

Well, you seem to have… if you get you want, you seem to concede that there would be a double recovery.

Daniel A. Rottier:

I don’t necessarily concede that, but what it would do… I concede it creates the potential.

Byron R. White:

Well, you’d be… you’d be being paid for something that you’re not out of pocket for.

Daniel A. Rottier:

I concede there is that potential.

Byron R. White:

Is that right?

Daniel A. Rottier:

I concede there is that potential, Your Honor.

However–

Byron R. White:

And yet… and yet you say that every… every dollar you want, you would categorize as compensatory?

Daniel A. Rottier:

–Every dollar we’re requesting I would categorize as nonpunitive, and if it is nonpunitive, it falls outside the exclusion.

Byron R. White:

Well, what is it if it isn’t compensatory or punitive?

Daniel A. Rottier:

Well, as the Court knows–

Byron R. White:

What do you call that?

Daniel A. Rottier:

–As the Court knows, there’s been much written about those two components and whether they’re totally mutually exclusive or not.

If you look at them from the perspective of the basis on which they’re awarded–

Byron R. White:

So I suppose you would lose if we concluded that anything that is not compensatory is punitive?

Daniel A. Rottier:

–Yes, but I respectfully disagree with the approach.

I think the approach would be from the perspective of what is the basis on which the damages are being awarded, because that was how punitive damages were defined traditionally at the time the Federal Tort Claims Act was imposed.

It’s those damages which were imposed because of the egregious conduct of the defendant.

It was–

William H. Rehnquist:

Would you say that actual damages imposed in a State which follows the collateral source doctrine were compensatory?

Daniel A. Rottier:

–They are compensatory even in circumstances where they’re–

William H. Rehnquist:

Where there’s a double–

Daniel A. Rottier:

–where they’re duplicative.

William H. Rehnquist:

–Yeah, okay.

Daniel A. Rottier:

They remain compensatory because the basis on which they were awarded was simple negligence, as opposed to some higher level of egregious conduct.

Byron R. White:

Well isn’t the definition of punitive damages a question of Federal law?

Daniel A. Rottier:

It is–

Byron R. White:

I mean, what punitive damages means under the Federal Tort Claims Act?

Daniel A. Rottier:

–I agree with that, Your Honor.

Byron R. White:

And if the Federal law is that anything that isn’t compensatory is punitive–

Daniel A. Rottier:

I lose.

Byron R. White:

–Yeah.

Yeah.

And so we get back to whether or not what you want is compensatory?

Daniel A. Rottier:

I’d like to just take a half-step back, if I may, Your Honor.

That’s why it’s so important that the Court, in deciding the definition of punitive damages, look to the traditional common law definition, and it hinged, as far as I know, on the nature of the defendant’s conduct.

That’s a–

Byron R. White:

We aren’t… we aren’t… we aren’t required to follow State law in defining punitive damages?

Daniel A. Rottier:

–Not with respect to the Federal Tort Claims Act.

Byron R. White:

Yes.

Daniel A. Rottier:

But I think the precedents of this Court are clear as to what punitive damages are both in the context of the Federal Tort Claim Act as well as in the broader context, going back to the 1800’s.

It’s based on… it has not been defined… punitive damages have not been defined by this Court as those which are not compensatory.

Daniel A. Rottier:

It was defined as those which are to be awarded to punish and deter egregious conduct of the defendant.

And those damages were never sought in this case, and they would not have been available under Wisconsin law even if the punitive damage exclusion provision were not in the Federal Tort Claim Act.

The other problem with the approach taken by Judge Shabaz in the Seventh Circuit is that it resulted in an unworkable situation.

Essentially, Judge Shabaz… and you may recall at the end of his decision from the bench, I asked him if he were giving… granting the equivalent of a permanent injunction against the Veterans Administration to provide the same level of care, and he said that the Court would retain jurisdiction and would monitor the situation and be available for interim relief.

The Court went on, however, to find that there were deficiencies in the Veterans Administration care and awarded $ 25, 000 a year so that the family could bring in an outside physician, outside physical therapists, outside respiratory therapists, and supplement the care in the respects in which it was deficient.

That is an unworkable situation.

Essentially what he said is, all future damages for medical care, other than $ 25, 000 a year, are noncompensatory and thus punitive, but he conceded that at least to the extent of $ 25, 000, compensatory damages were justifiable.

Antonin Scalia:

Mr. Rottier, suppose we were to agree with you on the punitive damages point but… but disagree with you on the… on the duplicative damages point, or at least not know what the answer to that is because we think it’s a matter of Wisconsin law, what ought our judgment to be?

In other words, suppose we agree that even though it’s noncompensatory it is recoverable so long as it is not punitive damages in the… in the generally understood common law sense, okay?

But suppose we further say we don’t know what the… what the Wisconsin law is as far as recovering judgment from the same defendant for damages that he’s already paying in some other capacity.

What should we do with the case, if that’s how we come out?

You lose, or… I mean, or what?

What happens?

Daniel A. Rottier:

I don’t lose until a decision is made, but one option is to… I assume, to certify it to the Wisconsin Supreme Court to answer that question, if you’re uncomfortable with the status of Wisconsin law on that issue.

I’m of the belief that Wisconsin law would allow such recovery, albeit that no such specific case has been presented in Wisconsin.

Antonin Scalia:

Well, is there… is there the same doubt… you have another claim for a different type of damages, the loss of life enjoyment?

Daniel A. Rottier:

Yes.

A claim was brought–

Byron R. White:

Is that… is there doubt about that under Wisconsin law?

Daniel A. Rottier:

–There is doubt about that under Wisconsin law.

Byron R. White:

I see.

You don’t have any case allowing loss of enjoyment of life where the patient is comatose and likely never to recover?

Daniel A. Rottier:

That is correct.

There is a series of cases of longstanding that allows compensation for loss of enjoyment of life, but none of those fact situations focused on a situation where the plaintiff was… was comatose, and totally unaware of his or her condition.

That is an undecided issue under Wisconsin law.

Byron R. White:

Well, I–

Daniel A. Rottier:

There have been trial court decisions, but–

Byron R. White:

–I suppose if someone loses an arm, he can recover damages for having lost an arm even, though he never well have the chance of using that arm at all?

Daniel A. Rottier:

–Well, the… obviously the side of the argument that I prefer is the one that no awareness of a loss is needed if an objective analysis can be made that a loss did occur and that some reasonable value can be affixed to it.

On the other hand, perhaps the best discussion of the need for some conscious awareness is in the McDougald case out of New York State, which actually followed Rufino, and in that case… and I may be arguing the Government’s point here… in that case there was a threshold requirement that there be some minimal awareness of the loss of enjoyment of life, and once that threshold requirement was met, then damages for that component were awardable.

Daniel A. Rottier:

Your Honors, in summary, before I sit down and reserve the balance for rebuttal, what I’m asking is that the Court look at the statute itself.

The statute is very clear in the sense of wanting to apply State-by-State law.

Yes, that results in a sometimes awkward situation because of variances from State to State, but that is the intended structure of the act.

And to follow the Government’s reasoning in this case will reduce the effect of that provision and fly in the face of the intent of Congress with respect to that provision.

I reserve the balance.

Thank you.

William H. Rehnquist:

Thank you, Mr. Rottier.

Mr. Wright, we’ll hear from you.

Christopher J. Wright:

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

I’d like first to discuss some general principles applicable to both claims in this case, and then turn to petitioner’s claim for $ 1, 300, 000 million for future medical care, and finally to the claim for loss of enjoyment of life.

The Government’s basic submission in this case is that there are only two kinds of tort damages, a matter that’s already come up… punitive and compensatory.

We agree with the court below that there is no third category of tort damages that are both noncompensatory–

Byron R. White:

You don’t think there is under any State law that you know of?

Christopher J. Wright:

–I know of no State that defines it, that has a third category, and frankly I don’t think opposing counsel was able to come up with a third category today.

We think that there are basically only two.

We admit that it is sometimes difficult to calculate tort damages, and we do not contend that compensatory damages need to be made with a sort of a scientific precision that is impractical.

William H. Rehnquist:

Mr. Wright, could you step a little closer to the microphone?

I’m having a little difficulty hearing you.

Christopher J. Wright:

Sorry.

David H. Souter:

Mr. Wright xxx.

Wouldn’t it make the analysis easier if you’d said there are three categories of damages: there are punitive damages, there are damages for pecuniary loss, and then there are damages for nonpecuniary loss?

Aren’t we fighting… we’re fighting over at least part of the third category here.

You’re saying there’s no pecuniary loss for a variety of reasons, but doesn’t the… doesn’t the argument at least, or doesn’t the position that the circuit took rest on… on… on sort of this, I think improper inference that because punitive damages do not compensate the pecuniary loss, any damages which do not compensate the pecuniary loss are punitive?

And if we reject that inference, which is an improper inference, then we’re… we’re simply thrown back on the definition of punitive damage that your brother came up with, and he says the way to solve the problem of what to do with nonpecuniary loss is simply determine the basis upon which the damage is awarded.

Is it punishment for egregious conduct, or isn’t it?

I guess my question is, did the lower court make the improper inference that I have just imputed to it?

Christopher J. Wright:

I don’t think so, Your Honor.

Let me make a number of points in response.

Pecuniary and nonpecuniary losses are normally thought of as subcategories of compensatory losses.

We do not argue, and I don’t believe the lower court thought, that nonpecuniary losses are always noncompensatory.

Christopher J. Wright:

Let me add that a future medical expense award is, of course, a pecuniary sort of loss.

This concern I think goes more simply to the loss of enjoyment of life award, and let me say in response to your question, finally in response to that, we do not… we think this is a very special category of case with respect to the loss of enjoyment of life issue.

David H. Souter:

What’s the difference between loss of enjoyment of life and pain and suffering?

Christopher J. Wright:

Many… courts, States, think of it as a subcategory further of pain and suffering.

Some courts say that it is a different sort of nonpecuniary but compensatory loss.

We do not–

David H. Souter:

Well, you wouldn’t claim that pain and suffering damages are punitive.

Christopher J. Wright:

–We would not contend that pain and suffering damages are punitive.

David H. Souter:

All right.

Why… why, then, are… is the category of loss of enjoyment punitive?

Christopher J. Wright:

Only under the circumstances of this case, where Mr. Molzof was never aware of a loss of enjoyment of life.

David H. Souter:

But isn’t that a question that goes to the definition of what can be compensated for loss of enjoyment of life, as opposed to what goes to what is punitive and nonpunitive?

You’re saying, you shouldn’t award him loss for… damages for loss of enjoyment because he’ll never know.

And that seems to me to be a question about the basis in State law on which those damages may be awarded, but it does not seem to me obviously to go to what is or is not, or whether they are or are not punitive unless you expand the standard definition of punitive damages.

Christopher J. Wright:

Well, Your Honor, we have a different view of punitive damages than does petitioner.

As… as I’ve said, they think… we all agree that something is punitive only if it is on top of compensation.

They would contend that it not only has to be on top of compensation but it has to be calculated according to the egregiousness of the conduct at issue, and let me… let me say in response to that that we think the following hypothetical shows that this is wrong.

If this were a case where there was undisputed evidence that a person, an employee at the VA hospital, had maliciously disconnected the respirator, it would be perfectly clear… everyone would agree… that the United States could not be subjected to punitive damages for that reason.

We think it odd to argue that because there is no such finding, a noncompensatory award may be added on top of the compensatory damages.

David H. Souter:

Well, but the–

–The manner in which you are assuming that anything which is not compensatory either in a pecuniary fashion or for an element of damage which the patient could appreciate is necessarily punitive.

I mean, your whole argument rests on that identification.

Christopher J. Wright:

With respect to loss of enjoyment of life, our entire argument is that because Mr. Molzof, under these unusual circumstances, never had any appreciation of loss of enjoyment of life, an award for that item is necessarily noncompensable and hence punitive.

But let me stress that there were nonpecuniary damages awarded in this case, and we don’t challenge them.

Mrs. Molzof received $ 150, 000 for loss of consortium.

We certainly do not contend that that–

Byron R. White:

And you wouldn’t be challenging this, if… except that the… if the patient weren’t in a vegetative state.

Christopher J. Wright:

–Yes, Your Honor.

It’s a seemingly paradoxical situation, of course.

Typically, the more severely you are damaged, the greater your loss of enjoyment of life is, and the greater an award is appropriate.

Antonin Scalia:

Mr. Wright, suppose you have a State statute that says, for all trespasses the trespasser shall be liable for the owner of the property for five… for $ 5, 000, and the Government somehow is… is sued under the Tort Claims Act on a trespass.

What result?

That’s punitive damages, in your estimation?

Christopher J. Wright:

I think not, the way you say it, because I assume that something like the following would be proposed as a rationale.

This is a sort of liquidated damages, if you will, that the State has decided that it’s very hard to approximate exactly what compensation is–

Antonin Scalia:

So whatever the State thinks is compensation is good enough?

Christopher J. Wright:

–We think that as a general matter, that’s so.

We think that there are certain circumstances where it is so clear that a particular award is not compensatory, and we have two of those situations here, that that–

Antonin Scalia:

Maybe the State here thinks that, you know, that this is… for loss of enjoyment of life they might deem it compensatory.

I mean, I don’t know… it seems to me it clearly isn’t compensatory.

If you say $ 5, 000, just a spot number… $ 5, 000 for everything, you could recover on that but you can’t recover here?

Christopher J. Wright:

–Certainly not… you could recover here certainly if a State said that for the reasons I outlined that it needs to be compensatory.

If a State said, I think that we’re deterring a trespasser, so even if there’s no damage we’re going to award $ 5, 000, that, in our view, would be… would be punitive.

William H. Rehnquist:

What if… what if you have a State that follows the normal collateral source doctrine and you subscribe to Blue Cross, the Blue Cross covers your hospital, your hospital bill is $ 5, 000, you’re entitled to recover that amount, I believe, from the tort-feasor.

Is that, in your view, punitive damages?

Christopher J. Wright:

No, Your Honor, and you could say that the key difference there is that in that situation the tort-feasor is not required to pay twice for the same injury.

In this situation… and we’re turning now to the $ 1, 300, 000 million for future medical care… the question is whether the Federal Government will both pay employees at the VA hospital to provide care and award [=$ 1, 300, 000] million on top of that to provide care.

William H. Rehnquist:

So double recovery does not mean it’s punitive.

Double payment would?

Christopher J. Wright:

Yes, Your Honor.

Let me add, as well, that in your situation double recovery would not occur either.

Blue Cross has a very strong subrogation policy that it would enforce.

Antonin Scalia:

I thought some States don’t allow that.

I thought some States have laws that if you recover you can… you can get your insurance and the recovery both.

That would–

Christopher J. Wright:

It is possible that subrogation does not always work in some circumstances.

Antonin Scalia:

–Right, and in that case, would you consider those punitive damages?

Christopher J. Wright:

No.

In that case–

Antonin Scalia:

Why not?

Christopher J. Wright:

–we would say… well, it’s a timing problem, really.

The tort-feasor is only required to pay once.

The tort-feasor has harmed the victim in a way that compensation is required, and–

Antonin Scalia:

Well, but that… that bears no relationship to whether it’s compensatory or not.

Whether one person pays once or twice doesn’t make it compensatory or noncompensatory.

Compensation is determined from the point of view of the recipient, not the donor, and you’ve accepted a case where the donor is clearly getting the money twice and yet you say that is not punitive.

That is not a punitive award, but somehow in this case it is.

It seems to me quite illogical.

Christopher J. Wright:

–It… it seems clear to us that the first payment is compensatory and the second payment is punitive.

As between the tort-feasor and the victim we think that State law has reasonably determined, and we would not challenge, that we will just look at the relationship of the tort-feasor and the victim and require the tort-feasor to pay for the damage to the victim.

Antonin Scalia:

Well, I agree that punitive is looked at from the… from the standpoint of the person that pays, but you say everything is punitive that is not compensatory, and yet you accept the Chief Justice’s example of something that is clearly not compensatory, and for some reason you say that that is not punitive.

And I don’t see why.

Christopher J. Wright:

Well, a first payment isn’t.

The question is what to do with the third party, with whom, typically, there’s a separate contract.

You’ve contracted, typically, both for an award… in case you are damaged you not only get compensation but you get the benefit you’ve contracted for as well.

That’s the situation in that case.

Let me… let me pose a hypothetical, if I may, in the double damage issue.

If a State decided, perhaps in cases where serious injuries such as occurred here result, that it will award double damages in all cases, not measured by egregiousness or maliciousness or any sort of traditional punitive damage or… just double damages in all case, it seems to us under petitioner’s theory that is not a punitive damage award under section 2674.

We think, to the contrary, such an award, which would be plainly deterrent in purpose and effect and is really no different than the future medical award in this case, we think that that sort of… that sort of damage award clearly has to be struck down under–

John Paul Stevens:

Why do you say that?

The statute says, to the same extent as a private individual under like circumstances, but shall not be liable for interest prior to judgment or for punitive damages.

The only exclusion is punitive damages, and you have described a case in which there are no punitive damages under common law… under your common law hypothesis, right?

Christopher J. Wright:

–Under petitioner’s view that punitive damages–

John Paul Stevens:

I mean, if we assume Congress meant to adopt the common law version of punitive damages, the Government would have to pay just like any private party would in that situation, wouldn’t they, if you just read the statute literally, and if you interpret punitive damages in the common law sense.

Christopher J. Wright:

–If you interpret punitive damages to mean what petitioner says.

Now, in the common law sense, I’d like to say that, first, an element of–

John Paul Stevens:

Well, you don’t agree with his–

Christopher J. Wright:

–Right.

John Paul Stevens:

–understanding of the common law.

Christopher J. Wright:

An element of agreement has actually occurred during the course of the briefing of this case.

Christopher J. Wright:

We now all agree, and it was stated today, that punitive damages is defined according to Federal law.

The question is, what did Congress mean in 1946 when it… when it enacted the Federal Tort Claims Act?

At that time, of course, it was well understood, as it is today, that the purpose of tort damages, the primary purpose, is compensatory.

Opposing counsel was kind enough to reference the New York Court of Appeals McDougald case.

I would like to further recommend that case.

It… the court explains in some detail that we always start in tort cases with the principle that compensation is the goal, not punishment.

John Paul Stevens:

Yes, but it is true, is it not, that at least in this paragraph of the statute the word “compensatory” doesn’t appear?

Christopher J. Wright:

That’s right, Your Honor.

John Paul Stevens:

It only appears in the death action section.

Christopher J. Wright:

I think that Congress in 1946 understood that there was one exception to the rule that punitive damages… I mean, I’m sorry… that compensatory damages are the purpose for awarding damages in tort.

And that exception was, and with relatively few exceptions continues to be, that the occasion for departing from the rule is when the behavior of the tort-feasor is particularly egregious.

In 1946, I think Congress could… would… must have thought courts would award compensatory damages and they would award noncompensatory damages only in the circumstances where there was a judgment of maliciousness.

John Paul Stevens:

Supposing you had a situation instead of your double recovery where you had a no-fault program in the State system and they awarded… they set precise recoveries for different kinds of injuries like you do under workman’s compensation, and they were demonstrably 30 percent higher than the actual compensation required.

Would you have to shave off the excess under your theory?

Christopher J. Wright:

I’m sorry, a workers compensation award?

John Paul Stevens:

Say you have a no-fault tort program in which the amount of damages for different kinds of injuries are set by statute, as they are in the workman’s compensation program, and those amounts were deliberately set by the legislature at maybe 25 or 30 percent above what they would calculate to be actual damages, to add a little deterrence and to… and to take care of possible inflation, one thing and another.

They just fixed them a little high at the start.

What would happen under such a statute under your view?

Would part of that be punitive?

Christopher J. Wright:

I would think in the general case, no, our position is not that compensation can be and must be awarded exactly, and I can well imagine a State situation that we would not challenge where a damage was an approximation, as most nonpecuniary damage awards are.

I was troubled when you added to your hypothetical situation where a State intentionally said we’re going to add 25 percent on top for deterrent effect.

It seems to me quite clear that in that situation, yes, the add-on for deterrence could only be understood as being punitive.

David H. Souter:

Mr. Wright, what about this case?

A State decides that it wants to cut down the amount of sympathy and sort of cry-baby damages the juries award, so they adopt a scheme whereby in place of the old commonlaw rule all damages for personal injury will be assessed on the basis of what the reasonable person would experience as damages so that when it comes time for pain and suffering damages, that it is the claim of a reasonable person which is going to be the measure of damages.

And in a given case a Government driver runs over my foot, and the claim is made were for pain, and yet you could prove that because of an abnormality in my nerves I have no sensation down there.

Would the awarding of the damages be punitive for the pain in my foot?

Christopher J. Wright:

In the unusual case that you suggest, I think so.

I would–

David H. Souter:

It would be punative.

Christopher J. Wright:

–Until you got to the point where you said that it’s clear that you suffer absolutely no sensation for pain, I was prepared to say, oh, that sounds like the sort of approximation that, frankly–

David H. Souter:

But you kind of invite my question.

I mean, just a little bit I just winced.

[Laughter]

xxx all I did was wince and walk xxx.

Would you have to shave it down to its punative element.

Christopher J. Wright:

–No.

I think that under our view we’re really arguing for a narrow position today that if you suffered some pain and there is a statutory award that is a reasonable compensatory approximation of a normal person’s pain, I don’t think we would challenge that.

If–

Antonin Scalia:

The narrower it gets the less logical it gets.

That’s the only–

Christopher J. Wright:

–If you suffered no pain whatever, as Mr. Molzof suffered no cognition of loss of enjoyment of life, we would say yes, it can only be punitive.

It’s not at all compensatory.

John Paul Stevens:

–You didn’t realize how stoic these New England Yankees are.

xxx.

On what basis did the court below refuse damages for loss of life enjoyment or for the double recovery?

Christopher J. Wright:

In both circumstances, the court went past the question of Wisconsin law and held as a matter of Federal law that punitive… that such awards would be punitive under 2674, in the one case, because it would require the United States to pay twice.

Byron R. White:

So that was essentially a construction of the Federal Tort Claims Act, but that means that the Government shouldn’t be held to the definition of punitive damages of common law?

Christopher J. Wright:

Yes, Your Honor.

Let me add in this respect that of course there’s no State law question before the Court.

It did come up while the petitioner was presenting his views.

Byron R. White:

Well, but it certainly would be left over if we didn’t agree with you on the reach of punitive damages.

Christopher J. Wright:

It would be left over.

Let me just note briefly, though, that there are very few circumstances in which the States have authorized damages awards that we would challenge as punitive.

And here, for instance, there is no authority that Wisconsin would allow a double recovery in a situation where the tort-feasor has to pay twice, and there is no Wisconsin authority for damages for loss of enjoyment of life by a person in a permanently comatose state.

Antonin Scalia:

Well, Mr. Wright, it’s not really… I don’t think it’s really paying twice.

I… suppose, you know, the Government comes up and says, we’ll… you’ll sign a medical contract with us and we’ll give you your medical services at 80 percent of cost, but you have to go to a Government hospital and take our doctors.

Now, I’m not sure you’d accept that.

I’m not sure I would.

I like to go to what doctor I want and buy services where I want.

What you’re saying is, because you have volunteered… the Government has volunteered… to provide to this individual services in a Veterans Administration hospital, he’s going to have to get the services there, whether he likes it there or not.

Antonin Scalia:

Isn’t that right?

Christopher J. Wright:

No, Justice Scalia, our position is narrower.

I hope you won’t think it’s–

Antonin Scalia:

Okay.

Christopher J. Wright:

–less logical in this respect.

We contend that it is… it was Mrs. Molzof’s choice where Mr. Molzof would be treated.

If she had intended to move him elsewhere, she then would have been entitled to an award for future medical damages.

In that situation, the Government would not have been required to pay twice.

It would not have been required to pay Federal employees to care for Mr. Molzof as well as to pay the tort damage award.

In that situation, also, Mrs. Molzof would not have been recompensed twice.

She would have taken the money and paid a private hospital to care for Mr. Molzof.

Antonin Scalia:

So you’re really… you’re really not objecting to paying the money, you’re objecting to providing the VA services, or, I mean, one or the other?

Christopher J. Wright:

We’re objecting to paying the money on top of the VA services.

And those courts of appeals that have said that the Ulrich and Feeley cases where the courts have said that it is the choice of the victim’s family as to where he is treated, we agree absolutely that it is the victim’s choice.

Here, however, it was clear that there was no other hospital in the vicinity that could provide comparable care, and it was clear that, indeed, Mrs. Molzof did not intend to move Mr. Molzof, and in fact he was cared for in the VA hospital until he died.

Anthony M. Kennedy:

Mr. Wright, in the New York regime, where I take it there’s no payment for loss of enjoyment when the person becomes comatose, is that person’s recovery the same as in a wrongful death action, or does that person get less than if there had been a wrongful death?

Christopher J. Wright:

I think… I think he gets the same.

I think–

Anthony M. Kennedy:

It would be a lost earnings–

Christopher J. Wright:

–Oh, yes.

Whatever… whatever the normal… lost earnings, or any losses–

Anthony M. Kennedy:

–In other words, those cases approximate the recovery to what a wrongful death recovery would be?

Christopher J. Wright:

–Yes.

Any pain and suffering.

Under a survival statute you would get any pain and suffering he suffered before entering the personal comatose state.

And again, we’re not challenging any of those sorts of awards here today.

Again, let me stress that we… we recognize that sometimes it’s difficult to approximate particularly nonpecuniary damage awards, but in two situations we think that it’s very clear that damages are noncompensatory and punitive, and those circumstances are where the tort-feasor has to pay twice, and where the tort-feasor is required to make a payment for an inherently noncompensable loss.

If there are no further questions, thank you.

William H. Rehnquist:

Thank you, Mr. Wright.

Mr. Rottier, you have 5 minutes remaining.

Daniel A. Rottier:

Mr. Chief Justice and the Court, there was proof at the trial level that three other hospitals, including the hospital in the home town of Mrs. Molzof… Boscobel, Wisconsin… would take this… the injured veteran.

Moreover, the suggestion that Mrs. Molzof should have taken him from the Veterans Hospital before the case was tried to evidence her intent overlooks the fact the cost of care is approximately $ 400, 000 per year, and there was testimony she had limited resources.

So that should not be the determinative factor here.

To respond to a couple of the issues raised with Justice Kennedy, I think under the New York regime the only difference between damages for a fully comatose individual versus someone who had died would be the future cost of care, which obviously wouldn’t be necessary.

The impairment of future earning capacity would likely be the same, I would expect, under the McDougald approach.

The attorney for the Government came very close to agreeing that they were not objecting to paying the money, but they were objecting to the continuation of free medical care under Mr. Molzof’s entitlement as a disabled veteran.

I suggest there is a very easy solution to that, and this is the wrong branch of Government for it.

It merely… it can come from the Veterans Administration; it can come from Congress.

They merely suspend eligibility for the underlying benefits and require the veteran to expend the dollars which have been awarded at his or her choice, whether in a private facility or whether in a Government facility.

But in either case they will be expended, and the purpose of the act will be complied with, and that is the much cleaner approach.

Each time you try to focus on whether the effect of receipt of compensatory damages is punitive or not, you get deeper and deeper in the quagmire.

It’s much easier to step back and say, what is the justification for punitive damages?

If the justification is to punish, and it’s based on the nature of the conduct, then it is not awardable because it falls within the prohibition of the Federal Tort Claims Act.

I might mention in response to Justice Souter’s questions about conscious pain and suffering and such, the state of the law in Wisconsin is that conscious pain and suffering is compensable, but not… there is no such entity as unconscious pain and suffering.

Loss of enjoyment of life is viewed as a component of pain and suffering.

The narrow issue that’s undecided in Wisconsin is whether a comatose individual who cannot exhibit an awareness of loss of enjoyment of life should be compensated for that component.

There was no effort made in this case to seek an award for conscious pain and suffering.

We took the position that we did not have the evidence to support that, and it was not available under Wisconsin law, even though some States might in fact have allowed that.

David H. Souter:

Excuse me, was the Government’s objection to the… to the award of damages on that point not only based upon its theory of what is punitive but also on State law?

Did it say Wisconsin law doesn’t allow for this anyway?

Daniel A. Rottier:

The Government didn’t go so far as to say Wisconsin law did not allow it.

They did take a position Wisconsin law was silent on it and that the primary argument was that it would be punitive.

Byron R. White:

And the court of appeals agreed with that?

Daniel A. Rottier:

That’s correct.

I agree with the Government’s counsel that the basic approach of both the trial judge and the Seventh Circuit was that both of these components of damages resulted in the punitive effect and therefore was prohibited by the Federal Tort Claims Act.

In closing, I would draw your attention to the Massachusetts Bonding case which did relate to the Federal Tort Claims Act and did require the Supreme Court to look at the definition of punitive damages.

That involved a Massachusetts wrongful death statute which said that if someone was killed their survivors could make a claim for wrongful death, but it had to fall within a certain minimum and maximum irrespective of what pecuniary damages had been sought.

What’s the name of the case, Mr. Rottier?

Massachusetts Bonding.

It’s a 1956 case.

Byron R. White:

Citation?

Daniel A. Rottier:

352 U.S. 128, and in that case the Supreme Court of the United States held that it would be inappropriate to follow these minimum and maximums because they were really punitive in nature, because… and Massachusetts had viewed them as punitive in nature, and the Supreme Court said, and I quote,

“By definition, punitive damages are based upon the degree of the defendant’s culpability. “

That’s what we’re asking this Court to reaffirm in the context of the Federal Tort Claims Act, just as this Court did in Massachusetts Bonding.

William H. Rehnquist:

Thank you, Mr. Rottier.

The case is submitted.