What is Conservatism?

November 12, 2008

I’ve been hearing a lot about where this country is politically and I have to confess that I do not understand much of what is being said. Yesterday I heard a Republican say that “America is right of center.” I sincerely do not understand what that means. I presume that it was intended to mean that Americans support the Republican agenda, but the election offered little to support that position and polls uniformly show that the majority of us support the political issues advanced by so called “liberals” such as opposition to the Iraq war, health care revision, regulation of financial institutions, and establishing a trade balance.

It seems to me that the notions of conservative and liberal are indistinct to say the least with conservatives proposing dramatic changes to the society at least over the last eight years (I’m thinking tax reduction during a war, the “Bush Doctrine” which permits attacking other countries that might be a threat in the future, domestic warrantless surveillance, rendition, Guantanamo and the related human rights issues, abdication of federal oversight of financial institutions, stuff like that) and liberals advocating a return to a balanced budget and trade balance, and rolling back many of the recent changes implemented by the administration.

Another instance of this confusion about what is conservative and what is liberal is the recent Supreme Court case, argued Tuesday, in which the Court heard arguments about the FCC’s right to penalize “fleeting profanity.” The FCC for example fined PBS for airing interviews with old blues men who sometimes used the “s” word.

During oral argument it appeared that the “conservative” judges favored upholding the FCC’s right to control the use of any bad words, while the liberals seemed to disfavor this relatively mild form of censorship. In the courts conservatism is not marked by a philosophical opposition to governmental intrusion into our lives, as conservative judges tend to favor this type of censorship, to favor expansion of the police power and generally to disfavor using civil rights to limit the powers of government. At least in cases involving these competing interests the conservatives are more likely to be on the side of the government. On the other hand when government interferes with business, they are more likely to be on the side of business and the limitation of government.

This reminds me that when the constitution was adopted there was no bill of rights, to Thomas Jefferson’s great disappointment. The conservatives, who generally had opposed the inclusion of a bill of rights, coalesced into the Federalist Party which favored a strong federal government. Federalists were also much more pacifist than Jefferson’s following. I guess the conservatives on the bench take inspiration from John Adams and the Federalists at least in part. The conservatives of that era were for radical changes in the government to centralize and strengthen the power of the federal government.

The just finished presidential election illustrates the blur between conservative and liberal, as these terms are commonly used. McCain could not effectively distinguish his policies from those of Bush. McCain could not identify any bright lines that distinguished his policies from Obama and appealed to the voters. Eventually he seemed to stake his campaign on “character” issues, which to some degree is a euphemism for personal attacks. He did this is substantial part because he could not find the “right of center” where Republicans say most of us reside.

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How the Tort System Really Works

August 27, 2008

I thought that I’d briefly discuss a case that shows how the legal system really works with tort claims. As the November elections approach we are no doubt going to hear quite a bit about run away jury awards and the poor, long suffering businesses and insurance companies.

In truth only about 4% of the cases filed ever make it to trial (according to King County records), as plaintiffs are subjected to withering pretrial procedures that drag out their cases for years.

Rivas v. Overlake Medical Center has been pending for nine years and Susan Rivas, the plaintiff, has yet to get her day in court. She went to Overlake Hospital for a procedure after which she was placed in intensive care for four days, then told that she would lose her kidney. With all hope of saving the kidney was lost she filed suit three years and two days after the operation. Overlake and Dr. Muraki, her doctor, replied saying the suit was too late. The three year statute of limitations passed two days before the suit was commenced.

Nine years later her case got to the State Supreme Court, which held on August 7 that the stature of limitations had been tolled for the four day period in which she was in intensive care. This gave her four extra days, so she is not barred by the statute of limitations from suing. She can now have a trial. (Justices Fairhurst and Alexander dissented saying that the statute of limitations should be strictly enforced.)

Most plaintiffs by this point would have given up and it remains to be seen whether Susan Rivas will have the resources (spiritual, mental and financial) to actually have a trial.

If say she has a trial in the next year or two and wins, then the defendants’ insurance companies can appeal the decision. So it is quite possible that even if she wins at every stage from here on out, it could be five or more years before she recovers any money whatsoever, assuming her health holds out.

Washington has no punitive damages that are available to her, so she will be entitled to receive only the damages that she can prove that she suffered directly due to her injury. You can see that insurance companies benefit by delaying payment 15 or more years.

Tort reform would further reduce Susan’s recovery by imposing an arbitrary limit on the amount she could receive. The effect of such a law would not only be to deprive people like Susan Rivas from receiving full compensation, but even more important to the insurance companies it would discourage people from filing suit and no doubt reduce the 4% of cases that survive pretrial procedures to say 3% or 2%.


Exxon Valdez: Permissive Standards for Corporations

August 26, 2008

The U.S. Supreme Court is coming under fire for favoring business at the expense of both precedent and principle. The linked article discusses decisions where the interest of business has predominated over the interests of consumers and citizens. This of course was the expected result of Bush’s appointments.

What is more interesting to me is the Court’s willingness to abandon supposedly “conservative” judicial tenets to achieve these results. Members of the Senate Judiciary Committee, for example, have criticized the Court for usurping the role of Congress in the Exxon Valdez decision.

What surprises me is the abandonment of the “law and order” principals that are invoked to incarcerate people when corporate malfeasance is at issue. Mandatory sentencing and long sentences are deemed appropriate for individuals because criminal behavior is reprehensible. For reprehensible corporate behavior, however, the Exxon Valdez decision says that limits are appropriate and the same juries that convict people should not be trusted to penalize corporations.

For this reason the Court declared in the Exxon Valdez decision that henceforth there will be a limit on the discretion of juries in awarding punitive damages for reprehensible behavior by corporations. Exxon received a 4.5 billion dollar reprieve by the Court in reducing the jury award to $500,000,000. This of course is just a small fraction of its continuously record setting profits last quarter.  Certainly a minor inconvenience compared to spending one’s life, or a significant portion of it, in prison.

There are now two standards for “reprehensible conduct” in America. There is the harsh standard levied upon individuals in criminal settings and the lax standard imposed upon corporations in the civil penalty context.

If the Court, and its allies, meant what they said in “law and order” discussions you would expect that reprehensible conduct would be viewed equally hostilely whether it was associated with an individual or a corporation.   Similarly, you would expect juries to be viewed in the same light whether the defendant was an individual accused of a crime or a corporation found to have committed anti-social behavior.


The Exxon Valdez Decision and Punitive Damages

July 9, 2008

Exxon Shipping Co. v. Baker (the Exxon Valdez decision) provides an interesting look at our Supreme Court, particularly since so many of the members were selected by our country’s first administration composed of former oil executives.

The decision derives from the worst environmental disaster in our country’s history, when millions of gallons of oil were leaked into Prince William Sound in Alaska. The oil came from a supertanker (over 900 feet long) whose drunken captain had left the vessel in the hands of an unlicensed third mate who could not negotiate the passage. The ship ran aground on a reef. Wildlife was destroyed, a habitat rendered toxic and all the people who depended on Prince William Sound for their livelihood, including fishermen in Alaska, Washington, as well as elsewhere, were ruined. The devastation was overwhelming. Even now nineteen years later, oil stained gravel and sand lies just below the surface on the shore.

The captain had a history of alcohol abuse and was still intoxicated eleven hours after the incident. Exxon was found by a jury to have acted recklessly, and the jury awarded $5 billion in punitive damages. Exxon appealed, questioning on a number of grounds the punitive damage award.

Before arriving at the Supreme Court, the case was considered by the Ninth Circuit Court of Appeals. That court upheld the jury’s right to award punitive damages, but cut the amount of the punitive damages award in half.

Exxon petitioned the Supreme Court for review hoping to convince it that punitive damages were in appropriate and failing that that even half of the jury’s award was excessive.

Washington’s Attorney General, an ardent tort reform proponent, who campaigned against large jury awards, saw an opportunity for publicity. While actually claiming to his constituents that large jury awards and excessive litigation costs prevented the State of Washington from correcting to the conduct that gave rise to the litigation against the State, he undertook to champion the cause for punitive damages to the Supreme Court. He argued for the right to punitive damages and asked that the $5 billion award be restored.

In a very unusual decision, the Court announced that it was evenly divided on the question of whether punitive damages could be awarded against a corporation under maritime law. The Court said that it would not render a decision on that point, leaving the decision of the Ninth Circuit in place. (With nine members you might wonder how the Court could be evenly divided. Justice Alito recused himself, presumably because of some association with Exxon, creating an even number of justices deciding this case.) In the next few years from two to four of the members of the Court will be replaced and a reconstituted Court could then decide this issue.

The Court, without examining the right to punitive damages under maritime, law chose to consider whether such damages were prohibited by the Clean Water Act and, if not, whether the award was excessive. What is odd about this is that the Court left open the opportunity for it to later decide that there were no punitive damages available under the maritime law, undercutting the entire decision.

This very narrow ruling is becoming a trademark of the new Roberts Court. The new Chief Justice attempts to avoid sweeping decisions and tries to limit them to the facts of the case while seeking to avoid fractious split decisions. In this decision he selected issues that were less divisive than the question of whether punitive damages were available under maritime law.

The Court, after finding the the Clean Water Act did not preempt maritime common law, discussed the roots of punitive damages, tracing it back to English common law, codes from the Middle Ages and even the Code of Hammurabi. The decision quotes from an 18th century American decision where punitive damages were awarded against the Secretary of State for an unlawful search of someone’s papers. (They apparently had different sensibilities then, although maybe not in the case of the Attorney General.)

The Court said that punitive damages were “wildly” accepted by American courts by the middle of the 19th century. At that time they were called “exemplary damages” a more favorable term, and were invoked in cases involving extraordinary wrongdoing. Their purpose was said to be to set an example for the sake of deterence. They were also said to compensate for intangible injuries that were not a part of the legal definition of compensatory damages. The court noted that the concept of compensatory damages has broadened so that this justification no longer applies. Today the Court said that punitive damages serve the purposes of retribution and deterrence and are reserved for outrageous conduct that is recklessly indifferent to the rights of others or otherwise deplorable.

In Nebraska punitive damages are barred entirely. In Washington, Louisiana, New Hampshire and Massachusetts they are permitted only when authorized by statute. (In Washington this nearly amounts to a bar on them as the legislature disfavors this aspect of the common law.) Two states have limited the type of rewards which may be recovered as exemplary damages and several have limited the amounts.

In an interesting and uncharacteristic detour the Court examined the laws of several other countries on the question of punitive damages and found that they were generally subject to tighter control than in American Courts.

The Court rejected the contentions of the tort reformers who claim that punitive damages are becoming extravagant. It stated that neither the amount of the awards nor the percentage of cases with punitive damages awards has increased over time. The Court said that the figures show restraint with respect to this type of award.

The Court though found fault in the lack of predictability of the amount of the awards and the lack of consistency in determining an appropriate amount. It announced that it would create criteria so that this element of damages would be rendered more predictable.

The Court noted that the criminal justice system’s sentencing function has the same purposes as a jury assessing punitive damages: retribution and deterrence. It found it noteworthy that the “indeterminate” sentencing system had been rejected and suggested that it would do the same thing for punitive damages awards, avoiding the “deserts of uncharted discretion.”

The court cited studies showing that the ratio of punitive damage awards to compensatory awards was less than 1:1, meaning that actual damage awards were on average more than the accompanying punitive damage award. Without much more discussion the Court decided that in maritime cases the limit on punitive damages would be the amount of the compensatory award.

Justice Scalia and Thomas separately concurred. Justice Thomas often seems to follow Justice Scalia’s views almost like a shadow. Scalia said that the reasoning here was correct but he disputes cases cited in the opinion that put a constitutional limit on punitive damages.

Justice Stevens dissented from the part of the opinion that imposed a limit on maritime punitive damages. His dissent shows the shallow, if not outright ignorant use of the term “activist judges,” Tort reformers often rant against judges usurping the role of the legislature and attribute that to “liberal judges.” Justice Stevens, sometimes called a liberal justice, opined that it is not the role of the Court to devise a formula to impose on juries. He said that this is a legislative function that ought to be reserved for Congress.

Justice Ginsburg, generally regarded as particularly thoughtful, shared Stevens’ aversion to the Court legislating damage limits. She pointed out that the majority acknowledged that there was no perceived urgency requiring the court to break from the common law tradition. She pointed out that the data that informed the decision showed that the traditional “abuse of discretion” standard by which punitive damages are traditionally reviewed functioned perfectly well. She also pointed out a number of unanswered questions about the decision.

Justice Breyer also filed a dissent, saying that he had no particular problem with the imposition of a ration like the one adopted but that it should not apply in extraordinary cases. He went on to point out the high degree of scrutiny that this award had received at the trial court level and what the Ninth Circuit Court called the “egregious” nature of Exxon’s conduct. As a special case exception he would have sustained the Ninth Circuit Court’s decision.

There are a number of interesting features to this case which I’ll discuss on another occasion. One quick observation. Broadly speaking punitive damages and criminal law address the same sort of conduct, as suggested by the Court in this decision. That is conduct that is deplorable or which recklessly endangers others or their rights. Punitive damages and sentencing have exactly the same purposes, to punish the guilty and to deter such conduct. You would think that people supportive of strong or harsh sentencing standards would support strong or harsh punitive damages standards. It turns out of course that generally speaking the people who support incarceration over rehabilitative purposes in sentencing favor the abolishment of punitive damages. There are racial and class distinctions between the two groups of defendants. Hopefully there is some other explanation for this apparent inconsistency.


Washington State: Haven for Special Interests

March 30, 2008
It is my impression that Washington, more than perhaps any other state, is led by special interests. My impression is based in part at least on my law practice which focuses on real estate and business, so my awareness of this influence is pretty much confined to those areas.Let me give you a few examples of what has given me the impression that special interests are more influential here than most other places.
Perhaps my most shocking moment practicing law occurred when, during oral argument before the State Supreme Court, a representative of the insurance industry pointed to the justices and told them that his people were closely looking at how each one of them voted on this case and the insurance industry would be heard from come election time. (I am paraphrasing here but this message was loud and clear.) I thought that this was a truly shocking insult to the integrity of the court, but the justices said nothing.
In the area of construction law Washington is I believe the most repressive with respect to consumer rights. Did you know that if a building or bridge collapses six years after it is permitted, there is absolutely no recourse against anyone in the construction industry, including builders, suppliers, architects, engineers, even surveyors and anyone one else claiming to be in the industry? Condominium owners have no recourse if their building collapses four years after it was permitted (although this is a little murky). In Washington, at least with respect to being able to enforce warranties and representations, all the talk about the useful life of structures is bogus. After six years (four for condos) no one is responsible.This is the result of Washington’s statute of repose, which is jokingly said to have received that name named because people had to be asleep for the legislature to get the law through.
Other states have statutes of repose. These were pushed through state legislatures by an unprecedented lobbying effort on the part of the insurance and building industries in the 1960’s. Washington’s four year statute for condos and six years for absolutely everything else is extremely rare among the states and may be the shortest of any state. If you buy a new condo you should know that you are stuck if anything (however disastrous) goes wrong four years after the permit was granted, which is ofter about two or so years after it is filled.
To give you a sense of the influence of the building lobby, in Washington say a school building collapses six years after completion and kills a child whose watch stops for no good reason. There would be no recourse against anyone in the construction industry but the parents could sue the watch manufacturer for the cost of the watch. Personal property here has a twelve year (or the useful life of the product) statute of repose.
Perhaps the best indicator of the exalted state of special interests here is that when three sitting justices of our State Supreme Court announced last week that they were seeking reelection, the newspaper interviewed not a law professor or someone who practices before the court, but a representative of B.I.A.W., the building industry lobby.

Sandra Day O’Connor on How to Improve our Court System

February 1, 2008

Retired Justice Sandra Day O’Connor, a Reagan-appointed U.S. Supreme Court Justice, is troubled by a court system that gives special interests great influence on the decisions of the courts. An independent court system is necessary to curb the influence of big money on the government. Dependence on campaign contributions for election creates an opportunity for moneyed interests to undermine the intended independence of judges. Justice O’Connor has spent much of her two years of retirement promoting the urgent need for re-establishing judicial independence in states where the level of campaign contributions plays a significant role in the selection of judges, states such as Washington.

Ironically Justice O’Connor became a trial judge in Arizona through an election, but happily saw Arizona replace that system with a merit system shortly before her appointment to the U.S. Supreme Court. She commented in a November speech that the quality of the Arizona judicial system appreciably improved with the new selection system.

Her second wish was that prosecutors and defense lawyers should be similarly trained and paid, and that they should periodically trade places, going from one side to the other. This she said is how it works in England, something that I didn’t know.


Result-Oriented Judicial Decisions

January 31, 2008

Contracts are certainly not inviolate, as there are numerous legal doctrines to set them aside, reform them, even add terms to them. The general idea is to effectuate the intention of the parties as discerned by a judge or appellate court. There are numerous judicial tools to discern the parties intent, often leading to conflicting results. Ultimately though once a contract is in the court system its interpretation is left to an individual or individuals who probably have no experience and limited understanding of the area of commerce from which the contract arose.

When the contract materially departs from the agreement of the parties or the contract turns out to involve performance beyond the expectations of the parties, the court will sometimes say that there has been a “mutual mistake of fact.” This can lead to the court rescinding the contract, or reforming it to comport with the actual understanding of the parties, and sometimes awarding damages and attorneys fees.

This situation occurs throughout the law, in almost every conceivable context. People want to get out of adoption agreements, supply contracts, debts of all kinds, personal service agreements, you name it. For the sake of predictability it is quite important that you be able to determine whether a contract will be canceled or reformed or enforced. Because of the sweeping nature of the situations into which these doctrines are applied, they are defined with a broad brush and often it is impossible to anticipate what a court will do with them.

Today the Washington State Supreme Court issued a decision involving an agreement sought to be set aside. Its treatment of the notion of “mutual mistake of fact” is of interest, although I’m not sure that it goes very far in making things any more predictable.

In State v. John Shannon Codiga, a criminal defendant entered into a plea agreement, pleading guilty to three counts of a crime involving a sentence of seven years. At the sentencing hearing the defendant learned that actually the sentence was life, or could be that. The defendant not surprisingly felt that this ought to invalidate the agreement so that he could go to trial. The prosecutor explained when his office prepared a statement of the defendant’s criminal history it omitted a marijuana-related felony conviction because by its terms it was to be expunged if the defendant stayed out of trouble and it had failed to identify one or more misdemeanors that had occurred to prevent the felony from being extinguished. The prosecutor pointed out that the defendant signed off on this mistaken statement of criminal history but the defendant contended that he too had thought that the felony had been expunged. As it turned out this was a pretty big fact to be mistaken about, as the existence or nonexistence of this conviction .

The Washington Supreme Court has been criticized for deciding what result it wanted then rendering the law in a manner to justify the result. Mutual mistake is a doctrine that applies when there has been a mistake about a material fact but it classically does not apply when the parties have been mistaken about their understanding their rights. This is now a little murky. For example in In Re M.D. it was found that a mistake about the person’s rights before entering into a contract could invalidate the agreement. This decision seemed to gloss over the distinction between law and facts and skip lightly over the idea that the mistake should be mutual.

In todays decision, the State Supreme Court upheld the plea agreement, saying in effect that the defendant had waived the right to claim mutual mistake of fact in the standard printed language of the agreement in which he assumed the risk of a mutual mistake of fact. The court then went on to emphasize that this was a mutual mistake of fact, not of law, as if the doctrine applied only to mistakes of law. This is vertigo inducing language to the average lawyer. The readers’ disorientation is heightened when s/he realizes that an acknowledged mutual mistake of fact is being used by the Court to sustain a contract, not avoid it. This was a unanimous decision!

If we pull ourselves back from behind the looking glass, there is a trend in the law to permit contracting parties to allocate the risk of mistake. Generally speaking this should be bargained for and to be enforceable it should be reasonably clear about what mistakes are being allocated and not a sweeping statement that allocates all mistakes, including those of the party that drafted the agreement with superior bargaining position, to the party presented with the agreement. The court did not analyze the plea bargaining agreement in light of this emerging area of law, it just pointed to the language of the agreement, as if that were the sole determining factor.

It might help in your effort to fit these decisions into a conceptual framework to know that In re M.D. where the doctrine of mutual mistake was contorted to avoid a contract involved a Native American mother trying to reclaim her parental rights which had been contracted away. Today’s decision involved a person arrested for the first time for child molestation. In these two decisions the doctrine was used to affirm parental rights over contractual rights and to incarcerate for life, or most of it anyway, a person who confessed to three acts of child molestation. Another factor that may have come into play is that three State Supreme Court seats are up for re-election this fall.

In these decisions most people would not take issue with the outcome and many would not take issue with the reasoning that obtained the results. Later we will look at decisions that involve other interests. If you go along with this approach in these cases, no fair complaining if a result you don’t like is arrived at through unconventional reasoning.