Source: http://openjurist.org/486/us/71
Timestamp: 2016-05-03 07:39:31
Document Index: 39193192

Matched Legal Cases: ['§ 11', '§ 11', '§ 1257', 'Art. 3', '§ 28', '§ 11', '§ 1257', '§ 11', '§ 11', '§ 11', '§ 11', '§ 1257', '§ 11', '§ 1257', '§ 11', '§ 11', '§ 11']

486 US 71 Bankers Life and Casualty Company v. M Crenshaw | OpenJurist
486 U.S. 71 - Bankers Life and Casualty Company v. M Crenshaw Homethe United States Reports486 U.S.
486 US 71 Bankers Life and Casualty Company v. M Crenshaw 486 U.S. 71
108 S.Ct. 1645
100 L.Ed.2d 62
BANKERS LIFE AND CASUALTY COMPANY, Appellant,v.Lloyd M. CRENSHAW.
In a state-court suit upon an insurance claim for loss of a limb, the jury awarded appellee the $20,000 provided by his policy and punitive damages of $1.6 million based on appellant's bad-faith refusal to pay the claim. Concluding that the punitive damages award was not excessive in light ofappellant's financial worth and the degree of its wrongdoing, the Mississippi Supreme Court affirmed the verdict without modification, and assessed an additional 15% penalty against appellant in accordance with a state statute imposing such a penalty on parties who appeal unsuccessfully from money judgments or other categories of judgments whose value may be readily determined. Although the appeal had not raised a federal constitutional challenge to the size of the punitive damages award, appellant argued, in its petition for rehearing, that the award "was clearly excessive, not reasonably related to any legitimate purpose, constitutes excessive fine, and violates constitutional principles." Appellant's Motion to Correct Judgment also alleged that the statutory penalty violated its equal protection rights under the Federal and State Constitutions. Without opinion, the State Supreme Court denied the petition for rehearing and the Motion to Correct Judgment.
1. This Court will not reach appellant's claims that the punitive damages award violated the Due Process, Contract, and Excessive Fines Clauses of the Federal Constitution, since those claims were not raised and passed upon in state court. Hathorn v. Lovorn, 457 U.S. 255, 102 S.Ct. 2421, 72 L.Ed.2d 824, distinguished. The petition for rehearing's vague and general appeal to constitutional principles was insufficient to adequately raise the Contract Clause or due process claims. Similarly, the petition's reference to the award's excessiveness is too oblique to have properly raised the Federal Excessive Fines Clause claim, since no mention was made of the Clause, the Federal Constitution, or federal law, and the Mississippi Constitution contains its own Excessive Fines Clause, which the State Supreme Court could have taken to underlie the excessiveness challenge if it understood appellant to be offering a constitutional challenge. Assuming that this Court's "not pressed or passed upon below" rule is not jurisdictional but is merely a prudential restriction, the more prudent course here is to decline review of the important and difficult Federal Excessive Fines Clause issue. This course will permit a number of less intrusive, and possibly more appropriate, resolutions by the state legislature or courts, while any ultimate review of the question in this Court will gain the benefit of a well-developed record and a reasoned opinion on the merits by the State Supreme Court. Pp. 76-80.
At the time of the amputation, appellee was insured under a group policy issued by appellant. The policy provided a $20,000 benefit for loss of limb due to accidental bodily injury. In April 1979, appellee submitted a claim under the policy. Appellant denied the claim. The apparent basis for the denial was an opinion of appellant's Medical Director, Dr. Nathaniel McParland, that the cause of the amputation was not appellee's accident but a pre-existing condition of arteriosclerosis, a degenerative vascular disease. Appellee responded to the company's denial by furnishing a statement signed by three doctors who treated him at the hospital. They stated that appellee's arteriosclerosis was " 'an underlying condition and not the immediate cause of the gangrenous necrosis. The precipating [sic] event must be considered to be the trauma which initially brought him to the Emergency Room on 9 January.' " 483 So.2d 254, 261 (Miss.1985). Dr. McParland and a company analyst concluded that this statement was inconsequential, and appellant adhered to its position that the arteriosclerosis was responsible for the loss of limb.
Appellee persisted in his efforts to recover under the policy, eventually hiring an attorney, and appellant persisted in its intransigence. In its correspondence with appellee and his attorney, appellant repeatedly asserted that appellee had not suffered an injury as defined in the policy, that is, a " ' "bodily injury, causing the loss while this policy is in force, directly and independently of all other causes and effected solely through an accidental bodily injury to the insured person." ' " Id., at 262, quoting letter of Apr. 8, 1980, from Wm. Herzau to appellee. In contemporaneous internal memoranda, however, appellant noted that notwithstanding the policy language, appellee was entitled to recovery under Mississippi law if his injury had "aggravate[d], render[ed] active, or set in motion a latent or dormant pre-existing physical condition or disease." Id., at 262, 263. The memoranda also demonstrated that appellant knew its files were incomplete yet never attempted to obtain appellee's medical records, most notably his emergency room report, even though Mississippi law and internal company procedures required such efforts.
The Mississippi Supreme Court affirmed the jury verdict without modification. It concluded that the punitive damages award was not excessive in light of appellant's financial worth and the degree of its wrongdoing. See id., at 279. Because the money judgment was affirmed without modification, a penalty of $243,000, or 15% of the judgment, was assessed against appellant and added to appellee's recovery in accordance with Mississippi's penalty statute. See Miss.Code Ann. § 11-3-23 (Supp. 1987). In its appeal to the Mississippi Supreme Court, appellant did not raise a federal constitutional challenge to the size of the punitive damages award.1 Following the affirmance of the jury verdict, appellant filed a petition for rehearing. Appellant argued in the petition that "[t]he punitive damage verdict was clearly excessive, not reasonably related to any legitimate purpose, constitutes excessive fine, and violates constitutional principles." App. to Juris. Statement 139a. An accompanying brief asserted that the punitive damages award violated "due process, equal protection, and other constitutional standards." Id., at 151a. Appellant also filed a Motion to Correct Judgment in which it alleged that the 15% penalty under § 11-3-23 "violat[ed] the rights of equal protection and due process of Bankers Life" guaranteed in the Federal and State Constitutions. App. to Juris. Statement 106a-107a. The Mississippi Supreme Court, without opinion, denied the petition for rehearing and overruled the Motion to Correct Judgment.
Appellant focuses most of its efforts in this appeal to challenging the punitive damages award of $1.6 million. It contends foremost that the award violates the Eighth Amendment's guarantee that "excessive fines [shall not be] imposed." Appellant argues first, that the Excessive Fines Clause applies to punitive damages awards rendered in civil cases, and second, that the particular award in this case was constitutionally excessive. In addition to its excessive fines claim, appellant challenges the punitive damages award in this case on the grounds that it violates the Due Process Clause and the Contract Clause. Although we noted probable jurisdiction as to all of the questions presented in appellant's jurisdictional statement, appellant's challenges to the size of the punitive damages award do not fall within our appellate jurisdiction. See 28 U.S.C. § 1257(2). We therefore treat them as if contained in a petition for a writ of certiorari, and our unrestricted notation of probable jurisdiction of the appeal is to be understood as a grant of the writ as to these claims. See Mishkin v. New York, 383 U.S. 502, 512, 86 S.Ct. 958, 965, 16 L.Ed.2d 56 (1966). We conclude, however, that these claims were not raised and passed upon in state court, and we decline to reach them here. See ibid. ("The issue thus remains within our certiorari jurisdiction, and we may, for good reason, even at this stage, decline to decide the merits of the issue, much as we would dismiss a writ of certiorari as improvidently granted").
Appellant's reference to the excessiveness of the punitive damages award more colorably raises a cognizable constitutional challenge to the size of the award, one based on the Excessive Fines Clause of the Eighth Amendment. But this language as well is too oblique to allow us to conclude that appellant raised before the Mississippi Supreme Court the federal claim it now urges us to resolve. As this Court stated in Webb v. Webb, 451 U.S. 493, 501, 101 S.Ct. 1889, 1894, 68 L.Ed.2d 392 (1981), "[a]t the minimum . . . there should be no doubt from the record that a claim under a federal statute or the Federal Constitution was presented in the state courts and that those courts were apprised of the nature or substance of the federal claim at the time and in the manner required by the state law." Although the petition for rehearing alleges that the fine is excessive, it does not indicate that the fine is excessive as a constitutional matter, be it state or federal. It certainly does not identify the Excessive Fines Clause of the Eighth Amendment to the Federal Constitution as the source of appellant's claim. Indeed, the crucial language from appellant's petition contains no reference whatsoever to the Eighth Amendment, the Federal Constitution, or federal law. This failure to invoke the Federal Constitution is especially problematic in this case because the Mississippi Constitution contains its own Excessive Fines Clause. Miss. Const., Art. 3, § 28. Thus, even if the Mississippi Supreme Court understood appellant to be offering a constitutional challenge, it may very well have taken that challenge to be anchored in the State Constitution. Cf. Webb, 451 U.S., at 496-498, 101 S.Ct., at 1891-1892 (finding that party's reference to "full faith and credit" in state-court proceedings had failed to raise a federal constitutional claim even though the State Constitution contained no full faith and credit clause); id., at 502-503, 101 S.Ct., at 1894-1895 (MARSHALL, J., dissenting). We therefore conclude that appellant's Eighth Amendment challenge, like its other challenges to the size of the punitive damages award, was not properly raised below.2 Whether appellant's failure to raise these claims in the Mississippi courts deprives us of all power to review them under our certiorari jurisdiction is an unsettled question. As then Justice REHNQUIST wrote for the Court in Illinois v. Gates, 462 U.S. 213, 103 S.Ct. 2317, 76 L.Ed.2d 527 (1983), the cases have been somewhat inconsistent in their characterization of the "not pressed or passed upon below" rule. Early opinions seemed to treat the requirement as jurisdictional, whereas more recent cases clearly view the rule as merely a prudential restriction that does not pose an insuperable bar to our review. See id., at 218-219, 103 S.Ct., at 2321-2322 (discussing cases). We are not called on today to conclusively characterize the "not pressed or passed upon below" rule, however, because assuming that the rule is merely prudential, we believe that the more prudent course in this case is to decline to review appellant's claims.
In determining whether to exercise jurisdiction over questions not properly raised below, the Court has focused on the policies that animate the "not pressed or passed upon below" rule. These policies are first, comity to the States, and second, a constellation of practical considerations, chief among which is our own need for a properly developed record on appeal. See Webb v. Webb, supra, 451 U.S., at 500-501, 101 S.Ct., at 1893-1894. Because the chief issue appellant would have us resolve—whether the Eighth Amendment's Excessive Fines Clause serves to limit punitive damages in state civil cases—is a question of some moment and difficulty, these policies apply with special force. See Illinois v. Gates, supra, 462 U.S., at 224, 103 S.Ct., at 2325 ("Where difficult issues of great public importance are involved, there are strong reasons to adhere scrupulously to the customary limitations on our discretion"); Mishkin v. New York, 383 U.S., at 512-513, 86 S.Ct., at 965 ("The far-reaching and important questions tendered by this claim are not presented by the record with sufficient clarity to require or justify their decision"). Our review of appellant's claim now would short-circuit a number of less intrusive, and possibly more appropriate, resolutions: the Mississippi State Legislature might choose to enact legislation addressing punitive damages awards for bad-faith refusal to pay insurance claims;3 failing that, the Mississippi state courts may choose to resolve the issue by relying on the State Constitution or on some other adequate and independent nonfederal ground; and failing that, the Mississippi Supreme Court will have its opportunity to decide the question of federal law in the first instance, while any ultimate review of the question that we might undertake will gain the benefit of a well-developed record and a reasoned opinion on the merits. We think it unwise to foreclose these possibilities, and therefore decline to address appellant's challenges to the size of the punitive damages award.
There remains appellant's challenge to Mississippi's "penalty statute," which requires unsuccessful appellants from money judgments, as well as from several other categories of judgments whose value may readily be determined, to pay an additional assessment of 15% of the judgment.4 Appellant argues that the penalty statute violates the Equal Protection Clause of the Fourteenth Amendment because it singles out appellants from money judgments, and because it penalizes all such appellants who are unsuccessful, regardless of the merit of their appeal. This claim is properly before us under our appellate jurisdiction because the Mississippi Supreme Court, in denying appellant's Motion to Correct Judgment, upheld the validity of § 11-3-23 against appellant's federal constitutional claim. See 28 U.S.C. § 1257(2).
In arguing that § 11-3-23 violates equal protection, appellant seeks to draw support from the Court's opinion in Lindsey v. Normet, supra. Lindsey addressed the constitutionality of an Oregon statute that required tenants challenging eviction proceedings to post a bond of twice the amount of rent expected to accrue pending appellate review. The bond was forfeited to the landlord if the lower court decision was affirmed. We agreed with the appellants that the doublebond requirement violated the Equal Protection Clause.5 We noted that the requirement was "unrelated to actual rent accrued or to specific damage sustained by the landlord." 405 U.S., at 77, 92 S.Ct., at 876. Moreover, the requirement, which burdened only tenants, including tenants whose appeals were nonfrivolous, erected "a substantial barrier to appeal faced by no other civil litigant in Oregon." Id., at 79, 92 S.Ct., at 877. We therefore concluded that the requirement bore "no reasonable relationship to any valid state objective" and that it discriminated against the class of tenants appealing from adverse decisions in wrongful-detainer actions in an "arbitrary and irrational" fashion. Id., at 76-77, 79, 92 S.Ct., at 875-876, 877.
As Lindsey demonstrates, arbitrary and irrational discrimination violates the Equal Protection Clause under even our most deferential standard of review. Unlike the statute in Lindsey, however, Mississippi's penalty statute does not single out a class of appellants in an arbitrary and irrational fashion. First, whereas the statute in Lindsey singled out the narrow class of defendant-tenants for discriminatory treatment, the sweep of § 11-3-23 is far broader: the penalty applies both to plaintiffs and defendants, and it also applies to all money judgments as well as to a long list of judgments whose money value may readily be determined. See n. 6, infra. Second, and more generally, there is a rational connection between the statute's objective and Mississippi's choice to impose a penalty only on appellants from money judgments or judgments the money value of which can readily be determined. If Mississippi wanted similarly to deter frivolous appeals from other kinds of judgments, it either would have to erect a fixed bond that bore no relation to the value of the underlying suit, or else it would have to set appropriate penalties in each case using some kind of individualized procedure, which would impose a considerable cost in judicial resources, exactly what the statute aims to avoid. Mississippi instead has chosen a partial solution that will deter many, though not all, frivolous appeals without requiring a significant commitment of governmental resources. Appellants from money judgments, and from the other types of judgments delineated in the statute, are a rational target of this scheme because the value of their claims, and thus of a proportional penalty, may be readily computed without substantial judicial intervention. Cf. Lindsey, supra, at 78, 92 S.Ct., at 877 ("We discern nothing in the special purposes of the [wrongful detainer] statute or in the special characteristics of the landlord-tenant relationship to warrant this discrimination"). The Constitution does not prohibit Mississippi from singling out a group of litigants that it rationally concludes is most likely to be deterred from bringing meritless claims at the least cost to the State.
In addition, Mississippi's statute is less likely than was the statute in Lindsey to discourage substantial appeals along with insubstantial ones. Because the penalty operates only after a judgment has been affirmed without modification, there is less risk than in Lindsey of discouraging appellants who believe they have meritorious appeals but simply lack the funds to post a substantial bond during the appellate process.6 And whereas the assessment in Lindsey "automatically doubled the stakes," 405 U.S., at 79, 92 S.Ct., at 877, the 15% penalty here is a relatively modest additional assessment. Cf. McCray, 291 U.S., at 571, 54 S.Ct., at 484-485 (12% additional assessment not oppressive). Although Mississippi may not have succeeded in eliminating all danger of deterring meritorious claims, we cannot say that the residual danger is sufficient to render the statutory scheme irrational.
In short, unlike the double-bond provision condemned in Lindsey, the means chosen in § 11-3-23 are reasonably related to the achievement of the State's objectives of discouraging frivolous appeals, compensating appellees for the intangible costs of litigation, and conserving judicial resources. See Lindsey, 405 U.S., at 70, 92 S.Ct. at 872. It of course is possible that Mississippi might have enacted a statute that more precisely serves these goals and these goals only; as we frequently have explained, however, a state statute need not be so perfectly calibrated in order to pass muster under the rational-basis test. See, e.g., Vance v. Bradley, 440 U.S. 93, 108, 99 S.Ct. 939, 948, 59 L.Ed.2d 171 (1979). We are satisfied that the means that the State has chosen are "reasonably tailored to achieve [the State's legitimate] ends." Lindsey, supra, 405 U.S., at 78, 92 S.Ct., at 876-877. We therefore affirm the judgment of the Mississippi Supreme Court denying appellant's equal protection challenge to § 11-3-23.
I join Parts I and III of the Court's opinion but not Part II. I continue to believe that "the statute which gives us jurisdiction in this cause, 28 U.S.C. § 1257(3), prevents us from deciding federal constitutional claims raised here for the first time on review of state-court decisions. Cardinale v. Louisiana, 394 U.S. 437, 438-439 [89 S.Ct. 1161, 1162-1163, 22 L.Ed.2d 398] (1969)." Illinois v. Gates, 462 U.S. 213, 247, 103 S.Ct. 2317, 2337, 76 L.Ed.2d 527 (1983) (WHITE, J., concurring in judgment). Thus, I disagree with the Court's analysis—under "prudential" standards—of appellant's preservation of its challenge to the punitive damages award here. Ante, at 79-80. Ultimately, because the majority properly declines to address claims which I believe are not within this Court's jurisdiction, I concur in Part II's result, but not its reasoning.
I join Parts I and II of the Court's opinion, for I agree that the Court should refrain from addressing appellant's challenge to the punitive damages awarded against it. I also agree with the Court's conclusion that appellant's challenge to Mississippi's "penalty statute," Miss.Code Ann. § 11-3-23 (Supp.1987), is properly before the Court under its appellate jurisdiction. See 28 U.S.C. § 1257(2). Nonetheless, because I conclude that the statute cannot survive scrutiny under the Equal Protection Clause of the Fourteenth Amendment, I dissent from the Court's conclusion to the contrary.
Section 11-3-23 " 'is in the nature of a penalty, or a condition of appeal.' " Pearce v. Ford Motor Co., 235 So.2d 281, 283 (Miss.1970), quoting Meek v. Alexander, 137 Miss. 117, 121, 102 So. 69, 70 (1924). Not all unsuccessful appellants, however, are subject to its penalizing effect. The statute imposes lump-sum "damages," calculated at 15% of the value of the underlying judgment, on an appellant who unsuccessfully appeals to the Mississippi Supreme Court a money judgment or possessory action.1 Although the penalty applies to both the defendant and the prevailing but unsatisfied plaintiff who unsuccessfully appeals, it does not apply to the plaintiff who unsuccessfully appeals an adverse judgment or to the unsuccessful cross-appellant.
There can be little doubt that this damages assessment burdens the statutory right of a litigant to appeal a money judgment. The statute makes it substantially more expensive to exercise the right if the judgment is ultimately affirmed, and it thereby obviously creates a disincentive to appeal.2 The Court concludes that "the means chosen in § 11-3-23 are reasonably related to the achievement of the State's objectives of discouraging frivolous appeals, compensating appellees for the intangible costs of litigation, and conserving judicial resources." Ante, at 85. In my view, the 15% automatic penalty provision is not at all "reasonably related" to any of these interests.3 To the contrary, the relationship of the statutory classification of a money-judgment appellant to the asserted governmental goals "is so attenuated as to render the distinction arbitrary [and] irrational." Cleburne v. Cleburne Living Center, Inc., 473 U.S. 432, 446, 105 S.Ct. 3249, 3258, 87 L.Ed.2d 313 (1985).
Section 11-3-23 does not permit the Mississippi Supreme Court to determine whether an appeal is frivolous; the 15% penalty is imposed on certain unsuccessful appellants whenever the judgment is affirmed, regardless of the substantial merit of the appellant's case. Thus, even if, as in this very case, a money judgment is affirmed by a narrow 5-4 majority of the Supreme Court, the assessment automatically is made. Such a provision obviously sweeps substantial appeals as well as frivolous appeals within its deterrent net.4
Appellant argues that § 11-3-23 impermissibly burdens some litigants' access to the State's appellate system. Although the Court indicated in Lindsey that the effective foreclosure of a state right to appeal as to some litigants only—for example, indigent litigants—might well violate equal protection guarantees under even deferential scrutiny, see Lindsey, supra, at 77, 79, appellee rightly notes that appellant lacks standing to challenge § 11-3-23 on this basis, because appellant has not alleged that its own right to appeal has been foreclosed by the statute. See Broadrick v. Oklahoma, 413 U.S. 601, 610, 93 S.Ct. 2908, 2914-2915, 37 L.Ed.2d 830 (1973).