Earl Warren: Hudson Distributors, Inc., versus Eli Lilly & Co. Mr. Krotinger.
Myron N. Krotinger: Thank you, Your Honor. Mr. Chief Justice and members of the Court, if the Court please. This case is a companion case to the Upjohn case. It has some different aspects. Its history and how it arose, follow in many respects the Upjohn litigation following the effectiveness of the Ohio Fair Trade Act or, rather, its passage in June of 1959. On October 1st, 1959, Hudson was nullified by Eli Lilly & Co. that Eli Lilly will continue to vigorously support fair trade and which is to give you notice of this policy. This letter invited Hudson to enter into a contract. This invitation was to -- was not taken up and on December 10th, 1959, a warning letter was sent from Eli Lilly to Hudson informing of the information that's come to Eli Lilly of sales below fair trade prices, again, enclosing duplicate copies of the fair trade agreement, enclosing "We trust your future operations will be strictly in accordance with the obligations imposed upon you under the Ohio Fair Trade Act so there will be no need -- occasion for any further controversy or litigation." The -- Hudson filed its petition for a declaratory judgment on the 22nd of October, 1959. This was followed by this warning letter and then by a second warning letter of January 26th, 1960 in which Hudson was told, "We are prepared to file suits for injunctions where contract violations cannot be worked out in a voluntary basis and we trust your future operations will be in accordance with your obligations under the contracts and under the Ohio Fair Trade Act." In other words, the demand was made that Hudson observe both the provisions of the Ohio -- rather, of the Lilly contract, as well as the fair trade pricing. As in Upjohn, a cross-petition was filed. Responsive pleadings were filed both to the petition and the cross-petition, and the case moved into a courtroom. Unlike Upjohn, in this case, there was a stipulation of facts and evidence. Again, like Upjohn, the litigation on the Hudson pleading -- rather, on the complex of pleadings was limited solely to the petition, the answer and the reply. The rulings made by the courts below, the Court of Common Pleas, the Court of Appeals, the Highest Court of Ohio were all made in the -- both cases as written by the Court. And as stated to the Court yesterday, the issues before the courts were limited to the constitutionality of the statute under the State and the Federal Constitutions. Now, Your Honors, as we noted yesterday, the Supreme Court of Ohio limited and placed its ruling solely upon the issues of the State of Ohio Constitution. It's as if the federal law did not exist and we believe that the Supreme Court of Ohio was misled or, at least, adopted the positions set forth both by Upjohn and by Lilly in their briefs, excuse me, namely, that the federal law had nothing to do with the legality of the Ohio Fair Trade Act. This position was taken both by Lilly and by Upjohn forthrightly in the court below, and net result was that we have a situation where, in the brief of Eli Lilly & Co. in this Court, the claim is made that a valid contract was instituted under the Ohio Fair Trade Act under Section 5 (a) (2). Seven pages of the Lilly brief in this Court are devoted to that proposition. In fact, Your Honors, at page 48, 48 or 49 of the Lilly brief in this Court, Lilly argues such a contract is within the common law meaning of a contract that is, under Section 1333.31, an implied contract. Williston states that a contract may arise from a “sellers making a general offer to all the world in this way to be accepted by taking ownership on the property, provided consideration could be found from the promise of the purchaser and also, such communication to the promisee as is necessary for a contract.” The next sentence of this section of Williston which deals with notices on merchandise is to the effect, if the ultimate purchase is not from the offeror but from one who has acquired from him absolute and unqualified ownership, it would seem impossible to treat the purchase of the property as consideration for a promise of the purchaser to the original seller, unless it leads to the facts warranting the assumption that the immediate seller demanded, as part of the consideration of the sale, a promise to the original seller.
Arthur J. Goldberg: (Inaudible)
Myron N. Krotinger: Only if the federal law so-permits, Your Honor. Under Section 5 (a) (2), this Court has held and has plainly held repeatedly that the words “contracts and agreements” in the McGuire Act are to be taken in their ordinary and usual meaning. In the ordinary and usual meaning of the term, Mr. Justice Goldberg, a notice is not a contract. A notice of another man's trademark is not a contract.
Arthur J. Goldberg: (Inaudible)
Myron N. Krotinger: Yes, Your Honor.
Arthur J. Goldberg: (Inaudible)
Myron N. Krotinger: Except, Your Honor, I would suggest that the issue in the case is the interpretation of the federal exemption. In other words, where the Supreme Court of Ohio committed, in our opinion, basic error, is impending this case and the validity of a fair trade contract and price fixing in commerce as a matter of state law, rather than as a grant of federal exemption. The issue is a federal one. Indeed, Your Honor, whenever a claim has been made, either by private party, administrative agency or government, that a price fixing contract is sought to be imposed upon anyone, the federal court, as in Schwegmann, looked at the statute and said, “Are there critical differences between the federal act and the state statute?” In --
Arthur J. Goldberg: (Inaudible)
Myron N. Krotinger: Well, Your Honor, may I answer that by stating that the question is perhaps stated over-broadly in that you would -- you would suggest by the question that there was a total commitment of price fixing for the states by the McGuire Act without relevance to the federal standard. And I would again suggest to Your Honor that the rulings of the Court, this Court foreclosed that approach. Contracts and agreements, signers and nonsigners have been two of the most bitterly litigated terms in American legal history where, for example, the McGuire Act was passed in 1952 to, one, due to the results of Schwegmann. This was by means of the nonsigner concept. At the time of the passage of that Act, there were 45 Fair Trade Acts in effect, each of which contained a nonsigner clause committed to the concept of signer and nonsigner. The Congress knew perfectly well what was the image and contour of those statutes. Section 5 (a) (3) said, states, "We will now allow you where you have nonsigner clauses to make them operative.” Beyond that, the Congress did not go. It said in Section 5 (a) (2), “You may enter into contracts and agreements. The section-by-section analysis of the bill talked about contracts.” The Congress further said, “You may enter into contracts by which you may require your contractee to enter into a further contract." A statutory system was created and with that statutory system came, as professor McLaughlin pointed out, the resentment of holding a man to a contract he never made, so that over this basic nonsigner clause came this round of litigation through the different States whereby 24 such States have now held that the nonsigner clause is ineffectual. Now, we find a different solution upon a different basis with a different premise in commerce undertaken by the State of Ohio based upon what was originally a national solution to a hotly contended economic issue but which one, basically, was a matter of national policy and as this Court pointed out, there has been no subject, perhaps in American history, so closely patrolled as the price fixing agreement. Excuse me?
Byron R. White: Suppose you have your -- I don't suppose Ohio changes its law in putting in this new statute because of any federal law. It did it to -- to avoid its own state constitutional ruling, isn't it?
Myron N. Krotinger: Yes, Your Honor.
Byron R. White: Now, I would suppose you would concede that in a State -- that -- that Ohio's previous law would've been fully constitutional under the McGuire Act.
Myron N. Krotinger: Yes, Your Honor. It was a typical little four-sectioned --
Byron R. White: Sure.
Myron N. Krotinger: -- statute designed --
Byron R. White: This allowed you to -- this allowed you to get release against nonsigner.
Myron N. Krotinger: Yes, Your Honor.
Byron R. White: You -- and I also gather, you concede that in this case, there were many actual agreements.
Myron N. Krotinger: Oh, yes. Lilly signed --
Byron R. White: Both Lilly and Upjohn.
Myron N. Krotinger: Yes, Your Honor.
Byron R. White: And both the evidence of these agreements were in the record.
Myron N. Krotinger: Yes, Your Honor.
Byron R. White: Now, what makes you think that the Ohio court construed its Act as though there were no agreements?
Myron N. Krotinger: I am suggesting, Your Honor, that what the Ohio court did was to construe the statute as if there were a nonsigner policy in the State of Ohio in violation of the federal provisions. Section 5 (a) (2) permits the enforcement of contracts between Lilly and those who have signed, perfectly valid. By Section 5 (a) (3), the nonsigner provisions might be enforced. A minority of the Supreme Court of Ohio held that it could not reverse a decision of the Court of Appeals of Cuyahoga County, finding such statute to be constitutional. However, Your Honor, the basic issue, now occur, is the interpretation of contracts and agreements in federal law.
Byron R. White: Well, I agree with you. I agree with you.
Myron N. Krotinger: That's --
Byron R. White: There -- it -- you -- you say that even if you're right on what the federal law requires, that it requires actual consensual agreement, not an implied obligation --
Myron N. Krotinger: That's right.
Byron R. White: -- even if you're right, the federal law is satisfied here because there were some agreements.
Myron N. Krotinger: Your Honor, it is --
Byron R. White: But many of them are actual agreements.
Myron N. Krotinger: Your Honor, it is not satisfied --
Byron R. White: Well, isn't that true or not?
Myron N. Krotinger: It is not satisfied --
Byron R. White: They were -- both Lilly and Upjohn had several agreements, wasn't it?
Myron N. Krotinger: Yes, but it's not satisfied as to Hudson because the only way in which Hudson can be cabined in to a price fixing agreement --
Byron R. White: (Voice Overlap) is a nonsigner.
Myron N. Krotinger: It's a nonsigner. Therefore, what this statute --
Byron R. White: But the federal offer permits enforcement again.
Myron N. Krotinger: Only where the policy of the State is to permit such enforcement and the policy of the State of Ohio is to abandon the nonsigner technique and may I quote, Your Honor --
Byron R. White: Do you think the federal law would bar the State from permitting nonsigners to be -- to be proceeded against by -- by an implied contract rather than by no contract at all?
Myron N. Krotinger: In a State where by definition, the state legislature has said, “We are binding only signers” and may I point out in the amicus brief filed here by Mr. Gorrell, the -- who was the sponsor in the legislature, in enacting the new Ohio Fair Trade Act, at page 32, the Ohio legislature decided to shift the emphasis from the nonsigner concept and to develop contractual rights and obligations between the proprietor of a trademark or trade name and the retailer desiring to use that mark in the sale of products. Now, this provision in Ohio, Your Honor, was gotten from Virginia, which had a notice provision, after the Virginia courts had held a nonsigner clause not to be binding within the State.
Byron R. White: Under their own constitution.
Myron N. Krotinger: Right. Now, in the case of Zale-Norfolk against Bulova Watch, a nonsigner -- rather, a nonsigner was before the Court, practically on all force with the facts in this case, where Zale-Norfolk had proceeded to buy merchandise from a wholesaler other than Bulova. Bulova went to court and said, “We want to find out where you got that merchandise and we also want to bind you,” and the Virginia court said a fair trade contract or rather, a fair trade statute, referring to contracts, means voluntary contracts, “We are not going to resurrect the nonsigner clause.” So, the interpretation of the Virginia courts was that the statute was not binding upon a nonsigner. Now, may I --
Byron R. White: Yes, just like -- just like the majority of the -- of the Court here.
Myron N. Krotinger: Yes, that's correct, Your Honor.
Byron R. White: On -- on state constitutional ground.
Myron N. Krotinger: No, upon state --
Byron R. White: But you started out talking about federal policy.
Myron N. Krotinger: Yes, sir.
Byron R. White: Well, we ought to keep talking about it.
Myron N. Krotinger: Yes. Now, the parity of policy of a federal ground also bars the enforcement against a nonsigner in the State because the only ground in the federal law is where there is a nonsigner policy in a State, and we see clearly in the State of Ohio that this is now construed as a contract.
Byron R. White: Well, there is a nonsigner policy in Ohio.
Myron N. Krotinger: Your Honor, this -- now.
Byron R. White: There is a nonsigner policy. It's just that -- that they justify proceedings against nonsigners in a different way.
Myron N. Krotinger: Well, except this, Your Honor.
Byron R. White: Instead of saying that there's no contract that will hold them anyway, we will say, by law, there's an implied contract --
Myron N. Krotinger: Now, may I state, Your Honor --
Byron R. White: -- which doesn't make them a non -- where anything else whether it's a nonsigner.
Myron N. Krotinger: And this denies the entire basic concept of what the state legislature in Ohio was doing. What I'm suggesting to the Court is that, by means of a play upon words, signer or nonsigner, a contract which we have here in Court this morning and a -- and a statute calls a signer, what is a nonsigner, contrary to the federal intent because what this concept does is to destroy any distinction between Section 5 (a) (2) and 5 (a) (3). Everybody is now a contractor.
Arthur J. Goldberg: (Inaudible)
Myron N. Krotinger: Yes, sir.
Arthur J. Goldberg: (Inaudible)
Myron N. Krotinger: Your Honor, I don't go so far as to say signatures. There is no form as such in the fair trade law, but the term “signer,” as construed in Schwegmann case, in the McKesson case, in the entire history of the McGuire Act, means a contractor is one who has evidence to consensual agreement in such form -- in some form, where within the valid conception of contractor agreement, we may find one. May I further point out, Mr. Justice Goldberg, what the implication is of saying that there is no longer any difference between a signer and a nonsigner. It means that all the States which have been struggling with this conception of signer and nonsigner, the basic matrix of the Miller-Tydings Act and the McGuire Act, this suddenly disappears in a concept of everybody is a contractor on an implied theory of notice where there is nothing in the law which makes a notice, except by prior to the legislature, which, in turn, depends upon the will of Congress. The further factor is that this is --
Arthur J. Goldberg: (Inaudible)
Myron N. Krotinger: Well --
Arthur J. Goldberg: (Inaudible)
Myron N. Krotinger: Yes.
Arthur J. Goldberg: (Inaudible)
Myron N. Krotinger: Your Honor --
Arthur J. Goldberg: (Inaudible)
Myron N. Krotinger: It -- this is what the statute was intended to accomplish. Mr. Gorrell said so, this is all through the legislative hearings, and in fact the dialogue in the legislature was to the effect. A Mr. Rod turned to Mr. Gorrell and he said, “Mr. Gorrell, why don't you please get us into a contract fill where you -- we at least employ a third-party beneficiary contract between a wholesaler who sells to the defendant and the manufacturer?” And Mr. Gorrell said, “Well, we can't find a very much in the way a contractual theory there because suppose the wholesaler never made such a request to the -- rather, of the retailer.” And to this, Mr. Rod said, “Well, then what do we do?” and Mr. Gorrell replied, “Well, that's the reason we join the crowd, shuffling up on the law of privity of contract in the implied warranty cases,” implied warranty. May I state further, Your Honor that this conception is found embedded in the matrix of the statute where a proprietary interest is found, a wholly new concept which is found for the first time in the 1958 and 1959 congressional legislation. In other words, this concept in the Ohio statute does not stand alone. It is part of a much larger system designed to overturn the basis of the McGuire Act. I should like to reserve 10 --
Arthur J. Goldberg: (Inaudible)
Myron N. Krotinger: Pardon me?
Arthur J. Goldberg: (Inaudible)
Myron N. Krotinger: Of course, Mr. Justice Goldberg.
Arthur J. Goldberg: (Inaudible)
Myron N. Krotinger: Yes, Your Honor.
Arthur J. Goldberg: (Inaudible)
Myron N. Krotinger: An -- yes, sir.
Arthur J. Goldberg: (Inaudible)
Myron N. Krotinger: Right.
Arthur J. Goldberg: (Inaudible)
Myron N. Krotinger: Yes, as to which --
Arthur J. Goldberg: (Inaudible)
Myron N. Krotinger: Yes, Your Honor.
Arthur J. Goldberg: Therefore, you say (Inaudible)
Myron N. Krotinger: Yes.
Arthur J. Goldberg: But that's a non (Inaudible)
Myron N. Krotinger: Regards policy and I might add, Mr. Justice Goldberg, this is the reason that the Court and the proponents of the statute analogized this proprietary interest is novel theory to a house, a candy bar, an apple, in other words, as if our client, when they bought the Lilly trademarked product in Michigan, bought something analogous to a (Inaudible).
Byron R. White: Mr. Krotinger, you've got two different points here. One is that -- that you're saying that the Ohio law doesn't require contracts at all. That's one point.
Myron N. Krotinger: That's correct, Your Honor.
Byron R. White: The other point was the one that you and I were discussing, namely, that Ohio has abandoned, you say, the so-called nonsigner policy which is a little different point, a little different point. As to the first point, there were contracts in this case and the Ohio courts knew it.
Myron N. Krotinger: Yes, Your Honor.
Byron R. White: I'm not sure you could say with confidence that the Ohio courts construed their statute in the absence as a -- as a valid in the light of the McGuire Act even though there were no contracts. That's the --
Myron N. Krotinger: Yes.
Byron R. White: -- on the first point but on the second point, your -- your issue is -- your -- your argument is that -- that Ohio doesn't treat nonsigners as non -- as non-contracting parties at all.
Myron N. Krotinger: It treats everybody as a contractor.
Byron R. White: And that -- that unless the State really treats them as a nonsigner, non-contractually bound, it violates the McGuire Act.
Myron N. Krotinger: Within the intent and purpose of the federal (Inaudible), Your Honor. I'd like to reserve my time, Your Honors.
Earl Warren: Mr. Willis.
Everett I. Willis: Mr. Chief Justice, may it please the Court. I'd like to go right to the notice question that Mr. Krotinger has been discussing and then discuss --
Byron R. White: At the outset, do you concede that the notice -- as to the notice question that it was raised in the -- in the trial court, it was raised in the Appellate Courts of Ohio.
Everett I. Willis: Yes, sir, it was raised, but, as has been pointed out, it -- it is not raised by the facts of this case because there were contracts and there's an unadjudicated question of interpretation of the Ohio Act as to whether the contracts are only permitted, which they clearly are --
Byron R. White: Well, that depends on --
Everett I. Willis: -- for our rebuttal.
Byron R. White: -- that depends on what you think the scope of the notice question is but anyway, the notice question, however that is --
Everett I. Willis: Yes, sir, it was raised.
Byron R. White: -- probably raised.
Everett I. Willis: I do not deny that. I do not -- not deny that. I want to discuss that and I want to discuss one other question which is heavily stressed on the merits in -- in the brief of Hudson and was not raised in the pleadings of the case, indeed, until the reply brief in the Supreme Court of Ohio but it's -- it's stressed in the brief. Now, I want to discuss that. If I have time, I will make one or two observations on the jurisdictional aspect after I discuss the merits but I think it's important to get to the merits first. Now, Hudson's argument does boil down to this. Oh, I want to say one more thing. A major difference between the Upjohn case and the Lilly case is that the McKesson & Robbins case issue that was discussed yesterday based on the claim that Upjohn has agreements with wholesalers, although it competes with them, is not an issue in the Lilly case. It was stipulated between the parties as a fact that Lilly does not sell to any retailers and therefore, does not compete with its wholesalers and that's -- so, that's not in the case. Now, due process has been raised. I don't think I need bother to discuss that beyond what is in our brief. There can't be any question about the applicability of the Old Dearborn case here. There's a rather timorous suggestion that it ought to be reconsidered. It's a bedrock decision, a 30-year standing. It was a unanimous court. The Due Process Clause reads exactly the same now as it did then. Now, on -- on the notice question, Hudson's argument just is that the McGuire Act sanctions only state statutes which require at least one express contract before you combine all the rest of the retailers in the State by notice. Now -- and that the Ohio Act exceeds that congressional mandate because it permits fair trade enforcement by notice only. Now, that just is not the meaning of these statutes or their interrelationship. I -- I have no hesitation making the flat statement that if one reads the McGuire Act with the objective of giving effect to the purpose of the Congress in enacting it, it's not possible to conclude that it doesn't permit what Ohio did here. Congress intended it. I realize it had to say it, too, in the statute but it did say it. Now, what was the background of the McGuire Act? In 1937, Congress had enacted the Miller-Tydings Act. It didn't mention nonsigners. As we have now been told by the House Report on the McGuire Act, Congress intended in the Miller-Tydings Act to permit fair trade to be enforced against all alike, whether parties to a contract or not. Congress thought, as we have now been told in the House Report that there wasn't any Sherman Act violation anyway without a contract. And if you -- and if Congress said the state law may authorize the contract, enforcement against -- enforcement rights against nonsigners would follow automatically. Now, unfortunately, the language that Congress used in the Miller-Tydings Act didn't reveal its intention with unmistakable clarity and so, in the Schwegmann case, this Court held the Sherman Act bans not only expressed fair trade contracts but the implied obligation that arises when a purchaser with notice acquires goods and then uses the trademark which has been notified the subject to the price restrictions in the resale. And the Court held Congress didn't articulate its intention to accept from the Sherman Act that implied obligation. Now, what did Congress do then? It very promptly passed the McGuire Act and this time, to make sure nobody could misunderstand its intention again, it laid it out in about 10 or 12 different ways, both in the House Report which explained and recommended the McGuire Act in the very form in which it passed and in the Act itself. Let me just review briefly what they did say. In the House Report, first, they said, in substance, “We intended the Miller-Tydings Act to permit state Fair Trade Acts to be enforced with respect to the implied obligation reaching with respect to the fellow who purchases with notice and then uses the trademark and cuts the price.” Then they said, in the Schwegmann case, it was held to the contrary. We overruled it, not part of it, all of it. They said, “We want to make it abundantly clear that Congress means to let these state Fair Trade Acts operate and be enforced in their totality” and they didn't stop there. They said, “We want to remove any federal obstacle to a broader interpretation of the state fair trade laws in interstate commerce” and lest anybody think that they were only talking about just the fair trade contracts that were in -- then on the books, they said, “We think the states should be permitted to experiment further with fair trade legislation” and they still didn't stop. They said, “So far as the Federal Government is concerned, we want to leave the States free to protect their trade against these predatory price practices in the manner best known to them.” Now, that's the House Report. There couldn't be any question about their purpose. Now, let's see whether this time, they were able to find the English words to give effect to -- to reveal the purpose.
Hugo L. Black: Is that quoted in your brief, the part that you have just said?
Everett I. Willis: Yes, sir. Well -- well, it's -- yes, it is, yes, it is in a reference to the House Report, which is House Report No. 1437, 82nd Congress, Second Section -- Second Session, February 27, 1952. Now --
Hugo L. Black: You don't have -- you don't have it quoted in your brief?
Everett I. Willis: Yes, sir. Well, I don't know that I have the quotes. I --
Hugo L. Black: That's fine. I don't want to delay you. It could take up your time.
Everett I. Willis: Alright. Well, it's all there.
Hugo L. Black: (Voice Overlap) was --
Everett I. Willis: All -- all that I've said is in the brief, yes, sir. All that I've said is in the brief. Now -- now, let's look at the -- at the Act itself. We know what the purpose was. Let's see if they were able to say it. In the first place, the preamble of the Act says that its purpose is to protect the rights of the States to regulate their internal affairs by adopting laws and policies authorizing the enforcement of fair trade prices against all alike, whether parties to a contract or not. There are more words than that. That's the substance.
Hugo L. Black: Would you mind stating what fair trade prices, what they mean just exactly?
Everett I. Willis: Oh, yes, sir. Under -- under the state fair trade laws and under the Ohio law, if the owner of a trademark enters into contract specifying minimum prices for resale, these are vertical.
Hugo L. Black: Fixing the prices for resale.
Everett I. Willis: Yes, sir, minimum prices for resale. Those -- those contracts are made lawful. It is also made lawful to enforce those prices against one who hasn't signed any contract if he's notified that “this is our trademark and if you acquire the goods and if you use our trademark in the resale, you don't use the trademark, it doesn't matter, if you use our trademark in the resale, this minimum price applies to you even though you are not a party to the contract,” so the preamble said, as I have recited. Now, when they got to the main operative provision of -- in paragraph 2 of the McGuire Act, they did not just repeat the language that this Court had regarded as applying only to express contracts. They said, “We want any, any contracts or agreements that are lawful under the state law for resale price maintenance to be enforceable despite the Sherman Act.” Now, I note in passing that that phrase -- that in using that phrase “any contracts”, they were using a phrase that this Court, many years ago, had construed when the phrase was included in another federal statute to be comprehensive enough to include “not only expressed contracts but contracts which arise by implication.” Now, to further forestall any misinterpretation, they said -- they added paragraph 3 to the Act which said that "the antitrust laws of the United States were not to prevent the exercise or the enforcement of any right or any right of action created by any state statute, state law or state policy against a person willfully failing to observe state fair trade prices, whether party to a contract or not." Now, lest anybody might think that they were putting the States in a straight jacket of just the fair trade laws they had then, both in paragraph 2 about the contract and in paragraph 3 about enforcement against parties not party to a contract, they said, “We mean contracts and rights of enforcement recognized by state statutes now or hereafter in effect.” And in paragraph 3, they said, "This nonsigner enforcement we're talking about is the enforcement permitted by any state statute which, in substance, provides that willfully and knowingly disregarding the prices is actionable.” And then, I think this is about number 12 on the list. To -- To just put an additional copper rivet in it, they added paragraph 4, which said, "None of these contracts, any contracts in 2, none of these enforcement rights under 3 shall constitute an unlawful burden on interstate commerce, restrain on interstate commerce or interference with the interstate commerce." Now, this time, Congress left nothing to the imagination. It didn't whisper its intention. It -- it roared, it repeated itself and it underscored that the antitrust laws are not a part of the Constitution of the United States. They're made by Congress. And Congress wanted to make clear this time that they meant to accommodate the right of the States to permit vertical resale price maintenance as they saw fit. Now, Hudson has a chivilla for this. They say, well, this Ohio Act permits fair trade enforcement by notice only and the McGuire Act requires at least one express contract before you combine the other 2000 by notice. Now, among other things, that assumes facts that are not in this case. Lilly established its fair trade prices by express contracts with 1400 retailers, 65% of the retailers in the State of Ohio and gave notice to all the others of the prices established in those contracts. And furthermore, the argument assumes an interpretation of the Ohio statute that the Ohio courts have not made. The Ohio statute can be read to mean that you establish your price in the first instance by an express contract and control it from thereon by contracts or notices. Now, I don't say that's inevitable that it has to be read that way, but it could, particularly if it was thought they were a constitutional question if it were interpreted the other way and as a matter of fact, although the Ohio Supreme Court didn't discuss the matter, if you look at page 402 of the Upjohn record where the Court of --
Byron R. White: Did they include the Ohio law (Inaudible)?
Everett I. Willis: Well, yes, it says “Establish and control by contract or by notice”. Now, just -- there isn't a comma after establish but suppose there were, it would say “Establish, and control by contract or notice”. You see, it could -- it could be. I don't say it's compelling. At page 402 of the Upjohn record, the Court of Appeals did interpret the -- the Ohio statute that way. They -- after reciting that they adopted an Act which -- that Ohio adopted an Act somewhat enlarging on the Virginia Act and -- and by the way, on the reference to the ball of the case where he said the -- that the Virginia courts held that remote parts wasn't as good. The Virginia statutes differ for one thing. The Ohio statute says and the Virginia statute does not, whether buying from the original vendor or not, but the -- the Court of Appeals said, in referring to the Ohio system of resale price maintenance, this is accomplished by fixing fair trade prices by contracts with other retailers with notice of such prices to the retailer involved and the retailer then purchasing such articles for resale on the retail market with knowledge that under the law, he has impliedly contracted to maintain fair trade prices by purchase for resale under such circumstances. Now, the -- the relationship of the nonsigner, under Ohio law, is one of implied contract. That made a difference in Ohio because the courts had held if it wasn't contractual, it wasn't -- Ohio requirements weren't satisfied. The Ohio legislature created that as a method of entering into a contract by action of the party and the courts then said, in this case, Ohio requirements are satisfied. Now, I want to mention one other thing that Mr. Krotinger -- he cited Williston on common law which, of course, Ohio is not bound by whatsoever, but he quoted a provision that indicate that there might not be a contract if the purchaser was remote, in other words, not the immediate purchaser but one further down. We must always distinguish between the commodity and the trademark. Nobody acquires ownership of our trademark when they buy the goods. Now, I say, whether it was an implied contract, it made a difference in Ohio but under Ohio only. Federally, it made not slightest difference whether the State denominated this relationship, a contract or not. If it's an implied -- if you're in a State that calls it an implied contract, then it's clearly enforceable under paragraph 2 of the McGuire Act. If it isn't a contract, but there are contracts with others and Hudson is notified of the prices in those contracts, then it's -- it's -- Hudson is caught under paragraph 3. And since here, it's both an implied contract and there are other contracts of which it had notice, it's got under both so the only difference it makes federally is which section you're proceeding under. Now, I would like to turn to the other question which, as I say, is briefed but has not been discussed by Mr. Krotinger and that is their argument that Section 29 (b) (2) of the Ohio Act permits horizontal agreements between competitors and horizontal boycotts and therefore, cannot apply in interstate commerce because of paragraph 5 of the McGuire Act. Now, the provision he bases it on is the provision in paragraph 29 (2) that says that a fair trade contract may require a vendee to obtain fair trade contracts from those to whom he resells on resale, an exact counterpart of the same provision in paragraph 2 of the McGuire Act. This wasn't in the Miller-Tydings Act but Congress is taking no chances this time and it put it in and it's -- and it wasn't anew. This is not an Ohio invention. Every Fair Trade Act in the country had such a provision in it in one form of words or another at the time Congress enacted the McGuire Act. The argument, as I understand it, of Hudson is that the resale by the vendee, who's required to get further contracts, might be a competitor and if so, paragraph 5 of the McGuire Act would prevent one retailer from getting a fair trade contract from another. Well, if that's so, and I think there's a lot of argument as to whether it is so that I won't go into, but suppose it is so, well, then the same is true under Section 34 of the Ohio Act which similarly prevents contracts between retailers, between wholesalers and between manufacturers and that provision of Section 34 limits every provision of the Ohio Act unless specifically excluded and Section 29 (b) (2) does not specifically exclude it.
Byron R. White: Well, how about the (Inaudible)
Everett I. Willis: No, sir. Oh, no, it did not. Not at all, not at all.
Byron R. White: (Inaudible)
Everett I. Willis: Well, this -- this question wasn't raised in the pleadings. It wasn't raised in Hudson's petition. The Court of Common Pleas was never heard of until the reply brief in the Supreme Court.
Speaker: Are there any other cases in Ohio that do construe that provision?
Everett I. Willis: Not that I know of. Now, of course, there is no -- there is no provision in Lilly's expressed fair trade contracts like this that the vendees have to get a -- a fair trade contract on resale. I've been arguing a little bit hypothetically because the argument I'm meeting is hypothetical. Hudson's argument is, there is a provision in the expressed contract of Lilly that requires the retailer not to resell to fair trade violators and he says, as I understand it, Hudson says this is enough like the 29 (b) (2) provision that it may be impliedly authorized and -- and involve the horizontal ban and -- and so -- and -- and therefore, it's not a good provision. Now, I should say that it's doubly hypothetical. There is no -- not a word in the record, no claim that Lilly's -- has entered into any horizontal agreements with anybody. There's no suggestion and there couldn't be that Lilly or anybody else had refused to sell to Hudson. Indeed, Mr. Krotinger's statement that Lilly called upon Hudson to observe this paragraph 6, this refusal to sell, to the provision is not supported by the record if you look at the very warning letter that he referred to, it's at page 17 and 18 of our record. You will -- you will see that the only obligation that they referred to on Hudson's part was an obligation, “You are obligated to uphold our minimum retail resale prices, whether you've signed the contract or not” and in the cross-petition in the Court of Common Pleas, the only injunctive relief they sought against Hudson -- Lilly sought against Hudson was injunction against disregarding the fair trade prices, no other, no other provision of the contract. Now, the Ohio courts have not --
Byron R. White: Mr. Willis, in -- the complaint in this case, it seems the -- there's this allegation that the Ohio law provides that after giving notice, a proprietor may require the distributor to sell it not less than a minimum resale price as stipulated by the proprietor and may further require the distributor not to sell to any other distributor without first obtaining an agreement from such other distributor. He will not sell it at price that's less than the minimum resale prices. Now, is this the horizontal argument that you've been talking about or not?
Everett I. Willis: May I just ask where -- where you were reading --
Byron R. White: Well, I was reading -- well, actually, I was reading out of the Upjohn record, out of the Upjohn record at page 12.
Everett I. Willis: Well, that's -- that's a --
Byron R. White: This is the second amended petition for declaratory judgment.
Hugo L. Black: It's on page 5 of your brief.
Everett I. Willis: Well, you see -- well, that was a reference to that provision of the Ohio Act and then there as a statement that the McGuire Act only permits enacting legislation authorizing contracts prescribing minimum resale prices. There were no -- no reference at all to this paragraph.
Byron R. White: Well, I just read you what the -- maybe you did -- was --was this the same -- is the complaint the same in the Lilly and the Upjohn cases?
Everett I. Willis: I believe so.
Byron R. White: Oh, I just read out of the -- out of his petition which refers to the Ohio Acts permitting a distributor -- forbidding a distributor to sell to other distributors without first obtaining an agreement to sell only at these prices. This is a horizontal arrangement.
Everett I. Willis: To that extent, yes, sir. No reference at all to Section 5 (a) (5) of the McGuire Act or to paragraph 6 of our -- of our contract.
Byron R. White: Well, it goes right on and says that it's contrary and inconsistent with a section of the Sherman Act as admitted by the Miller-Tydings Act and the McGuire Act.
Everett I. Willis: Section 5 (a) (2) and 5 (a) (3) of the McGuire Act, 5 (a) (5) is the one that would raise this question and -- that is said to raise this question.
Byron R. White: Well, it seems I -- is this the -- is this the issue though, the -- the business about selling to the other distributors, is this the horizontal issue --
Everett I. Willis: Yes, sir.
Byron R. White: -- that you're talking about?
Everett I. Willis: Yes, sir. I suppose you might say it was handed out there. Now, the Ohio courts have not said whether this paragraph seeks refusal to -- to sell is or is not authorized by the Ohio Act by Section 29 (b) (2). I must say that in most States, the refusal to sell is a permissible method of enforcement because one fundamental aspect of fair trade is that if you're going to have a program, it's got to be uniform against all alike, not let some go merrily along violating while the others comply, but the Ohio courts haven't said. Now, if it is alright under paragraph 29 (b) (2) in the Ohio court note, then it' also alright under paragraph 2 of the McGuire Act because it has the same provision. If it runs afoul of paragraph 5 of the McGuire Act, it also runs afoul of Section 34 of the Ohio Act and if it's not a good provision, the Ohio Act can't be tainted by it. This has nothing to do with the constitutionality of Ohio Act. It's just a question of whether Lilly can enforce a particular contract provision. They've made no attempt to and we don't know whether they can or not, very frankly. Now, let me make one last assumption. Let's suppose paragraph 6 isn't authorized by either Act or although the reasoning by which this might be done eludes me, let's suppose we could find that it is authorized by the Ohio Act but not by the McGuire Act, it -- it wouldn't make the slightest difference. Paragraph 9 of the same Lilly contract, our record at page 14, says this, “This contract shall be interpreted under and shall be subject to the limitations imposed by the Fair Trade Act of the State in which the retailer does business. And in the event any provision of this contract shall be held invalid under such Act or any other statute, law or public policy or to be held inapplicable with respect to any given set of facts or circumstances, then or in either such events, this -- that provision is severed out of the contract and the rest of the contract remains. So even if paragraph 6 were bad under the Ohio Act, it just couldn't under this -- it would be severed out and couldn't apply to intrastate commerce. If it's good under the Ohio Act but not good under the McGuire Act, well, paragraph 9 says you sever it out in interstate commerce. It just doesn't apply. Now, I -- I believe -- I submit that if there was ever a case in which Congress went to unusual lengths to guarantee that its decision to turnover to the States a particular area of regulation would not be thwarted. This is that case. The will of Congress was thwarted once or the intention of Congress, I should say, when the Miller-Tydings Act was held not to be enforceable against persons who hadn't signed a contract and to be sure that's Congress' own fault, that can be laid to the fact they didn't use enough words in the Miller-Tydings Act to reveal their real intention, but this time, they have and I respectfully submit that the will of Congress should not be thwarted a second time. Now, I -- I believe I have time to say just a brief word about the jurisdictional aspect and I want to refer particularly to a question which was raised yesterday in the course of the Upjohn argument.
Hugo L. Black: May I ask you before you go to that, can you just give me the number of the House Report from which you quote on?
Everett I. Willis: Yes, sir. The House Report on the McGuire Act was No. 1437.
Hugo L. Black: 14?
Everett I. Willis: 1437.
Hugo L. Black: 37.
Everett I. Willis: And it's the 82nd Congress, Second Section -- Session and is dated February 27, 1952.
Potter Stewart: I think it's a -- that appears on page 46 of your brief as well as the quotation policy.
Everett I. Willis: It appears on that page and on other pages shown at page IX of our index. There are a number of references to it. Now, on jurisdiction, we have briefed fully that we believe, and we do believe, that the case should be dismissed for want of jurisdiction. The question was asked yesterday, suppose these questions were raised in the Ohio courts but the Ohio courts just didn't discuss them, does that preclude jurisdiction in this Court? Well, stated in that way, of course not, of course not. But there are some pretty rigid requirements to get these questions properly raised and decided and before this Court and it's the burden of the appellant to show that he has got them here. The questions have got to be properly raised below and that has to do with the -- under Ohio practices, including them both in the assignments of error and in the brief, and preserving them from one court to another and not raising it here, skipping the intermediate court and then raising it in the Ohio Supreme Court. It has to be properly raised. Furthermore, it's got to be either. Actually, to bring the question here, either actually decided by the courts so you can read it and see it or it's got necessarily to have been decided in the sense that there are no possible interpretation of the state statute under which the Court could have been concluded that the Constitution was violated because the statute is not to be interpreted in such a way as to raise it and then, finally, the judgment of the highest court of the State, the Ohio Supreme Court in this case, must be final and here in our case, as in the Upjohn case, there has been a remand and as a matter of fact, one or two other questions that are being raised here are -- have been raised in the remand proceedings and yet, they say they're here and so, I believe that the -- that this appeal should be dismissed for want of jurisdiction. If it is not, if Your Honors retain jurisdiction, I think it's as clear as the English language could make it, that the McGuire Act carefully and explicitly and completely almost repetitiously authorized what Ohio has done here and the judgment holding the Ohio act constitutional should be affirmed.
Earl Warren: Mr. Krotinger, would you mind addressing yourself for a moment to -- to what Mr. Willis said about the -- the Report, House Report --
Myron N. Krotinger: Yes, Your Honor.
Earl Warren: -- on the McGuire bill?
Myron N. Krotinger: Yes, Your Honor. I believe that Mr. Willis is reading of the legislative history is a reading after the event.
Earl Warren: I beg your pardon?
Myron N. Krotinger: Is a reading after the event. Congress never so understood such a legislative history. The legislative -- the understanding of Congress, as shown by the Harris Bill Report, House Report 1253 of June 9th, 1959 when, for the first time, a proposal appeared in Congress to add notice to the statute to amend the McGuire Act, at page 18, states the only change proposed in paragraphs 2, 3 and 4, that is the McGuire Act, is to where reference to notices in the provisions referring to contracts and agreements. This change is made so that where a state law permits a manufacturer to establish a stipulated, a minimum resale price by the giving of notice, the McGuire Act provisions will apply to the same extent they do now in the case of state laws which permit the establishment of such prices by contracts or agreements between manufacturers and the distributors. Your Honors, there has never been so closely cabined as the piece of legislation as the McGuire Act which was subject to a vicious three-way fight through both House of the Congress. I have here the House release from --
Earl Warren: May I --
Myron N. Krotinger: -- the House Report.
Earl Warren: -- may I ask this. Does or does not this House Report that Mr. Willis paraphrased for us apply to the -- to this Act?
Myron N. Krotinger: No, sir. In no sense --
Earl Warren: What Act -- what Act did it refer to?
Myron N. Krotinger: Only the McGuire Act of 1952 and the Miller-Tydings Act and may I state, Your Honor, in the section-by-section analysis of this statute at page 5 of the House Report, paragraph 2 --
Hugo L. Black: (Voice Overlap) which House Report?
Myron N. Krotinger: On -- on the HR 5767, the 1952 House Report, Your Honor. Paragraph 2, with the two exceptions referred to below, this paragraph contains substantially the same provisions as those contained in the first proviso of the Miller-Tydings Act. In substance, this paragraph provides that neither the Federal Trade Commission Act nor any of the Antitrust Acts shall make unlawful a contract proscribing minimum or stipulated prices for the resale of a trademarked commodity in open competition of other commodities. This paragraph differs from the Miller-Tydings Act in two respects. First, it includes a provision expressly covering contracts which proscribe stipulated prices. Such contracts are not expressly covered by the Miller-Tydings Act. Second, it includes a provision expressly covering a contract which requires a vendee to enter into another contract. In other words, Your Honors, nobody in 1952 thought about notices. It wasn't even an issue before the Congress. This is all reading back after the event. And as Mr. Priest, the Chairman of the House Committee, as shown in our brief, said to the Congress, “Our purpose is to let the laws now, in effect, operate as they operated from 1937 until the date of the Schwegmann relief, the laws then in effect.” Now, Your Honors, the effect of the broadened reading that Mr. Willis would like to give us would be to state that the State of Ohio can, for example, take a proprietary interest concept in the Old Dearborn case which was made in 1936 in an intrastate transaction, without relationship to a federal enabling law, take a formula and a standard which wasn't even mentioned in the Miller-Tydings Act and the McGuire Act. And so, now, we say, in 1958, the notice was contemplated by the Congress in 1952, not at all. The proprietary interest of 1958 was contemplated in 1952, not at all, not a word about this. Why do we get both notice and proprietary interest in 1958, because this is the third round of fair trade legislation? This is the solution, Your Honors, and the answer to the declarations of unconstitutionality of the nonsigner clauses in 24 States and where the Congress points out in the report on the Harris Bill that unless we do this, fair trade is dead in 16 States, now 24 and this is the manufacturer's means of giving notice of his proprietary interest and reestablishing his rights. This history you have been hearing, Your Honors, is after the event, reading events of 1952 backward in a way which was never contemplated at the time and which any reasonable reading of a legislative history will show. Point 2, Your Honors, we come to the business of the due process issue and how it was raised and its reasonable scope. Your Honors, due process --
Arthur J. Goldberg: (Inaudible)
Myron N. Krotinger: Yes, sir.
Arthur J. Goldberg: (Inaudible)
Myron N. Krotinger: Yes, sir.
Arthur J. Goldberg: (Inaudible)
Myron N. Krotinger: Section 5 (a) (3) may not be enforced, Your Honor. Section 5 (a) (3) turns upon state policy and I reiterate to Your Honors that the whole purpose of the Ohio legislation was to solve the problems of fair trade and not as was done in 1952 by adding the nonsigner clause but to redefine a conception of contract so as to eliminate the problem altogether. The problem is solved by killing it. There is no longer a signer or nonsigner case. Thank you (Inaudible).
Earl Warren: Very well.


Warren E. Burger: Mr. Berardo, I think you may proceed whenever you are ready.
Patrick J. Berardo: Mr. Chief Justice, and may it please the Court: We urge the Court in this case to affirm the rule of Carey versus Piphus. In every 1983 case, except where nominal damages are awarded, litigants be required to prove their actual damages; that is to say there are no presumed or per se damages in the absence of proofs. The trial court and the Sixth Circuit seem to indicate in their opinions concerning this case, that Carey would permit... Excuse me, that Carey applies only in the case of denial of procedural due process, that it doesn't apply where substantive due process may have been involved. We think that there is no reason for that distinction.
John Paul Stevens: May I ask, counsel, because you started out with Carey v. Piphus, is it your position that damages, intangible damages, emotional distress and mental damages, are recoverable or not?
Patrick J. Berardo: Justice Stevens, we think that emotional distress damages are recoverable as an element of actual damages in any 1983 case for any constitutional deprivation.
John Paul Stevens: Including this one?
Patrick J. Berardo: Including this one.
John Paul Stevens: Oh, I misread your brief. And, including a case like Carey against Piphus?
Patrick J. Berardo: Including a case like Carey against Piphus--
Byron R. White: If the denial--
Patrick J. Berardo: --If proofs had been made that the actions taken in that case had caused the litigants emotional distress. 1983 and we think Carey allow the Court to instruct the jury that actual damages may be awarded and that if actual damages are found that punitive damages may also be awarded. Likewise, if there are no actual damages and a jury finds that nominal damages may be awarded to a litigant in a 1983 action, then punitive damages may also be awarded. In addition, of course, a matter that is not before a jury, attorney's fees may be available to the litigant under Section 1988.
William H. Rehnquist: --Mr. Berardo, did you say that punitive damages would be available in a case like this against the School District?
Patrick J. Berardo: Justice Rehnquist, our position throughout, and I think the instructions of the court in this case, were that punitive damages could not be awarded against the School District.
William H. Rehnquist: Because of the City of Newport?
Patrick J. Berardo: Because of the City of Newport. However, it is our position that the instructions given, which was the basis for this Court's grant of certiorari, in effect allows the jury to award a punitive award against the School District in violation of Carey, Newport, and other precedents.
Byron R. White: Say that again. Our action does what?
Patrick J. Berardo: The instruction involved here allowed the jury to consider the intrinsic value of the constitutional rights that were defied. Your Honor, my next point in my argument was to get to the sequence of the instructions.
Byron R. White: You go ahead. You do it your way.
Patrick J. Berardo: And that will explain your question.
Byron R. White: You do it your way.
Patrick J. Berardo: First, the jury was authorized to award actual damages, being admonished not to consider speculative damages. Then the jury was authorized, if they found no actual damages, to award nominal damages and in both cases to award punitive damages. After having been instructed on damages in that manner, the jury was then instructed that it could award damages for the intrinsic value of the constitutional rights, taking into account the importance of the right in the history of our country and the importance of the right in the context of the activities in which the Plaintiff was involved at the time of the deprivation. Sequentially, and because the jury has already been admonished not to award punitive damages against a municipal corporation prior to receiving the intrinsic value instruction, it is then permitted to look at the intrinsic value and award damages against the Board of Education for the intrinsic value of the right in the absence of any proof that there were damages that flowed from what the Board of Education did or that the intrinsic value is involved at all. I think in that way, by viewing the instructions as a whole and looking at the sequence, it can be seen that the instruction is extremely prejudicial, first of all, to the Board of Education, but, secondly, to the rest of the defendants in the case. The reason it is so prejudicial is because as to the rest of the defendants, they have already been considered in light of the punitive damages instruction and the additional inherent value instruction allows a multiplier effect after punitive damages have already been considered. The objection to the instruction that was given and the instruction again is... the complaint of instruction is the intrinsic value instruction is that it violated the rule of Carey versus Piphus. Secondly, that it allowed the jury to speculate as to damages which is a violation of Carey and other precedents. The speculation is I think most troublesome to the defendants and petitioners in this case. How can one measure the value of the First Amendment or any procedural due process right? It invites the jury to order or prioritize or find a value for really a priceless right. The instruction to the jury itself indicated that damages for the intrinsic value of those rights are very difficult to measure, but, in effect, that instruction told the jury that the value of those rights are great. They were presumed by the court to have great value because of the context of the deprivation. As a result, in terms at least of the objection that was made to the court, it was quite clear, not only to the court but to plaintiffs and defendants at trial, what the nature of the objection to the instruction was. The court responded on the motion for judgment notwithstanding the verdict to further objection concerning the instruction, saying that counsel had not requested the court to segregate the damages between procedural and substantive deprivation. We would urge the Court to consider that it would have made no difference that procedural and substantive deprivations were segregated for purposes of determining if the award was proper. The real distinction is whether intrinsic value damages could be segregated from actual damages for the deprivation of the right. There are several unwarranted consequences of the instruction. First, the intrinsic value instruction conflicts with the availability of nominal damages. There is just no reason to give a nominal damage instruction if you can, in the absence of nominal damages or in the absence of actual damages, give damages for the intrinsic value of these rights. It allows speculation by the jury and it encourages plaintiffs to look at the value of a constitutional right involved before they file litigation. In encourages some ordering of constitutional rights by value. Secondly, it permits a multiplier in the context of... at least in the context of which--
John Paul Stevens: May I interrupt you for a minute because I must confess from the beginning I am having a little bit of difficulty. Are you contending that the instructions told the jury that they could award damages even if there were no injury to the plaintiffs of any kind?
Patrick J. Berardo: --Yes, Your Honor. I think if you read the instructions--
John Paul Stevens: I am reading from page 93. "If you find that the plaintiff is entitled to a verdict, you may award him only such damages as will reasonably compensate him for such injury and damage you find from a preponderance of the evidence. " Don't they in so many words say there has to be an injury?
Patrick J. Berardo: --Justice Stevens, even though the instructions seem to indicate that there has to be an injury, if you will look on page 96 of the instructions, after nominal damages have been discussed... I am assuming that a jury which has these instructions with them in the jury room deliberating is going through each paragraph, paragraph by paragraph, to determine what they are going to do with these instructions. They have gone through actual damages, they have gone through nominal damages, they have gone through punitive damages, and then they find an instruction that says if you find plaintiff has been deprived of a constitutional right. And, in this particular instruction, the second full paragraph on page 96--
John Paul Stevens: It says, "damages for type of injury are more difficult to measure. " Doesn't that assume there has got to be an injury?
Patrick J. Berardo: --That presumes an injury, Your Honor. We think that violates Carey.
Byron R. White: The injury is the deprivation of the constitutional right.
Patrick J. Berardo: Excuse me, Your Honor.
Byron R. White: Isn't the injury the deprivation of the constitutional right?
Patrick J. Berardo: I think not. I think that traditional tort recovery concepts require an injury to be something other than an abstract deprivation of a right. It is not the deprivation of the right to--
Byron R. White: I would think you would say the court was implying or saying that it is enough to find injury in a sense of the deprivation of a constitutional right.
Patrick J. Berardo: --Then, Your Honor, I think Carey would require that nominal damages be awarded.
Byron R. White: Very well. I would think you would say that is exactly what the court meant.
Patrick J. Berardo: However, damages as opposed to injury flow from the expectation that the plaintiff might have had to exercise certain rights, including First Amendment rights.
Warren E. Burger: Under Tennessee law may you recover in an automobile accident case for the abstract violation of a constitutional right not to be run down by an automobile?
Patrick J. Berardo: I think--
Warren E. Burger: Or do you just recovery the injury?
Patrick J. Berardo: --Mr. Chief Justice, I think that there would be no damages permitted for that kind of injury, but there would be damages permitted for pain and suffering and emotional stress under Michigan law if a constitutional or statutory right were, of course, involved.
Warren E. Burger: Loss of employment, permanent disability, all that sort of thing? In that respect are we to take it that Tennessee law is no different from common law generally?
Patrick J. Berardo: That is correct. Michigan law, Your Honor... In Memphis School District... This is a rather confusing case. It is located in the eastern district of Michigan as opposed to Tennessee, but in any event, the law in Michigan is very simple on the issue of tort liability. It is standard tort liability concepts that are applied across the country, and, in fact, those same tort liability concepts that prevailed at the time Section 1983 was drafted. Another factor that flows from the giving of this instruction is that damages for procedural deprivations might be awarded where there is no proof of actual damages. This violates both Carey and common sense. Damages additionally would be allowed without regard to any objective standards for determining what those damages are. There is no objective standard of which I am aware to measure the value of a First Amendment right or any procedural due process right and I think this Court has clearly stated in Carey and in other cases that--
John Paul Stevens: Let me ask you a hypothetical question. Supposing you had a community that wouldn't... that didn't like one particular religion, say they didn't like Catholics, and there was a priest in town that wanted to go to mass and the police just wouldn't let him go to mass and he brought a 1983 and he couldn't prove any damages, he just was not allowed to exercise his right to go to church, damages or no damages?
Patrick J. Berardo: --I think, Justice Stevens, the answer to that question depends on the proofs that are put in by the plaintiff. Assuming that the expectation of his right to exercise freedom of religion was such that it caused him humiliation in front of his friends in the community or that it caused him emotional distress that would be observable by a third party--
John Paul Stevens: Suppose it didn't cause him anything, he just couldn't go to church and he very deeply wanted to go to church.
Patrick J. Berardo: --Then he is entitled to nominal damages.
William H. Rehnquist: Mr. Berardo, you don't question, do you, that a jury properly instructed in your view of the law of the case could have returned this amount of damages for the plaintiff or do you question that?
Patrick J. Berardo: Justice Rehnquist, we don't know what the jury considered in this case. We don't know how deeply this award was tainted by the instruction.
William H. Rehnquist: No, that is why I asked you the question. Assuming that the jury had not received this instruction that you claim was wrong and had been properly instructed in your view of the law, do you think it could nonetheless... Could you claim that a verdict by this was excessive?
Patrick J. Berardo: I think you might claim that this verdict was excessive, Your Honor, because it was more than double what plaintiff's attorney asked for in his final argument.
William H. Rehnquist: Well, that isn't an invariable.
Patrick J. Berardo: No.
Byron R. White: It wouldn't be unconstitutional.
Patrick J. Berardo: I agree, but in view of defendant's counsel it is certainly an indication that this award included factors other than what plaintiff's counsel at least argued to the jury at the conclusion of the trial. I think it is just as likely, perhaps even more likely that in light of this particular instruction that this damage award did exceed what would have been given for actual damages. In this case, for example, the plaintiff was suspended with pay and never lost a day's pay throughout the pendency of the case. In fact, is still employed by the School District. That particular fact which was, indeed, before the jury, that he had continued to be paid throughout the period of the dispute, was apparently ignored in calculating the damages.
William H. Rehnquist: But, he got some very bad publicity, didn't he, of the same sort that a libel plaintiff is apt to get?
Patrick J. Berardo: Justice Rehnquist, he did get very bad publicity the same as a libel plaintiff might be expected to get, but this wasn't a libel for a deformation case. It wasn't tried as one and it wasn't presented to the jury as one so that those kinds of per se damages that might be available in that case weren't available and weren't presented to the jury.
Warren E. Burger: Could there be a recovery for libel against a school board as such?
Patrick J. Berardo: I--
Warren E. Burger: As distinguished from individuals.
Patrick J. Berardo: --As a state law case, I think not. I think they are entitled to immunity under state statute.
Sandra Day O'Connor: Mr. Berardo, if we were to agree with you on the single question of proper instructions for damages for intrinsic value of a constitutional right, is there any need to do more than to remand it for a new trial on damages alone as opposed to liability?
Patrick J. Berardo: I think not, Justice O'Connor, for the reason that this Court in granting certiorari failed to grant certiorari as to Issue No. 2 in our petition which was more factually oriented, therefore, I presume from the Court's action on our petition that the facts in this case are settled and we are only talking now about damages and the proper calculation of damages. At this juncture then it would be appropriate for me to say that we think that should be requested because of this tainted award is that this case should be remanded to the Sixth Circuit... Excuse me, remanded for retrial and that the decision of the Sixth Circuit be overruled. Thank you.
Warren E. Burger: Mr. Heldt?
Jeffrey A. Heldt: Mr. Chief Justice, and may it please the Court: Mr. Berardo and I have been trying two different cases since at least 1982 when this case went to trial. I guess it does my heart good we still are. The issue here as we see it is not as it has been defined by the petition or by the petitioners. The issue is rather does Carey versus Piphus require a jury to ignore the historical and contextual significance of the constitutional rights it finds were violated when it reaches the point in its deliberations that it must assess damages and assign a monetary value. We think the answer is obviously no. We don't expect a jury should be compelled to ignore both our history and the context of the activities in which the plaintiff was engaged in at the time his rights were violated.
Harry A. Blackmun: You think they could consider it wholly apart from any instruction?
Jeffrey A. Heldt: Wholly apart from any instruction?
Harry A. Blackmun: Suppose Judge Harvey had not given the instruction of which complaint is made here. You feel the jury could and might well consider the nature of the rights infringed in the jury room.
Jeffrey A. Heldt: They certainly could. I think that a plaintiff is entitled to an instruction assuring the jury that they may and that is all we are talking about here. They may consider all sorts of things in the jury room that we generally never know about because we simply don't try and ask them afterwards in any legal way what did you do and how did you reach your results?
Byron R. White: And, hence, I take it, you would say it would be quite proper for the judge to say now as a matter of damages I am instructing you that there has been no evidence presented of any actual injury in the sense of monetary loss or pain or suffering or humiliation or anything like that. But, there is a constitutional right involved and was violated and the jury may consider what that is worth and return a judgment for whatever damages they think it is worth. I take it that is what you think the jury should be permitted to do.
Jeffrey A. Heldt: Well, I don't think that issue is presented in this case and I am loathe to speak on behalf of--
Byron R. White: I think it quite well is presented in this case. So what is your answer to it?
Jeffrey A. Heldt: --My answer is that that would be permissible depending on the nature of the constitutional right which was violated.
Byron R. White: Right.
Jeffrey A. Heldt: As Justice Stevens said, if you are not allowed to go to church, perhaps that is a case--
William H. Rehnquist: Then you have problems with Carey against Piphus. You have got to limit that to procedural due process.
Jeffrey A. Heldt: --No, I don't think that is true. I don't think that Carey requires that you must either establish some separate quantum of proof of damage or be precluded from any at all. Carey expressly reserves the question to a later day depending exactly what constitutional right has been violated. In Carey we dealt only with the right of procedural due process. And, indeed, there was substantial evidence in a stipulated record that the student was guilty of smoking a marijuana cigarette on school grounds during school hours.
William H. Rehnquist: But then you have to say that the holding of Carey against Piphus as to procedural due process violation damages would not be carried over into the First Amendment area.
Jeffrey A. Heldt: I think that is clearly correct. I think that is unmistakable from the analysis of the opinion and I wouldn't seek to do otherwise.
Thurgood Marshall: Counsel, can you explain to me the elements of $233,750?
Jeffrey A. Heldt: I am not sure I can, but I don't think that any plaintiff can.
Thurgood Marshall: You can't even get close to explaining this, can you?
Jeffrey A. Heldt: I don't think any plaintiff can. We simply do not in our legal system require the jury to set forth a calculus.
Thurgood Marshall: How about $35,350 compensatory?
Jeffrey A. Heldt: They broke those awards out by party. Frankly, it surprised me. No one objected to that formulation of the special interrogatory. I would have expected them to put the same numbers for each individual, but the jury did not.
Thurgood Marshall: You don't think they drew lots for something like that, do you?
Jeffrey A. Heldt: Not that I am aware of.
Warren E. Burger: I mean, drew it out of a hat or something. Sometimes juries are required to explain their verdict by special verdicts, is that not true?
Jeffrey A. Heldt: Well, there is a special verdict forum here, but when it came to the question of what value do you place on the damages that you find are appropriate, we don't ask them how did you do it, did you accept the plaintiff's lawyer's calculus and multiply these numbers together to come up with your verdict? Did you compromise between what the defendant insisted and what the plaintiff insisted? Did you adopt some third theory? We don't ask them to tell us. We don't put them on the witness stand as it were after they return their verdict and decide whether we agree with the number. The traditional, legal and judicial remedy as you look at that number taken as a whole against the facts of the case and if it is sufficiently monstrous, there is authority to, either by remittur or new trial, start over again. But, that has been rejected twice in this case by the trial judge himself as well as by the Sixth Circuit. I would submit three propositions to suggest that our formulation that Carey certainly doesn't preclude the jury to take these items into consideration control here. One is Carey itself. The second is the facts of this case and especially the conduct of the trial itself justified a challenged instruction. And, thirdly, the principal arguments that are raised here are raised for the first time. You can read those Sixth Circuit briefs, you can read the motions for a new trial in the district court, and you simply will not find arguments about ambiguities of causation. You will find no proposed and rejected instructions on causation or any different form of verdict as proposed by the defendants who now on brief suggest that the damages need to be segregated among plaintiff's theories, and as I understand Mr. Berardo's oral argument this afternoon, to suggest, well, no, I think that is useless. It was never asked for below. I don't think they are entitled to complain about it now. I think I have already described the salient points with respect to our view of Carey. It was a case on stipulated facts without any substantive underlying contest. At least Mr. Piphus certainly didn't have a very good one on the stipulated facts. The principal caught him in the school yard with a cigarette that got thrown in the bushes. There was a strong smell of marijuana and he was suspended. It really doesn't raise any substantive issues about was he guilty or not and how elaborate a hearing do we need to decide whether he was guilty or innocent.
William H. Rehnquist: Of course, he was... It was held he was denied procedural due process.
Jeffrey A. Heldt: That is correct.
William H. Rehnquist: Then that denial is regardless of whether or not after a hearing he would have been found guilty.
Jeffrey A. Heldt: But, what the Court in Carey says is that that creates an ambiguity of causation. We don't know. There is no proof that Mr. Piphus suffered any anguish, lost anything as a result of being suspended from school for 20 days, but even if he presented proofs, we don't know whether he was anguished because he was caught guilty in the school yard or is anguished because he didn't get a chance to plead for mercy before he was punished.
William H. Rehnquist: At least that... The Carey opinion suggests that you don't get anything in the way of substantive damages by reason of the fact you were denied the constitutional right to procedural due process. You have to show something, emotional distress, some traditional element of damage.
Jeffrey A. Heldt: Carey, I think, clearly requires that. It says we will not presume it. It is not too much to ask a plaintiff if they contend that their injury arises from the nature of the wrong, to get on the witness stand and try and explain it, try and quantify it in some way that the jury can deal with it, or the factfinder. I believe Carey was non-jury case.
Byron R. White: How about my example where the judge says there is no evidence of any other damages except the denial of this constitutional right and he said, of course, the plaintiff hasn't gotten on the stand and claimed that it really hurt him any, but members of the jury, you are entitled to give damages for the violation of this right, whatever you think it is worth.
Jeffrey A. Heldt: I don't believe that Carey would permit that. Carey certainly doesn't--
Byron R. White: No matter what the constitutional right is involved.
Jeffrey A. Heldt: --That is what I was going to say. Carey clearly does not permit that if the only claim before the jury is the denial of procedural due process.
Byron R. White: What about other constitutional rights?
Jeffrey A. Heldt: It leaves that open and it says expressly it depends on what right you are talking about. Are you talking about a First Amendment right to go to church, are you talking about a right to be secure in your home from--
Byron R. White: It might be too much to make a plaintiff get up on the stand and attempt to say how he really has been injured if some other kind of constitutional right is involved like freedom of speech or--
Jeffrey A. Heldt: --I don't think it is ever too much to expect a plaintiff to try and articulate that, but the question as a legal matter I don't see as being before the Court in this case because the plaintiff took the stand and he testified at length about the consequences of these deprivations on him. His wife testified. We brought in expert testimony with respect to the stigmatization issue.
Byron R. White: --So, it is just really a question of whether or not... what chance there is that the jury pay too much attention to the last part of his instruction.
Jeffrey A. Heldt: I don't--
William H. Rehnquist: Because that instruction... You know, maybe he read it in the context that it isn't all that harmful, but that part of the instruction embodies the idea that the denial of the right itself entitles you to substantial damages without, as you say, your plaintiff getting on the stand proving anything.
Jeffrey A. Heldt: --I don't think that is true and I think it is belied by the balance of the instructions.
William H. Rehnquist: Well, perhaps it is belied by the balance of the instructions, but do you feel that even the particular instruction that the petition brings here doesn't permit that?
Jeffrey A. Heldt: I don't think it permits it in the context of this case because it was never argued that way. If you go back to my closing argument, I didn't ask for emotional damages and then say to the jury, now, give me some more, give me an award for the intrinsic value of a constitutional right. I didn't argue that at all. I said to the jury, my client has suffered 1,144 days of human misery waiting to get to this courtroom to vindicate himself and I think he is entitled to compensation for that and I then said to the jury, there are other ways to approach damages. You don't have to do that. You can approach damages, this court will tell you, I said to the jury, on the basis of the constitutional rights that you find violated and I had discussed those extensively in closing argument with respect to establishing the elements of my case that plaintiff had been denied of liberty interests, he had been denied a right of privacy, he had been denied a right of academic freedom, and he had also been denied a right to due process, an opportunity to be heard and to vindicate himself. And, I discussed those at length and I said, you can evaluate those rights and you can make an award on that basis, and then I said, in either event, it really boils down to what Ed Stachura has been through, what has it made him live through in his own mind and in the public eye. That is right in the transcript, exactly what I argued to this jury. I didn't ask for things that perhaps I might have asked for if I interpreted the instruction the way--
Byron R. White: Are you the one who requested the instruction the judge gave about constitutional rights?
Jeffrey A. Heldt: --Yes.
Byron R. White: And, I suppose in the record here that that request is contained somewhere. It is not contained in the printed record.
Jeffrey A. Heldt: It is not contained in the printed record. It would be contained in--
Byron R. White: In the transcript.
Jeffrey A. Heldt: --No, it would be contained in the series of proposed written instructions which were presented to the court before trial.
Byron R. White: Well, isn't that in the record?
Jeffrey A. Heldt: Yes, but not in the transcript.
Byron R. White: But, it is in the record that has been lodged here?
Jeffrey A. Heldt: Yes, yes, it is. It was not asked for so we could ask for two measures of recovery, one for Mr. Stachura's mental anguish and a second measure of recovery for some intrinsic or inherent value of a constitutional right. And, I think that is well demonstrated by the closing argument. We simply didn't ask for that. We said you can do it in one of two ways. In either event, the teaching of Carey that there must be proof of actual damage before the jury is allowed to cogitate on what monetary value to place on those damages I think is unmistakable.
Byron R. White: You are saying as long as you get on the stand and prove up a major injury by the way of emotional distress, if it so happens you have been denied the right to go to church and that is a denial of an important constitutional right, the jury should maybe double the damages it otherwise would have awarded just because of the nature of the constitutional right that is involved.
Jeffrey A. Heldt: If you are asking me do I think that is a permissible argument for plaintiff to make--
Byron R. White: I thought that was the argument you were making.
Jeffrey A. Heldt: --No. I am saying that they are entitled to consider the significance of the conduct in which my client was engaged and the significance of the rights which are violated in deciding whether his mental anguish is genuine, in deciding how big it is, how severe it is.
Byron R. White: That is what I say. You would say the jury should be able to give more damages for mental anguish. If the constitutional right is not being able to go to church, then perhaps say the denial of a procedural due process.
Jeffrey A. Heldt: No, I would formulate it differently. I would say there is a world of difference between a plaintiff who suffers mental anguish because a tornado came out of the midwestern skies and killed his family. He suffers all the mental anguish in the world, but it comes from something that is unpredictable and uncontrollable and that is just a part of life. That is not the same as the plaintiff who instead of being struck down by a tornado is struck down by his professional colleagues in a scheme to scapegoat him to protect their own skin.
Thurgood Marshall: Counsel, do you practice in this county regularly?
Jeffrey A. Heldt: Do I practice in Memphis or in Port Huron when the court sits?
Thurgood Marshall: In Michigan--
Jeffrey A. Heldt: I practice with some regularity in that state and in those counties, yes.
Thurgood Marshall: --What is the average death value in a civil action in your practice?
Jeffrey A. Heldt: As I understand it... I have never tried a wrongful death case.
Thurgood Marshall: Have you heard of any?
Jeffrey A. Heldt: As I understand it, in Wayne County, the county in which Detroit resides, it is probably in excess of seven figures. I understand in Port Huron, Michigan, 50 miles to the northeast, it is probably less than six figures.
Thurgood Marshall: Less than this, so this is more than he would get if he was killed.
Jeffrey A. Heldt: I don't think that is true. You asked what average range of verdicts are in two counties in cases that I have never tried. I am not responsible for justifying those. I am sure there is an overlap in both cases. I think there is more in damage to this case than simply mental anguish. As I indicated, I think my client's privacy interests were violated. He became a public figure. The question is is that shown by evidence? I mean, we are not speculating about it. It is shown by the myriad of harassing phone calls. I think it is shown by the refuge dumped on his porch. The man became an involuntary public figure. I don't think you can just call that mental anguish and say that takes care of the recovery. He lost his zest for teaching. He couldn't be a zealous advocate of his own students. He testified to that. He said going back to school in the fall of 1979 under court order was the hardest thing he ever did in his life. At the time of trial he said there is no zeal any more, there is no fun. I tried to do a job and look what has happened to me without ever the opportunity to defend myself. I think that is a loss that is something other than measured by mental anguish. We are not asking the jury to speculate about it. There is testimony in the record that that is a real live, living and breathing loss. We offered expert testimony unrebutted in this record that Mr. Stachura was foreclosed from a definite range of employment opportunities. His professional career was dead. That is a loss. It doesn't translate itself into mental anguish.
William H. Rehnquist: Well, supposing this had been a diversity case that was being tried before Judge Harvey in Port Huron and the defendant was someone... the school board had done exactly these same things to the plaintiff except there was no claim that there was a federal constitutional violation, it was a claim that it was a violation of Michigan state law. The plaintiff suffered all the exact same damages that you say your client did. Now, is your client entitled to an extra measure of damages over the hypothetical case I proposed simply because his identical damages stem from a violation of a First Amendment rather than state law?
Jeffrey A. Heldt: No, I don't think so and I don't think this instruction says that. It is not different than if the state court in your hypothetical instructed that you may take into consideration that the plaintiff has suffered damages because the defendant violated state law. They weren't just merely negligent.
Sandra Day O'Connor: Well, isn't the real question we have whether these instructions then permitted the jury to base their award of damages in part or in whole on the jury's estimate of the intrinsic value of the constitutional right as opposed to all those things you have been telling us about?
Jeffrey A. Heldt: Well, that is the issue as framed by the petitioner and to that we say, first of all, that all the language of the instruction says is you may take into consideration the roots of these rights and their application in the context of Mr. Stachura's conduct at the time those rights were violated in deciding what quantum of damages should be awarded and that we did not argue... We simply did not ask the jury to award some extra element, award something over and above the reasonable value that they placed on his suffering. That they placed it on a higher plane that I did... I mean, there is simply no controlling precedent or law to suggest that there is something wrong with that. Indeed, not only the district court but the Sixth Circuit said these numbers are justifiable. They did not shock Judge Harvey's judicial conscience. He sits up there and tries cases every day. They did not shock the conscience of the Sixth Circuit and I don't think in the light of the kinds of verdicts that are returned today, I just... I think I read about one in the New York Times in the last 24 hours, $13 million for somebody who was killed in a AMC Jeep. I don't think $300,000 in this case is at all unreasonable in modern society. If it was maybe $2 million I might gulp when I make that argument, but I just don't think that is the problem here.
Sandra Day O'Connor: But that isn't the allegation, is it? We are not being asked to do something based on the size of the verdict.
Jeffrey A. Heldt: That seems to be Mr. Berardo's argument here today. He says I don't know how much the jury awarded for this, but after all, it was more than Mr. Heldt asked for and it must mean, therefore, that the jury was misled by this instruction. You have to remember that I think he has misread the whole text and tenor of the court's instructions. The court, three different times in laying out the elements of my case, things that I must prove by a preponderance of the evidence, said one of the things I must prove is that the defendants by their conduct proximately caused the damage to Mr. Stachura.
Byron R. White: But you weren't satisfied with those instructions. You asked for the additional instructions.
Jeffrey A. Heldt: I asked only for an instruction which said if you find there is damage, and there is clearly damage in this record, you may take into consideration in deciding what amount of money to place on that damage, the fact that these are constitutional rights and that they are important rights that the teacher was entitled to engage in--
Byron R. White: In short, if except for the fact that there were constitutional rights involved, you would have found $50,000 worth of damage, because of constitutional rights you are entitled to return $200,000.
Jeffrey A. Heldt: --I don't think that is what the instruction says.
Warren E. Burger: Or one million. Did it put any limits?
Jeffrey A. Heldt: The only limit was imposed by the plaintiff's complaint which, as I understand it, was considerably higher than the amount returned by the verdict. I did not draft the complaint and I did not select the numbers in it. But, as I recall, the complaint raised the issues of some larger amount. What I want to continue saying, because I think it is important to understand the distinction in a way the jury instructions are drafted, plaintiff is obligated to prove under these instructions every element of his case, including the conduct of the defendants prior proximately caused damage to the plaintiff. That is generally a threshold legal question. It is tested as it was here by motions for directed verdict at the close of my proofs. Did the plaintiff prove sufficient damage that a jury could find that element has been met? And, of course, the district court said, yes, there is sufficient evidence in this record to find some damage and I am going to allow the case to go to the jury. Every single time this court instructed... He actually did it four times, the district court actually did it four times, three times on Mr. Stachura's claims and a fourth time on the student plaintiff, James David McDonald's claim, as well. And, the court said, even in the student plaintiff's case, although the student plaintiff only asks for nominal damages and nothing more, one of the elements that James David McDonald must prove is that he suffered damages as a result of... as a proximate result of the conduct of the defendants. And, it is not hard to understand in this record why the jury no-caused Mr. McDonald because Mr. McDonald didn't take the stand and he didn't try and testify that he suffered some damage and there was no expert testimony of damage. There was no testimony that James David McDonald had been damaged at all. What Mr. Berardo suggests is that the damage instructions have to be merged. And, in fact, the opposite is the case. I started to say that once the court is satisfied that a plaintiff has met that element of proof, has established some quantum of damage, the case goes to the jury and the instructions on damages are merely a guide to assessing and weighing the damages that the jury is obligated to find in order to satisfy those elements of proof. It tells the jury what things it may take into consideration, what things it ought not to take into consideration, it posits a test, you ought to try and put the plaintiff in the same position as he had been in if his rights had not been violated. The instructions are not how to award damages but how to assess damages if you find there are any at all. There are no four categories of damages in the special interrogatory form as Mr. Berardo would suggest. That special interrogatory form doesn't say how much damages do you award to compensate Mr. Stachura, and if none, what nominal damages do you award, and if you award either, do you award punitive and then create a fourth category and say, oh, yes, now what damage is the award for the value of constitutional rights? At all times there were only three categories. And, indeed, the word compensate or compensation appears twice in the very instruction that is before this Court. It is not non-compensatory damages, it is merely a part of the calculus by which one places a value on things that are generally intangible. What is the value of a loss of a leg? You can't decide that without some notion of what it is like to live life with two legs and what it might be like to live life with only one. I submit that there is no basis in this case for a reversal of the Sixth Circuit. The jury may certainly consider the significance of the rights before it as a part of the process of evaluating what damages to award. No inherent value was sought or argued. And Rule 51 certainly doesn't count. It is the raising of such things as improper causation instructions for the first time in this Court. I don't think there is any meaningful prejudice or probability of prejudice that necessitates a remand for any purposes and I would ask the Sixth Circuit be affirmed. Thank you.
Patrick J. Berardo: Mr. Chief Justice, and may it please the Court: Just a couple of very brief points. First of all, to say the principal arguments here are raised for the first time belies the fact that the arguments to the jury and the entire presentation of this case to the trial court from defendants' side was aimed at attempting to limit the damages to those that were caused by the action of the defendants. Causation has been an issue throughout this case and continues to be the issue today. The instruction, we submit, does not adequately reflect the fact that causation is the elementary principle of damages that overrides the entire system of tort compensation.
Sandra Day O'Connor: Does your objection go to causation?
Patrick J. Berardo: Justice O'Connor, I think so.
Sandra Day O'Connor: As I looked at it, your objection to the instruction was that they allowed the jury to speculate on the value of a constitutional right citing Carey.
Patrick J. Berardo: To say speculate to me means to permit the jury to determine damages without relation to objective factors and without relation to what caused the damages. In fact, the instruction itself defined a violation of constitutional rights or a deprivation of constitutional rights as the injury, then went on to allow damages to be awarded without regard to either causation or determination of actual injury. I think if you read that instruction, you will get that flavor. Notwithstanding the rest of the precautionary instructions, the fact that it is given last in that context would allow the jury to award damages without regard to actual injury. Secondly, to say that Carey versus Piphus is not the substantive due process case is not entirely accurate because Briscoe in a companion case had a free speech claim concerning his earring and that, I submit, was before the Court at the time that was decided. The Court at that time declined to say that the rule didn't apply in substantive due process cases but left the question opened to be determined in each individual circumstance depending upon the right involved. I think additionally it is inconsistent for counsel to argue that after asking for an award... Excuse me, after asking for an instruction on damages that he can then take the position, either before the jury or before this Court, that the instruction is harmless when, in fact, the intent of the instruction was to permit damages to be awarded and to permit the jury to assess factors in assessing the damages against the defendants that otherwise would not have been assessed. Finally, proof of actual damages in this case does not cure the error of this overbroad instruction. It only exacerbates the error. Thank you.
Warren E. Burger: Thank you, gentlemen. The case is submitted.
Speaker: The Honorable Court is now adjourned until Monday next at ten o'clock [= 10:00].