William H. Rehnquist: We'll hear argument now in No. 98-208, Carole Kolstad v. the American Dental Association. Mr. Schnapper.
Eric Schnapper: Mr. Chief Justice, and may it please the Court: The 1991 Civil Rights Act made several fundamental changes in the method of enforcing Title VII and the Americans with Disabilities Act. Section 1981a(a) authorizes awards of punitive damages if punitive or compensatory damages are sought, and either party has a statutory right to trial by jury. The determination of whether punitive damages should be awarded proceeds in two distinct stages. First, Section 1981a establishes several statutory prerequisites which must be satisfied before a jury or, in the case of a bench trial, a judge, is authorized to consider an award of punitive damages. Satisfaction of the statutory requirements only permits, but does not require, an award of such damages.
Sandra Day O'Connor: Well, is it your position... and I take it that it is... that every case of intentional discrimination should at least go to the jury on the question of punitives?
Eric Schnapper: That is not our position. Our position is that there must be proof of either reckless indifference or malice. And there are a number--
Sandra Day O'Connor: Well, does proof of intentional discrimination suffice for a jury to find punitives?
Eric Schnapper: --Not necessarily. There are a wide variety of circumstances under Title VII, as well as the ADA, in which one might have intentional discrimination, but not reckless disregard. Because, for example--
William H. Rehnquist: Reckless disregard of what?
Eric Schnapper: --Of the... of the rights... the federally protected rights of the plaintiff.
William H. Rehnquist: And where do you get that out of the statute... that it should be reckless disregard of--
Eric Schnapper: I'm sorry... reckless indifference. I misspoke. That is the statutory standard: reckless indifference.
William H. Rehnquist: --But one ordinarily thinks that intentional is a higher level of... of mens rea than recklessness. And so... but in... in this statute, you have to find intentional discrimination to find liability.
Eric Schnapper: But there... there could be circumstances, as was true in the Hazen case, in which the... for example, the law was sufficiently unclear as to whether or not a particular act of discrimination, although technically intentional, was, nonetheless, illegal. The Court noted in Hazen, for example, that there was a BFOQ exception under the ADEA, the same exception as this--
William H. Rehnquist: So, it's kind of like qualified immunity in a--
Eric Schnapper: --Well, it... it's a little bit analogous. And I think the standard is not as... as stringent as for qualified immunity. But--
David H. Souter: --But, Mr.... I'm sorry--
Eric Schnapper: --If... if you had a situation in which... the standard that we propose with regard to reckless indifference is that the defendant either knew or should reasonably have known that what it was doing was probably illegal. Now, there are circumstances involving intentional discrimination where you couldn't say that.
Sandra Day O'Connor: --Well, do you think that, just in general, that Congress probably intended, as is normally the case, to make it more difficult to get... to be entitled to punitive damages than to gain compensatory damages, really?
Eric Schnapper: The... the statutory standard for... for punitive damages in many Title VII cases will, as a practical matter, be satisfied by proof of intent, but not all. The standard is different. And... but I think we... we would acknowledge that--
Sandra Day O'Connor: Well, you didn't answer my question, though.
Eric Schnapper: --I'm sorry.
Sandra Day O'Connor: Which is, do you think Congress intended for it to be more difficult to get punitive damages than to get compensatory damages? 0.... I'm sorry to hear you pause. I... I thought from your briefs that you said yes.
Eric Schnapper: Well, I... I... I think the textual answer is yes. I'm... I'm reflecting over the legislative history. And it's... I can't--
Antonin Scalia: Oh, you think Congress may have made a mistake?
Eric Schnapper: --No, no, no.
Antonin Scalia: It ended up that way, but they really didn't--
Eric Schnapper: No. I'm... I'm... insofar as the... the intent of Congress is... is to be inferred from the language of the statute, the statute sets a different standard.
David H. Souter: --Well, Mr. Schnapper--
Eric Schnapper: If that's a question about... about whether it was debated, I think I purport it was not.
David H. Souter: --I see. Mr. Schnapper, help me on one thing. In order to be found liable for an intentional violation, does the... does the defend... does it have to be shown that the defendant was aware of Title VII, or is it sufficient to show that the defendant discriminated, intentionally discriminated, said, I am going to prefer a woman because she is a woman?
Eric Schnapper: It does not require any knowledge of the law for there to be--
David H. Souter: All right. Doesn't the punitive damage standard require knowledge of the law? It's indifference to the defendant's rights. And I presume that means rights under the statute.
Eric Schnapper: --Yes, it would require either knowledge or... or, as the Court said, I think, in McLaughlin, recklessness in determining what the defendants knew their obligations were.
David H. Souter: Okay. So, the... so, the... the reference of the two standards are different. With respect to the intentionality that is required for liability, all that has to be shown was that there was an intentional discrimination, period. In order to get punitive damages, there has to be shown that there was either knowledge or indifference to the... the likelihood of a statutory violation. And... and because you have to, in effect, prove this reference to the statute, the reference to the legal source of the rights, that is more difficult, and that's why it makes sense to say that the punitive damage standard required proof of something more; isn't that the key to it?
Eric Schnapper: Yes.
William H. Rehnquist: Well, then, if you're correct in that, Mr.... then it... it bears a remarkable resemblance to qualified immunity.
Eric Schnapper: The... the... the difference, Your Honor, as we formulate the standard, is that the knowledge required here is that the action is probably illegal. Under qualified immunity, there would have to be a clearly established right. So, that's a... that's a higher--
William H. Rehnquist: And you would charge... you would charge the jury to find whether or not something was probably illegal?
Eric Schnapper: --If... if, in a particular--
William H. Rehnquist: I mean, you would have to, wouldn't you? If that's the test, and it's for the jury to decide, you would have to say, You of the jury, would you find this was probably illegal?
Eric Schnapper: --Your Honor, if... if there was a question as to whether or not the action was probably illegal, our view is that that would be a question the judge would have to decide.
John Paul Stevens: But-- --Is the statute not-- --No, but you'd have to charge the jury as to what the defendant knew, whether he thought it was probably illegal--
Eric Schnapper: The defendant's knowledge or the defendant's lack of care in ascertaining the law would be jury questions.
Eric Schnapper: --Yes. What--
Eric Schnapper: But the question of whether or not... what the state of the law in fact was--
Antonin Scalia: --The jury... the jury-- --What about the malice standard? There... there are two tests. One is... one is reckless indifference; the other one is malice. Does malice mean certain knowledge that it's illegal?
Eric Schnapper: --No. I... I had not yet come to that separate clause. Our view is that malice can be satisfied by proof of one of three things: ill will, an intent to injure, or an attempt to violate the statute. Those are the... those are the concept of evil motive that are in this Court's opinion in Smith v. Wade.
Antonin Scalia: You mean usually... I mean, my goodness... you mean usually there's... there's no intent to injure when you... when you discriminate on this basis? I would think that exists in most of the cases, doesn't it?
Eric Schnapper: I think a desire that the victim be injured is not necessarily present in... in a case like this, where the defendant has been found to have preferred to hire... to promote Mr. Spangler because he's a man. That doesn't necessarily mean they wanted the... the plaintiff to... to... to suffer.
Ruth Bader Ginsburg: Mr. Schnapper, you gave one such example. You said that the... the compensatory damages... now, the jury doesn't have to find probably, they have to find there is a violation. Then, for punitive, awareness of the legal standard. And you gave as an example of intentional discrimination... treat a man differently than a woman, the BFOQ defense. Are there other instances in which there would be intentional discrimination; therefore, compensatory damages would be a must, not a "may", and yet, not reckless indifference to the plaintiff's federally protected right... that's the statutory phrase?
Eric Schnapper: Yes, Your Honor. We've set out in our briefs some 15 different kinds of circumstances in which that might arise, simply on the face of the statute, questions about whether the defendant, for example, under Walters, was covered by the statute, questions about other circumstances in which, for example, religion/conscience decisions are legal under the statute for certain defendants. And there are, in addition to the specific statutory issues that we noted there, there continue to be issues that arise in the lower courts as to whether particular practices which are intentionally discriminatory are nonetheless legal under Title VII. What--
Anthony M. Kennedy: Well, I take it what Congress was trying to do was to tell us that there are degrees of culpability insofar as the defendants are concerned. Is it relevant to say that a corporation or an association, such as you have here, a corporate employer, has a... has an admirable employment policy and makes... has very, very clear guidelines, you have one employer in a management position who departs, is it relevant to tell the jury that the employer might not be chargeable with those punitive damages if the jury finds certain criteria?
Eric Schnapper: --Yes. But let me... let me explain why I say yes to that with reference to the two distinct stages of determination on punitive damages. The circumstances that you describe would not be relevant to the statutory prerequisite, but they would be relevant to the discretion the jury has to exercise in deciding whether to award punitive damages.
Anthony M. Kennedy: How does the... how does the jury... how is the jury instructed?
Eric Schnapper: Well, at this point in time, with regard to the second phase, the... the practices vary quite widely as to whether juries are in fact given much guidance as to how to exercise that discretion. But certainly it would be appropriate in the case that you describe to advise the jury that that would be a factor the jury could consider, and it would militate against punitive damages.
Antonin Scalia: Mr. Schnapper, what about... what about attribution? Normally, in... in tort law, a... a higher... what should I say... a higher agency principle is applied for punitive damages than for compensatory damages. So that if... I mean, an agent of the company can render the company liable for compensatory damages, but not for... not for punitive. Is that the... is that also true here?
Eric Schnapper: We don't believe so. But I should start by saying that's not an issue in this case. In this case, the culpable officials included the executive director of the defendant, the highest ranking official they had.
Antonin Scalia: Well... well-- --He's a proxy for the company-- --Well, it... it's relevant to the extent that... whose... whose mental condition you have to look to... Wheat, who is a lower one, or... who was the higher one, I forgot his name?
Eric Schnapper: Allen.
Antonin Scalia: Allen. Yeah, Allen was the highest, and he was the one that... that did the... the non-promotion. And if we look only to Allen, we... you would instruct the jury differently as to whose mental... whose mental state was relevant.
Eric Schnapper: I think, if... if one were to look only at agency principles, even... even Wheat would be high enough. But... but if I could respond in some more detail to that.
Ruth Bader Ginsburg: Was... Wheat was the head of the Washington office?
Eric Schnapper: Yes.
Ruth Bader Ginsburg: And Allen was the executive director of the whole operation?
Eric Schnapper: That's exactly right. I... I think that mechanically carrying over here the principles of agency law with regard to punitive damages would not be appropriate for... for two distinct reasons. And I note, to begin with, that this Court indicated in Faragher and Ellerth that... that these kinds of issues had to be determined both by looking at agency law and by looking at the purposes and principles underlying Title VII. There are two reasons that I... I suggest that... that one couldn't mechanically use agency principles. The first one is that one of the central purposes that prompted Congress to adopt punitive damages was to assure more effective monetary relief to deter and punish discrimination in the cases of sexual harassment. If one were to apply mechanically provisions of the restatement of torts to sexual harassment, it would... it would be a rare case, if ever, that you could get--
Eric Schnapper: Well, how do I know that that was the reason?
Eric Schnapper: --Because--
Antonin Scalia: I mean, all I see is the text of the statute. And from the text of the statute, it says punitive damages. I would apply normal punitive damages agency principles. And... and to tie into Justice Kennedy's question, I would think that a company who has a policy against this... this kind of activity, and if one of its lower employees, even... even an officer such as Wheat... violates that policy, I would think, under normal agency principles, you would not punish the company. If you wanted to sue... if you wanted to sue Wheat individually, that's a different question. But, normally, the... the company has to be a bad actor. And here, the company has this policy, and it's... it's Wheat who violated it.
Eric Schnapper: --Let me... let me take another try at answering this. With regard to the first part of your question, How would you know that, reading the statute? The stat... statute has statements of... of purpose and findings, which both refer to the need for additional remedies about sexual harassment. With regard... a bit of an aside to Wheat... it's not under prevailing law, at least in the lower courts... it's not possible to sue individuals for compensatory and punitive damages. It's the employer or nobody. The... in addition to--
John Paul Stevens: Mr. Schnapper, may I just interject this thought? Although references to legislative history won't persuade Justice Scalia, some of the rest of us are interested in what you might say about it. [Laughter]
Eric Schnapper: --Well, in this case, I would hope I could persuade even Justice Scalia, because this is in fact in the text of the statute. It's not in Section 1981a; it is in the... in the... in the Public Law that was adopted by Congress. In... in addition to that, the... I'd note that the... the statute, on its face--
Antonin Scalia: It's not in your appendix A. It's... it's in the prologue of the... of the statute? I mean, I don't see it in any of the... in your statutory appendix.
Eric Schnapper: --I... I believe that's right. It... it's been the Public Law--
Antonin Scalia: I'll be happy to look at the Public Law.
Eric Schnapper: --Thank you, Your Honor. I'd like to reserve--
Sandra Day O'Connor: May I ask... now, the position of the en banc dissenters here supported the notion that it must be the company or the Dental Association itself that acted recklessly or with malice here, was it not? I mean, that was the position taken, as I read it, by the en banc dissenters.
Eric Schnapper: --I think that's... I think that's probably the right... correct reading. Our view is that that issue would not go to the statutory prerequisite, it would only go to a guideline for the jury. Thank you.
William H. Rehnquist: Thank you, Mr. Schnapper. General Waxman, we'll hear from you.
Seth P. Waxman: Mr. Chief Justice, and may it please the Court: This case presents to the Court, in the context of the Disabilities Act and Title VII, very much the same questions that this Court considered under the ADEA in TWA v. Thurston and Hazen Paper Company. This is a case of statutory interpretation. And the statute provides explicitly that in cases of intentional employment discrimination under the Disabilities Act or Title VII, punitive damages may be awarded.
William H. Rehnquist: Well, Mr.... General Waxman, that's quite true. But, obviously, looking at the divided opinion of the Court of Appeals, there are several different possible... possible ways of interpreting that. And why isn't one possible canon of construction that punitive damages are not favorites of the law? This Court has held a couple of times that there are constitutional limitations on them. So, when there is reasonable doubt as to whether they're available or not, the... the Court's answer should be they're not available.
Seth P. Waxman: Mr. Chief Justice, it is entirely appropriate for this Court, and other courts, to proceed on the assumption that punitive damages are generally not favored in the law, and that, as this Court demonstrated in BMW v. Gore, there are constitutional limitations on the amount of punitive damages that are awarded. But in this case, as under the ADEA that this Court considered in TWA and Hazen, Congress has made that determination, and it has explicitly stated what standard the plaintiff must prove before the jury may consider the independent question of whether punitive damages can be considered. And I think you were quite right, Mr. Chief Justice... I think it was you... to observe that as... as Judge Randolph did in his concurring decision below, that traditionally, at law, reckless indifference, or reckless disregard, is viewed essentially as a lesser included offense of knowledge. The reason why there isn't a collapse of what was called the two tiers of liability here, as there was... as this Court found there was not under the ADEA, is that the two tests look at two different things. In order to establish liability for intentional violation, you look at the volition of the defendant. That is, did the defendant treat someone differently on the... deliberately... on the basis of a prohibited characteristic? The further question that the jury has to consider in evaluating whether to exercise its discretionary moral judgment to consider punitive damages is the defendant's consciousness of wrongdoing.
Sandra Day O'Connor: Should it be the consciousness of the company itself or, in this case, the Association, or some lesser employee?
Seth P. Waxman: Well, clearly, the defendant in the case is the employer. And although this Court has never directly confronted the issue, the lower courts are unanimous that individual employees or supervisors may not be sued under Title VII and, I think presumably, analogously, under the Disabilities Act. So, in a case, which I... I agree with Mr. Schnapper, is not really presented here because the two officials that--
Sandra Day O'Connor: Well, I'm asking you for a principle.
Seth P. Waxman: --Well--
Sandra Day O'Connor: Because I want to keep that in mind as we decide this case. And what is your position on that?
Seth P. Waxman: --I think our position on it, Justice O'Connor... let me first say that, following this Court's decisions in Faragher and Ellerth last spring, there has already developed a split in the circuits, between the Fifth and the 11th Circuit, in cases, both coincidentally involving Wal-Mart, over whether the paradigm that this Court created in Faragher and Ellerth should be directly applied to punitive damages, or whether you should do what the... whether you should start from the place this Court began in those cases. Which is to say, we know we have to look at traditional agency principles and we have to look at the purposes of Title VII. Now, Justice Scalia was quite right that traditional agency principles apply differently in the case of punitive damages than they do in the case of compensatory damages. In Faragher and Ellerth, this Court, I would say, expressed considerable doubt over whether somebody who was engaging in... an employee or a supervisor engaging in sexual harassment that did not rise to the level of a tangible employment action could ever be said to be acting within the scope of employment. And I think that's correct. But the Court found that a comp... an employer might, nonetheless, be liable because one could say that, with reference to traditional agency principles, the supervisor was aided in the agency relationship. Now, at common law... and this is reflected in Restatement... the Restatement, Second, of Torts, 909, and the Restatement of Agency, 217(c), which are identical: An employer is vicariously liable for punitive damages only if the employee acted in a managerial capacity within the scope of employment. Now, the... the EEOC, prior to Faragher and Ellerth... and I don't think this Court's opinion changes it any... has taken the position that if a supervisor, vested with the company's authority to hire or fire, fires somebody in an act of intentional discrimination, the company... the jury may consider whether or not punitive damages may be awarded.
William H. Rehnquist: But if the EEOC considers something like that, I mean, it's not on the basis of running jury trials, is it?
Seth P. Waxman: Well, no. But it... it is... the EEOC... these are the instructions that it requests from the jury, and this... this is the position--
William H. Rehnquist: Well, why... why does the EEOC have any business laying down jury instructions?
Seth P. Waxman: --The EEOC, Your Honor, under Title VII, is a plaint... is a plaintiff in very many of these cases.
William H. Rehnquist: So, you're talking about not the EEOC as an administrative body, but when it goes to court?
Seth P. Waxman: Oh, sure. The EEOC has no authority under the statute to dictate jury instructions. It does have general enforcement and interpretive authority with respect to Title VII. The question was, what position has the United States taken? And the United States is in court most frequently on this in the posture of the EEOC as a plaintiff.
Sandra Day O'Connor: Well, have you answered my question yet?
Seth P. Waxman: I haven't fin--
Antonin Scalia: Because I'm not sure you have. You're winding up, though. [Laughter]
Seth P. Waxman: --I would... our position, Justice O'Connor, is that in cases resulting in tangible employment consequences, as in this case, the EEOC--
Sandra Day O'Connor: By that, you mean not hiring?
Seth P. Waxman: --Not fired... not fired, not hired, demoted, promoted. The way this Court used those terms in Faragher and Ellerth. In those cases--
Sandra Day O'Connor: Well, that's 90 percent of the cases, but go ahead.
Seth P. Waxman: --In those cases, we believe that the... the principle expressed in the Restatement, that if the employee acted in a managerial capacity and was within the scope of his employment, the company is liable for punitive damages in the jury's discretion. And we have--
Sandra Day O'Connor: Is that the same as the traditional agency principles for when you subject a company to punitive damages liability?
Seth P. Waxman: --That... that... what I've told you--
Sandra Day O'Connor: Or is some variation of that?
Seth P. Waxman: --Well, what I've... the articulation I've given you is verbatim out of the Restatement of Torts. We have a... maybe it's an interpretation of that... we've interpreted "managerial capacity" to include regional supervisors and store managers who have authority to fire, where there is a tangible employment action. In the area of sexual harassment, where there may not be a tangible employment relation... consequence, as in the case... as this Court considered in Faragher and Ellerth... as a result of Faragher and Ellerth, the EEOC is in fact at this point evaluating its position and trying to come to a conclusion as to the position that it will advocate in those cases, which actually have--
Seth P. Waxman: General Waxman, could--
Seth P. Waxman: --almost never arisen.
Ruth Bader Ginsburg: --Can I ask you, before you sit down, what charge would you request or what charge would you say fits with your interpretation of the law? How should a jury in this case, for example, be charged on the issue of punitive damages?
Seth P. Waxman: Well, I think that the jury ought to be charged in the language of the statute that Congress set out. That is, the jury ought to be told that before you can award punitive damages, you must... compensatory damages... you must find that the defendant intentionally discriminated. That is, treated this person--
Anthony M. Kennedy: Suppose you have a case in which the employer tells the female employee, you're... you're carrying a child, you're going to be a mother soon, we think this position is... is just going to put too much stress on you, because women have special bonds with the child. A violation of the law, in... insensitive, and yet a person who acts in good faith. Can the jury consider that--
Seth P. Waxman: --Well, that--
Anthony M. Kennedy: --and say, well, this man was wrong under the law, but he acted in, really, her best interest, he wasn't malice... malicious in the usual sense of that term; could the jury--
Seth P. Waxman: --Well, if the... if the... if--
Anthony M. Kennedy: --consider that among themselves in their own deliberations?
Seth P. Waxman: --The answer is certainly yes. I would say further--
Anthony M. Kennedy: Okay. Then can... can you instruct the jury that they could consider that?
Seth P. Waxman: --Well, with respect to punitive damages--
Ruth Bader Ginsburg: Yeah, if you could complete the... you didn't get to finish what your instruction would be. So--
Seth P. Waxman: --No. I think the instruction would be, and all the pattern instructions, not just with respect to this statute, but with respect to liability under the civil rights statutes generally, under Smith v. Wade, instruct the jury... and may I just finish this sentence... instruct the jury in the language of the statute. Which is that you may consider but are not required to impose punitive damages if you find that the defendant acted with malice or with reckless indifference to the employee's federally protected rights. Thank you.
William H. Rehnquist: --Thank you, General Waxman. We'll hear from you, Mr. Fay.
Raymond C. Fay: Mr. Chief Justice, and may it please the Court: The fundamental difference in perspective between the two sides in this case is that the Petitioner's focus, exclusive focus, on the term "reckless indifference" ignores the fundamental starting point: that this is a statute about punitive damages. And when Congress uses the term "punitive damages" or other terms derived from common law in a statute, those terms, absent a contrary indication by Congress, have the same meaning as they do at the common law. And at common law, there were three hallmarks of punitive damages. First, the focus is on the nature of the conduct, not purely the mental state, as the Petitioner says. Secondly, the conduct is outrageous or egregious. And, thirdly, the purpose is to punish or... or to deter. It's egregious conduct.
John Paul Stevens: May... may I just... I'm just not quite sure I followed your argument. The... the common law term that we are comparing this to is "punitive damages", or is it the common law meaning of the words "reckless indifference" and "malice"?
Raymond C. Fay: It's both, Justice Stevens. Because this is a statute that says punitive damages may be awarded under a particular standard. And my point is that if we focus solely on the word "reckless" or "indifference", or the two together, we're losing sight of the fact that Congress was imposing punitive damages for a particular action here, and that... and there is no indication the Congress was meaning anything other than the traditional meaning of punitive damages--
Ruth Bader Ginsburg: So, your answer would be different, and... and you would... would you concede that Plaintiff is correct, if instead of saying "punitive damages" it had been called "liquidated damages"? And the same thing, a jury may award liquidated damages if it finds the defendant acted with reckless indifference to the federally protected rights of the aggrieved individual?
Raymond C. Fay: --That may... very well may be a... a different signal, Your Honor. Because, for example, in the cases that were brought up before, the ADEA cases, the reference there, liquidated damages for a willful violation, was to a statute... that is, the Fair Labor Standards Act... whereas the reference here is to punitive damages without embellishment, meaning we look to the common law.
Ruth Bader Ginsburg: Well, I'm... I'm proposing liquidated damages without embell... embellishment, or, say, if it had said statutory damages.
Raymond C. Fay: And... and my answer is that I agree that that may very well have a different meaning. Because punitive damages has a common law root, whereas liquidated damages does not.
Ruth Bader Ginsburg: How about civil penalties?
Raymond C. Fay: Civil penalties come in different... different shapes. There is a rich body of law about what types of civil penalties there may be. Just using the term "civil pen... penalties", I think--
John Paul Stevens: Mr. Fay... Mr Fay, I'm... you said the... the language, it's reckless indifference to the federally protected rights. The reckless indifference has a definite frame of reference in the statute.
Raymond C. Fay: --It certainly does. And that reference, first of all, is in the common law. And this Court, on many occasions... a case in point in Molzof v. United States... States... and Smith v. Wade, which is cited in the legislative history here, and from which the words were borrowed to put... to put those words in this statute. Reckless indifference is the equivalent of malice. It is the equivalence in the sense that, again, we look to the conduct. Because reckless indifference to federally protected rights means acting, or failing to act, in putting a person at substantial risk of serious harm. It's the consequences and the conduct that are focused--
Antonin Scalia: No, but malice... malice is conduct?
Raymond C. Fay: --Well, when... again, the statute is framed this way. It says: the discriminatory practices are committed with malice or reckless indifference. The reference is always back to the discriminatory practice or the conduct.
David H. Souter: Well, the reference is to the statute... to the... to the rights. The statute uses the word "rights".
Raymond C. Fay: It also tells us, Justice Souter, that it is the... it is the discriminatory practice that is done with respect to those rights. So, we look to both the mental state and the conduct.
David H. Souter: And the mental state looks to rights, not to the conduct or consciousness of the conduct, or even consciousness of the tangible consequences of the conduct.
Raymond C. Fay: It does both, Your Honor. And what... what our point is--
David H. Souter: Well, at the very least, then, you agree that it does look to consciousness or... or indifference to the existence of the sources of the legal rights?
Raymond C. Fay: --That's correct.
David H. Souter: Okay.
Raymond C. Fay: And what I'm saying is you can't divorce that from the conduct that's at issue. Otherwise what happens is you look at the mental state without regard to whether the underlying discriminatory conduct was serious enough to impose punitive damages, or even whether the underlying discriminatory conduct was a violation at all.
Antonin Scalia: Why isn't it up to the jury? I mean, it's not as though the seriousness of it will... will... will not come into the case. What we're talking about here is what... what this language permits the factfinder to determine. And it'll usually be a jury, I assume. What... what is the problem about letting the jury take into account the egregiousness issue? I suppose they may.
Raymond C. Fay: They certainly would take it into account. But the... but the test that's advocated by the Petitioner would be to usurp the traditional role of the court in determining whether there is evidence of this higher standard of culpability in the statute to impose punitive damages. The Petitioner would say virtually all cases of intentional discrimination go to the jury.
Stephen G. Breyer: Well, what-- --I take it-- --Isn't that what the statute says? I mean, that... that's the... the way I've read the statute... and I'd like you to... it's the same as what Justice Souter has been asking, and I think Justice Stevens.
Raymond C. Fay: It is.
Stephen G. Breyer: What it says specifically is the first question in these cases is, was there intentional discrimination, say, on the ground of gender? And, normally, they're defended on the ground that it was a pretext, that it wasn't a pretext. I fired her because she was always late. No, that's a pretext. You fired her because she was a woman. So, you have to establish the facts. Once the facts are established, and if the plain... the plaintiff wins on the facts, that means that the person has intentionally discriminated on the ground of gender. So, then, there'd be a second question: Did that defendant know that intentional discrimination against a woman is illegal? And if the answer to that question is yes, he did know it's illegal, that's the end of this case; you can assess punitives. Now, there's a third very rare situation, where the answer to the second question is no, he didn't know; he thought it was legal. I don't know that there's a human being in the United States who thinks it's legal, intentionally, to discriminate against women or on grounds of race. But if we find that human being, the next question would be... the next question would be: should he have known... not just should he have known, but should he really, really have known? That's reckless disregard. Okay. Now, it seems to me that's what the statute says. And even though it means punitives now could be assessed pretty regularly with intentional discrimination, it might have meant there'd be far fewer cases at the time this was enacted, when people didn't know what the law is. But that's what it seems to say. And if that's what it seems to say, what's the answer... what's the argument that we should do something other than what it says?
Raymond C. Fay: I... I think that your second question, Justice Breyer, does not take into account what types of damages these are. These are punitive damages. These are not damages that are assessed simply on a separate inquiry about what someone thinks. They are... they are based on a common law tradition of a more difficult standard of proof, and they are also based on the tying together of the discriminatory practice with the required mental state.
Ruth Bader Ginsburg: Mr. Fay, do I understand that you are riding... putting your heaviest weight on the label "punitive damages"? That is, you answered me that if the statute had said liquidated damages or statutory damages, then you would have no problem with Justice Breyer, what he said is the proper; is that right?
Raymond C. Fay: The second part of my answer to the... to your previous question, Your Honor, was that at common law, reckless indifference was, as stated in footnote 10 of the Smith v. Wade opinion, the equivalent of malice.
Ruth Bader Ginsburg: Oh, so, then, the label doesn't matter, and you'd say the same thing, even if it said "liquidated damages" or "statutory damages" and not "punitive damages"? So, it's not--
Raymond C. Fay: No. I... I stand by my previous answer, that that tells us what the statutory reference point is. It is not liquidated damages, as in the ADEA, where the sole reference point--
Ruth Bader Ginsburg: --So, suppose the label were "liquidated damages". Then, is Justice Breyer's description of how the case would unfold correct?
Raymond C. Fay: --It would be very much closer to Justice Breyer's description.
David H. Souter: Well, you're saying, I guess, then, that there's got to be deliberate indifference with respect to the... to the... to the right, as such, but there's got to be some egregiousness in addition to that. Does that... are you saying there's got to be an egregious deliberate indifference?
Raymond C. Fay: I'm saying that it... it has to be, as part of it, in this statutory framework.
David H. Souter: Well, if that's the case, then why doesn't deliberate... egregious, deliberate indifference just collapse into malice? Because malice, I suppose, under this statute, the... the paradigm example of malice... would in fact be consciousness of the legal prohibition and intentional discrimination in the face of that consciousness.
Raymond C. Fay: That's correct.
David H. Souter: And I... I don't know quite how I would draw a line between malice, in that sense of consciousness, and some kind of egregious degree of... of indifference.
Raymond C. Fay: Well--
David H. Souter: I don't know how... I don't know how a jury would ever tell them apart.
Raymond C. Fay: --The... in terms of the classical definitions of malice, which is actual evil motive or intent to injure, and--
David H. Souter: No, but you've just given... I don't want to put words in your mouth if you don't want to take them... but I thought you had... had agreed with me that malice here probably means a... an actual knowledge of the legal prohibition.
Raymond C. Fay: --Oh, it may--
Raymond C. Fay: You... you don't agree with me on that?
Raymond C. Fay: --malice may have a actual intent which is irrespective of the knowledge of the requirements of the law.
David H. Souter: Malice is an intent to be... to be nasty, to hurt.
Raymond C. Fay: Yes. Exactly.
Antonin Scalia: You-- --Gee, an actual intent to be nasty or to hurt may... may well disprove the... the sexual discrimination charge. I mean, it would usually be the defendant's defense. He'd come in and say, no, I didn't discriminate against this person because she... she was a woman. I just didn't like her. I really hated her. And I--
Raymond C. Fay: And that's--
Antonin Scalia: --How could that be malice?
Raymond C. Fay: --And that's precisely why, Justice Scalia--
Antonin Scalia: So, I think malice may well mean... malice may well mean actual knowledge that it's against the law, and nothing but that.
Raymond C. Fay: --Well--
Antonin Scalia: Because you have to read it: malice or deliberate indifference. Deliberate indifference is always a lesser state of whatever malice is.
Raymond C. Fay: --That's true. But the... but the reference point in the statute is to the discriminatory practice. So, if it's not a discriminatory practice that's committed with malice... that is, to discriminate because the applicant was a woman, instead of personal animus... then it wouldn't be discriminatory to begin with. You have to tie the two together by the structure of the statute.
Antonin Scalia: Exactly. But you don't have to know that it's unlawful to be in violation of the statute.
Raymond C. Fay: I agree... I agree with that.
Antonin Scalia: So, actual knowledge of unlawfulness is malice; you agree with that?
Raymond C. Fay: I... I don't think you need actual knowledge of unlawfulness to get to malice. I think you need to commit the... the intentional act, which may or may not relate to a consciousness of what the statute requires, with an evil motive or intent to injure that individual. And whether you even knew anything about the requirements of the Act, I don't think bears on that aspect of it.
Antonin Scalia: Again, my problem isn't even an intention to injure. The individual negates, it seems to me, the... the sex discrimination charge.
Raymond C. Fay: If it's unrelated to the sex discrimination.
William H. Rehnquist: Well, but isn't discriminating against someone because of sex... isn't that an intent... intent to injure them? You're denying them, say, a job promotion. And you're denying them because of... because of their sex.
Raymond C. Fay: And that is... that is injurious. And in a case in which the conduct is serious enough, then it should go to the jury on the question of punitive damages.
William H. Rehnquist: But how... you say the conduct is serious enough. But what more do we need?
Raymond C. Fay: The... the classic example of... of the difference between the two... and Congress' intending to have only the more serious cases go to the jury... is that this Court, in McDonnell Douglas v. Green, and follow-up cases, has established a paradigm of proof for intentional discrimination in which there may be very little known about what the employer thinks; that pretext alone may suffice, by judicial presumptions and inferences, to get to the jury on the question of intentional discrimination.
John Paul Stevens: You don't suggest, Mr. Fay, that every time there's an intent to discriminate, there's also the intent to harm the individual? Supposing the police force decides they think, in a particular neighborhood, they'd like to promote an African American officer, so white officers didn't get the job. There's no intent to harm the white person, they just made perhaps an impermissible decision.
Raymond C. Fay: And that would also be... be true in the pretext cases.
John Paul Stevens: Sure.
Raymond C. Fay: It... it is classified as intentional discrimination, but it certainly does not carry with it any reckless indifference to their rights or malicious intent.
John Paul Stevens: Why? Why not? Why not, the pretext was a pretext?
Raymond C. Fay: Well--
Stephen G. Breyer: The pretext was a pretext. There's a finding that the... the person--
Raymond C. Fay: --Because a person could be--
Stephen G. Breyer: --on the facts, discriminated intentionally.
Raymond C. Fay: --Well, for example, an employer may be misguided in thinking that they need to foster affirmative action, when affirmative action might result--
Stephen G. Breyer: If... if in fact the employer thinks that if I'm doing this intentionally, I don't know if it's illegal, I agree that then you would have, on I think what I'm taking is the opposite theory from yours, as I said, that if the employer believes that intentional discrimination is not unlawful, then punitives would not be assessable unless he should have known that it was unlawful. I agree with that. So, maybe we don't agree. Can I ask you one other question? Which is, why... why, if the statute is... I think is... why should we fight so hard to resist eligibility for punitives in a statute that has two other checks? One is the check that the jury might not assess the punitive, but, more importantly, is the unusual check that the punitives are rather limited in amount? I think it's like 300,000 dollars, or 30,000 dollars, or 50,000 dollars, depending on the firm. Am I right about that?
Raymond C. Fay: --That's correct. The total cap is 300,000 dollars for the largest employers.
Stephen G. Breyer: And so... so, given the cap that's in the statute, why do we think that Congress would not have wanted them widely assessable?
Raymond C. Fay: One answer I think is that there were, as this Court is aware, many, many compromises in reaching this... this Act the second time around. And the caps and the punitive damages and the pun... and the compensatory damages, at times, ran on different tracks. So, in a sense, the question of... of what is the standard for punitive damages was decided apart from the very political compromise as to the caps. And the... the stigma and the seriousness of punitive damages, I would submit, should be decided apart from what the caps are, which might be amended tomorrow.
Anthony M. Kennedy: I... I just want to make it clear what you're... do... do you agree that every time the employer knows, or should have known, that his official... or its official actions is a violation of the law and the employer then proceeds to take that action in any event, that there is malice or reckless disregard?
Raymond C. Fay: No.
Anthony M. Kennedy: All right. What... what are the instances in which there is no malice or reckless disregard?
Raymond C. Fay: If... the instances are in which there is no risk of serious physical, psychological or, in the rare instance, economic, harm to the individual. And that analysis has to be done, in our view, in the first instance, by the district judge.
Anthony M. Kennedy: Was that true in this case?
Raymond C. Fay: It was certainly true in this case. The judge decided that there was no evidence to satisfy the statute standard. And the district court's comments were... were based on the fact that the majority... almost all of the evidence in this case was based on pre-selection and pretext.
Anthony M. Kennedy: But wasn't... wasn't the woman, in her... in her own mind and in her own psyche, injured, disturbed, et cetera, et cetera, et cetera?
Raymond C. Fay: No. She did not claim any type of compensatory damages for pain and suffering or emotional distress and the like.
Anthony M. Kennedy: If she had, the result would have been different?
Raymond C. Fay: If she--
Anthony M. Kennedy: If she said, you know, I really knew I was discriminated against for being a woman... woman, and it... it hurt me very, very badly, it upset me, et cetera, et cetera?
Raymond C. Fay: --If there had been inter... first of all, that would have qualified for... for compensatory damages under the statute. And that's one of the big changes that was made in this law. Secondly, if the evidence had shown that there was interaction, to show that the... the employer was punishing her or treating her poorly because she was having that reaction, that would be the type of case that would go to the jury; yes, Your Honor.
Anthony M. Kennedy: So... so, you capture this by instructing the jury in terms of egregious behavior?
Raymond C. Fay: I don't think you need to capture it by instructing the jury of that, because it's up to the judge to make the threshold determination. And then it would go to the jury on instructions which may--
Anthony M. Kennedy: Well, then... then we capture it by putting the law of this Court, that it has to be egregious behavior?
Raymond C. Fay: --Because that's what's required at the common law.
Ruth Bader Ginsburg: And that all comes from the label "punitive", because the common law wasn't that way for liquidated or statutory?
Raymond C. Fay: It's more than from the label "punitive", Your Honor. Because, for example, if Congress wanted to modify the meaning of punitive damages, it could have done that, as, for example, it did with compensatory damages. It said you get compensatory damages here, but then it says certain things don't count as--
Antonin Scalia: Why did it say malice or deliberate indifference, then, if it wasn't... if it wasn't changing what... what punitive damages were at the common law? Why didn't they just say the jury may award punitive damages, period?
Raymond C. Fay: --Because it was using as its reference point the case... this Court's decision in Smith v. Wade, in which malice and reckless indifference were defined as standards for punitive damages under the common law. And it... it, almost word for word, carried those words from the opinion into the statute. But this Court's decision in Smith v. Wade emphasizes that outrageous conduct is required to meet those standards of malice or reckless indifference. And... and the difference between our view and the Petitioner's is you don't focus simply on the state of mind; you have to focus on the discriminatory conduct. And it has to be serious enough to impose--
John Paul Stevens: Let me just be sure about one thing. Your view is that this statute adopts the same standard that the majority adopted in Smith against Wade?
Raymond C. Fay: --I... yes, I think that its common law roots are the same, Your Honor.
David H. Souter: Did Smith and... did Smith and Wade refer to indifference to rights? Yes, it says callous indifference to the federally protected rights of others. It's the same language.
Raymond C. Fay: That... those were the very words--
John Paul Stevens: Yeah.
Raymond C. Fay: --from Smith v. Wade that were incorporated here. The... the main difference, of course, is that this was a decision of this Court explicating the common law, whereas Congress then embodied that into a statute. And the first question is: When Congress used those words in the statute, did it mean to alter the common law? There's a suggestion in the government's brief, and a footnote, that it did. There's nothing in the legislative history that shows that Congress intended to alter the common law in incorporating these words. There's no reference as there was, for example, that we were trying to mimic--
John Paul Stevens: Let me go one step further with you, to be sure I... there was a very sharp debate in Smith against Wade as to exactly what the common law did mean. And the majority took one view and the dissenters very persuasively argued the other view. [Laughter] But your view is that the majority view is the one that we should follow?
Raymond C. Fay: --That's... that's the rule which explicates the common law and was carried forward in this statute.
Antonin Scalia: We usually do that, don't we? [Laughter]
Raymond C. Fay: Yes, Your Honor.
Ruth Bader Ginsburg: Will you also clarify whether... at one point you said that malice is a synonym for reckless indifference to the federally protected rights of the aggrieved individual, and at another point you seem to suggest that those two terms had discrete meanings. So, which is it? Does malice mean something different than reckless indifference to the federally protected rights?
Raymond C. Fay: I... certainly malice implicates the actual intent, and recklessness implicates more than negligence but less than the actual intent, in terms of looking at the mental state. What I was referring to was the passage in Smith v. Wade, in footnote 10, at 461 U.S., on page 43, and in the text, which says that reckless indifference implicates behavior that is so bad that it becomes the equivalent of malicious behavior. That's what I was referring to in that context. That is, in terms of the conduct.
Ruth Bader Ginsburg: So, but let's take these words written into this statute. It says "malice". And then it says "or reckless indifference to the federally protected rights. " What you read suggests that there's no difference; that reckless indifference, when it's bad enough, becomes malice. But the statute seems to have two discrete categories. One is malice. The other reckless indifference to federally protected rights.
Raymond C. Fay: And my point is... is that the reckless indifference is not so radically different from the malice standard that it becomes a statutory standard whereby all cases of intentional discrimination would go to the jury. And--
Ruth Bader Ginsburg: Well, we've already established that there are some cases, like good faith but wrong judgment, about the exceptions under the law, the BFOQ, when you're allowed to make a religious preference.
Raymond C. Fay: --And our position on that, Your Honor, frankly, is that it's better not to establish any type of classes of cases that would be exempt from punitive damages. Because as soon as someone says, well, the BFOQ case won't go to the jury, someone else will come back and say, well, that BFOQ really was not invoked in good faith; that was a sham; it was concocted after the fact. And if it's egregious enough, why shouldn't that case go to... to the jury on punitive damages? So, I don't think there should be any... any--
Antonin Scalia: Well, what egregious... I mean, what do you mean by... by an... an egregious act? This Act only covers firing. It doesn't involve murder or torture or anything else. How can you... how can you have a really egregious firing? [Laughter] Unless... unless it's the motive. Unless it's the motive, which... which you assert is not the point.
Raymond C. Fay: --If you look at it in terms of... of the risk of harm that someone is put to, it... it... there can be aggravating circumstances, where someone is put into a horrible mental state because of the actions that took place with the firing. Like I say, it's rare that it's going to happen in the economic context, but perhaps an--
Ruth Bader Ginsburg: So, if-- --But you just said it's the conduct, it's what the defendant does, not the... I mean, punitive damage is not going to turn on whether the plaintiff is thin-skinned, is it?
Raymond C. Fay: --In... earlier, I answered a question, saying that the interaction between the plaintiff and the defendant might make... might show that the defendant's behavior is more serious.
Antonin Scalia: I have it: Firing on Christmas Eve. That would do it, wouldn't it? [Laughter] That is really--
Raymond C. Fay: Timing has been an issue in the case law, at... that is cited as one of the factors.
Anthony M. Kennedy: --Well, why... why isn't intentional... intentional discrimination... you have to assume the facts show it... we intentionally dismissed someone from her... her job on the basis, let's say, of gender, because she's a woman, or of race, and I... the employer does it intentionally, for that reason, knowing that it's unlawful under the law of the United States; why isn't that egregious?
Raymond C. Fay: It may... it very well may be.
Stephen G. Breyer: Just in and of itself? That, intentional discrimination on the grounds of race, knowing that that's illegal, no BFOQ things, et cetera. I mean, that's it. Is that, in your opinion, egregious and goes to the jury?
Raymond C. Fay: It very well could be. Because, in that case, the... the Court is citing... or Your Honor is citing an example where someone knows that, in terms of this statute, which protects against various types of discrimination, that harm is going to occur.
William H. Rehnquist: Well-- --But you still... to say it goes to the jury, you still have to resolve the question of whether the intent of the particular supervisor is going to be attributed to the corporation, don't you?
Raymond C. Fay: Yes. And that... that is... and one thing I think we all agree here is that that precise issue is not before the Court. But I did want to... to state that... that we believe--
Ruth Bader Ginsburg: And it's not before... before the Court why?
Raymond C. Fay: --Well, the... the question of... of the difference in standards that was referred to by Mr. Schnapper and the Solicitor General is not precisely before the Court. But we would submit that the higher agency principles, under common law, would apply to punitive damages. And common law--
Antonin Scalia: The question presented is, in what circumstances may punitive damages be awarded under Title VII of the 1964 Civil Rights Act? If that isn't included in the... in the question presented, I don't know what is.
Raymond C. Fay: --In... in direct response to the question, the... I don't think the Petitioner or the Respondent briefed this issue at length. One of the amicus parties did. The Chamber of Commerce, in its brief, starting on page 22, did explicate the common law to show that there is... there is no vicarious liability for punitive damages at common law. It is different from some of the things that we've been discussing today.
Anthony M. Kennedy: In your answer to Justice Breyer's question--
Raymond C. Fay: Yes.
Anthony M. Kennedy: --you said there's an intentional violation; why isn't that the end of the case?
Raymond C. Fay: Because--
Anthony M. Kennedy: You said "It may very well be". But I need to know your description of those class... classifications of the cases where it is not so. I know it may very well be--
Raymond C. Fay: --One... one way I can--
Anthony M. Kennedy: --but I... I want to know when it isn't.
Raymond C. Fay: --One way to describe the very difference in approach between the Petitioner and the Respondent here is... is to contrast the EEOC's policy guidance, which is referred to in the government's brief, and some of the examples that the government gives that would get you to the jury on punitive damages. And, for example, they say resentment of Federal civil rights laws. Well, that may be unfortunate, that someone resents the civil rights laws, but that, in and of itself, should not get you to the jury on punitive damages. It is not tied to discrimination against the individual. Another example that--
Ruth Bader Ginsburg: Where are you reading from?
Raymond C. Fay: --I... I'm reading from pages 11 and 12 of the government's brief, where it sets forth a list of things that would be examples to go to the jury. And I'm saying that those... those examples that... that the government gives, that have only to do with the isolated mental state, without reference to the discriminatory conduct in this case, are not appropriate for submission to the jury. Sophistication of the employer is another one. That's... that's something that should have nothing to do, because it doesn't have... it doesn't describe the seriousness of the discriminatory conduct at issue. The EEOC's policy guidance, also cited in note 7 of the government's brief, on page 11, is much more allegiant to the statutory standard.
William H. Rehnquist: Well, I'm glad we don't carry over the government's resentment of Federal civil rights law into the income tax. [Laughter] May I go back to your answer to Justice Breyer's question for a different purpose? You said that if... if there is in fact awareness of the... of the Federal Civil Rights Act and a... and an intentional discrimination in disregard of... of what one knows is a legal duty, that... that may very well be malice, and at least it would go to the jury.
Raymond C. Fay: Yes.
David H. Souter: You... you've also said that the... that the indifference standard in the statute is... is virtually identical, or tantamount, to that kind of malice. So, I suppose, in any case in which the... the indifference is shown, that would at least get to the jury, too; is that right?
Raymond C. Fay: In that instance, we are focusing solely on the mental state, and I think there is a difference to... his question, as I understood it, was if somebody knew darn well that they were violating the law.
David H. Souter: Well, the... Justice Breyer's question focused only on the mental state.
Raymond C. Fay: That's right.
David H. Souter: And... and you said, yes, that would be enough to get to the jury.
Raymond C. Fay: Because he was posing an example... I thought Justice Breyer was posing an example where the employer knew that there was a violation of the law.
David H. Souter: That's right.
Raymond C. Fay: We get into a... a different area... a little bit different area where, instead of actual knowledge of an intentional violation, someone is acting recklessly as to... as to whether or not those actions are in violation.
David H. Souter: Right.
Raymond C. Fay: But, again, I don't... I don't think you can take any of that into consideration without looking at the statutory framework, which says we're talking about punitive damages--
David H. Souter: Well, I... I just... I just want to... to go further in terms of your answer to his question. And I... and I guess my... my question is, if... if malice... I'm sorry... if knowledge... if discrimination with knowledge of the Act goes to the jury, and the indifference is, I guess, virtually tantamount to that, why doesn't every indifference case also go to the jury without anything more?
Raymond C. Fay: --Because both would require serious actions. Thank you.
William H. Rehnquist: Thank you, Mr. Fay. Mr. Schnapper, you have four minutes remaining.
Eric Schnapper: I'd like to respond to a number of the questions that have been asked by the Court by returning to the distinction I made at the outset between the statutory prerequisites and instructions that might be given to guide the discretion of the jury. Section 1981a sets forth two and only two prerequisites: intent, first; and, second, either reckless indifference or malice. We don't think that the courts are at liberty to add a third prerequisite to that list. The statute says that if those requirements are met, punitive damages may be awarded. Now, a number of the concerns the Court raised I think could properly be contained in guidance that would shape the jury's exercise of its discretion, but that's fundamentally different. To return, for example, to the question put to me by Justice Scalia, Section 909 of the Restatement of Torts contains very specific requirements, under agency principles, for the imposition of punitive damages. None of them are in the statute. The statute does not say indifference, reckless indifference, intent, and compliance with the principles of the Restatement of agency--
William H. Rehnquist: But in... in the Faragher case last year, we certainly imported standards from the Restatement that weren't in the statute.
Eric Schnapper: --You weren't... you weren't dealing with this specific statute, which is... is quite--
William H. Rehnquist: Well, we weren't dealing with the same statute, but I... I don't see why that bears on the desirability or vel non.
Eric Schnapper: --I--
William H. Rehnquist: I mean, this... this statute is simply confusing to... no... no one can pretend that it's a clear guideline as to where... where a court is to go.
Eric Schnapper: --I think that the text of the statute does... does provide some guidance.
William H. Rehnquist: Well, look... look at the way the Court of Appeals split on it. It suggests that reasonable people can surely differ as to what it means.
Eric Schnapper: I don't want to characterize six members of the D.C. Court of Appeals as unreasonable. But, in all fairness, the words "reckless indifference" could not possibly mean egregious conduct. That's simply not within the range of... of possible means of those words.
Antonin Scalia: Well, but I mean, the argument made by... by your opponent is not an unreasonable one. It... it comes down to whether punitive damages is a term of art. And the... the later limit... the... the later specification of malice and reckless indifference is a limitation upon normal punitive damages. Punitive damages may be awarded. That is, damages for egregious conduct. But only if there is malice or... now, that's one way to read it. And the other way to read it is... is not as a term of art, and just to say, punitive damages... that is, damages that punish the defendant... may be awarded whenever there is malice or reckless indifference. It seems to me both readings are plausible ones.
Eric Schnapper: I certainly wouldn't want to disagree with you as to whether that's plausible. But... but I think, in all fairness, that Congress has specifically address the prerequisites in... in the statute. And it's spelled out, too--
Antonin Scalia: The question is whether they are limitations upon normal punitive damages or whether they are a re-description of what punitive damages consist of. And they could be either.
Eric Schnapper: --Either way, I don't think the Court is... is free to add to them, and I don't think egregious conduct is a possible interpretation of... of any provision in the statute.
Ruth Bader Ginsburg: Well, there was one brief, at least, that said, inherent in the very word "punitive damages" is this egregiousness notion. So, by using the word "punitive", Congress meant egregious.
Eric Schnapper: I... I think that that really is a stretch of the language. When Congress says "punitive dam"... if Congress had said you can award punitive damages, it might make sense to look to the common law for standards. But when Congress goes ahead and spells out the standards that it has in mind, I don't think it's appropriate to add to them.
John Paul Stevens: When the Court summarized its holding in Smith against Wade, did it use the word "egregious"?
Eric Schnapper: It did not.
Antonin Scalia: Suppose... suppose it said compensatory damages may be awarded if there is malice or... or reckless indifference. Now, in reading that, wouldn't you say that the damages that can be awarded can be no more than the loss which the plaintiff incurred? Because the Congress used the word "compensatory damages". Wouldn't you read it that way?
Eric Schnapper: I would agree, Your Honor.
Speaker: Okay.
William H. Rehnquist: Thank you, Mr. Schnapper. The case is submitted.