Legal Document

532 U.S. 424121 S.Ct. 1678149 L.Ed.2d 674 NOTICE: This opinion is subject to formal revision before publication in the preliminary print of United States Reports. Readers are requested notify Reporter Decisions, Supreme Court States, Washington, D. C. 20543, any typographical or other errors, order that corrections may be made goes press.COOPER INDUSTRIES, INC., PETITIONERv.LEATHERMAN TOOL GROUP, INC. No. 99-2035. SUPREME COURT OF THE UNITED STATES Argued February 26, 2001 Decided May 14, Syllabus Respondent Leatherman Tool Group, Inc., manufactures a multifunction tool which improves on classic Swiss army knife. When petitioner Cooper Industries, used photographs modified version Leatherman's posters, packaging, and advertising materials introducing competing tool, filed this action asserting, inter alia, violations Trademark Act 1946 (Lanham Act). Ultimately, trial jury awarded $50,000 compensatory damages $4.5 million punitive damages. Rejecting Cooper's arguments were grossly excessive under BMW North America, Inc. v. Gore, 517 559, District entered judgment. As relevant here, Ninth Circuit affirmed award, concluding did not abuse its discretion declining reduce award. Held: Courts Appeals should apply de novo standard when reviewing district court determinations constitutionality awards. The erred applying less demanding abuse-of-discretion case. Pp. 6-18. (a) Compensatory redress concrete loss plaintiff has suffered by reason defendant's wrongful conduct, but private fines intended punish defendant deter future wrongdoing. A jury's assessment former essentially factual determination, imposition latter an expression moral condemnation. have broad imposing criminal penalties Thus, no constitutional issue raised, federal appellate reviews court's determination standard. Browning-Ferris Industries Vt., Kelco Disposal, 492 257, 279. However, Fourteenth Amendment's Due Process Clause imposes substantive limits States' discretion, making Eighth prohibition against cruel unusual punishments applicable Furman Georgia, 408 238, prohibiting from "grossly excessive" tortfeasors, e.g., U.S., at 562. cases such enforced involved predicated judicial disproportional gravity offense. E.g., Bajakajian, 524 321, 334. line inherently imprecise, id., 336, but, deciding whether been crossed, focused same three criteria: (1) degree reprehensibility culpability; (2) relationship between penalty harm victim caused actions; (3) sanctions imposed for comparable misconduct. See, 575-585; 337, 339, 340-343. Moreover, greatest relevance instant issue, each case engaged independent examination criteria. 337-344; 575-586. reasons supporting Court's holding Ornelas 690, judges' reasonable suspicion probable cause reviewed novo-that "reasonable suspicion" "probable cause" fluid concepts take their content particular contexts standards being expressed; that, because acquire only through case-by-case application, review necessary if courts maintain control of, clarify, legal principles; tends unify precedent stabilize law-are equally passing 6-12. (b) Because award finding "fact," consistent with due process does implicate Seventh Amendment concerns raised amici. 12-16. (c) It seems likely thorough, rejection objections might led reach different result. In fact, own consideration Gore factors reveals questionable conclusions survive illustrates why Circuit's answer question depend review. 16-18. 205 F.3d 1351, vacated remanded. ON WRIT CERTIORARI TO APPEALS FOR NINTH CIRCUIT Stevens, J., delivered Court, Rehnquist, O'Connor, Kennedy, Souter, Thomas, Breyer, JJ., joined. concurring opinion. Scalia, Ginsburg, dissenting Opinion Justice Stevens Court. 1 found guilty unfair competition respondent held violate Federal Constitution. concluded "the amount damages." App. Pet. Cert. 4a. applied wrong considering 2 * parties manufacturers. 1980's, (Leatherman respondent), introduced Pocket Survival (PST). described PST as "ingenious multi-function pocket 'Swiss knife' number respects. Not least improvements was inclusion pliers, which, unfolded, nearly equivalent regular full-sized pliers... . apparently created largely undisputedly now dominates market tools generally resemble PST." Group 199 1009, 1010 (CA9 1999). 3 1995, (Cooper petitioner), decided design tool. planned copy basic features PST, add few own, sell new name "ToolZall." hoped capture about 5% market. first ToolZall designed virtually identical PST,1 ultimately response litigation. controversy resolved involves improper original design. 4 August 1996 National Hardware Show Chicago. At show, it purported actually PST. those prepared, ToolZalls had yet manufactured. employee "mock-up" grinding trademark handles pliers substituting unique fastenings ToolZall. one retouched remove curved indentation where been. used, trade normally draws audience over 70,000 people, also marketing catalogs sales force throughout States. distributed touched-up drawing international representatives.2 5 Shortly after asserting claims trade-dress infringement, competition, false 43(a) Act), 60 Stat. 441, amended, 15 U.S.C. 1125(a) (1994 ed. Supp. V), common-law claim selling "imitation" December 1996, injunction using pictures advertising. withdrew developed model plastic coated differed November anticipatorily sent notice personnel ordering recall all promotional containing attempt retrieve customers until following April. result, offending continued appear advertisements well into 1997. 6 After conducted October 1997, returned verdict answered several special interrogatories. With respect Lanham infringement claims, rights overall appearance infringed damaged Leatherman. then infringe off, advertising, assessed aggregate claims. "Yes" interrogatory: "Has shown clear convincing evidence engaging acted malice, showed reckless outrageous indifference highly unreasonable risk conscious rights?" 18. affirmative, instructed determine "amount [that] Leatherman." Ibid. million. 7 verdict, considered, rejected, our decision 559 (1996). See 24a. judgment, provided 60% would paid Criminal Injuries Compensation Account State Oregon. judgment permanently enjoined 22 designated foreign countries. 8 On appeal, challenged both copying issued two opinions. published set aside injunction. supra. protected laws distinguishing features, combination functional. Accordingly, even though deliberately copied lawfully doing so.3 9 unpublished opinion, rejected argument Oregon Constitution, interpreted prohibit awards torts impose liability speech, precluded "was proportional fair, given nature intentional size create deterrence entity size" "that rights" 3a, judgt. reported 1351 noted "passing off" "very unusual" "even assuming superior product," perceivable photographs. 3a. "Any customer who bought based what received he she paid." use involve sort potential arise traditional off." Id., clear, however, condone off. "[A]t minimum," observed, "[the off] gave advantage" allowing work product "to obtain 'mock-up' more cheaply, easily, quickly" than waited ready. concluded, 10 petition writ certiorari asked us decide correct violated criteria we articulated Gore. We granted resolve confusion among question.4 531 923 (2000). conclude merits "abuse discretion" standard, remand second proper II 11 Although typically time decisionmaker, they serve distinct purposes. conduct. Restatement (Second) Torts 903, pp. 453-454 (1979); Pacific Mut. Life Ins. Co. Haslip, 499 1, 54 (1991) (O'Connor, dissenting). latter, "quasi-criminal," 19, operate "private fines" extent plaintiff's injury whereas Gertz Robert Welch, 418 323, 350 (1974) ("[Punitive damages] compensation injury. Instead, levied civil juries reprehensible conduct occurrence"); dissenting) ("[P]unitive specifically exact punishment excess actual make misconduct especially reprehensible").5 12 Legislatures extremely defining offenses, Schall Martin, 467 253, 268-269, n. 18 (1984), setting range permissible offense, ibid.; Solem Helm, 463 277, 290 (1983). Judicial decisions within these legislatively-enacted guidelines discretion. Koon 518 81, 96, 99-100 (1996); cf. Apprendi New Jersey, 530 466, 481 (2000) (it "for judges exercise ... prescribed statute"). 13 sentencing context, legislatures enjoy authorizing limiting Cf. 568 ("States necessarily considerable flexibility determining level will allow classes case"). good many enacted statutes place awards.6 limits, role judge confines state law, determine, reference Rule 59, remittitur ordered." 279 (1989). If court, system, merely "determination standard." Ibid.7 14 Despite possess damages, Constitution That makes 238 (1972) (per curiam). prohibits 562; TXO Production Corp. Alliance Resources Corp., 509 443, 453-455 (1993) (plurality opinion). involving deprivations life, Enmund Florida, 458 782, 787, 801 (1982) (death "a valid Amendments neither took attempted nor life"); Coker 433 584, 592 (1977) (opinion White, J.) (sentence death disproportionate" crime rape);8 liberty, 279, 303 (life imprisonment without possibility parole nonviolent felonies "significantly disproportionate"); property, 324 (1998) (punitive forfeiture $357,144 violating reporting requirement disporportional" offense); 585-586 ($2 fail- ing advise minor predelivery repairs automobiles therefore unconstitutional). 16 cases, defendant[s'] offense[s]." 334; see 585-586; Solem, 303; Coker, J.). recognized "inherently imprecise," rather "marked simple mathematical formula," 582. But general culpability, see, 337; 575-580; 290-291; Enmund, 798; 598 J.); actions, 339; 580-583; 293; misconduct, 340-343; 583-585; 291; 789-796; 593-597 address today, 575-586; 295-300; 788-801; 592-600 17 expressly appeals must proportionality "de novo" suggestion respondent, prevailed judge's excessiveness "The findings conducting inquiry, course, accepted unless clearly erroneous... fine constitutionally calls application facts case, context appropriate." 336-337, (citing 697 (1996)). Likewise, Ornelas, appeal. support First, observed precise meaning like cannot precision; "fluid assessed." 696. is, characteristic concept "gross excessiveness." Second, rules application. Independent principles." 697. Again, true forth Gore; meaningful level. "Finally, precedent" " 'stabilize law.' 697-698. Breyer similar point his Gore: 19 "Requiring decisionmaker's caprice, simply provide citizens actions them punishment; helps assure uniform treatment similarly situated persons essence law itself." 587. Our analogous together reasoning produced decisions, thus convince courts' awards.9 III 20 "Unlike measure suffered, presents historical predictive [St. Louis, I. M. & S. R. Craft, 237 648 (1915)], really 'fact' 'tried' jury." Gasperini Center Humanities, 415, 459 (1996) (Scalia, constitute amicus.10 Brief 18-24; Association Trial Lawyers America Amicus Curiae 17-20. Hetzel Prince William County, 523 208 curiam), concerned contrary.11 21 argued deterrent function suggests indeed "fact" implicated Some scholars, example, assert compensate underdeterrence unlawful behavior result evasion liability. Polinsky Shavell, Punitive Damages: An Economic Analysis, 111 Harv. L. Rev. 869, 890-891 (in optimal deterrence, "punitive equal multiplied ratio injurer's chance escaping liable"); Ciraolo York, 216 236, 244-245 (CA2 2000) (Calabresi, concurring). efficient theory regards augmentation achieve economic efficiency." Galanter Luban, Poetic Justice: Damages Legal Pluralism, 42 Am. U. 1393, 1449 (1993). However attractive approach abstract policy matter, do engage finely tuned calibration awarding Sunstein, Schkade, Kahneman, Do People Want Optimal Deterrence?, 29 J. Studies 237, 240 all, purpose served supra, 6-7. And there dispute four consider damages.12 obvious can economically "optimal deterrence." "[C]itizens legislators rightly insist willing tolerate some efficiency morally offensive albeit cost-beneficial conduct; just many." Rev., 1450.13 Differences institutional competence conclusion. evaluating award's consistency disparity (or harm) difference authorized cases. 574-575. Only inquiry somewhat vantage appeals, advantage exists primarily issues turning witness credibility demeanor.14 seem capable analyzing factor. third criterion, comparison, suited expertise courts. Considerations fail tip balance favor deferential IV 23 possible affect analysis relatively small 46-48; American Railroads 18; Gasperini, 448 (Stevens, Nonetheless, petitioner's Indeed, series 24 guided instructions characterized deliberate wrongful. selection may, therefore, influenced intent future. Similarly, belief unlawfully 23a. But, correctly held, functional unpatented lawful. TrafFix Devices, Marketing Displays, ___ (2001). attorney's fees could supported premise unlawful, predicate undermined basis large 25 factor, tortious respondent's submission injury-which $50,000-that relevant, succeeded conduct." 7, Record Doc. p. 23. calculated "potential harm" referring fact anticipated profits approximately $3 during five years sales." 7; Even estimate correct, unrealistic assume attributable photograph initial materials. pointed out, picture misrepresent deceived significant way. Its enabled expedite promotion wrongdoing surely treated principal entire volume 5-year period. 26 argues sanction Oregon's Unlawful Trade Practices Act. 49. suit brought Act, up $25,000 per violation assessed. Ore. 646.642(3) (1997). view, thousands pieces material warranted maximum fine. Petitioner, hand, preparation single distribution viewed statute. Reply Petitioner 2-3. expressed dispute. did, observe unfairness nothing misleading related inability quickly cheaply. observation single-violation notion statutory sanctioned multimillion dollar 27 comments prejudge question, illustrate persuaded Appeals' upon govern decision. vacate further proceedings 28 so ordered. concurring. 30 31 dissenting. Notes marked fasteners, and, words Appeals, "included serrated blade certain particularly visible differences." To "create" drawing, manager photocopied line-art "whited out" trademark. 43-47. removed 2, directed remand, standing alone, sufficient warrant fee form distinguish off matter law. 35(a) statute violated, believe amicus times conflate conformity instance. Arthur F. McEvoy ("[O]n appeal litigant's objection substance holding-whether damages-should evaluated 'rational factfinder' ..."); 13. agreed already 599 443 (1993), "heightened scrutiny" awards, 456, wholly irrelevant resolution presented. Assessing (With Cognition Valuation Law), 107 Yale 2071, 2074 retributive expressive function, embody social outrage serious wrongdoers"). 614-619 (Ginsburg, Since additional added caps: Alabama, Alaska, Carolina, Ohio. Ala. Code 6-11-21 (Supp. 2000); Alaska Ann. 09.17.020 (2000); N. Gen. 1D-25 (1999); Ohio 2315.21 2000). Browning-Ferris, argue Excessive Fines Amendment, inapplicable reliance unavailing petition. 276-277. disagreeing specific Chief Burger then-Justice Rehnquist proposition "concept disproportionality bars crimes." 604 (Burger, Contrary assertion, 12-13, today 20-21 (1991). emphasized importance ensuring comports process. ("[A]ppellate rational light occurred repetition"). Honda Motor Oberg, 512 415 (1994), rests assumption fact. reexamination "fact tried jury," Const., Art. VII, 3, considered provision cover implicitly 27-28. interpretation provision, compelled covered. 427; Van Lom Schneiderman, 187 89, 93, 210 P.2d 461, 462 (1949) (construing Constitution). Nor relies extensively, 19-24, conflict require Most sources cites stand perhaps fact-sensitive undertaking, left jury. Barry Edmunds, 116 550, 565 (1886) ("[I]t peculiar jury" damages); Day Woodworth, How. 363, 371 (1852) "left jury"). They not, indicate itself Reexamination Clause. 432 (distinguishing "Trial Jury" Clause, "bears allocation functions "Reexamination" "controls authority verdicts"); 447-448 (same). event, evolved since sources. Until 19th century, frequently operated intangible injuries, otherwise available narrow conception prevalent time. 61 dissenting); Note, Exemplary Law Torts, 70 517, 520 (1957) (observing "vacillation" 19th-century "compensatory" "punitive" theories "exemplary damages"). types plaintiffs broadened, Nates, Kimball, Axelrod, Goldstein, Tort Actions 3.01[3][a] (pain suffering species damages), behind shifted towards purely (and factual) understanding. (noting shift away compensatory-and punitive-conception damages). factors: character claims"; motive"; sum money required discourage others future"; (4) income assets." 14. depended permit disregard findings. 579-580. express govern-and inappropriate-if adopt scheme tied tightly State's constrained determined defined multiple (e.g., treble While test novo, course remains defer erroneous. (1998). 32 I continue constrain joined For reason, opportunity, vote overrule BMW. present opportunity. ruling challenge. agree join 33 remain) view Clause; otherwise. (rather novo) fact-bound resistance generalization, damages-namely, stop search; 690 700 Finally, dissent unnecessary me categorically stated review." (1998); 344 (Kennedy, O'Connor Given precedents, best accords jurisprudence. concur 34 (1996), refusal reconcilable "appellate [is] limited 'abuse discretion.' 419. diversity York applies challenging hold, oversight review, concludes, 35 "An essential [the court] system manner distributes influence-if command-of assigns disputed questions Byrd Blue Ridge Rural Elec. Cooperative, 356 525, 537 (1958)). provides: "In Suits common right shall preserved, jury, re-examined according law." although traditionally verdicts grant trials, 432-433, denial motion late, secure, development," 434. preclude 436, explained "[w]ithin practical combine constraints lodge primary responsibility [an standard]," 438. opportunity living courtroom context," said, "while cold paper record." (citations internal quotation marks omitted). "If [courts appeals] reverse, discretion... very problem counsels restraint... [Appellate courts] give benefit every doubt judge." 438-439 (internal omitted) Dagnello Long Island Co., 289 F.2d 797, 806 1961)). 36 logic abandoned alleged excessive. longstanding reiterate, task "has [always been] (1852); ("[N]othing better settled [of verdict."). commitment explained, reflects understanding inflicted circumstances case." Day, How., 371. include motives defendant" whether, "in committing complained recklessly, wilfully maliciously, oppress injure plaintiff." Sutherland, 720 (1882). Such acknowledges, "is undertaking." Ante, 13, 11. 37 nevertheless asserts "jury's Amendment. 12. ultimate true, matters ibid. dissenting)). fundamentally dependent characterize factfindings-e.g., faith, individual instance part broader pattern, behaved negligently, maliciously. "[u]nlike suffered," ante, (citation omitted), intangible, noneconomic One dollars' worth pain exist world outrage. Both derive underlying quantification properly regarded factfinding, St. 648, 661 (1915) (compensation "involves fact"), well. 38 257 (1989), approved reserved run afoul (i.e., pre-Gasperini), "ha[d] never allows excessive." 25. survived lower intact. 25, 280. short, signaled recognition most "[P]articularly strictures Amendment," "reluctant stray too far standards, steps interfere 280, 26. 39 finds incompatibility observing presented challenge resting solely 8, 7. unclear distinction difference. Of guideposts established assessing excessiveness, derived inform 575, ("The principle fit deeply rooted repeated jurisprudence." omitted)); 580 exemplary bear 'reasonable relationship' long pedigree."). guidepost-comparability misconduct-is factbound. states, criterion comparison." 16. "legal" character, little familiar maxim deems error discretion.").1 40 Apart "Seventh constraints," sense "practical reasons." conduct), undeniably appeals. earlier noted, "cold record," assess seats vital credibility. "it [a] erroneous." 15, 14.2 41 recognizes edge say "[t]rial [Gore] factor" inflicted), [i.e., intrajurisdictional interjurisdictional comparisons] courts." factor requires plaintiff," 580, positioned demur relative strengths, accepting assessment, disagree conclusion "[c]onsiderations review," assigned characterizing "degree reprehensibility" "[p]erhaps important indicium reasonableness award." 575. courts, 5, fact-intensive inquiry. Therefore, typical envisioned reprehensibility, infrequent occasion reverse. 43 observation, readily acknowledge, my large. it, hews closely complex. ordinary separate out factfindings qualify "clearly erroneous" (suggesting "if administer. Complex suspect mine yield outcomes 44 Circuit, conclude, identified appropriate stated, affirm Appeals. Notes: Appellate instruction, suspicion, cause, fines. 10-11 (1998), 696-698 involvement, 325-326; 694, Bajakajian said [criminal] 10, disturb "Excessive [civil] parties," 260. accord deference absent employment either accompanied written Fed. Civ. Proc.

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