Supreme Court Review: Analysis: Questions Linger on Punitives and Evidence; TXO Won't End the Furor over Large Awards

Abstract

Commentary and analysis of three Supreme Court decisions in TXO Production Corp. v. Alliance Resources Corp., Daubert v. Merrell Dow Pharmaceuticals Inc., and Leatherman v. Tarrant County. In TXO, the Court approved a $10 million punitive damage award. The products liability bar followed with great trepidation this controversial appeal concerning the limits on punitive damages, and defense lawyers now know that apparently there aren't many limits. The justices pointed out several times in their multiple opinions that the punitive-damages award was 526 times the actual damages. This disparity was repeated in the mass media to support the thesis that Americans are overly litigious and that the judicial system has run amok. With the civil justice system under attack in recent years from politicians and lawyers alike, the call for legislative caps on punitive damages has been a centerpiece for various reform initiatives. The court's pronouncements in TXO are likely to increase the drive for such caps. As is often true in difficult cases, the justices failed to achieve consensus. Instead, the court issued a jigsaw puzzle of plurality, concurring and dissenting opinions. In the other major case closely watched by federal litigators and by the scientific community the Court unanimously upheld the standards in the Federal Rules of Evidence for admitting expert scientific testimony at trial and refused to apply the so-called Frye standard instead. Whatever vehement beliefs divided the justices in the TXO case, they agreed in Daubert v. Merrell Dow Pharmaceuticals Inc. to vindicate the liberal evidence regime embodied in the Federal Rules of Evidence. In a third procedural decision, which brought good news for plaintiffs and particularly for the public interest bar, the court unanimously agreed in Leatherman v. Tarrant County that it is impermissible for federal courts to impose a heightened pleading standard on actions brought under the federal civil rights statutes. In one of the shortest, most jargon-free opinions of the term, the justices forthrightly upheld the liberal pleading regime of the Federal Rules of Civil Procedure and rejected the notion that civil-rights claimants have to plead their cases with more particularity than anyone else. In so doing, the court resolved a long-standing, controversial split among the federal circuits concerning whether plaintiffs had to meet heightened pleading requirements. Thus, in reaffirming the liberal spirit of the rules in both Daubert and Leatherman, the court helped make it a good year for plaintiffs and for the federal rules.

Keywords: TXO Production Corp. v. Alliance Resoruces Corp., Daubert v. Merrill Dow Pharmaceutical Inc., Leatherman v. Tarrant County, punitive damages, excessive punitive damages, expert witness testimony, Daubert, Federal Rules of Evidence, heightened pleadings, civil rights litigation