CURTIS v. LOETHER

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Argument of Robert Scott

Chief Justice Warren E. Burger: We'll resume arguments in Rogers against Loether.

Mr. Scott, you have 21 minutes left.

Mr. Robert Scott: Mr. Chief Justice and may it please the Court.

Yesterday afternoon in the course of his discussion of this case, my distinguished opposing counsel, in response to a question by the Chief Justice conceited that if this case is in fact in a nature of a common law action then it cannot escape the reach of the preservative power of the Seventh Amendment.

When court adjourned yesterday afternoon, in response to another question by the Chief Justice, I was responding to how the Seventh Amendment test may be applied to the particular circumstances of this case and I would like to pursue that further this morning.

When we adjourned yesterday, I had concluded my discussion with regard to the first test announced by this court in Ross versus Bernhard, namely, how the circumstances of this case compared -- contrast with the premerger custom of the Federal Courts with respect to like issues.

And, I suggested to the court the test proposed by Justice Story in Parsons versus Bedford to the effect that the Seventh Amendment reaches all cases which are not of equity or admiralty jurisdiction and I also suggested that the literal approach be rejected.

And I would pass on now to the other two tests which were announced in Ross versus Bernhard, namely, what type of relief is requested and, thirdly, third test being the practical abilities and limitations of juries.

The second test, I think, is particularly applicable to this case and this goes back to a question that Justice Brennan asked me yesterday afternoon with respect to what type of relief was asked for.

I recall the Justice asking whether or not actual damages had been asked for in the complaint and the record shows, I believe, that they were not.

However, they did enter the case by way of a pretrial order after the first pretrial conference and, in all subsequent pretrial orders issued by the District Court, this case was announced to be one on damages.

And when it came time for this case to be decided after the trial had been concluded, and I am referring specifically to page 51 (a) of the Appendix, at the top of that page, the District Court said, "Now, we come to the question, the questions of damages."

Further down in that page the District Court said, "I do not believe there had been any compensatory damages proven in this case or out of pocket expenses of that nature."

And so he rejected the claim for compensatory damages.

There had been a trial on compensatory damages.

All the evidence elicited by the plaintiff on direct testimony had related to actual damages.

The plaintiff offered no testimony with respect to the other issue that was being tried, namely the issue of discrimination, because the court had incorporated the testimony that had been elicited at the time of the preliminary injunction on that issue.

Practically, the entire testimony in that two days of trial related to the question of the extent to which if at all, the plaintiff had sustained any actual damages.

And in the final analysis, very specifically, the trial court rejected that claim and went on to award punitive damages in the amount of $250.

And this was a -- this topic was a source of some discussion when this case was argued before the Seventh Circuit and at that time, opposing counsel for the plaintiff conceited to the Seventh Circuit that actual damages were in the case.

Now, why is this important with respect to the second issue in Ross versus Bernhard?

You look to see what type of relief is requested, particularly at the time when the availability of a jury becomes important to determine the reach of the Seventh Amendment at least in part.

And there are two reasons at least why the type of relief requested is important to the jury issue cause it goes to the abilities of juries.

And I'd point this out that we had two claims for money damages; actual damages, punitive damages.

Both of those are issues that juries are particularly responsive to particularly in determining the extent of damages.

This is one area where Appellate Courts, I find are laws overturn, the finding of juries because that is one of their particular strengths and I think there is probably no damage issue at law that calls upon the common sense judgment of jurors more than the question of whether, and to what extent, punitive damages should be awarded.

Both of these damage issues were before us at the time the jury trial issue became critical.

Chief Justice Warren E. Burger: Would you say that, in this respect, there are some analogies between this kind of an action and a libel or slander suit?

Mr. Robert Scott: Exactly.

And Mr. Chief Justice, I referred specifically to those types of action in my brief and to the fact that previously this court has held, and I think, specifically in Ross versus Bernhard, those types of issues were mentioned as ones to which the Seventh Amendment reaches, in which the jury right is preserved.

We pass on, if I may, to the third test in Ross versus Bernhard.

This is the test which was described as being the practical abilities and limitations of juries.

I feel, in some regard, this is the real battleground to this case.

That test is -- as I read Ross, was not applied in Ross.

In my brief, I suggested that the test includes at least two considerations.

One is the consideration of whether or not juries, given the particular issues that are going to be tried, can deal competently and justly with those particular issues.

Brings in the question of whether or not the issues are very complicated or, for other policy reasons, might best be withdrawn from juries.

And I would suggest there is another consideration included in that third criteria set down in Ross, namely, whether or not this particular cause of action with a jury trial right attached to it will frustrate any particular statutory purpose or frustrate any particular statutory scheme.

And I am thinking particularly in this regard of Katchen, and I will get to that point after discussing the first consideration, if I may, because I want to suggest that in terms of the competence of juries this case is an excellent example of just the type of issue that should go to jury consideration because what's going to be tried here are questions of credibility and motivation.

This trial, on the discrimination issue particularly, involved whether or not at the time Leroy Loether determined not to rent one of the two flats in the two-flat home that he happened to own to the plaintiff, whether or not at that time his motivation was based on race or based solely on other considerations.

Leroy Loether testified at this trial.

His wife testified.

To the -- two of them owned the house together.

And what was called upon for a determination of the discrimination issue was a testing of their credibility, and this is an area where there is particular strength of jurors.

The question was whether or not he had a racial motivation.

He said he didn't.

He said it was because of something else.

He said if the same circumstances had been presented and District Judge Reynolds had been the applicant for the apartment, he would have refused him in those circumstances.

This was his testimony on cross-examination at the time of trial.

Justice William H. Rehnquist: Mr. Scott, on the issue of discrimination of course, if the plaintiffs had sought only an injunction, that same issue would've been tried and if you concede then it would've been tried to the court, don't you?

Mr. Robert Scott: Right.

That's right, Mr. Justice Rehnquist.

In further response to that, I believe we've made that concession down the line in the previous hearings on this issue.

Injunctive relief was asked for at the outset and just -- to put this a little bit in perspective, a temporary restraining order was asked for.

It was granted before the first hearing.

A preliminary injunction was requested to follow up the TRO.

We had a hearing on the preliminary injunction and that injunction was granted by order of the District Court on December 19, 1969 very briefly after the action had been started in November.

The following month, in January of 1970, we were advised in a pretrial conference that the plaintiff no longer wish to occupy the apartment and at that time, a proposal was made with the court's concurrence that the matter be resolved by renting to any black family or any black individual.

And, at the time we returned to argue the jury trial issue to the District Court in April 1970, the plaintiff's counsel reported back that that particular offer had been rejected by the plaintiff and at that time, the injunctive relief was abandoned.

And so when this case went to trial, there was nothing in the way of injunctive relief that was requested.

All that was asked for by way of relief was in terms of money damages, both punitive and compensatory.

Justice Thurgood Marshall: What happened to the preliminary injunction?

Mr. Robert Scott: Preliminary injunction was dissolved with the consent of the plaintiff, Your Honor.

It was dissolved in April of 1970 after the plaintiff rejected our proposal for resolving the case.

Justice Thurgood Marshall: Is that in the record?

I missed it.

Mr. Robert Scott: Excuse me?

Justice Thurgood Marshall: Is that in the record?

I missed it.

Is that in the appendix?

Well, but say I can find it but I just -- I guess I missed it.

Mr. Robert Scott: I'm fairly sure it is in the appendix.

I know --

Justice Thurgood Marshall: Okay.

Mr. Robert Scott: That it's in the record because I argued the matter on the jury trial issue to the District Court on that April day in 1970 when it was decided, and I believe I have a record cite or appendix cite in my brief.

Justice Thurgood Marshall: If it is in the record, I can find it.

Mr. Robert Scott: All right.

I don't want to go beyond the record, Your Honor.

Justice Thurgood Marshall: Okay.

Chief Justice Warren E. Burger: Mr. Scott, you a -- you've emphasized the credibility issues one in a particular way for 12 jurors rather than a single judge but all those credibility issues were presented in connection with the equitable relief or an injunction, were they not?

And the judge tried those issues.

Mr. Robert Scott: We had a fairly elaborate hearing on that, Your Honor, and certainly, the Court was called upon to make a determination but it was not a binding determination on the merits.

And, this is why I would argue that the availability of a jury in this case does not frustrate the need for speed of relief.

Chief Justice Warren E. Burger: But if -- when a permanent injunction is entered that's done by a judge acting alone, is it not?

Mr. Robert Scott: That's correct.

Justice Thurgood Marshall: Well, if a permanent injunction had been issued in this case, would you still take the same position on the damage point?

Mr. Robert Scott: Yes, Your Honor.

If a permanent injunction had been requested in this case together with the other elements of relief, then I would be still before you this morning arguing that the Seventh Amendment reaches that.

Justice Thurgood Marshall: So you'd have to have two full trials?

Mr. Robert Scott: No, you wouldn't have to have two full trials.

You'd have to have a trial on the issue of discrimination, on the issue of damages and the issues of fact would be directed to the jury.

Justice Thurgood Marshall: And they'd be different?

Mr. Robert Scott: They'd be different in what regard?

The issues of fact would be the same.

Justice Thurgood Marshall: I'm asking would they be different?

Mr. Robert Scott: Would what be different?

I'm afraid I do not follow you.

Justice Thurgood Marshall: Would the evidence, the testimony, the record be different in the injunction case where permanent injunction was issued and the trial on the damage point?

Mr. Robert Scott: No.

Justice Thurgood Marshall: Would the issue not be exactly the same?

Mr. Robert Scott: It's exactly the same.

Justice Thurgood Marshall: Well, why have two trials?

Mr. Robert Scott: We're not proposing two trials.

Well, I thought you said if he got a permanent injunction he still would have to have a trial on damages.

Mr. Robert Scott: We had a request for permanent injunction, all factual issues.

I believe this is the teaching of the case, it's under the Seventh Amendment.

All factual issues would be addressed to the jury.

They would have to determine in the first instance, Your Honor, whether or not there is any discrimination.

Justice Thurgood Marshall: Oh! Wait a minute now.

You asked for an injunction, a permanent injunction and 1,000 punitive damages and actual damages.

There is a full trial, a full hearing before the judge sitting as a chancellor, and he grants a permanent injunction.

Is it your position that after that he holds a new trial with the jury to determine the damages?

Mr. Robert Scott: No, it is not.

But it is --

Unknown Speaker: It's your position that under cases like Beacon Theatres and Dairy Queen, what my Brother Marshall has postulated, could not be -- properly occured that the -- that since he has joined a legal and equitable action there has to be a jury trial of the factual issues --

Mr. Robert Scott: That are common.

Unknown Speaker: Yes, that are common to the two.

Correct?

Mr. Robert Scott: That's my position.

Unknown Speaker: That's what Dairy Queen and Beacon Theatres certainly seem to say, isn't it?

I dissented in both of those cases so I'm very aware of what they said.

Mr. Robert Scott: I'm aware of your dissent in the laws.

Justice Thurgood Marshall: But Section 812 then -- you say Section 812 says that?

Mr. Robert Scott: No, I say that this court has said it and has said it repeatedly.

Justice Thurgood Marshall: Well, then Section 812 is unconstitutional?

Mr. Robert Scott: No, I don't believe Section 812 is unconstitutional.

In the Seventh Amendment -- the Seventh Circuit --

Justice Thurgood Marshall: Well, it says there that the court may award the plaintiff the actual damages in addition to the temporary injunction.

Mr. Robert Scott: And I would argue that that use of the term "the court" is an institutional reference and I would --

Justice Thurgood Marshall: (Inaudible) in order to -- for it to be constitutional it would have to include the jury.

If it didn't include the jury, it'd be unconstitutional.

Isn't that not your position?

Mr. Robert Scott: If 812 can be properly read to exclude the right to a jury on the factual issues pertaining to a case that involves common law issues, then 812 is unconstitutional.

That issue was avoided by the Seventh Circuit, by another reading of that section.

And to a certain extent, their position was supported by the only legislative history that has been brought into this record and that is the testimony of the Attorney General Katzenbach at the time this case or this issue -- that the statute was an issue before the Congress.

And, I refer specifically to the petitioner's brief at page 15 and 16 where Senator Irvin asked whether or not there would be any objection to having the statute amended to spell out that a man has a right to have the issues of fact tried to a jury when there's a damage issue.

And, the Attorney General said, "No."

On the damage suit, I have no objection to that.

That's the only legislative history we've got in the record on this case and I think it supports an appropriate reading of 812 and that is that it's silent on the jury trial issue and you can avoid ruling that that statute is unconstitutional.

As I've said, I believe that this case is particularly appropriate for jury determination because of the issues of credibility.

I had also urged that this statute with the jury trial right attached to it under the Seventh Amendment does not frustrate any statutory scheme in any of the regard suggested in the cases of Katchen versus Landy or Jones & Laughlin versus NLRB or NLRB versus Jones & Laughlin.

And I distinguish in my brief the Katchen case on the basis of the facts in that case, namely, what the court was dealing with, there was a very specific summary type of proceeding. .

And, in Katchen, Justice White distinguished between the summary proceeding of bankruptcy and the plenary proceeding.

Unknown Speaker: That's what the court wrote?

Mr. Robert Scott: That's correct, Your Honor.

The distinction was made in that case by the court.

And I believe the distinction is important to our case because what we have here is a civil action established by Congress as such with all of the (Inaudible), an ordinary lawsuit accompanying it at the time of trial, pretrial conferences, pretrial orders, or regular trial, not a summary proceeding, an informal proceeding such as that provided for in the bankruptcy statute for summary proceeding.

The petitioner in this case has said that Katchen was dispositive of our case.

As a matter of fact, Katchen and NLRB versus Jones & Laughlin are quite distinguishable.

They involve what was referred to in NLRB versus Jones & Laughlin as a statutory proceeding.

We have a civil action very much like an ordinary lawsuit.

It's interesting to note that the statute that we're talking about here provides for an alternate proceeding that is really quite a bit more like the summary proceeding than our civil action we have here.

And that's the proceeding by which an aggrieved party can apply to the Secretary of Housing and Urban Development for conciliation and it provides the Secretary with a vast panoply of discovery procedures, subpoena, power to get at the heart of whatever the dispute is.

That path was not chosen in this case.

Instead, the petitioner started a civil action.

For that reason, upon their choice of trying their case in District Court as a civil action with questions of damages attached, we would strongly urge this court to affirm the unanimous opinion below and to return this case for a trial by jury in accordance to the decision below.

If there are no further questions --

Chief Justice Warren E. Burger: (Inaudible).

Mr. Greenberg, you have about 10 minutes left.

Argument of Jack Greenberg

Mr. Jack Greenberg: May it please the court.

We submit that in Title 8 Congress has created a single integrated equitable remedy, out of which a court might fashion relief appropriate to particular cases.

That remedy consists of various parts.

Statute says the court may issue temporary restraining orders, preliminary injunctions, may appoint counsel, may foster conciliation, may award compensatory damages, may award punitive damages, may award costs, and may award counsel fees or all or none of them.

Now, the fact that money damages is part of it, the entire remedy does not necessarily make it legal as Jones & Laughlin demonstrates.

A judge is suppose to pick and choose among these various aspects of the remedy and harmonize them in a manner appropriate to the case.

And it's instructive to look at just what the judge did in this particular case.

He granted a temporary restraining order.

He granted a preliminary injunction.

He urged settlement discussions which went on for many months.

So long, in fact, that Mrs. Rogers had to take a new apartment.

He denied compensatory damages.

He granted punitive damages and in doing that, he took into account the fact that the respondent had been denied rent for the apartment for a period of 6 months.

He denied attorney fees and he denied costs.

He engaged in the typical kind of balancing that a chancellor engages in and, indeed, he referred to the fact that he had had a very difficult case before him and it would take as -- he said, the wisdom of a Solomon to decide it.

And indeed, in the second hearing that he had, he incorporated all the evidence that was taken at the first hearing on temporary restraining order rather on preliminary injunction.

And that is something that could not have been done with a jury and, if one imagines, interposing a jury into this complicated delicate process which has been confided to the judge and which he actually exercised.

It -- the -- it's easy to imagine just how terribly confused the whole thing could be.

Chief Justice Warren E. Burger: Would you say it is more a delicate, more complicated than the function the jury undertakes in a libel or slander case where it must evaluate malice or recklessness or motives and all that sort of thing?

Mr. Jack Greenberg: Well, it involves conciliation and to some extent, presiding over the conciliation.

It involves --

Chief Justice Warren E. Burger: That's a separate route, isn't it?

Mr. Jack Greenberg: Well, it -- the judge did this.

If that is a separate route.

It also may occur during the course of action, and it did.

The judge said, "Can't you two not get together?" and he --

Chief Justice Warren E. Burger: That's much like a pretrial settlement conference, is it not?

Mr. Jack Greenberg: Well, but this was pretrial and post trial and he urged them to try to settle it for long.

I'm not trying to evaluate orders of difficulty, but I'm trying to describe the quality of what goes on here and how it's peculiarly appropriate to a judge.

For example, in attorney's fees and costs and various other things are involved with, an appointment of counsel that -- just entirely inappropriate for juries.

And, he balanced all these things.

Chief Justice Warren E. Burger: Oh! We have appointment of counsel in our criminal case where there is a jury.

That doesn't give any difficulty.

Mr. Jack Greenberg: No.

That that --

Chief Justice Warren E. Burger: There are some things the judge does alone.

Mr. Jack Greenberg: Some things he does alone, that's true.

But Congress here fashioned what I would term "a single integrated equitable remedy" that had all these various components to it.

Justice William J. Brennan: Mr. Greenberg, are there any counterparts for a single integrated equitable remedy, as you style it, that includes authorization to the chancellor to award actual damages and punitive damages?

Is there any other statute like this?

Mr. Jack Greenberg: I am not-- in Title VII, Fair Employment cases, there is no explicit mention of punitive damages in the statute, I believe, but at least one court has awarded them out of general --

Justice William J. Brennan: Oh! Ordinarily, do -- in -- does the chancellor award punitive damages?

And when dealing with equitable actions where there --

Mr. Jack Greenberg: We have a considerable discussion of the punitive damage forum -- aspect in our brief and it is quite unclear with the origin of --

Justice William J. Brennan: No, my question is,are you familiar with any other equitable action, which is what you stylist (Voice Overlap).

Mr. Jack Greenberg: In which punitive damage is--?

Justice William J. Brennan: Yes.

Mr. Jack Greenberg: Well, certainly in contempt matters which is always before a chancellor, punitive damages may be imposed both in civil and criminal contempt by a chancellor.

Justice William J. Brennan: Are they labeled punitive damages?

Mr. Jack Greenberg: I'm not certain.

Justice William J. Brennan: They're more nearly a fine, aren't they?

Mr. Jack Greenberg: What label is put upon them, it amounts to the same thing.

What the judge did in this case and what the statute says is of the essence, we submit, of how equity acts.

Congress could have decided these cases should be treated in equity because of the need for speed and expedition because of the possibility of jury bias.

It could've done it because this particular cause of action was unknown to the common law in what was done involving the conveyance of real property or the signing of a lease, resembled equity more than it resembled law and did bear some sort of analogy to equitable servitudes on real property.

Congress could have seen that the equitable and legal aspects were so inextricably entangled that it had to be one or another and therefore, exercised the choice to deem it equitable, not legal.

And against all of these considerations, the Seventh Amendment, we submit, can be applied only by saying this is a cause of action at common law.

And that can't be said except by some sort of an analogy and we submit that this analogy should not be indulged in view of the congressional determination under the Thirteenth and Fourteenth Amendments and the policies of those amendments which Title VIII seeks to advance.

Chief Justice Warren E. Burger: Mr. Greenberg, when the State Courts have -- has a good many of them have done, stricken down sovereign immunity and allowed civil action for damages against a municipal corporation or a state, would you say that that was a common law action that was then arising?

Mr. Jack Greenberg: Well, I'm not certain, Mr. Chief Justice, but I do know that in actions against the United the States under the Tucker Act are not heard by a jury simply because --

Chief Justice Warren E. Burger: Those are created by --

By statute.

Chief Justice Warren E. Burger: That -- they're comparable to the Federal Tort Claims Act, I suppose.

Mr. Jack Greenberg: Yes.

Chief Justice Warren E. Burger: But when the states have set aside sovereign immunity --

Mr. Jack Greenberg: I am not aware of how those State Court --

Chief Justice Warren E. Burger: Common law actions arose, did they not?

Mr. Jack Greenberg: I am not aware of that.

Chief Justice Warren E. Burger: What about the Bivens case?

There was some reference to that yesterday and I didn't get a chance to take a fresh look at it this morning.

In the Bivens case when the court in exercise of the common law function created a new cause of action is there -- that -- that's a case tried by a jury, is it not?

Mr. Jack Greenberg: Well, there was -- Well it may be, but there was no Congressional deter -- if Congress had passed a statute which said that this -- that the -- cause of action of this sort shall be tried in a certain way and it had equitable components and bore no relationship to what existed at the common law, I would say we have something closer to this case.

Chief Justice Warren E. Burger: Well, I'm just -- I'm addressing myself only to the constitutional aspect now, not the construction of the statute, that's a separate question.

But I think it is probably quite clear that the Bivens case, in creating that new cause of action, and must have created an action which is triable to a jury.

Although, I think the opinion was solid on the subject.

Mr. Jack Greenberg: Well, I'd -- I really do not know whether it's quite clear and we certainly don't have the component here of a quite complicated multifaceted congressional remedy, large parts of which are unquestionably equitable in a congressional determination that the entire thing should be treated in equity for the reasons that I stated because it's largely equitable or resembles equity, it's not common law, but if it could de deemed such only by analogy.

Chief Justice Warren E. Burger: Thank you, Mr. Greenberg.

Thank you, Mr. Scott.

The case is submitted.