CGB Occupational Therapy, Inc. v. RHA Health Services, Inc.

ROTH, Circuit Judge,

dissenting:

‘It seems a shame, ’ the Walrus said,

‘To play them such a trick,

After we’ve brought them out so far,

And made them trot so quick!’

Lewis Carroll, Through the Looking-Glass

This case was botched on remand. A litigant appealed to our Court and won a partial reversal, and yet the judicial system left that litigant worse off on remand than it had been before it appealed. The proceedings before the District Court simply did not comport with the mandate we had issued. For that reason alone, the judgment of the District Court should be vacated, and this case should be remanded for proceedings consistent with our original mandate. We need not, and therefore should not, reach the constitutional question of whether the remitted punitive award was so excessive as to violate the Due Process Clause of the Fourteenth Amendment. I therefore do not join my colleagues in answering a question that should not be before us, and so I respectfully dissent.

I.

The first jury found in favor of CGB Occupational Therapy, Inc., having determined that the defendants, Sunrise Assisted Living Management, Inc. and Sunrise Assisted Living, Inc. (collectively, Sunrise), tortiously interfered with CGB’s contracts with two nursing home facilities and its own therapists. The jury awarded CGB $576,000 in compensatory damages for Sunrise’s interference with the nursing home contracts, $109,000 in compensatory damages for Sunrise’s interference with CGB’s therapist contracts, and $1.3 million in punitive damages. It was not clear how the jury allocated the punitive damages award between the two acts of interference, because the verdict form did not specify. See CGB Occupational Therapy, Inc. v. RHA Health Serv., Inc., 357 F.3d 375, 382 (3d Cir.2004).

A panel of our Court considered this case and concluded that, as a matter of law, Sunrise was entitled to judgment in its favor on the claim of tortious interference with the nursing home contracts. Id. at 385-88. We allowed the judgment to stand on the other claim of tortious interference, regarding the therapist contracts. Id. at 389-90. The effect of our holding on compensatory damages was simple: CGB retained the $109,000 award on the affirmed claim, but lost the $576,000 award on the reversed claim. The award of punitive damages posed a thornier question because we had no way to know what part, if any, of the $1.3 million punitive award was intended by the jury to punish Sunrise for action underlying the claim we had reversed. In recognizance of this difficulty, we wrote:

[I]t is impossible to determine how punitive damages should be allocated in light of our determination that Sunrise could not have interfered with the contract between CGB and RHA/Pennsylvania. Consequently, we must reverse the punitive damage determination and remand to the District Court for a redetermination of punitive damages in accordance with this opinion.

Id. at 390. On remand, the sole task for the District Court was to be a redetermi-nation of punitive damages. Had we been able to apportion the punitive award then, we would not be here today.

The District Court found our mandate for the remand to be unclear. The court ruled that although “[t]he Third Circuit ruling in this case has not, unfortunately, completely illuminated the path that this Court must take[,] ... [t]his Court’s reading of the Third Circuit’s mandate is that the entire issue of punitive damages, including whether or not they are appropriate given Defendants’ conduct, must be retried.” Order of December 29, 2004. The District Court went on to hold that Sunrise was entitled to argue that its conduct was not “sufficiently grievous as to justify an award of punitive damages,” but that it could not argue that its conduct was not wrongful or tortious because our Court had affirmed the first jury’s finding that the conduct was tortious. Under this ruling, the second jury was to consider whether punitive damages should be awarded based on Sunrise’s tortious interference with CGB’s therapist contracts, and the jury was free to award any punitive award it saw fit, from zero to infinity, subject to review for excessiveness.

At the end of the second trial, the jury considered the issue of punitive damages and returned with the punitive award that it saw fit: $30 million. The District Court determined that this award was excessive and reduced it to $2 million. Needless to say, neither the jury’s award nor the court’s remittitur reflects an attempt to apportion the first jury’s punitive award of $1.3 million.

II.

A longstanding and central principle of our judicial system is that “an inferior court has no power or authority to deviate from the mandate issued by an appellate court.” Briggs v. Pa. R.R. Co., 334 U.S. 304, 306, 68 S.Ct. 1039, 92 L.Ed. 1403 (1948). See also Casey v. Planned Parenthood of Se. Pa., 14 F.3d 848, 856 (3d Cir.1994). Where a reviewing court in its mandate states that the trial court must proceed in accordance with the opinion of the reviewing court, that opinion becomes a fully-merged part of the mandate. See Bankers Trust Co. v. Bethlehem Steel Corp., 761 F.2d 943, 949 (3d Cir.1985) (quoting Noel v. United Aircraft Corp., 359 F.2d 671, 674 (3d Cir.1966)). Once the mandate is issued, “[a] trial court must implement both the letter and spirit of the mandate, taking into account the appellate court’s opinion and the circumstances it embraces.” Bankers Trust, 761 F.2d at 949. The question we must answer is whether the District Court violated the letter or the spirit of our Court’s mandate, looking for guidance at the entirety of our opinion, which we expressly stated to be part of our mandate.

By our Court’s express language, the punitive award was reversed, and the case was remanded for a “redetermination” of punitive damages. The judgment was silent as to whether the range of punitive awards available on remand would be limited by the award determination of the first jury. The District Court interpreted our silence as lack of direction and proceeded to decide that the range was open. If we did not settle this issue on the first appeal, then the District Court acted properly, as a trial court on remand “is free to make any order or direction in further progress of the case, not inconsistent with the decision of the appellate court, as to any question not settled by the decision.” Casey, 14 F.3d at 857 (quoting Bankers Trust, 761 F.2d at 950) (internal quotation marks omitted).

The express language of the mandate was not, however, the entirety of what the District Court should have considered. As we explained in Bankers Trust, when a district court executes a mandate issued by our Court, it must seek guidance not only in the letter of mandate, but in its spirit, and it must look both to the opinion and to the circumstances it embraces. 761 F.2d at 949.

What it means to follow the “spirit” of a mandate, however, is uncomfortably ambiguous. When we remand a case for further proceedings, we of course cannot expect the court to do what we mean, even when what we mean cannot reasonably be understood from what we say. We do, however, expect that the court will implement faithfully the mandate it receives. When a case is remanded for a limited purpose, faithful implementation of the mandate means that the district court will narrowly tailor the proceedings to ensure that the proceedings do not enlarge themselves beyond their narrowly mandated scope, as they are wont to do. Faithful implementation of a mandate is often more art than science, and considerable discretion is owed to the district court. This discretion, of course, has outer limits, and at least one of those limits should be clear: When the proceedings on remand result in an outcome that is grossly incongruous with the purpose for which the remand was ordered, the spirit of the mandate is violated.

The purpose of our mandate in this case was clear. The District Court had ordered Sunrise to pay compensatory and punitive damages totaling $1,985,000, and Sunrise appealed the judgment against it. We partially reversed the judgment and therefore needed to reduce the $1,985,000 award. We struck the $576,000 compensatory award, and sought to do the same to a portion of the $1.3 million punitive award. In other words, the punitive award needed to be reduced, and we ordered a redeter-mination of punitive damages because, although we knew that the original punitive award was too high, we did not know by how much. Instead, the redetermination resulted in an enlargement of the punitive award, to a figure that was higher than the original punitive and compensatory awards together. The procedural history can be reduced to this: The District Court used the remand we had ordered to nullify the effect of our holding and place Sunrise in a worse position than it had been before it won its appeal. The spirit of our mandate was violated.

In a just legal system, such a result should not be tolerated. If a victorious appellant is to be rewarded with a higher award against it, then we as judges are little better than the Walrus and the Carpenter, who beseech the Oysters to walk with them, only to reward the Oysters by eating them. See Lewis CaeRoll, Through the Looking-Glass and what Alice found there, in The Complete Works of Lewis CaRroll 133, 185-88 (Vintage Books 1976) (1871). Litigants in federal court deserve better treatment than that.⁸

III.

“A fundamental and longstanding principle of judicial restraint requires that courts avoid reaching constitutional questions in advance of the necessity of deciding them.” Lyng v. Nw. Indian Cemetery Protective Ass’n, 485 U.S. 439, 445, 108 S.Ct. 1319, 99 L.Ed.2d 534 (1988). The majority decides this case under the Due Process Clause of the Fourteenth Amendment. I recognize that the law on this subject is not clear and that litigants in our circuit would benefit from what guidance they can receive from our Court. The role of the court of appeals, however, is not to provide guidance whenever we believe it will be helpful. Our job is to decide cases, and the case before us today does not raise a constitutional question. Had the District Court adhered to the spirit of our mandate, the $2 million punitive award that the majority considers never would have issued. I would ask the District Court to correct the error, not use the error as a springboard to constitutional analysis.

The judgment of the District Court should be vacated as to punitive damages and remanded with an explanation of what our original mandate required. Punitive damages should be capped at $1.3 million, the maximum amount attributable to Sunrise’s interference with the therapist contracts under the first jury’s award.

I respectfully dissent.

8 . Judge McConnell recently has voiced similar concerns in the context of criminal resen-tencing, where sometimes a defendant successfully challenges his or her sentence and nonetheless faces an "appeal tax” in the form of a higher sentence. See United States v. Medley, 476 F.3d 835, 840-43 (10th Cir.2007) (McConnell, J., concurring). I express no view as to whether appellants in some circumstances must risk unfavorable outcomes as a result of their success on appeal. Our mandate in this case, however, should not have placed Sunrise in such a dilemma, and because the proceedings on remand did so, they undermined our holding.