16 October 1995
WASHINGTON - For the federal government's top Supreme Court litigators, the primary concern is long-term, not to win but to develop the law. But trade the traditional morning coat for a business suit and clients with millions of dollars at stake; then, winning in the nation's highest court becomes paramount.
But Andrew L. Frey, who spent almost as many years in the Office of Solicitor General, representing the United States, as he has in private practice, aims to do both-win and develop the law, particularly the law on punitive damages.
Mr. Frey, 57, a partner in the Washington, D.C., office of Chicago's Mayer, Brown & Platt, is a first-string Supreme Court player who moves easily with the best from one complex legal challenge to another. But what earns him a spot in a rather small subset of Supreme Court regulars is his careful, creative and tenacious nudging of the justices toward his view of one area of the law in case after case after case.
When he stands before the justices on the morning of Oct. 11, the bearded advocate will argue-in his typically straightforward, poker-faced, slightly nasal delivery-his 62d high court case. It also will be the fifth punitive damages challenge to be heard by the court in six years. Of those five punitive damages cases, Mr. Frey has been shepherd to three, a remarkable record given the awesome hurdles to winning high court review.
And while he and his firm have been busy at the high court, they also have led the charge in lower courts against what they believe are excessive punitive damages awards, strategizing with defense lawyers on how to minimize a company's exposure and laying the constitutional groundwork for appeals.
Although the Supreme Court holds open the door to punitive damages challenges by business, it has not yet asked business to stay for dinner. Of the last four punitive damages decisions, business scored but one victory, on narrow grounds unique to the state of Oregon. That victory belonged to Andy Frey.
Given the justices' apparent reluctance to curb these awards, lawyers and court scholars who have followed the justices' decisions closely are not certain why they took BMW of North America Inc. v. Gore, 94-896, this term. Some justices repeatedly have voiced concern about punitive damages that "run wild," but the court has refused to draw "a mathematical bright line" to guide lower courts on when damages awards are excessive.
The BMW case ultimately may not turn on the issue of the excessiveness of the $2 million award being challenged. But if it doesn't, "logic dictates they should take another case," says Mr. Frey. "I don't think this is a situation where you have to convince the court there is a problem. They just don't know what to do about it."
A Logical Approach
As a child, when sleep failed to chase the remains of a busy day, Andy Frey did not count sheep; he multiplied five-digit numbers by five-digit numbers in his head.
As an adult, he relaxes in his D.C. home at a custom-made poker table, in a weekly game which for 25 years has hosted such amateur card sharks as former White House counsel Abner Mikva.
He also does logic puzzles to engage and relax the mind.
"He has an almost encyclopedic understanding of the law: He understands how disparate aspects of the law fit together in an almost holistic way," says Evan M. Tager, his colleague in the firm's Supreme Court and Appellate Practice Group. "You seldom see that in any lawyer."
His love of logic puzzles, adds Mr. Tager, is emblematic of his approach to legal problems. "He looks first to the logic; it is central to his approach," he explains.
Mr. Frey, who graduated first in his class from Columbia University School of Law in 1962, is "one of the best people I've met to analyze a legal problem," says longtime friend Kenneth S. Geller, managing partner of the firm's D.C. office and a former deputy solicitor general who served with Mr. Frey. "It's rare when he's caught off guard in an argument because he has worked his position through to basic principles."
And, he adds, "Andy has probably given more thought to the analytical underpinnings of punitive damages than anybody else in the country."
The three men, along with Charles A. Rothfeld and Andrew J. Pincus, have become the firm's de facto punitive damages team. If he adheres to prior practice, before arguing the BMW case before the high court, Mr. Frey will have conducted a moot court, sponsored by the U.S. Chamber of Commerce, and tested his argument's strengths and weaknesses before the team, all of whom, with the exception of Mr. Tager, served in the Solicitor General's office.
Mayer Brown was drawn into the punitive damages battle about a decade ago through its work for a client, the Products Liability Advisory Council, a Tysons Corner, Va.-based association of products liability defense attorneys, recalls Mr. Frey. The council wanted an overview of punitive damages law.
While a long, detailed memo for the council was in its final stages, Mr. Frey says, "Serendipitously, I got a call from Paul McGrath asking if I would be interested in getting Browning-Ferris into the Supreme Court."
At the time, J. Paul McGrath, now corporate counsel to Allied-Signal in Morristown, N.J., was with New York's Dewey Ballantine. His client Browning- Ferris, the waste disposal giant, was fighting a $6 million punitive damages award.
Mr. McGrath had worked in the Justice Department's civil and antitrust divisions when Mr. Frey was deputy solicitor general. "He was my coach, mentor, sparring partner, in my first two arguments in the Supreme Court," he recalls. Turning to Mr. Frey at Mayer Brown, he adds, "was like working with the crew at the S.G.'s office."
In Browning-Ferris Industries v. Kelco Disposal Inc., 492 U.S. 257 (1989), the justices rejected Mr. Frey's claim that the Eighth Amendment's guarantee against "excessive fines" applied to punitive damages awards.
After Browning-Ferris, the high court took up three punitive damages challenges, all based on the 14th Amendment's due process clause. In two, Mr. Frey did not play a central role, but made his clients' views known in amicus briefs. In the third, Mr. Frey scored business' only victory thus far.
In Pacific Mutual Life Insurance Co. v. Haslip, 499 U.S. 1 (1991), and TXO Production Corp. v. Alliance Resources Corp., 113 S.Ct. 2711 (1993), the high court upheld punitive awards that were four times and more than 500 times the compensatory damages, respectively. Review of the punitive damages awards by the trial courts and appellate courts, the justices said, met the demands of due process.
Refusing to articulate a test that would fit every case, the court in Haslip said "general concerns of reasonableness and adequate guidance from the court" should determine whether due process has been given.
But in Honda Motor Co. v. Oberg, 114 S.Ct. 2331 (1994), Mr. Frey, up against Harvard Law School's Laurence Tribe, returned to convince the justices that an Oregon statute barring trial and appeals courts from reviewing jury-issued punitive damages awards violated the due process clause.
From the last three high court cases, Mr. Frey says, "We've gained a clear and unequivocal recognition there is a substantive due process right to be free from unreasonably excessive punitive damages. What we don't know is what the content of that right is. Honda recognized this was unfinished business. I think the court took BMW to start addressing this."
Mr. Frey says his work on punitive damages parallels his experience in the Solicitor General's office. He joined that office as an assistant in 1972, and a year later became the deputy solicitor general for criminal appeals, a position he held for 13 years and in which he became noted for developing the law on the exclusionary rule, Miranda and double jeopardy.
Persuading the Justices
During that period, the law surrounding double jeopardy was very unsettled and the high court began to work its way through a series of related problems. Mr. Frey is credited by scholars and others with persuading the justices, in case after case, to read the double jeopardy clause as he did, ultimately taking a pro-law enforcement position.
In Lincoln Caplan's book on the solicitor general's office, "The Tenth Justice," double jeopardy scholar Peter Westen, of the University of Michigan Law School, called Mr. Frey's work "just highly intelligent advocacy...He just tested old myths about doctrine, and came up with ideas based on good legal reasoning. It was a careful, methodical, incremental process."
With punitive damages and the high court, the process is similar, says Mr. Frey, explaining, "You have a dialogue with the court as it works through these issues. I get a great deal of satisfaction from that."
Mr. Frey and his team are not the only voices of business talking to the high court about punitive damages. Other significant players include Theodore B. Olson, of the D.C. office of Los Angeles' Gibson, Dunn & Crutcher, and Carter Phillips, of the D.C. office of Chicago's Sidley & Austin.
At Mayer Brown, punitive damages work is not a large percentage of its huge appellate practice, says Mr. Geller, but "it involves some of our most significant cases."
Besides its work on the excessive fines and due process issues, Mr. Frey and his team have brought to the high court in the BMW case a new wrinkle, the so- called extraterritoriality issue. In the TXO decision two years ago, the justices said juries could consider a defendant's alleged wrongdoing in other jurisdictions to show a pattern of conduct or intent in determining whether to award punitive damages. In BMW, Mr. Frey argues, the Alabama jury went a step further.
In punishing BMW for failing to disclose it had repainted a new car before Dr. Ira Gore Jr. bought it, he contends the jury illegally multiplied the $4,000 in compensatory damages by the 1,000 refinished cars sold by BMW over a 10-year period throughout the United States, even though failure to disclose would not have been illegal in some states. When the Alabama Supreme Court later reduced the award to $2 million, he adds, its remittitur was tainted by the original illegal jury award.
Mayer Brown also is developing "good constitutional arguments" for the bifurcation of trials to determine whether punitive damages should be awarded, says Mr. Tager, and is working on issues surrounding multiple awards for the same conduct.
"Sensitizing lawyers to adequately preserve these issues is still a very live problem," says Mr. Frey. "The earlier we get involved, the greater the likelihood we can help; we have just spent so much time thinking through these issues."
When he first began researching the law and history of punitive damages a decade ago, "it was a sleepy backwater" of academic interest, recalls Prof. Michael Rustad, of Suffolk University Law School in Boston.
"Punitive damages have been around a long time, but all of a sudden, in the ' 80s, we see this theory that they are amercements [pecuniary penalties] under the Eighth Amendment," he says. "That is quite amazing. When that challenge was rebuffed, they mounted another."
Case for Punitives
All of the empirical evidence shows punitive damages are used appropriately, says Professor Rustad, who is supporting Dr. Gore in the BMW challenge. A joint study by the Justice Department and National Center for State Courts this summer reported that punitive awards, particularly in products liability and medical malpractice cases, are rare, he notes.
"I would never say that in individual cases there are not injustices," says Professor Rustad, a punitive damage scholar. "But the high-ratio awards tend to be reduced or vacated by trial or appellate judges.
"To suggest this is an issue of due process magnitude is another global achievement. How these lawyers were able to step-by-step lay the foundation for a due process challenge is an amazing feat."
Faced with the "creative lawyering" of Mr. Frey and others, Professor Rustad and his supporters say Dr. Gore was wise to turn to another Supreme Court veteran, Michael Gottesman, of Georgetown University Law Center, to fend off the BMW challenge. Professor Gottesman urges the justices not to decide the constitutional questions because legislation in Congress addresses those issues.
Not only should the Supreme Court stay out of the fray, says Professor Rustad, so should Congress. "This has always been the province of the states and they have been very active in mounting their own reforms."
A major cottage industry of lawyers and interest groups has grown up around the punitives issue, he adds. "From 1986 until today, look how far they've come with this. Where they'll go next, I don't know."
For now, Andy Frey is focused on Oct. 11. He says he waits until the day before a high court argument to decide what he actually will say.
"That's part of his persona; it makes him look a little risque," chuckles Mr. Geller. "The truth is he has thought about his argument for months."
The only time his day-before method threatened to fail was when he was deputy solicitor general and thought he was having a heart attack the afternoon before an immigration argument. "It was actually something I ate in the Justice Department cafeteria," he recalls. "I got home from the hospital about 11 p.m., totally washed out, and started making an argument outline."
Mr. Geller still remembers him lying on the couch in Mr. Geller's adjoining office. The next day, Mr. Geller says, Mr. Frey delivered a "brilliant argument, typical of his composure and self-confidence."
Although the BMW case may be decided on the extraterritoriality issue, the high court also agreed to hear the excessiveness challenge, reminds Mr. Frey. That shows the justices feel the lower courts need guidance and explains why logic dictates they will take another case if they don't address it in BMW, he says.
And when that occurs, Mr. Frey adds, "My hope is to have the right case in place."
10/16/95 NLJ A1, (col. 2)
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