Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, March 17, 1991                   TAG: 9103190386
SECTION: EDITORIAL                    PAGE: B-3   EDITION: METRO 
SOURCE: JAMES J.  KILPATRICK
DATELINE:                                 LENGTH: Medium

SUPREME COURT/ SUPREME COURT/ IN PUNITIVE-DAMAGE CASE, CONSERVATIVES ARE

The controversy involved a light-fingered fellow named Lemmie L. Ruffin Jr., a municipal worker named Cleopatra Haslip, and two insurance companies named Pacific Mutual and Union Fidelity.

When the dust settled, the faithless Ruffin was in trouble, Haslip (and her lawyer) was in Fat City, Pacific Mutual was out a million bucks, and Union Fidelity was feeling no pain. The mutt Principle had triumphed and injustice had prevailed.

This was the story: In 1981 the town of Roosevelt City, Ala., decided to offer its municipal workers an opportunity to buy health and life insurance. Presenting himself as a licensed agent for Pacific Mutual, Lemmie Ruffin made a deal. Union Fidelity would provide group health coverage; Pacific Mutual would offer life insurance.

So far, so good. But Union Fidelity agreed to send its monthly billings to Ruffin at Pacific Mutual's Birmingham office. The city clerk would send a monthly check, equal to payroll deductions, to Ruffin as agent for the two companies. In theory, Ruffin would then send Union a check, less his commission, for the health-insurance coverage.

Alas, the rogue kept the premium payments and sent Union nothing. Late in 1981, Union sent a notice of lapsed health coverage to town workers in the group health unit, but Union sent the notices in care of Ruffin. It was not the most reliable mail service. Sad to say, Ruffin sat on the notices. He did not forward them. As a consequence, Haslip did not know her coverage had been canceled. And in January 1982 she came down with a kidney infection.

Her hospital bill came to nearly $4,000. When Union refused to pay, the hospital referred the account to a collection agency. The agency obtained a judgment against Haslip. Her credit was adversely affected. She brought suit against Pacific Mutual for damages, and, at last, we get to the tale of mutt Principle and the wounded conservatives.

The trial jury awarded Haslip $200,000 for out-of-pocket expenses and damage to her reputation. Then the jury added $840,000 in punitive damages, for a total of $1,040,000. (If you would meet the mother of ironies, note that Pacific didn't even write the health coverage. But Ruffin was its agent, and the legal theory of "respondeat superior" applied.) The Supreme Court voted 7-1 to affirm the judgment.

The court had been asked to declare the punitive damages a violation of due process of law. The aggrieved company argued that the $840,000 figure had been fabricated from whim, caprice and very thin air, and indeed this was so. The entire business community rose to the side of Pacific Mutual. CBS, The Washington Post and the American Society of Newspaper Editors filed briefs in support of Pacific Mutual. Lawyers for the Church of Scientology and the Krishna Consciousness group chimed in. The court heard from Bethlehem Steel, the Chamber of Commerce, Price-Waterhouse and 30 others who spoke eloquently of the injustice of punitive damages.

The high court was not impressed. In the field of jurisprudence, conservatives have one principle they cherish above all others - the principle of judicial restraint. Judges, we hold, must not usurp legislative powers. Conservatives are in love with tradition; we revere the wisdom of the ages. The more ancient a custom, the more fiercely we clutch it to our breast.

Well, ho-ho. The high court's opinion of March 4 was a veritable paradigm of judicial restraint. Justice Antonin Scalia, concurring, went back to Magna Carta in 1215. You can't get much more ancient than that. If punitive damages are to be limited, said the court, it is up to state legislatures to fashion the limits.

This is an exercise in federalism, a constitutional principle that we also adore, though not too warmly in this particular instance. The truth of the matter is that the court blew us up with our own ammunition. Unbridled punitive damages are dead wrong. They violate the judicial concept of "fundamental fairness." O woe! Where are activist judges when we really need them? Universal Press Syndicate When the dust settled, the mutt Principle had triumphed and injustice had prevailed.