Bernard LITMAN, Plaintiff-Appellant, v. MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, Defendant-Appellee.

No. 85-5939.

United States Court of Appeals, Eleventh Circuit.

Aug. 31, 1987.

Joel D. Eaton, Podhurst Orseck Parks, Josefsberg, Eaton, Meadow & Olin, P.A., Miami, Fla., for plaintiff-appellant.

Gerry S. Gibson, Steel Hector & Davis, Miami, Fla., for defendant-appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before RONEY, Chief Judge, GODBOLD, TJOFLAT, HILL, FAY, VANCE, KRAVITCH, JOHNSON, HATCHETT, ANDERSON, CLARK and ' EDMONDSON, Circuit Judges, and HENDERSON ^{Footnote *} , Senior Circuit Judge.

ON PETITION FOR REHEARING AND SUGGESTION FOR REHEARING IN BANC

FAY, Circuit Judge:

The case was taken in bane to consider whether the mandate in Litman v. Massachusetts Mutual Life Insurance Co.,  739 F.2d 1549 (11th Cir.1984) ("Litman I") was properly executed. The mandate included an order for a new trial on punitive damages. The district court did not conduct a new trial, however, because it was of the opinion that the "Waiver of a Right to New Trial and Consent to Entry of Judgment" presented by Massachusetts Mutual ("Mass Mutual") was an acceptable alternative disposition of the case. For the reasons that follow, we find that the district court's order was inconsistent with and in disregard of the law of the case established in Litman I. We REVERSE and REMAND for a new trial on punitive damages. Because this case involves the structural relationship between the appellate court and district court within the judicial hierarchy, we examine the creation of the federal court system, the tools that emerged to enforce the three-tier structure and the institutional values the tools are designed to perpetuate.

I. Historical Perspective of the Organization of the Federal Court System.

Judicial power is created by the Constitution and Congress. Art, III of the Constitution provides: "[t]he judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish." U.S. Const., art. Ill, § 1. As early as 1789, Congress created district courts and circuits courts. Judiciary Act of 1789, ch. 20, 1 Stat. 73. In 1891, Congress passed the Evarts Act, Act of Mar. 3, 1891, 26 Stat. 826, which established the circuit court of appeals as a separate intermediate level court. The primary objective of the Evarts Act was to relieve the Supreme Court of the excessive burden imposed upon it arising from the rapid growth of the country, and the steady increase in litigation, by transferring a considerable part of its appellate jurisdiction to the Circuit Court of Appeals, and making the judgments of that Court final, absent compelling circumstances. United States v. Dickinson,  213 U.S. 92, 97, 29 S.Ct. 485, 486, 53 L.Ed. 711 (1909); American Construction Co. v. Jacksonville, Tampa & Key West Ry.,  148 U.S. 372, 382, 13 S.Ct. 758, 762, 37 L.Ed. 486 (1893). Today's judicial structure emerged when Congress passed the Judicial Code of 1911, Mar. 3, 1911, ch. 231, 36 Stat. 1131, which aligned the circuit courts as those handling most appeals and assigned the district court as the general trial court of original jurisdiction. In so doing, Congress established the three tier system as well as the chain of command within the judiciary hierarchy.

The Constitution confers jurisdictional powers on the Supreme Court. See U.S. Const., art. Ill, § 2. The Court has limited original jurisdiction and exercises appellate jurisdiction, either by direct appeal or by the discretionary writ of certiorari, over the district courts, the courts of appeals, and the highest courts of the states. 13 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3507 (2d ed. 1984). The Supreme Court has the power to make determinations as to the law of the land that binds all courts. By statute Congress has assigned jurisdictional powers to both district and circuit courts. The district courts are courts of original jurisdiction. 28 U.S.C. § 1331 (1982). The circuit courts have appellate jurisdiction over district courts, administrative agencies and exercise power to issue original writs in appropriate cases. 13 C. Wright, A. Miller & E. Cooper, supra, at § 3506. Appellate courts have the power to issue mandates which are commands that cannot be ignored. Absent a Supreme Court decision to the contrary, district courts are compelled to follow mandates of appellate courts. In re Sanford Fork & Tool Co.,  160 U.S. 247, 255, 16 S.Ct. 291, 293, 40 L.Ed. 414 (1895); Sibbald v. United States, 37 U.S. (12 Pet.) 488, 492, 9 L.Ed. 1167 (1838).

The three tier system evolved purposefully and deliberately and operates to define the proper allocation of authority and responsibility within the judicial system. Experience has demonstrated that the system works. Throughout history courts at all three levels have recognized that careful observation of this allocation of authority is necessary for a properly functioning judiciary. When district courts err, appellate courts do not hesitate to correct mistakes and confine the court to its authorized boundaries. When an appellate court errs, the Supreme Court does likewise.

II. Institutional Tools, Values and Illustrations.

There are several methods used to ensure order is maintained within the judicial hierarchy. Pursuant to statutory provisions, appellate courts have the authority to issue writs of mandamus. All Writs Statute, 28 U.S.C. § 1651 (1982). The historic use of the writ of mandamus issued by an appellate court has been to exert its revisory appellate power over the district court. Roche v. Evaporated Milk Ass'n,  319 U.S. 21, 26, 63 S.Ct. 938, 941, 87 L.Ed.

1185 (1943); Ex parte Peru,  318 U.S. 578, 583, 63 S.Ct. 793, 796, 87 L.Ed. 1014 (1943). The writ affords an "effective means of confining the inferior court to a lawful exercise of its prescribed jurisdiction, or of compelling it to exercise its authority when it is its duty to do so." Ex parte Peru, 318 U.S. at 583, 63 S.Ct. at 796. The writ of mandamus, while an extreme remedy, is still used when a district court usurps power or abuses its discretion. Kerr v. United States District Court,  426 U.S. 394, 402, 96 S.Ct. 2119, 2123, 48 L.Ed.2d 725 (1976); United States v. Fernandez-Toledo,  737 F.2d 912, 919 (11th Cir.1984); In re Extradition of Ghandtchi,  697 F.2d 1037, 1038 (11th Cir.1983); see United States v. Cannon,  807 F.2d 1528, 1529 (11th Cir.1986). The writ is a tool used to keep the courts functioning within the constitutional and congressional design.

The Supreme Court, by accepting cases through the discretionary writ of certiorari, has kept order within the courts. The notion that the federal district courts and circuit courts of appeal must adhere to controlling Supreme Court decisions is reinforced whenever necessary. In Hutto v. Davis,  454 U.S. 370, 375, 102 S.Ct. 703, 706, 70 L.Ed.2d 556 (1982), the Court emphasized the need to adhere to the hierarcal structure of the federal court system created by the Constitution and Congress. "[U]nless we wish anarchy to prevail within the federal judicial system, a precedent of this Court must be followed by the lower federal courts no matter how misguided the judges of those courts may think it to be." 706.

150

Davis, 454 U.S. at 375, 102 S.Ct. at

A recent case serves as a compelling illustration.^{Footnote 1} In Jaffree v. Board of School

Comm'rs, 554 F.Supp. 1104 (S.D.Ala.1983), the district court held that the fourteenth amendment did not incorporate the establishment clause of the first amendment against the States. The district court ruled that the United States Supreme Court had erred. Id. at 1128. Justice Powell, in his capacity of Circuit Justice for the Eleventh Circuit, entered an interlocutory emergency stay of the judgment of the district court and stated that, "[u]nless and until this Court reconsiders the following decisions, they appear to control this case. In my view, the District Court was obligated to follow them. Similarly, my own authority as Circuit Justice is limited by controlling decisions of the full Court." Jaffree v. Board of School Comm'rs,  459 U.S. 1314, 1316, 103 S.Ct. 842, 843, 74 L.Ed.2d 924 (1983).

Thereafter, the Court of Appeals for the Eleventh Circuit reversed the district court's order dismissing the complaint,  705 F.2d 1526 (11th Cir.1983), cert, denied, 466 U.S. 926, 104 S.Ct. 1707, 80 L.Ed.2d 181 (1984). The Court emphasized the district court's obligation to adhere to Supreme Court precedent. The Supreme Court had considered the historical implications and concluded that its present interpretation of the first and fourteenth amendments is consistent with the historical evidence. Id. at 1532. Even though the district court

concluded that the Supreme Court erred it was required to follow the controlling decision. Id. at 1532; Stell v. Savannah-Chatham County Bd. of Ed.,  333 F.2d 55, 61 (5th Cir.), cert, denied, 379 U.S. 933, 85 S.Ct. 332, 13 L.Ed.2d 344 (1964). The Supreme Court affirmed the judgment of the court of appeals. Wallace v. Jaffree,  472 U.S. 38, 105 S.Ct. 2479, 86 L.Ed.2d 29 (1985) (this appeal dealt with the narrow question of whether a period of silence for "meditation or voluntary prayer" established religion within the meaning of the first amendment). The message sent to the district court from both the Supreme Court and the court of appeals was clear' it had an obligation to follow precedent.

Many devices have been created to ensure that authority, jurisdiction and responsibility remain properly allocated among the three levels of courts within the federal judiciary. The discussion above merely serves to illustrate the point. The courts within the system have differing responsibilities and standards and values must be formulated and communicated in order to ensure that the process functions.

Institutional tools perpetuate the value of stability and predictability'essential factors in the proper operation of the judiciary. Bonner v. City of Prichard,  661 F.2d 1206, 1209 (11th Cir.1981) (en bane). Predictability is essential not only to lawyers who must advise their clients about the law, but also to the notion of judicial review in creating a stable body of law. It is generally thought that appellate courts are in a better position than trial courts to accommodate the need for stability. Reviewing courts are better able to maintain the necessary continuity of doctrine over time. Carrington, Crowded Dockets and the Court of Appeals: The Threat to the Function of Review and the National Law, 82 Harv.LRev. 542, 551-52 (1969). The uniformity achieved is not necessarily rigid; the appellate court "can change, or can react to advocacy or external reality to alter the direction of its commands." P. Carrington, D. Meador & M. Rosenberg, Justice on Appeal p. 148 (1976). But the primary mission of the courts recognizes this particular feature. "Judicial precedence serves as the foundation of our federal judicial system. Adherence to it results in stability and predictability." Jaffree v. Wallace,  705 F.2d 1526, 1533 (11th Cir.1983). In Moragne v. States Marine Lines,  398 U.S. 375, 90 S.Ct. 1772, 26 L.Ed.2d 339 (1970) the Supreme Court discussed the reasons for adhering to precedent: Among these are the desirability that the law furnish a clear guide for the conduct of individuals, to enable them to plan their affairs with assurance against untoward surprise; the importance of furthering fair and expeditious adjudication by eliminating the need to relitigate every relevant proposition in every case; and the necessity of maintaining public faith in the judiciary as a source of impersonal and reasoned judgments. Id. at 403, 90 S.Ct. at 1789. "The confidence of people in their ability to predict the legal consequences of their actions is vitally necessary to facilitate the planning of primary activity." Id. The law of the case doctrine rests on the same principles.

The law of the case doctrine was created to ensure that authority and responsibility remain properly allocated among the courts. The doctrine is based on the premise that an appellate decision is binding in all subsequent proceedings in the same case unless the presentation of new evidence or an intervening change in the controlling law dictates a different result, or the appellate decision is clearly erroneous and, if implemented, would work a manifest injustice.^{Footnote 2}

Piambino v. Bailey,  757 F.2d 1112, 1120 (11th Cir.1985), cert. denied, 'U.S. ------, 106 S.Ct. 2889, 90 L.Ed.2d 976 (1986); Westbrook v. Zant,  743 F.2d 764, 768-69 (11th Cir.1984); Baumer v. United States,  685 F.2d 1318, 1320 (11th Cir.1982) (quoting White v. Murtha,  377 F.2d 428, 431-32 (5th Cir. 1967)). A district

court when acting under an appellate court's mandate, "cannot vary it, or examine it for any other purpose than execution; or give any other or further relief; or review it, even for apparent error, upon a matter decided on appeal; or intermeddle with it, further than to settle so much as has been remanded." In re Sanford Fork & Tool Co.,  160 U.S. 247, 255, 16 S.Ct. 291, 293, 40 L.Ed. 414 (1895); Sibbald v. United States, 37 U.S. (12 Pet.) 488, 492, 9 L.Ed. 1167 (1838).

The law of the case doctrine, self-imposed by the courts, operates to create efficiency, finality and obedience within the judicial system. See Wheeler v. City of Pleasant Grove,  746 F.2d 1437, 1440 (11th Cir.1984); United States v. Williams,  728 F.2d 1402, 1406 (11th Cir.1984); Lehrman v. Gulf Oil Corp.,  500 F.2d 659, 662 (5th Cir.1974), cert, denied, 420 U.S. 929, 95 S.Ct. 1128, 43 L.Ed.2d 400 (1975); White v. Murtha,  377 F.2d 428, 431 (5th Cir.1967). Judicial dispute resolution must have certain essential elements. Due process, as a constitutional value, may be the cornerstone, but finality and stability, as institutional values, may be of equal importance. While the law of the case doctrine is not an "inexorable command,"^{Footnote 3} White v. Murtha,

377 F.2d at 431, adherence to it helps to ensure that the essential elements are maintained in the process. Failure to honor its commands can only result in chaos.

The mandate rule is simply an application of the law of the case doctrine to a specific set of facts. Piambino, 757 F.2d at 1120 (citations omitted). Each tier in the judicial hierarchy has its responsibility once a mandate is issued. A mandate may be vague or precise resulting from the disposition of those issues presented which vary widely from the rather simple to the most complex. Determining the scope of a mandate can present problems with interpretation. The case law is replete with examples of disputes arising from interpretations of mandates. The disputes focus on the rela15H tionship between the appellate courts and district courts and center on the proper allocation of authority and responsibility.

The law of our circuit concerning the obligations of a district court to follow our mandates is settled. See Piambino,  757 F.2d 1112 (11th Cir.1985); Wheeler v. City of Pleasant Grove,  746 F.2d 1437 (11th Cir.1984); Westbrook v. Zant,  743 F.2d 764 (11th Cir.1984); Dorsey v. Continental Casualty Co.,  730 F.2d 675 (11th Cir.1984); United States v. Williams,  728 F.2d 1402 (11th Cir.1984); Robinson v. Parrish,  720 F.2d 1548 (11th Cir. 1983); Baumerv. United States,  685 F.2d 1318 (11th Cir.1982). All circuits are in accord. See e.g., Todd Shipyards Corp. v. Auto Transportation, S.A.,  763 F.2d 745 (5th Cir.1985); Bankers Trust Co. v. Bethlehem Steel Corp.,  761 F.2d 943 (3d Cir.1985); In re Beverly Hills Bancorp.,  752 F.2d 1334 (9th Cir.1984); Devines v. Maier,  728 F.2d 876 (7th Cir.), cert, denied, 469 U.S. 836, 105 S.Ct. 130, 83 L.Ed.2d 71 (1984); Stamper v. Baskerville,  724 F.2d 1106 (4th Cir.1984); City of Cleveland v. Federal Power Comm'n,  561 F.2d 344 (D.C.Cir.1977); Crane Co, v. American Standard, Inc.,  490 F.2d 332 (2d Cir.1973); In re United States Steel Corp.,  479 F.2d 489 (6th Cir.), cert, denied, 414 U.S. 859, 94 S.Ct. 71, 38 L.Ed.2d 110 (1973); Cherokee Nation v. Oklahoma,  461 F.2d 674 (10th Cir.), cert, denied, 409 U.S. 1039, 93 S.Ct. 521, 34 L.Ed.2d 489 (1972); Poletti v. Commissioner,  351 F.2d 345 (8th Cir. 1965); United States v. Iriarte, 166 F.2d 800 (1st Cir.), cert, denied, 335 U.S. 816, 69 S.Ct. 36, 93 L.Ed. 371 (1948).

When an appellate court issues a specific mandate it is not subject to interpretation; the district court has an obligation to carry out the order. A different result would encourage and invite district courts to engage in ad hoc analysis of the propriety of appellate court rulings. Post mandate maneuvering in the district courts would undermine the authority of appellate courts and create a great deal of uncertain-

ty in the judicial process. It would also eliminate any hope of finality.

We recognize that there are cases wherein a seemingly specific mandate such as an order for a new trial may wind up with a different result on remand. However, in such cases the opinion, when viewed in its totality, supports the alternative disposition. See e.g., Publishers Resource, Inc. v. Walker Davis Publications, Inc.,  762 F.2d 557 (7 th Cir. 1985) (remand for a new trial did not necessarily mean that a trial would be necessary when the district court was instructed to look at the contractual provisions governing termination and then make a "determination of damages"); United States v. Curtis,  683 F.2d 769 (3d Cir.), cert, denied, 459 U.S. 1018, 103 S.Ct. 379, 74 L.Ed.2d 512 (1982) (reversal of conviction and remand for a new trial did not preclude district court from dismissing indictment based on double jeopardy claim as constitutional question was not raised on appeal;) ^{Footnote 4}

Shelkofsky v. Broughton,  388 F.2d 977 (5th Cir.1968) ^{Footnote 5} (reversal for a trial by jury did not preclude district court from disposing of the case summarily if the evidence offered was insufficient to warrant submission to the jury). Such cases do not weaken the "mandate rule" but give it flexibility. See Arizona v. California,  460 U.S. 605, 618, 103 S.Ct. 1382, 1391, 75 L.Ed.2d 318 (1983).

III. Litman v. Mass Mutual.

With the foregoing principles in mind, we focus on the dispute before us which raises the issue of whether the opinion in Litman v. Massachusetts Mutual Life Insurance Co.,  739 F.2d 1549 (11th Cir.1984) ("Litman I"), when viewed in its totality, allows for the district court's order on remand.

A. Procedural History ^{Footnote 6}

This was an action for breach of general agency contract and two counts of slander brought by Bernard Litman ("Litman") against Massachusetts Mutual Life Insurance Company ("Mass Mutual"). The trial resulted in a jury verdict for Litman on ail three counts and judgment was entered in the amount of $2,500,234. The jury's verdict included separate compensatory damage awards for the breach of contract claim and each of the two claims of slander. ^{Footnote 7}

The punitive damage award for the slander was undifferentiated. It was as-

LIFE INS. CO. sessed in response to a single question on the special verdict form. ^{Footnote 8}

Mass Mutual appealed on several grounds and challenged the punitive damage award asserting alternative theories. Mass Mutual argued that it was entitled to judgment on the issue of punitive damages and in the alternative, that the amount of punitive damages awarded was excessive entitling it to a new trial. Our court affirmed the judgment of the district court with one exception. Finding that the statement made by a Mass Mutual spokesman to a prospective employer of Litman, could not be slander as a matter of law, the court reversed the $100,000 slander award which necessarily resulted in a reversal of the entire punitive damage award. The case was remanded to the district court for a new trial solely on the issue of punitive damages. Mass Mutual made no motions to modify the ruling or to withdraw its challenge to the award of punitive damages.

On remand, Mass Mutual filed a written "Waiver of Right to New Trial and Consent to Entry of Judgment." Mass Mutual stated that it was now content to accept the original jury verdict on the punitive damage issue in the interest of terminating the suit. The district court accepted Mass Mutual's argument that if a prima facie case for the award of punitive damages against Mass Mutual were shown at all, under our opinion ^{Footnote 9} a jury would consider only a portion of the original $250,000 award for the remaining claim which was based on the statements made by two Mass Mutual employees to Litman's former salesmen. Memorandum in Support of Mass Mutual's Waiver at 3, Litman, (No. 78-3314 CivEBD). Accepting this argument the district court concluded that a new trial on punitive" damages would be inappropriate, and was not required by the mandate. The district court acknowledged that the Litman I opinion did not hold that the punitive damage award was excessive as a matter of law, but interpreted the holding to indicate that the award was improperly inflated. The district court framed the issue presented by Mass Mutual as a new one. Specifically, the issue as stated by the district court was whether "a [d]efendant, whose right to a new trial has been recognized by the Court of Appeals, [can] waive that right by offering to accept the original judgment, in the situation where the infirmity at the first trial necessarily inflated [p]laintiffs recovery [?]." Litman v. Massachusetts Mutual Life Insurance Co., No. 78-3314 Civ-EBD p. 5 (S.D.Fla. August 20, 1985). The district court answered the question in the affirmative. Final judgment was entered in favor of Litman in the amount of $250,000, with interest from the date of entry of the original final judgment, plus taxable costs of the litigation. Id.

B. Discussion Five major premises provide the analytical framework for our disposition of this case. First, the finding that the statement made by the Mass Mutual spokesman to Litman's prospective employer was not slander as a matter of law became part of the law of the case. Second, because the special verdict form posed only a single question for punitive damages on the slander, the reversal of the slander award necessitated reversal of the original $250,000 judgment for punitive damages. ^{Footnote 10}

The effect of the reversal voided the original

judgment. ^{Footnote 11}

Third, the basis for an award of punitive damages on the surviving slanderous statements was affirmed on appeal and became part of the law of the case. Litman was entitled to punitive damages. Fourth, the litigants were sent back to the district court for a new determination of punitive damages as if the first trial never occurred. ^{Footnote 12}

Fifth, a jury trial on punitive damages is the only proper outcome under Florida law unless a settlement was negotiated between the parties or the mandate modified by the court of appeals.

Given the law of the case established in Litman I, the mandate was clear and specific'the district court was to conduct a new trial solely on the issue of punitive damages. Mass Mutual argues that under Florida law and the facts of this case, a right to a new trial on punitive damages belonged to it alone. We disagree. Our opinion in Litman I governs the rights and obligations of both parties. Once the appellate ruling became final, the right to a new trial belonged to neither party individually but rather to both. The law of the case prescribed the outcome and could not be altered. Although Litman had no right under Florida law to seek a new trial on punitive damages, the first appeal left Litman in a position where the original judgment was set aside yet the basis for the punitive damage award was affirmed. The law of the case established that Litman was entitled to punitive damages. Both parties had a right for a jury to set the amount. But the original judgment as to the amount of punitive damages was null and void. It no longer existed.

The Florida Supreme Court defines the respective provinces of the court and jury explicitly when claims for punitive damages are presented. The court decides whether there is a legal basis for recovery of punitive damages, the jury sets the amount, if any. A trial judge may not substitute its judgment for that of the jury. Arceneaux v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,  767 F.2d 1498, 1503 (11th Cir.1985); St. Regis Paper Co. v. Watson, 428 So.2d 243, 247 (Fla.1983); Arab Termite & Pest Control v. Jenkins, 409 So.2d 1039, 1041 (Fla.1982). Once the error was established on the slander claim, the case necessarily went back for a jury determination of the amount of punitive damages on the surviving claim. ^{Footnote 13}

The district court erred when it stated that since the first reasonable jury that heard the evidence awarded an amount of $250,000 based on three slanderous statements, it follows, inexorably, that another reasonable jury, when presented with the assessment of the amount of punitive damages for only two slanderous statements, would fix an amount at less or equal to the $250,000 award. ^{Footnote 14}

Litman v. Massachusetts Mutual Life Insurance Co., No. 78-