City of Newport v. Fact Concerts, Inc

• Decision Date: 26 June 1981
• Docket Number: No. 80-396,80-396
• Citation: 101 S.Ct. 2748,69 L.Ed.2d 616,453 U.S. 247
• Parties: CITY OF NEWPORT et al., Petitioners, v. FACT CONCERTS, INC. and Marvin Lerman
• Court: U.S. Supreme Court

453 U.S. 247

101 S.Ct. 2748

69 L.Ed.2d 616

CITY OF NEWPORT et al., Petitioners,

v FACT CONCERTS, INC. and Marvin Lerman.

No. 80-396.

Argued March 31, 1981.

Decided June 26, 1981.

Syllabus

Respondents (an organization licensed by petitioner city to present certain musical concerts, and a promoter of the concerts) brought suit in Federal District Court against the city and city officials. Alleging, inter alia, that the city's cancellation of the license amounted to a violation of their constitutional rights under color of state law, respondents sought compensatory and punitive damages under 42 U.S.C. § 1983. Without objection, the court gave an instruction authorizing the jury to award punitive damages against each defendant, including the city. Verdicts were returned for respondents, which in addition to awarding compensatory damages also awarded punitive damages against both the individual officials and the city. The city moved for a new trial, arguing for the first time that punitive damages could not be awarded against a municipality under § 1983. Although noting that the challenge to the instruction was untimely under Federal Rule of Civil Procedure 51, the District Court considered and rejected the city's substantive legal arguments on their merits. The Court of Appeals affirmed, finding that the city's failure to object to the charge at trial, as required by Rule 51, could not be overlooked on the theory that the charge itself was plain error. The court also expressed a belief that the challenged instruction might not have been error at all, and identified the "distinct possibility" that municipalities could be liable for punitive damages under § 1983 in the proper circumstances.

Held:

1. The city's failure to object to the charge at trial does not foreclose this Court from reviewing the punitive damages issue. Because the District Court adjudicated the merits, and the Court of Appeals did not disagree with that adjudication, no interests in fair and effective trial administration advanced by Rule 51 would be served if this Court refused to reach the merits. Nor should review here be limited to the restrictive "plain error" standard. The contours of municipal liability under §1983 are currently in a state of evolving definition and uncertainty, and the very novelty of the legal issue at stake counsels unconstricted review. In addition to being novel, the punitive damages ques- tion is also important and appears likely to recur in § 1983 litigation against municipalities. Pp. 255-257.

2. A municipality is immune from punitive damages under § 1983. Pp. 258-271.

(a) In order to conclude that Congress meant to incorporate a particular immunity as an affirmative defense in § 1983 litigation, a court must undertake careful inquiry into considerations of both history and public policy. Pp. 258-259.

(b) In 1871, when Congress enacted what is now § 1983, it was generally understood that a municipality was to be treated as a natural person subject to suit for a wide range of tortious activity, but this understanding did not extend to the award of punitive damages at common law. Indeed, common-law courts consistently and expressly declined to award punitive damages against municipalities. Nothing in the legislative history suggests that, in enacting § 1 of the Civil Rights Act of 1871, Congress intended to abolish the doctrine of municipal immunity from punitive damages. If anything, the relevant history suggests the opposite. Pp. 259-266.

(c) Considerations of public policy do not support exposing a municipality to punitive damages for the malicious or reckless conduct of its officials. Neither the retributive nor the deterrence objectives of punitive damages and of § 1983 would be significantly advanced by holding municipalities liable for such damages. Pp. 266-271.

626 F.2d 1060, vacated and remanded.

Guy J. Wells, Providence, R.I., for petitioners.

Leonard Decof, Providence, R.I., for respondents.

Justice BLACKMUN delivered the opinion of the Court.

In Monell v. New York City Dept. of Social Services, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978), this Court for the first time held that a local government was subject to suit as a "person" within the meaning of 42 U.S.C. § 1983. Aside from concluding that a municipal body was not wholly immune from civil liability, the Court had no occasion to explore the nature or scope of any particular municipal immunity under the statute. 436 U.S., at 701, 98 S.Ct., at 2041. The question presented by this case is whether a municipality may be held liable for punitive damages under § 1983.

I

A.

Respondent Fact Concerts, Inc., is a Rhode Island corporation organized for the purpose of promoting musical concerts.¹ In 1975, it received permission from the Rhode Island Depart- ment of Natural Resources to present several summer concerts at Fort Adams, a state park located in the city of Newport. In securing approval for the final concerts, to be held August 30 and 31, respondent sought and obtained an entertainment license from petitioner city of Newport.² Under their written contract, respondent retained control over the choice of performers and the type of music to be played while the city reserved the right to cancel the license without liability if "in the opinion of the City the interests of public safety demand." App. 27.

Respondent engaged a number of well-known jazz music acts to perform during the final August concerts. Shortly before the dates specified, the group Blood, Sweat and Tears was hired as a replacement for a previously engaged performer who was unable to appear. Members of the Newport City Council, including the Mayor, became concerned that Blood, Sweat and Tears, which they characterized as a rock group rather than as a jazz band, would attract a rowdy and undesirable audience to Newport. 2 Record Appendix (R. A.) 265, 316-317, 325.³ Based on this concern, the Council attempted to have Blood, Sweat and Tears removed from the program.

On Monday, August 25, Mayor Donnelly informed respondent by telephone that he considered Blood, Sweat and Tears to be a rock group, and that they would not be permitted to perform because the city had experienced crowd disturbances at previous rock concerts. Id., at 195. Officials of respondent appeared before the City Council at a special meeting the next day, and explained that Blood, Sweat and Tears in fact were a jazz band that had performed at Carnegie Hall in New York City and at similar symphony hall facilities throughout the world. Speaking for the Council, the Mayor reiterated that the city did not condone rock festivals. Without attempting to investigate either the nature of the group's music or the representations made by respondent, the Council voted to cancel the license for both days unless Blood, Sweat and Tears were removed from the program. Id., at 267-269. The vote received considerable publicity, and this adversely affected ticket sales. Id., at 248-G.

Later in the same week, respondent was informed by the City Solicitor that the Council had changed its position and would allow Blood, Sweat and Tears to perform if they did not play rock music. On Thursday, August 28, respondent agreed to attend a second special Council meeting the following day.

The second Council session convened on the afternoon of August 29, the day before the first scheduled performance. Mayor Donnelly informed the Council members that the city had two options—it could either allow Blood, Sweat and Tears to perform subject to the prohibition against rock music, or cancel the concert altogether. Although the City Solicitor advocated the first alternative and advised that cancellation would be unlawful, 3 R. A. at 478, the Council did not offer the first option to respondent. Instead, one of the Council members inquired whether all provisions of the contract had been fulfilled. The City Manager, who had just returned from the concert site, reported that the wiring together of the spectator seats was not fully completed by 3 p. m., and that the auxiliary electric generator was not in place. Under the contract, respondent had agreed to fulfill these two conditions as part of the overall safety procedures. App. 28.⁴ The Council then voted to cancel the contract because respondent had not "lived up to all phases" of the agreement. 4 R. A. 10. The Council offered respondent a new contract for the same dates, specifically excluding Blood, Sweat and Tears. Respondent, however, indicated that it would take legal action if the original contract was not honored. 1 R. A. 96; 2 R. A. 202; 4 R. A. 11. After the meeting adjourned at 9:30 p.m., the decision to revoke respondent's license was broadcast extensively over the local media. 1 R. A. 97; 2 R. A. 204.

On Saturday morning, August 30, respondent obtained in state court a restraining order enjoining the Mayor, the City Council, and the city from interfering with the performance of the concerts. The 2-day event, including the appearance of Blood, Sweat and Tears, took place without incident. Fewer than half the available tickets were sold.

B

Respondent instituted the present action in the United States District Court for the District of Rhode Island, naming the city, its Mayor, and the six other Council members as defendants. Alleging, inter alia, that the license cancellation amounted to content-based censorship, and that its constitutional rights to free expression and due process had been violated under color of state law, respondent sought compensatory and punitive damages against the city and its officials under 42 U.S.C. § 1983 and under two pendent state-law counts, including tortious interference with contractual relationships. App. 8. At the conclusion of six days of trial, the District Court charged the jury with respect to the § 1983 and tortious interference counts. Included in its charge was an instruction, given without objection, that authorized the jury to...