Jacobson v. Rose

• Decision Date: 29 November 1978
• Docket Number: 77-1210,Nos. 77-1196,77-1314,s. 77-1196
• Citation: 592 F.2d 515
• Parties: Nathan S. JACOBSON, Ronald Friedland, Richard F. Levy, Sandy Jacobson, Forrest Paull, Edward Jacobson, et al., Plaintiffs-Appellants, v. Robert ROSE etc., et al., Defendants-Appellees. Nathan S. JACOBSON et al., Plaintiffs-Appellees, v. BELL TELEPHONE CO., OF NEVADA, Defendant-Appellant. Nathan S. JACOBSON, et al., Plaintiffs-Appellees, v. Robert ROSE, etc., et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 515

592 F.2d 515

Nathan S. JACOBSON, Ronald Friedland, Richard F. Levy, Sandy

Jacobson, Forrest Paull, Edward Jacobson, et al., Plaintiffs-Appellants, v. Robert ROSE etc., et al., Defendants-Appellees.

Nathan S. JACOBSON et al., Plaintiffs-Appellees, v. BELL TELEPHONE CO., OF NEVADA, Defendant-Appellant.

Nathan S. JACOBSON, et al., Plaintiffs-Appellees, v. Robert ROSE, etc., et al., Defendants-Appellants.

Nos. 77-1196, 77-1210, 77-1314.

United States Court of Appeals Ninth Circuit.

Nov. 29, 1978.

Rehearing Denied in No. 1196 March 21, 1976.

Thomas R. Sheridan (argued), of Simon & Sheridan, Los Angeles, Cal., for plaintiffs-appellants, cross-appellees.

Anthony S. Warburg (argued), of Porter, Scott, Weiberg & Delehant, Sacramento, Cal., Noble K. Gregory (argued), of Pillsbury, Madison & Sutro, San Francisco, Cal., for defendants-appellees, cross-appellants.

Appeal from the United States District Court for the District of Nevada.

Before CHOY and KENNEDY, Circuit Judges, and SCHNACKE ^*, District Judge.

CHOY, Circuit Judge:

Appellants brought suit against certain officials of Washoe County, Nevada, and Bell Telephone Company of Nevada, seeking civil damages for an allegedly illegal wiretap pursuant to Title III of the Omnibus Crime Control and Safe Streets Act of 1968, 18 U.S.C. § 2520. Appellants claim that the district court improperly limited its award to them. The Washoe County officials and Nevada Bell cross-appeal, claiming that the district court impermissibly failed to instruct the jury on certain defenses. We affirm in part, and reverse and remand in part.

I. Statement of the Case

In September, 1971, the Washoe County Sheriff's Department and District Attorney's Office sought a court order authorizing wiretapping of certain telephone lines at the Kings Castle Hotel and Casino, purportedly to uncover information concerning a possible kidnapping at Kings Castle. On September 20, 1971, District Attorney Rose obtained an "Order for the Authorization to Intercept Wire Communications" ¹ from a state judge. The order specified that it would terminate thirty days from its date. The order also "requested" that Nevada Bell "cooperate in every respect" with the government officials. Upon receiving a copy of the order, Nevada Bell requested that a more precise order be drafted apparently to ensure compliance with applicable law. Rose and his deputy, Hicks, redrafted the order in cooperation with Nevada Bell, obtaining court approval of the revised order on September 29, 1971. The second order set the period of authorized interception as thirty days from the date of the original order of September 20. ²

Benham, Chief Deputy of the Sheriff's Department and the individual responsible for effecting the wiretap, learned of the issuance of the second order. Without seeing the order but having been told of its contents he assumed that the second order provided for interception for thirty days from the signing of the second order. After preliminary work by Nevada Bell and after encountering technical difficulties, Benham and other sheriff's officials succeeded in making the intercept operational on October 18, 1971. Benham closed down the intercept on October 29, 1971, thirty days after the signing of the second order. The wiretaps provided no information useful in investigating the alleged kidnapping.

In May, 1972, Jacobson and others whose conversations were allegedly wiretapped filed a class action suit for recovery of statutory liquidated damages (not actual damages), attorney's fees, and costs, as provided in § 2520. ³ Having denied class action status, the district court on April 10, 1975, granted plaintiffs leave to amend their complaint to add as plaintiffs other individuals whose conversations were allegedly overheard. On October 17, 1975, a stipulated pretrial order was filed in which plaintiffs' claim was stated to be for statutory liquidated damages, no mention being made of actual damages. After extensive discovery, a jury trial commenced. On the second day of the trial, appellants unsuccessfully sought leave to amend their complaint to ask for actual damages.

At the close of the defense's case, the district court directed verdicts against defendants Rose, Hicks, Benham, and Galli, Sheriff of Washoe County, as to statutory liquidated damages. The district judge gave to the jury the claims for statutory damages against Nevada Bell, Butner, a lieutenant with the Sheriff's Department, and Whitmire, a deputy sheriff. ⁴ The judge also instructed the jury on punitive damages as to Rose, Hicks, Galli, and Benham. The judge refused to give defendants' proposed instruction setting forth a defense based on good faith reliance on a court order, concluding that "(t) here is no way you can misinterpret an order that you have never seen." The court also refused to instruct the jury as to prosecutorial immunity for Rose and Hicks, "finding that the attorney defendants were not acting as attorneys."

Though not awarding punitive damages, the jury found Butner, Whitmire, and Nevada Bell liable for statutory damages. The jury awarded the statutory maximum, $1000, against each of the seven defendants. The court later determined that defendants' liability should be joint and several and not individual. It therefore reduced the award to $1000 for each plaintiff as against all seven defendants jointly, for a total judgment of $12,000. The court also awarded $12,000 in attorney's fees pursuant to § 2520(b). The court clerk awarded costs to plaintiffs.

II. Appellants' Claims

A. Leave to Amend

Appellants assert that the district judge abused his discretion in refusing to allow them to amend their complaint to seek actual damages.

"It is settled that the grant of leave to amend the pleadings pursuant to Rule 15(a) is within the discretion of the trial court." Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 330, 91 S.Ct. 795, 802, 28 L.Ed.2d 77 (1971); Waters v. Weyerhaeuser Mortgage Co., 582 F.2d 503, 507 (9th Cir. 1978); Komie v. Buehler Corp., 449 F.2d 644, 647 (9th Cir. 1971). ⁵ The Supreme Court has instructed that in exercising its discretion the trial court should consider the potential prejudice to the other parties. Zenith Radio, 401 U.S. at 330-31, 91 S.Ct. 795. We have also noted that delay in seeking an amendment is a common reason for refusing leave. Komie, 449 F.2d at 647-48. For example, in upholding a district judge's refusal to allow an amendment regarding agency to pleadings and the pretrial order, we wrote:

Here there were "justifying" reasons (for rejecting the amendment) which were readily apparent. The motion was made 31 months after the answer was filed, eleven months after the pretrial statement was signed, and more than six months after the case was set for trial. There had been extensive discovery none of which had been directed to (the issue sought to be added). The proposed amendment was not based upon any facts which were not known or readily available to the defendants and their counsel, at least when the pretrial statement was signed.

Id. at 648. See Waters, 582 F.2d at 507.

In the instant case the plaintiffs' motion to amend came on the second day of trial, two months after the trial court had ordered the close of discovery, some 50 months after the action was filed, 15 months after the filing of the first amended complaint, and nine months after the filing of the pretrial order. Not based on any newly-revealed material facts, the amendment would have interjected an entirely new issue into the trial. Following Komie and Waters, we conclude that the district court did not abuse its discretion in refusing to allow the proposed amendment. ⁶

B. Punitive Damages

Appellants next contend that the trial judge erred in restricting its instruction on punitive damages to certain defendants. We have noted, however, that "(n)o error is committed by failure to give an instruction which finds no support in the evidence." Southern Pacific Co. v. Villarruel, 307 F.2d 414, 415 (9th Cir. 1962). See Bechtel v. Liberty National Bank, 534 F.2d 1335, 1342 (9th Cir. 1976). In order to receive punitive damages under § 2520, appellants must show that defendants acted wantonly, recklessly, or maliciously. Halperin v. Kissinger, 434 F.Supp. 1193, 1195 (D.D.C.1977). See Scott v. Donald, 165 U.S. 58, 86-89, 17 S.Ct. 265, 41 L.Ed. 632 (1897); Lake Shore & Michigan Southern Railway Co. v. Prentice, 147 U.S. 101, 106-07, 13 S.Ct. 261, 37 L.Ed. 97 (1893). Having reviewed the record, we think the district court limited the instruction as to punitive damages in accord with the evidence proffered. We refuse to accept appellants' claim that the events surrounding the wiretapping, of themselves, manifest the necessary wantonness, recklessness, or maliciousness.

C. Joint Liability

Appellants next claim that the language in § 2520 providing that an aggrieved individual shall "be entitled to recover from any such person" who illegally wiretaps indicates that Congress intended recovery for liquidated damages to be against each defendant individually and not jointly.

Appellants' interpretation is inconsistent with the language and purpose of § 2520. Section 2520 provides that the victim shall "be entitled to recover from any such person" actual or liquidated damages, punitive damages, reasonable attorney's fees, and costs. If "any such person" means that liability is individual, then a plaintiff could recover actual or liquidated damages in a § 2520 action in excess of actual loss. Indeed, the amount of recovery would depend on the number of defendants named. This result does not comport with the common understanding that these types of damages are intended to reimburse a plaintiff for his losses and not to provide a windfall against multiple defendants. See Scott, 165 U.S. at 86-89, 17 S.Ct. 265; Lake Shore, 147 U.S. at 107, 13 S.Ct. 261. In the absence of a clear congressional direction, we cannot...