absolute defense

Appellant Jim Garrison served as the District Attorney of Orleans Parish, Louisiana, during a dispute with the eight judges of the Criminal District Court of the Parish over disbursements from the Fines and Fees Fund, which required judicial approval for expenditures. After disagreements including a refusal for office furnishings and a new rule requiring five-judge concurrence for further disbursements, the judges denied funds for undercover vice investigations in New Orleans on October 26, 1962. A retired judge issued a public statement criticizing Garrison’s conduct of his office on November 1, 1962. The next day, Garrison held a press conference and issued a statement charging the judges with creating a large backlog of pending criminal cases due to their inefficiency, laziness, and excessive vacations, and with hampering vice law enforcement by refusing disbursements while suggesting racketeer influences on the vacation-minded judges. Garrison was subsequently tried without a jury before a judge from another parish and convicted of criminal defamation under the Louisiana Criminal Defamation Statute. The Supreme Court of Louisiana affirmed the conviction at 244 La. 787, 154 So. 2d 400. The United States Supreme Court noted probable jurisdiction at 375 U. S. 900, heard argument first in the 1963 Term, ordered the case restored for reargument at 377 U. S. 986, and ultimately reversed the conviction.

In 1987, petitioner Alexis Geier, then four months old, was a passenger in a 1987 Honda Accord that crashed into a tree. The car was equipped with manual shoulder and lap belts but had no airbag. The lap and shoulder belt did not prevent Alexis from striking her head on the dashboard, and she suffered serious injuries as a result. Alexis and her parents sued the car's manufacturer, American Honda Motor Company, Inc., and its American distributor, Honda of America Manufacturing, Inc., in the United States District Court for the District of Columbia. They claimed that American Honda had designed its car negligently and defectively because it lacked a driver's side airbag. American Honda moved for summary judgment on the ground that the National Traffic and Motor Vehicle Safety Act of 1966 and FMVSS 208 preempted the lawsuit. The District Court dismissed the lawsuit. The Court of Appeals for the District of Columbia Circuit affirmed the dismissal. The Supreme Court granted certiorari to decide whether the Act or the safety standard preempts a no-airbag lawsuit. FMVSS 208, promulgated under the Act, required auto manufacturers to equip some but not all of their 1987 and later model vehicles with passive restraints. The standard required manufacturers to equip 10 percent of their 1987 vehicles, 25 percent of their 1988 vehicles, 40 percent of their 1989 vehicles, and 100 percent of their 1990 and later vehicles with one of several different passive restraint systems, including airbags, automatic safety belts, or other passive restraints providing at least the same level of crash protection.

Joseph Beauharnais was president of the White Circle League of America. In January 1950 he arranged for the printing of several thousand copies of a leaflet in the form of a petition to the Mayor and City Council of Chicago. The leaflet called for segregation of the white and Negro races. It stated that the aggressions, robberies, rapes, and other acts of violence by Negroes were causing crimes that made it unsafe for white people to walk the streets. The leaflet also solicited membership in the White Circle League. On January 6, 1950, Beauharnais distributed bundles of the leaflets to volunteers at a meeting. He provided detailed instructions for street-corner distribution the next day. On January 7 the leaflets were in fact handed out on downtown Chicago corners. Beauharnais was arrested after the distribution began. He was charged with violating section 224a of the Illinois Criminal Code. The statute makes it unlawful to publish or exhibit in any public place any lithograph that portrays depravity, criminality, unchastity, or lack of virtue of a class of citizens of any race, color, creed, or religion and thereby exposes such citizens to contempt, derision, or obloquy or is productive of breach of the peace or riots. At trial the evidence that Beauharnais had caused the leaflets to be published and distributed was undisputed. The court instructed the jury that it must return a guilty verdict upon a finding that he had manufactured, sold, offered for sale, advertised, published, presented, or exhibited the lithograph. The court refused a requested instruction requiring proof of a clear and present danger of serious substantive evil. The jury convicted Beauharnais. The judge imposed a fine of two hundred dollars. The Illinois Supreme Court affirmed the conviction. It held that the statute was a valid exercise of the state's police power. The United States Supreme Court granted certiorari.

From 1946 through 1967, Ernst & Ernst, an accounting firm, was retained by First Securities Company of Chicago, a small brokerage firm and member of the Midwest Stock Exchange and the National Association of Securities Dealers, to perform periodic audits of the firm's books and records. Ernst & Ernst prepared for filing with the Securities and Exchange Commission the annual reports required of First Securities under § 17(a) of the 1934 Act. It also prepared responses to the financial questionnaires of the Midwest Stock Exchange. Respondents were customers of First Securities who invested funds in a fraudulent securities scheme perpetrated by Leston B. Nay, president of the firm and owner of 92% of its stock. From 1942 through 1966, with the majority of the transactions occurring in the 1950s, Nay induced respondents to invest in escrow accounts that he represented would yield a high rate of return. In fact, there were no escrow accounts, as Nay converted respondents' funds to his own use immediately upon receipt. These transactions were not in the customary form of dealings between First Securities and its customers. They were not reflected on the books and records of First Securities. They were not shown on its periodic accounting to respondents or included in First Securities' filings with the Commission or the Exchange. The fraud came to light in 1968 when Nay committed suicide, leaving a note that described First Securities as bankrupt and the escrow accounts as spurious. Respondents subsequently filed this action for damages against Ernst & Ernst in the United States District Court for the Northern District of Illinois under § 10(b) of the 1934 Act. The complaint charged that Nay's escrow scheme violated § 10(b) and Rule 10b-5. It also charged that Ernst & Ernst had aided and abetted Nay's violations by its failure to conduct proper audits of First Securities. As revealed through discovery, respondents' cause of action rested on a theory of negligent nonfeasance. The premise was that Ernst & Ernst had failed to utilize appropriate auditing procedures in its audits of First Securities. This failure prevented discovery of internal practices of the firm said to prevent an effective audit. The practice principally relied on was Nay's rule that only he could open mail addressed to him at First Securities or addressed to First Securities to his attention. Respondents specifically disclaimed the existence of fraud or intentional misconduct on the part of Ernst & Ernst. After extensive discovery the District Court granted Ernst & Ernst's motion for summary judgment and dismissed the action. The Court of Appeals for the Seventh Circuit reversed and remanded. The Supreme Court granted certiorari to resolve the question whether a private cause of action for damages will lie under § 10(b) and Rule 10b-5 in the absence of any allegation of scienter.