## Facts

- Fact Concerts, Inc., a concert promoter, obtained an entertainment license from the City of Newport, Rhode Island, to hold concerts at Fort Adams in 1975.
- After learning that “Blood, Sweat and Tears” would perform, the Newport City Council voted to cancel the license due to public safety and political concerns.
- The cancellation was widely publicized and depressed ticket sales.
- Fact Concerts and its promoter sued the city and city officials under 42 U.S.C. § 1983, seeking compensatory and punitive damages for constitutional violations under color of state law.
- The district court instructed the jury, without objection, that punitive damages could be awarded against each defendant, including the city.
- The jury awarded compensatory damages and punitive damages against both the individual officials and the municipality.
- After the verdict, the city challenged municipal exposure to punitive damages under § 1983; the district court found the objection untimely under Rule 51 but reached and rejected the merits.
- The First Circuit affirmed, relying on Rule 51 and indicating municipal punitive-damage liability under § 1983 was at least possible in some cases.

## Issues

1. Whether the city’s failure to object to the punitive-damages jury instruction under Federal Rule of Civil Procedure 51 barred Supreme Court review.
2. Whether a municipality may be held liable for punitive damages under 42 U.S.C. § 1983.

## Decision

- The Supreme Court held that Rule 51 did not bar review because the lower courts addressed the punitive-damages question on the merits and declining review would not serve trial-administration interests.
- The Court declined to confine review to a restrictive “plain error” standard given the importance and likely recurrence of the question and uncertainty in the doctrine at the time.
- On the merits, the Court reversed the allowance of punitive damages against the city, holding municipalities are immune from punitive damages under § 1983.

## Legal Principles

- Municipalities and other local governmental entities are immune from punitive damages in suits under 42 U.S.C. § 1983.
- In assessing asserted immunities under § 1983, courts examine historical common-law practice at the time of the statute’s enactment and relevant public-policy considerations.
- The common-law backdrop in 1871 generally rejected punitive damages against municipalities for officials’ misconduct; absent clear statutory direction, § 1983 is not read to abrogate that immunity.
- Monell’s recognition that municipalities are “persons” for compensatory liability under § 1983 does not itself imply exposure to punitive damages, which are a distinct remedy.
- Punitive damages aim to punish and deter; when imposed on a municipality, the financial burden falls primarily on taxpayers rather than culpable officials, weakening punishment and deterrence rationales.
- Deterrence under § 1983 is served through compensatory awards and potential punitive damages against individual officials in their personal capacities where legally warranted.

## Conclusion

The Court held that, despite municipal liability for compensatory relief under § 1983, Congress did not authorize punitive damages against municipalities; punitive damages remain available, if at all, against individual officials rather than the local government treasury.


City of Newport v. Fact Concerts, Inc., 453 U.S. 247 (1981)