California Punitives by Horvitz & Levy

  • Law Review Article: Punitive Damages and Class Actions

    Francesco Parisi of the University of Minnesota Law School and Marta Cenini of the University of Milan have posted an article on SSRN entitled “Punitive Damages and Class Actions.”

    Here’s the abstract:

    Punitive damages and class actions can be viewed as sharing a common economic function – creating optimal deterrence. This is a function that these remedies can best pursue in different domains. When a tortfeasor causes harm that affects many victims, the preferred remedy is a class action. This is especially so when the amount of compensatory damages are high.There are scenarios, however, in which imposing punitive damages represents the best solution. We identify some of these scenarios to suggest the proper domains of these two remedies. Finally, we identify situations where a combined use of these two remedies is desirable. We suggest that when the amount of losses suffered by victims is so small as to preclude a class action due to transaction costs and inactivity, it may nevertheless be useful to combine punitive damages with a class action. Punitive damages should be awarded within a class action if and only if there are frictions that could prevent the injured party from taking legal action.

    Law professors have been writing on this subject for decades, but unfortunately, the courts have yet to fashion any of these academic proposals into a generally accepted method for resolving punitive damages claims in mass tort cases.

    Hat tip: Mass Tort Litigation Blog.

  • Commentary on Prof. Dan Markel’s Punitive Damages Theory

    Professor Michael OHear has posted this commentary on the Marquette University Law School law blog about a presentation made by Florida State law professor Dan Markel. Prof. Markel presented his paper “How Should Punitive Damages Work?” to kick off a speaker series at Marquette. Prof. O’Hear questions whether Prof. Markel’s proposals are workable in the real world.

  • Forthcoming Law Review Article: “How Should Punitive Damages Work?”

    Professor Dan Markel of Florida State University College of Law has posted on SSRN a draft of his forthcoming law review article “How Should Punitive Damages Work?” As he describes in his post on Prawfsblog, the article is part of a three-part series that he intends to assemble into a book, tentatively titled “The Punitive Damages Mess: How to Fix It.”

    In this installment, he explains that there are three main goals of punitive damages: (1) to vindicate a public interest in retribution (which he calls “retributive damages”), (2) to vindicate a plaintiff’s private interest in redress for harms to his/her dignity (which he calls “aggravated damages”), and (3) to provide cost-internalization of harmful conduct (“deterrence damages”). He suggests that it’s a mistake to include all these different concepts under the umbrella of punitive damages. He says each form of damages should be assessed separately, with defendants enjoying different procedural protections depending on the type of damages at issue. It’s an intriguing idea, but unfortunately we aren’t likely to see that level of sophistication from actual policy makers anytime soon.

  • “Punitive Damages and French Public Policy”

    Georges A. J. Cavalier, Jr. has posted a working paper on SSRN entitled “Punitive Damages and French Public Policy.” Here’s the abstract:

    When asked whether French law admits punitive damages, Professor Durry, a prominent French academic, responded: “No, No, and No!; three times No! But…” These few words seem to pretty much illustrate where French law stood several years ago regarding punitive damages.

    In French legal terminology, one generally opposes “punitive damages” to “compensatory damages.” Compensatory damages repair the victim’s injury, as if he or she had incurred no loss at all. They are sometimes just symbolic or token sums. In this school of thought, the indemnification must in no way be enrichment for the victim. Contrary to compensatory damages, punitive damages are outrageous sums awarded in excess of compensatory damages to punish a party for outrageous conduct.

    For a long time now, punitive damages have been a common law specialty. The US Supreme Court repeats again and again that the US Constitution imposes certain limits, limits that forbid only “grossly excessive” punitive damages. Let us give you a recent example: in a case tried on February 20, 2007, the representative of a certain Jesse Williams, who died from smoking cigarettes manufactured by Phillip Morris, was awarded $821,000 in compensatory damages, and $79,5 million in punitive damages. One major question that could have been debated in court was whether this 100-to-1 ratio constituted a “grossly excessive” amount.

    Hat tip: TortsProf Blog.

  • Trio of Punitive Damages Law Review Articles

    Three recent law review articles address punitive damages issues:

    Frank A. Perrecone and Lisa Fabiano have an article in the Northern Illinois University Law Review entitled “The Federalization of Punitive Damages and the Effect on Illinois Law.”

    Paul Edgar Harold and Tracy L. Cole have an article in the University of Arkansas at Little Rock Law Review entitled “Darned if You Due Process, Darned if You Don’t Understanding the Due Process Dilemma for Punitive Damages in Title VII Class Actions.” (No link available but the cite is 30 U. Ark. Little Rock L. Rev. 453.)

    Maren P. Schroeder has an article in the Wyoming Law Review entitled “Damage Control? Unraveling the New Due Process Standard Prohibiting the Use of Nonparty Harm to Calculate Punitive Damages, Philip Morris USA v. Williams.” (No link available but the cite is 8 Wyo. L. Rev. 607.)

  • Doug Rendleman Law Review Article: “A Plea to Reject the United States Supreme Court’s Due Process Review of Punitive Damages”

    Doug Rendelman, a law professor at Washington & Lee School of Law, has posted this article on SSRN. Here’s the abstract:

    Because the audience and readers of this piece are not United States lawyers, I supply background and I paint with a broad brush. In short, the United States Supreme Court’s use of the Due Process Clause for judicial tort reform of punitive damages was a serious mistake. On the nebulous due-process foundation, the Court built imprecise yet wrongheaded doctrine based on misguided policy justifications. Other common-law countries ought to learn from our blunders, above all not to repeat them.

    I wrote this for the Second International Symposium on the Law of Remedies sponsored by the University of Windsor and the University of Auckland. The Symposium was in Auckland, New Zealand, in November 2007. It will be published in 2008 in a book titled The Law of Remedies: New Directions in the Common Law edited by Jeff Berryman and Rick Bigwood. The footnotes are in Canadian, not Bluebook, form.

    The adoption of U.S.-style judicial review of punitive damages is not likely to be a big issue in many countries; most other legal systems don’t seem to generate the sort of mega-awards we see here in the U.S. As far as the U.S. system goes, Rendleman’s criticisms echo the views Justices Scalia and Thomas have expressed ever since the Supreme Court required due process review of punitive damages in BMW v. Gore in 1996. Nevertheless, there is no indication that Justices Scalia and Thomas will be able to win over a majority of the justices on that issue anytime soon. Things may change, however, if McCain wins the presidential election and appoints a justice or two in the Scalia/Thomas mold. This is one area in which a more conservative court would actually be bad news for business interests.

  • CQ Politics Emphasizes Supreme Court’s Observation that Punitive Damages Are Not “Out of Control”

    CQ Politics has a post by columnist Kenneth Jost entitled “Courts & the Law: Damage Controlled.” Jost writes that most commentators on Exxon Shipping Co. v. Baker have overlooked a fundamental premise of the Court’s reasoning, namely, that most punitive damages awards are infrequent, have not increased in recent years, and are generally lower than the amount of compensatory damages.

    Personally, I find this aspect of the Supreme Court’s opinion very ironic. For years, a contingent of lawyers who oppose restrictions on punitive damages have written articles and published studies showing that punitive damages are rarely awarded, and when they are, the awards are usually modest. (See, e.g., the writings of Neil Vidmar and Michael Rustad.) I have always thought that such studies are effective in countering the perception that punitive damages are “out of control,” but they really don’t support the argument that the monster awards, rare as they may be, shouldn’t be reined in.

    Justice Souter, in his opinion in Exxon Shipping Co., actually turned these stats against the people who have long been touting them. He pointed to these stats as evidence that plaintiffs’ advocates have no basis for complaining about a 1-to-1 ratio limit, because it will only affect a small subset of all punitive damages cases.

  • PrawfsBlawg: Supreme Court Punitive Damages Cases Illustrates Folly of Attempting to Predict Outcomes Based on Political Labels

    Prof. Rick Hills at PrawfsBlawg has a post entitled “Spatial Attitudinalism & Philip Morris v. Williams.” Hill criticizes the approach of political scientists who attempt to predict or explain the outcomes of legal cases by focusing on the political ideology of the judge (often based on the party of the President who appointed the judge.) Hill points out that the voting patterns of Supreme Court Justices in punitive damages cases illustrates the shortcomings of such an approach:

    Could any attitudinalist model predict that these two conservative Republicans would be making a stand against the National Association of Manufacturers in favor of state power over punitive damages? Loyalty to federalism and hostility to judicial discretion in interpreting the due process clause surely explain their votes more than any constitutionally irrelevant “attitude.” Likewise, Breyer’s championing restrictions on juries surely rests on his love of technocracy over decentralized juries more than any fealty to the values of the Democratic Party or love of Big Tobacco.

    I think Hill has a good point. As my co-blogger Jeremy Rosen has observed, however, popular commentary on the Court’s punitive damages decisions (and even some academic commentary, like this article by Erwin Chemerinsky) has often criticized the “conservative” court for the outcomes in those cases, without even seeming to notice that the most conservative justices on the court dissented from those opinions. After all, BMW v. Gore, the case that launched the Court’s foray into substantive due process restrictions for punitive damages, was authored by Justice Stevens, not usually described as a conservative. (Though he was appointed by a Republican, so I guess that would fit a primitive “spatial attitudinalism” model.)

  • Forthcoming Yale Law Journal Article: “Clearing the Smoke from Philip Morris v. Wiliams . . .”

    Professor Thomas Colby of George Washington University Law School has posted his forthcoming Yale Law Journal article entitled “Clearing the Smoke from Philip Morris v. Williams: The Past Present, and Future of Punitive Damages” on SSRN. I haven’t had a chance to read it, but here’s the abstract:

    In Philip Morris v. Williams, the Supreme Court held that the Constitution does not permit the imposition of punitive damages to punish a defendant for harm caused to third parties. This Article critiques the reasoning, but seeks ultimately to vindicate the result, of this landmark decision. It argues that, although the Court’s procedural due process analysis does not stand up to scrutiny, punitive damages as punishment for third-party harm do indeed violate procedural due process, but for reasons far more profound than those offered by the Court. To reach that conclusion, the Article confronts the most basic and fundamental questions about punitive damages – questions that the Supreme Court has studiously avoided for more than a century: what, exactly, is the purpose of punitive damages, and how is it constitutional to impose them as a form of punishment in a judicial proceeding without affording the defendant the protection of the Constitution’s criminal procedural safeguards?

    The Article argues that punitive damages are properly conceived of a form of punishment for private wrongs: judicially sanctioned private revenge. As such, the Article explains, it makes both theoretical and doctrinal sense to impose them without affording the defendant criminal procedural protections, which are necessitated only for the punishment of public wrongs on behalf of society. When, however, courts employ punitive damages as a form of punishment for public wrongs, they become a substitute for the criminal law and thus make an intolerable end run around the Bill of Rights. For that reason, Williams was ultimately correct that punitive damages must be limited to punishment for the harm done to the individual plaintiff, not the harm done to the general public.

    The Article concludes by considering the future of punitive damages in light of the Williams decision. It concludes that, contrary to the emerging conventional wisdom, Williams does not stand in the way of the imposition of substantial extra-compensatory damages of the type favored by law and economics scholars as a means of forcing the defendant to internalize the costs of its behavior in order to achieve optimal deterrence. It is the fact that punitive damages punish, and that they do so in order to vindicate the interests of the state, that precludes their use to address third-party harms. Once the element of punishment is eliminated from the remedy, the constitutional infirmity at issue in Williams is ameliorated.

    Hat tip: Legal Theory Blog.

  • Widener Law Journal’s Crimtorts Symposium

    TortsProfblog has a post with hyperlinks to all the articles in the forthcoming Widener Law Journal Crimtorts Symposium issue. Some of the more intriguing titles include:

    The Supreme Court and Me: Trapped in Time with Punitive Damages by Michael L. Rustad.

    A Theory of Wealth and Punitive Damages by Keith N. Hylton

    The Road Not Taken: Would Application of the Excessive Fines Clause to Punitive Damages Have Made a Difference? by Sheila B. Scheuerman