Saturday, December 6, 2008
Article in the L.A. Times -- Exxon Valdez victims receive first payments, by Kim Murphy. (H/t to Torts Prof Blog.) Here's an excerpt:
Reporting from Cordova, Alaska -- A little less than 20 years ago, Mike Webber was king of his own watery world. He was 28 years old, with three herring fishing boats. He leased another long-line boat for halibut, and gill-netted the fat salmon that made Prince William Sound one of the most legendary fisheries in the world.
Then came the 1989 Exxon Valdez oil spill. Overnight, it was all gone: Fish prices plummeted. People started selling their fishing permits to pay their mortgages, and then lost their houses anyway. Salmon rebounded, but the $12-million-a-year herring fishery all but disappeared.
On Friday, Webber and more than 200 other residents of this rain-soaked fishing town began getting the first round of punitive damage payments from ExxonMobil, closing the book on one of the nation's most epic battles over environmental destruction and corporate responsibility.
Thursday, December 4, 2008
Article on Bloomberg.com -- Altria Punitive-Damages Case Divides U.S. High Court, by Greg Stohr. Here's an excerpt:
A divided U.S. Supreme Court wrestled with a $79.5 million award against Altria Group Inc.’s Philip Morris USA unit in an Oregon smoker lawsuit and discussed the possibility of broadening the scope of the case.
In a case now before the justices for the third time, Philip Morris is seeking a new trial and a reprieve from what would be a record payment in a smoker suit. The cigarette maker says the Oregon Supreme Court improperly circumvented a 5-4 ruling the company won at the U.S. Supreme Court last year. The Oregon court then reaffirmed the award, saying the company violated a state procedural requirement.
Comments during today’s argument suggested that several justices may switch sides, putting the outcome in doubt. Antonin Scalia, who dissented in 2007, today said the Oregon court had disobeyed the high court’s instructions. At the same time, Stephen Breyer and David Souter, who previously sided with Philip Morris, hinted they might vote against the company this time.
Friday, October 3, 2008
Dan Markel (Florida State
Here is the abstract of the first piece:
What are punitive damages for? In a companion article, I argued that states should re-conceive and restructure punitive damages to advance, in part, the public's interest in retributive justice. I called such damages "retributive damages." Although that article provided the rationale and basic structure for retributive damages as an expressly "intermediate sanction," and explained why society should want retributive damages independent of other remedial or penal options, the theoretical nature of the proposal only scratched the surface of how they would operate in practice. This Article addresses the next critical question: how should punitive damages work? This question is especially timely in light of the Supreme Court's recent decision in Philip Morris v. Williams, which held that juries may not consider the harms to non-parties in determining the amount of punitive damages a defendant must pay. To make punitive damages work, we must first separate retributive damages from damages meant either to achieve optimal deterrence (to the extent permitted by Philip Morris) or to vindicate the victim's dignity interests. Because these purposes are distinct, a jurisdiction that conflates them risks both under- and over-protection of various defendants. Once we correctly understand these distinct purposes, our institutional design for civil damages should map these values appropriately.
This Article begins that important task, first by explaining why and how defendants should enjoy certain procedural protections depending on which purpose the damages vindicate, and second, by addressing the critical implementation issues associated with this pluralistic scheme of extra-compensatory damages: insurance, settlement, and taxation.
Monday, July 14, 2008
Article in Bloomberg.com -- Ford Gets California Review of $82.6 Million Rollover Verdict, by Edvard Pettersson. (H/t to AmLaw Litigation Daily.) Here's an excerpt:
Ford Motor Co., the second-biggest U.S.-based automaker, will get a review from California's highest court of an $82.6 million verdict stemming from a 2002 rollover crash that left a woman paralyzed.
The California Supreme Court, in a notice posted today on its Web site, granted Ford's petition for review of a California appeals panel's decision not to reduce the $55 million punitive damages part of the verdict or to grant a new trial.
The U.S. Supreme Court last year ordered the appeals court in San Diego to reconsider the punitive damages in light of a decision in a smoker's lawsuit against Altria Group Inc.'s Philip Morris unit that said punitive damages couldn't be based on harm to people not involved in the court case. The appeals court said March 10 there was no evidence the Ford jury based its award on harm to people who weren't part of the lawsuit.
Thursday, July 3, 2008
Ted Frank, director of the AEI Legal Center for the Public Interest, discusses the recent punitive-damages Supreme Court decision, Exxon v. Baker, as part of a Federalist Society SCOTUScast.
Wednesday, July 2, 2008
Anthony Sebok (Cardozo) has an excellent Findlaw colum (click here) on Exxon v. Baker. There are lots of interesting points in this column. Sebok's discussion of the history -- and of the importance of the theory of punitive damages in light of that history -- is very illuminating.
Thursday, June 26, 2008
I just finished reading the decision in Exxon v. Baker and have a few preliminary thoughts. As most of our readers are aware from Byron's post, the decision reconsidered the punitive damages in the case arising out of the Exxon Valdez disaster. The court held that punitive damages are available under maritime law, that this is a federal common law question, and that the appropriate punitive damages award for the type of reckless conduct found in this case was a 1:1 ratio to the compensatory damages awarded in the case. For those wanting more commentary, you might check Scotusblog commentaries here.
So what's so weird about the decision?
1. Its a punitive damages class action! Forgive me for not noticing this before, but that is a rare bird indeed.
2. The Court's main concern is that punitive damages are inconsistent. But that assertion, if true, doesn't at all support the idea that punitive damages should be pegged in a 1:1 ratio to compensatory damages. We need to ask why they are inconsistent and what that means. For example, assume there are two trials arising out of the same conduct. In one trial there is a punitive damages award of $8 million and in another trial a punitive damages award of $0. Does this mean that $0 punitive damages is the right answer? No. There are three possible answers: $8, $0 and $4. Which is right? I don't know. But none of them bear any relationship to the compensatory damages in the hypothetical case (which is why, you may have noticed, I did not mention the compensatory damages). What inconsistent punitive damages tell us is that the whole concept of punitive damages is contested, and people can't agree on whether and how much we should punish wrongdoers through the civil justice system. Some juries think we should, some think we shouldn't. Imposing a randomly selected ratio does not solve the underlying policy question. In any event, here the punitives across cases are consistent because all the cases arising out of this conduct were included in this class action! Furthermore, we tolerate inconsistent verdicts all the time in personal injury cases. This is part of life, because the process of valuing cases is one of the social construction of damages. And it is contested.
2a. And on that ratio, the idea that the appropriate measure of punitive damages is the same as the mean ratio is absurd. The court did not even consider comparable cases (because there aren't any, perhaps). Can you imagine what my students would say if I told them that I am not reading their exams and grading them individually, but instead giving them a B, because we have a B median requirement at the law school where I teach? That would be incredibly unfair, regardless of what I think about grading as a policy matter.
3. The Court stands the economic theory of punitive damages on its head. The majority quite clearly states that the purpose of punitive damages is retribution and deterrence. But if deterrence is your goal, pegging punitive damages (in any multiplier) to compensatory damages makes no sense. The theory of deterrence requires that the wrongdoer pay something more than the cost of preventing the accident/bad act. That cost has no relationship to compensatory damages. If the cost of preventing the the wrongful act is the same as the damages that act cost, that is pure luck. For example, maybe a test to find out if ship's captains are relapsed alcoholics only costs $100 per captain per year. Then the punitive damages need to be something more than that amount. Not $2.5 billion. Not $20 million either.
3a. To the extent that its not about deterrence but about retribution, pegging the punitive damages to compensation still doesn't make sense. If you want to hurt the defendant, you have to look at the defendant's wealth and figure out what amount will hurt him. Knowing how much the defendant hurt the plaintiff will not help because there is, again, no relationship between the marginal value of a dollar to the plaintiff and to the defendant. For an article on the retribution theory of punitive damages see Anthony Sebok, Punitive Damages: From Myth to Theory on SSRN and Iowa L. Rev.
3b. The only way that pegging compensatory damages to punitive damages makes sense is to say that punitive damages are a part of compensatory damages - they compensate for other things, say harm to third parties. This is a theory, but its one the court has rejected as far as I can tell in
Philip Morris v. Williams as well as in Exxon. For an article on this theory see Catherine Sharkey, Punitive Damages as Societal Damages abstract on SSRN , published in the Yale L. J.
Wednesday, June 25, 2008
Article on cnn.com -- High court reduces Exxon oil spill damages. Here's an excerpt:
The Supreme Court has reduced a $2.5 billion punitive damages award against energy giant Exxon for its role in an infamous 1989 maritime oil spill.
The high court concluded, 8-0, that punitive damages should roughly match actual damages from the environmental disaster, which were roughly $507 million. Justice Samuel Alito took no part in the case because he owns Exxon stock.
The court ruled that victims of the worst oil spill in U.S. history may collect punitive damages from Exxon Mobil Corp, but not as much as a federal appeals court determined.
Wednesday, June 18, 2008
The Widener Law Journal has published its issues in connection with its February 2008 symposium, Crimtorts. Torts Prof Blog has links to all the articles, which include the following:
Christopher J. Robinette, Introduction
Kenneth W. Simons, The Crime/Tort Distinction: Legal Doctrine and Normative Perspectives
Michael L. Rustad, The Supreme Court and Me: Trapped in Time with Punitive Damages
Jeffrey O'Connell, The Large Cost Savings and Other Advantages of an Early Offers "Crimtorts" Approach to Medical Malpractice Claims
Byron G. Stier, Crimtorts, Class Actions, and the Emerging Mass Torts Method
Keith N. Hylton, A Theory of Wealth and Punitive Damages
Sheila B. Scheuerman, The Road Not Taken: Would Application of the Excessive Fines Clause to Punitive Damages have Made a Difference?
Monday, June 9, 2008
The Supreme Court today granted certiorari to hear another appeal concerning punitive damages in Williams v. Philip Morris, this time to decide whether the Oregon courts complied with the U.S. Supreme Court's earlier ruling in the case. Here's a link to the Oregon Supreme Court opinion in question, and an excerpt from the NY Times article by David Stout:
The United States Supreme Court will review a $79.5 million punitive-damages award against Philip Morris in the latest back-and-forth between the justices and the high court of Oregon. The last time the case was before the United States Supreme Court, the justices overturned the award by an Oregon jury on the ground that jurors might have improperly calculated the monetary figure to punish the cigarette maker, by weighing the harm the company caused to smokers other than Mr. Williams.
That ruling, on Feb. 20, 2007, sent the case back to the Oregon Supreme Court, which concluded in January that the award against Philip Morris could stand because the United States Supreme Court had acknowledged that harm to people not involved in the lawsuit could still play a role in the punitive-damages calculation “in the sense that it is relevant to showing the degree of reprehensibility of a defendant’s conduct.”
In announcing on Monday that it would look at the Williams case once again, the United States Supreme Court said it would not consider whether the amount of the judgment was constitutionally permissible. Rather, it would decide if the Oregon court’s January action was taken in defiance of the February 2007 ruling.
For earlier accounts of the Williams case on this blog, see here (on the Supreme Court's opinion and a related editorial), here (on a subsequent law review symposium), and for earlier accounts with links to articles, audio, and more, see here, here, here, here, here, here, and here.
Tuesday, April 1, 2008
Last September, Charleston Law School hosted a symposium entitled, Punitive Damages, Due Process, and Deterrence: The Debate After Philip Morris v. Williams. (See prior posts here and here.) The resulting symposium issue of the Charleston Law Review has just been published. Articles in the issue include the following:
Anthony Sebok, After Philip Morris v. Williams: What is Left of the "Single-Digit" Ratio?, 2 Chas. L. Rev. 287 (2008)
Anthony J. Franze, Clinging to Federalism: How Reluctance to Amend State Law-Based Punitive Damages Procedures Impedes Due Process, 2 Chas. L. Rev. 297 (2008).
Neil Vidmar & Matthew Wolfe, Fairness Through Guidance: Jury Instruction on Punitive Damages After Philip Morris v. Williams, 2 Chas. L. Rev. 307 (2008)
Christopher J. Robinette, Peace: A Public Purpose for Punitive Damages?, 2 Chas. L. Rev. 327 (2008).
Keith N. Hylton, Due Process and Punitive Damages: An Economic Approach, 2 Chas. L. Rev. 345 (2008)
Victor E. Schwartz & Christoper E. Appel, Putting the Cart Before the Horse: The Prejudicial Practice of A "Reverse Bifurcation" Approach to Punitive Damages, 2 Chas. L. Rev. 375 (2008)
Elizabeth J. Cabraser & Robert J. Nelson, Class Action Treatment of Punitive Damages Issues After Philip Morris v. Williams: We Can Get There From Here, 2 Chas. L. Rev. 407 (2008)
Byron G. Stier, Now It's Personal: Punishment and Mass Tort Litigation After Philip Morris v. Williams, 2 Chas. L. Rev. 433 (2008).
Michael L. Rustad, The Uncert-Worthiness of the Court's Unmaking of Punitive Damages, 2 Chas. L. Rev. 459 (2008)
Downloads of the articles via .pdf files are available at TortsProf Blog.
Monday, March 31, 2008
The New York Times has an interesting story on Italians’ view of punitive damages. Apparently they are "so offensive to Italian notions of justice" that Italy refuses to enforce judgements containing punitive damages. Here’s an excerpt of the full article, which begins by highlighting an Alabama woman who sued when her 15-year old’s motorcycle helmet failed:
Most of the rest of the world views the idea of punitive damages with alarm. As the Italian court explained, private lawsuits brought by injured people should have only one goal — compensation for a loss. Allowing separate awards meant to punish the defendant, foreign courts say, is a terrible idea.
Punishments, they say, should be meted out only by the criminal justice system, with its elaborate due process protections and disinterested prosecutors. It is not fair, they add, to give plaintiffs a windfall beyond what they have lost. And the ad hoc opinions of a jury, they say, are a poor substitute for the considered judgments of government safety regulators.
Some common-law countries do allow punitive damages, though in limited circumstances and modest amounts. In the United States, by contrast, enormous punitive awards are relatively common, although they are often reduced or eliminated on appeal. Last month, for instance, the United States Supreme Court heard arguments in the Exxon Valdez case, where a jury’s initial award of $5 billion was later reduced to $2.5 billion.
Still, such awards terrify foreign courts.
"The U.S. practice of permitting a lay jury to exercise largely discretionary judgment with limited constraints in awarding punitive damages is regarded almost universally outside the U.S. with a high degree of disfavor," said Gary Born, an American lawyer who works in London.
Foreign lawyers and judges are quick to cite particularly large American awards. Julian Lew, a barrister in London, recalled a Mississippi court’s $400 million punitive award against a Canadian company in 1995 with scorn. "It did bring America into total and utter contempt around the world," Mr. Lew said.
Yet there are signs that the gap between the United States and the rest of the world is narrowing, as American courts and legislatures start to limit punitive awards and other countries start to experiment with them.
Punitive damages have deep roots in American and English common law, but their nature has changed here over time. "Until well into the 19th century," Justice John Paul Stevens of the Supreme Court wrote in 2001, "punitive damages frequently operated to compensate for intangible injuries" like pain and suffering or emotional distress.
These days, driven by the structure of the American civil justice system, entrepreneurial plaintiffs’ lawyers and the populism they embrace, punitive damages are used to send messages to large corporations, to fill gaps in regulation and to reward successful plaintiffs with multiples of what they have lost. Distinctive features of the American legal system — civil juries, class actions, contingency fees and the requirement that each side bear its own lawyers’ fees — all play a role in amplifying punitive damages.
Tuesday, March 25, 2008
Interesting article by Adam Liptak in tomorrow's New York Times -- Foreign Courts Wary of U.S. Punitive Damages -- as part of the series on the American legal system in comparative perspective. The main point of the story is the uniqueness of U.S. punitive damages and the reluctance of some foreign courts to enforce U.S. punitive damage awards, but the story also suggests "that the gap between the United States and the rest of the world is narrowing, as American courts and legislatures start to limit punitive awards and other countries start to experiment with them."
Friday, February 29, 2008
The Supreme Court heard oral argument Wednesday on whether to uphold the $2.5 billion punitive damages award against Exxon Mobil and its shipping subsidiary in a class action arising out of the 1989 oil spill of the Exxon Valdez in Alaska's Prince William Sound. For commentary on the argument and on the Justices' questions, see Scotusblog, Point of Law, and the New York Times. The Times article points out that the award, on behalf of a class of 32,000 fishermen and business owners, is the largest punitive damages award ever upheld in federal court. With Justice Alito recused because of stock ownership, a 4-4 tie would result in affirmance of the judgment. Observers have suggested the strong possibility that the award will be reduced but not eliminated.
Sunday, February 17, 2008
Professor Mark Geistfeld (NYU) has posted his paper, Punitive Damages, Retribution, and Due Process, 81 Southern Cal. L. Rev. 263 (2008), on the NELLCO Legal Scholarship Repository. Here's the abstract:
Tort law provides awards of punitive damages for reasons of deterrence and retribution. In light of a recent decision by the U.S. Supreme Court in Phillip Morris USA v. Williams, the retributive rationale for punitive damages will inevitably come under heightened scrutiny. The case involves a punitive award of $79.5 million, which is ninety-seven times greater than the compensatory damages, making it constitutionally suspect for exceeding the single-digit ratio between punitive and ompensatory damages. The Court, though, has never addressed the institutional issue in a case involving serious bodily injury or death, and so Williams poses a number of new questions. How can compensatory damages provide an appropriate baseline for evaluating punitive damages in a case of wrongful death, given that monetary damages provide no compensation to a dead person? What is the appropriate baseline? Any future deterrence provided by a punitive award cannot protect the decedent’s tort right, and so the award must be justified exclusively in terms of retribution. Is retribution inherently subjective and arbitrary, unless constrained by some objective measure such as the single-digit ratio between the punitive and compensatory damages? Or is there some way to translate retribution into dollars? These questions are not limited to wrongful death cases and must be resolved by any court trying to determine whether a punitive award is unconstitutional for exceeding the single-digit ratio. These questions can all be answered once retribution is tied to the inherent limitations of compensatory damages, which yields a method for quantifying this form of punitive damages. Based on government data and methodology for quantifying the social cost of a premature death, this method shows why vindication of the decedent’s tort right in Williams justifies the $79.5 million punitive award. When formulated in this manner, vindictive damages satisfy the requirements of both substantive and procedural due process and provide a baseline for reviewing courts to determine whether any given punitive award, like one based on general deterrence, is excessive in violation of substantive due process. This method fully accounts for the reprehensibility factors that determine the constitutionality of a punitive award, while also explaining why the Court could defensibly rely on procedural due process to reverse and remand Williams back to state court.
Monday, October 29, 2007
The United States Supreme Court has granted certiorari to review the punitive damages award in the Exxon Valdez litigation. Interestingly, Justice Alito has recused himself, because of his ownership of Exxon stock. Here's an excerpt from the cnn.com article, Supreme Court to review Exxon Valdez damages:
The Supreme Court on Monday agreed to decide whether Exxon Mobil Corp. should pay $2.5 billion in punitive damages in connection with the huge Exxon Valdez oil spill that fouled more than 1,200 miles of Alaskan coastline in 1989.
The high court stepped into the long-running battle over the damages that Exxon Mobil owes in the spillage of 11 million gallons of oil into Alaska's Prince William Sound, the worst oil spill in U.S. in 1994.
The justices said they would consider whether the company should have to pay any punitive damages at all. If the court decides some money is due, Exxon is arguing that $2.5 billion is excessive under laws governing shipping and prior high court decisions limiting punitive damages.
The damages were, by far, the largest ever approved by federal appeals judges, the company said in its brief to the court.
The case probably will be heard in the spring. The court's last ruling on punitive damages, in February, set aside a nearly $80 million judgment against Altria Group's Philip Morris USA. The money was awarded to the widow of a smoker in Oregon.
Tuesday, October 23, 2007
As the Associated Press reports -- DuPont guilty of wanton, willful, reckless conduct: Company ordered to pay nearly $200M over zinc waste site in Harrison County -- Dupont has been found liable in a West Virginia class action suit apparently based on claims of negligence and public and private nuisance in connection with the dangers of a zinc waste site. The multiphase trial plan resulted in the jury awarding $196.2 million in punitive damages, in one of the early post-Williams punitive-damages, class-action awards. Total damages in the lawsuit, which include the cost of medical monitoring, surpass $400 million. The lawsuit was brought by Florida plaintiffs' attorney Mike Papantonio.
Monday, October 15, 2007
A jury in Reno today lashed Wyeth with a $99 million punitive damages verdict in a three-plaintiff Prempro lawsuit in Nevada state court. The massive award was predictable given how events unfolded in the case last week. On Wednesday, the jury rendered a compensatory damages verdict totaling $134.5 million. When Judge Robert Perry learned that the jury was confused about compensatory and punitive damages, he ordered the jury to reconsider the amounts, and the jury came back with a total compensation verdict of $35 million. Today, the jury returned to consider punitive damages, and unsurprisingly hit Wyeth with essentially the same amount it had intended as punishment last week. An AP story on the Houston Chronicle website -- Punitive Damages Awarded in Wyeth Case -- reports on today's punitive damages verdict:
Jurors awarded $99 million in punitive damages Monday to three Nevada women who claimed hormone replacement drugs distributed by pharmaceutical giant Wyeth caused their breast cancer. A Wyeth attorney said the award would be appealed. ...
After lawyers for both sides gave closing arguments again on Monday, the judge instructed the five-man, two-women jury to move to the punitive stage of the trial to consider whether the company's actions were so "reprehensible" that additional damages were warranted to punish it and discourage such behavior in the future. ...
The jurors returned at 1 p.m. Monday, two hours after they began deliberations following an impassioned plea by one of the plaintiffs' lawyers to return a large enough judgment to "get the attention and hold responsible" a company with a net worth of $14.6 billion.
Friday, October 12, 2007
If Wednesday's verdicts in the Nevada Prempro case seemed implausibly large for compensatory damages, here's the explanation: the jury was confused about the difference between compensation and punitive damages. Although for now, this means a substantial reduction in the verdicts, under the circumstances it cannot be considered good news for Wyeth.
According to this Reno Gazette-Journal article -- Jurors to reconsider Prempro damages -- the judge instructed the jury to reconsider its damages calculations:
Jurors in the Wyeth trial were sent back to the jury room this morning to reconsider the amount of damages the company must pay after they told the judge that they were confused about punitive damages when they ordered the company to pay millions on Wednesday.
The jurors told Judge Robert Perry that they included punitive damages in the total they awarded three women who had sued Wyeth, claiming its hormone replacement drugs caused their breast cancer.
... After learning of the confusion, Perry sent the jury back and said they must first recalculate the past and future damages, and then said he would hold a hearing with witnesses before the panel would decide punitive damages.
Later today, an article by AP writer Sandra Chereb -- Jury Cuts $100M From Award Against Wyeth -- reported that upon reconsideration, the jury reduced the total verdicts from $134.5 million to $35 million:
A jury on Friday slashed $100 million from a judgment against pharmaceutical giant Wyeth after it conceded a previous award was improper because it was intended to punish the company for its hormone replacement drugs. Washoe District Judge Robert Perry instructed the five-man, two-woman jury to reconsider a $134.5 million compensatory award issued Wednesday after questions were raised about whether the judgment included punitive damages. Perry said the matter was brought to his attention by a bailiff, who overheard discussion in the jury room. "If we don't correct it now, we'll be trying this case again," the judge said. After deliberating for about three hours, jurors on Friday awarded $35 million to three Nevada women for past and future medical expenses, as well as physical and emotional pain and suffering. ...
Perry twice denied a motion by Wyeth lawyer Dan Webb to declare a mistrial over the jury's confusion. Webb argued that jurors were predisposed to punish the company before the punitive phase of the trial had begun. The judge said jurors raised questions expressing their confusion during the initial deliberations, but Wyeth lawyers wouldn't allow an explanation. ...
The revised compensatory damage verdicts include $10.5 million for Jeraldine Scofield, $12 million for Arlene Rowatt, and $12.5 million for Pamela Forrester. The jury will return Monday to decide whether to impose punitive damages. Given the jury's premature attempt to punish Wyeth with an extra $100 million or so, there cannot be much doubt about how the punitive damages phase will turn out next week.