Saturday, May 2, 2009
Over at Legal Theory Blog, Larry Solum (Illinois) has recommended two pieces of torts scholarship. First, Theodore Eisenberg, Michael Heise, and Martin Wells (all Cornell) have the "Download of the Week" in Variability in Punitive Damages: An Empirical Assessment of the U.S. Supreme Court's Decision in Exxon Shipping Co. v. Baker. Here is the abstract:
Exxon Shipping Co. v. Baker acknowledged what virtually all methodologically sound punitive damages research shows. The Supreme Court relied in part on an article by the present authors and others to state that empirical studies undercut the most audible criticism of punitive damages and that no mass of runaway punitive awards existed. Paradoxically, the Court simultaneously expressed concern about jury predictability based on a high mean and standard deviation in the punitive-compensatory ratio published in our article. The Court therefore reduced a $2.5 billion punitive award relating to the Exxon Valdez oil spill to $500 million to implement a 1:1 punitive-compensatory ratio and stated that “the constitutional outer limit may well be 1:1.” This article shows that our empirical findings relied on by the Court do not support the unpredictability concern or widely applying the limiting ratio. The high mean and standard deviation are artifacts of not accounting for the key variable that explains punitive awards - the compensatory award. Stratifying the mean and standard deviation of the punitive-compensatory ratio by the level of the compensatory award shows that the ratio is reasonably stable in high award cases and significantly and explicably more variable in low award cases. Basing doctrine on summary statistics that combine these heterogenous distributions is not statistically supportable. The award reduction in Exxon Shipping may have promoted consistency with other high compensatory award cases but the 1:1 principle the case hints at is not statistically supportable across the broad range of compensatory awards, and could contribute to an inability to tailor punitive awards to the facts and circumstances of particular cases.
Here I am concerned with Jules Coleman's challenge, in his book The Practice of Principle, to the attempts of some economists of law to defend, in economic terms, certain core doctrines of the law of torts. The core doctrines in question are (a) that a tort is a wrong and (b) that the remedial duties of tort law (especially to pay damages) are duties to repair the wrong (or the damage that forms part of it). Although I share the view that economists of law typically work with a bad theory of value, I doubt Coleman's contention that their bad theory of value disables them from defending these doctrines in terms of it. Along the way I doubt the contrasts that are sometimes drawn between 'justificatory' and 'explanatory' theories of tort, and between 'normative' and 'positive' economics.