TortsProf Blog

Wriggins on Race and Insurance

Jenny Wriggins has posted to SSRN The Color of Property and Auto Insurance:  Time for Change.  The abstract provides:

Insurance company executives issued statements condemning racism and urging change throughout society and in the insurance industry after the huge Black Lives Matter demonstrations in summer 2020. This time period presents a crucial opportunity both for examining insurance as it relates to race and racism, including history and current regulation, and for actual, overdue changes in insurance in the U.S. Two of the most important types of personal insurance are property and automobile.

Part I begins with history, focusing on property insurance, auto insurance, race, and racism in urban areas around the mid-twentieth century. Private insurers deemed large areas of cities where African Americans lived to be “blighted” and refused to insure all homes in these areas, despite lacking clear evidence of increased risk. This created a property insurance crisis in the cities. Affordable automobile insurance in areas such as Harlem was hard to come by; complaints of race discrimination went back to the 1930s.The federal government got involved in the late 1960s after state and local remedies were insufficient. The federal Urban Property Protection and Reinsurance Act of 1968 (UPPRA) was aimed to incentivize private insurance companies to enter the urban market and to support states in establishing plans (known as Fair Access to Insurance Requirements or FAIR Plans) that would require companies to cover a certain amount of risk in urban areas.

The UPPRA and FAIR plans led to a robust urban property insurance market at minimal cost to the government and industry, Part II finds. The federal program later was discontinued and largely forgotten, probably due to its success. This forgotten history tells us that insurance markets have not functioned in a neutral way and that for long periods companies did not sell property insurance based on objective neutral data but based on at least in part on racial prejudice. It further shows that the federal government can play a socially positive rule in insurance markets without miring the government in taking on the entire risk or costing taxpayers huge sums. Yet the reform measures did not end redlining or challenge many of the equity issues involved in insurance. Property and auto insurance companies have shifted in recent decades from explicit race-based exclusions to the use of facially neutral practices for pricing and underwriting such as algorithms, machine learning, and credit scores. However, insurance antidiscrimination law (which is largely state law) has not kept pace. No federal law directly bans race discrimination in auto insurance, and federal housing antidiscrimination law has not been consistently applied to housing insurance practices which have a disproportionate impact on racial minorities.

Three reforms would improve current practices, Part III asserts. First, insurance regulation should require more disclosure with requirements parallel to those of the Home Mortgage Disclosure Act. Insurers should be required to collect and disclose specific data on insurance applications and declinations, membership in protected groups, and other information. Second, a private cause of action should potentially be made available for insurance discrimination when insurance practices lead to a disparate impact on African Americans and other racial minorities. Third, insurance regulation should be shifted away from rate regulation which currently serves no useful purpose; this would make more room and time for the other proposed reforms which might lead to long overdue changes in property and auto insurance regulation and practices.

JOTWELL Torts: Bublick on Kendrick on Public Nuisance

At JOTWELL, Ellie Bublick reviews Leslie Kendrick's The Perils and Promise of Public Nuisance.

TX: Jury Awards $7 Billion in Punitive Damages Against Cable Company

In late June, a Texas jury found Spectrum liable for the death of one of its customers.  The cable company employed an internet installer who robbed and stabbed an 83-year-old woman to death.  The jury found the murderer 10% responsible and Spectrum 90% responsible.  Years earlier, Spectrum had ceased industry-standard, pre-employment verification checks.  Such a check would have revealed that the murderer had fabricated his work history and was fired from several jobs for theft and misconduct.  The company also had notice that the murderer was suffering emotional and financial problems prior to the robbery and murder.  The jury awarded $375 million in compensatory damages, of which part Spectrum was to pay $337.5 million.  The jury also determined that Spectrum forged an arbitration agreement.

In late July, the jury awarded the plaintiffs $7 billion in punies.  The forgery finding allowed the plaintiffs to avoid Texas's cap on punitive damages.  That verdict, however, is going to be severely tested on post-trial motions and appeal.  The Court's Due Process jurisprudence does not impose a hard cap, but it does set limits.  In State Farm v. Campbell, the Court stated that few awards exceeding a single-digit ratio between punitive and compensatory damages will satisfy Due Process.  It further stated that an award of more than four times might be close to the line of constitutional impropriety, and that when compensatory damages are substantial, a one-to-one ratio is likely the outermost limit.  The current ratio is approximately 20:1.  

Awards of this magnitude are often reduced.  The largest punitive damages award to an individual of which I am aware is a 2002 California jury verdict of $28 billion against Phillip Morris.  Ultimately, after 9 years of appeals, the award was reduced to $28 million.  The plaintiff had died years earlier.   

Cara Salvatore at Law 360 has the story (behind a pay wall).

Torts Position at UIC

The University of Illinois-Chicago School of Law invites applications for several tenure-track candidates to begin teaching in the fall of 2023.  Our needs are varied but one of our primary areas of interest is Torts.  Other needs include Property, Legal Research and Writing, Criminal Law, Professional Responsibility, and Business Associations.

 

Candidates must have a Juris Doctor from an ABA-approved law school or its equivalent from a foreign country; a record of teaching excellence or demonstrated potential to become an excellent teacher and a record of high-quality scholarship or demonstrated potential to produce high-quality scholarship; and a demonstrated interested in serving the academy, the community, and legal profession at an urban, public as part of the university community. 

 

If you or anyone you know is interested in applying, please visit https://uic.csod.com/ux/ats/careersite/1/home/requisition/30?c=uic

Open Rank Faculty (Tenured/ Tenure- Track) UIC Law invites applications for 1) a tenured or tenure-track faculty and director of its Intellectual Property Center (more information about the IP ... uic.csod.com

 where you will find a link to the application process.  Applicants should submit a letter of intent, current curriculum vitae, and the name of three professional references no later than October 7, 2022.  

Magliocca on Dobbs and Wrongful Birth Actions

At Prawfsblawg, Gerard Magliocca discusses the effects of Dobbs on wrongful birth actions.

Fox on Medical Disobedience

Dov Fox has posted to SSRN Medical Disobedience.  The abstract provides:

The conscience regime that governs American healthcare is broken. When physicians or pharmacists deny treatment by appeal to their heartfelt convictions, conscience laws in most states shield them from being fired or disciplined. In many, they can’t be held liable for malpractice or prosecuted for endangering patients, however badly they needed care, or serious the resulting harm. Refusers don’t even have to tell patients which procedures are medically indicated, let alone help them to access those options elsewhere. So long as refusers invoke conscience, they almost always go scot-free. There’s virtually no such protection for clinicians who have equally conscientious reasons to perform interventions that their employer or state rules out.

Emboldened by the Supreme Court’s recent decisions in Little Sisters of the Poor and Dobbs, hospitals and legislatures increasingly prohibit services from abortion, emergency contraception, and long-term birth control to puberty blockers, advance directives, and aid-in-dying. Now clinicians are laying their careers and freedom on the line to supply these forbidden forms of care. The treatments that they seek to provide bear crucial differences, to be sure. Some the law prohibits, others it permits. Some are safer, or more effective, than others. Some require facilities and staff. Others, a prescription pad. Some fall squarely within the medical norm. Others push its boundaries, or cross them. These particulars matter. But they also miss a simple fact: Providers honor patients’ wishes, while refusers override them. Yet only refusers’ conscience counts. This asymmetry selectively burdens conscientious providers and drives desperate patients underground.

Fixing this regime demands principled reforms, tailored to distinct levels of authority: the employer and the state. To offset the costs of workplace exemptions, this Article proposes disclosure mandates and objector fees for conscience-claiming clinicians, and distancing measures for the institutions that employ them to mitigate the expressive harms that come from accommodating practices they oppose. The stakes differ when doctors and nurses defy government restrictions. This Article introduces a partial excuse that would take the edge off of the penalties that otherwise attach to certain practices that clinicians undertake in the name of conscience. This limited defense of “medical disobedience” would afford modest space for dissent and debate that a pluralistic democracy needs, in negotiating the controversies of our time, to adapt to moral change from within. That compromise also equips us to resolve the long-simmering tension between the practice of medicine and the rule of law that has reached a boiling point today.

Cain on the Taxation of Tort Damages

Patricia Cain has posted to SSRN Taxation of Tort Damages.  The abstract provides:

Under Section 104(a)(2) of the Internal Revenue Code, damages for personal injury can only be excluded from income in cases in which the plaintiff is physically injured. If the plaintiff instead suffers emotional distress from the injury, even if the distress is so great that it results in physical injury or physical sickness, then all damages are taxable. This “physical injury” or “physical sickness” requirement was added to Section 104(a)(2) in 1996. This article, as many before it have done, questions the wisdom of that intended bright line. It does so by exploring the history in tort law of the treatment of emotional distress injuries, which used to require a physical injury for recovery. Tort law has moved beyond that strict requirement, whereas tax law seems to have moved backwards. Interestingly, the physical injury does not need to be that of the taxpayer. Wrongful death and loss of consortium damages are excluded even though the taxpayer’s only injury is an emotional one. Finally, the article questions the soundness of a recent Ninth Circuit opinion, Blum v. Commissioner, upholding a Tax Court opinion, that ruled that malpractice damages could not be excluded because the lawyers did not physically harm the plaintiff. They paid her the damages, however, to reimburse her for the damages she would have won from the hospital she had been suing for physical injuries. Since the malpractice settlement was “in lieu of” an award for physical injury damages, it would seem the better alternative would be to exclude the settlement payment under Section 104(a)(2).

Texas Tech Seeks Professors, Torts Is a Priority

Texas Tech University School of Law anticipates filling two doctrinal faculty positions beginning with the 2023-24 academic year. These positions are open to candidates who would be on the tenure-track or who are tenured at another law school. We welcome applications from exceptional candidates in all subject matter areas, but our projected curricular needs—while varied—will likely include courses in areas such as Constitutional Law, Civil Rights, Torts, and Intellectual Property.

Applicants must possess a J.D. degree and have a commitment to or demonstrated record of scholarly distinction, exemplary teaching, and institutional or public service. Experience working with diverse student populations or first-generation law students is highly desirable.

Texas Tech University, located in Lubbock, Texas, is a state-supported National Research University with an enrollment that exceeds 40,000 students. In addition, Texas Tech University is a Hispanic-Serving Institution (HSI).  The law school has approximately 420 students and 38 full-time faculty members.  The law school is an integral part of the University and offers 10 dual-degree programs with other Texas Tech schools and colleges.  The Lubbock metropolitan area is home to over 300,000 people, enjoys affordable housing, abundant sunshine, friendly people, and offers easy access to other parts of the country.  For more information, visit our website at http://www.depts.ttu.edu/law/.

As an Equal Employment Opportunity/Affirmative Action employer, Texas Tech University is dedicated to the goal of building a culturally diverse faculty committed to teaching and working in a multicultural environment. We actively encourage applications from all those who can contribute through their research, teaching, and/or service, to the diversity and excellence of the academic community at Texas Tech University. The University welcomes applications from minoritized candidates, women, protected veterans, persons with disabilities, and dual-career couples.

To view the full descriptions for the two positions and information on how to apply, see https://www.depts.ttu.edu/law/Texas-Tech-School-of-Law-Faculty-Openings.pdf.

Lytton on Using Insurance to Regulate Food Safety

Tim Lytton has posted to SSRN Using Insurance to Regulate Food Safety:  Field Notes from the Fresh Produce Sector.  The abstract provides:

Foodborne illness is a public health problem of pandemic proportions. In the United States alone, contaminated food sickens an estimated 48 million consumers annually, causing 128,000 hospitalizations and 3,000 deaths. Nowhere is this crisis more acute than in the fresh produce sector, where microbial contamination in growing fields and packing houses has been responsible for many of the nation’s largest and deadliest outbreaks. This Article examines emerging efforts by private insurance companies to regulate food safety on farms that grow fresh produce.

Previous studies of using insurance to regulate food safety rely on economic theories that yield competing conclusions. Optimists argue that insurance can promote efficient risk reduction. Skeptics counter that insufficient information regarding the root causes of contamination renders insurance impotent to reduce food safety risk. This Article adds a sociolegal perspective to this debate. Based on interviews with insurance professionals, the Article documents how, notwithstanding limited information, underwriters employ a variety of techniques to encourage compliance with government food safety regulations and conformity to industry standards. These techniques include premium discounts for clients who adopt state-of-the-art food safety practices, coverage exclusions for high-risk activities, and loss control advice about how to avoid contamination.

Insurance plays a growing and potentially transformative role in advancing food safety. Government food safety regulation has traditionally been hampered by inadequate inspection resources. This Article advocates expanding insurance to fill oversight gaps in the U.S. food safety system, and it offers specific recommendations for how to nurture emerging markets for food safety coverage.

The findings presented in this Article have implications for understanding how insurance regulates risk more generally. Economic analysis of many well-established types of insurance—for example, life, health, homeowners, and auto—emphasizes the role of actuarial data in pricing premiums, determining coverage limits, and informing loss control advice. However, the underwriting professionals in this Article who describe their efforts to improve food safety on farms tell a different story. They operate in an emerging market with a low volume of claims and a dearth of actuarial data. Three aspects of their work stand out. First, underwriting in this area is more impressionistic than economic analysis assumes. When assessing the risk of microbial contamination on farms, underwriters rely more on their intuitions about a farmer’s competence and on media coverage of high-profile foodborne illness outbreaks than on actuarial data. Second, the mindset of these underwriters is more administrative than economic. They think in terms of regulatory compliance and standards conformity rather than optimal risk reduction. Third, farm size determines the role of insurance in managing risk. High-premium coverage for larger farms provides more underwriting resources for risk management than low-premium policies priced for small farms. These findings suggest that although economics explains the logic of insurance as form of risk regulation, understanding how underwriters regulate risk in practice, especially in emerging markets, requires attention to professional judgment, bureaucratic thinking, and resource constraints.

JOTWELL Torts: Lahav on Simon on Bankruptcy and Mass Torts

At JOTWELL, Alexandra Lahav reviews Lindsey Simon's Bankruptcy Grifters.

Levin & Lytton on Bruen

Hillel Levin and Tim Lytton have written Firearms Regulation through Constitutional Litigation.  A sample:

“Beyond its impacts on gun control legislation, Bruen also has implications for another front in the battle over gun control: civil litigation against the firearms industry.”

“Bruen may have erected an immunity shield for the firearms industry that is far more extensive than the one that Congress constructed in PLCAA.”

AALS Torts Section: Call for Newsletter Submissions and Prosser Award Nominations

1. Torts and Compensation Systems Section Newsletter

As most of you know, our section publishes a newsletter each year listing: (1) symposia related to tort law; (2) recent law review articles on tort law; (3) selected articles from Commonwealth countries on tort law; and (4) books relating to tort law. If you know of any works that should be included in this year's newsletter, please forward relevant citations and other information to weeksleo@uga.edu<mailto:weeksleo@uga.edu>. The deadline for inclusion in this year's newsletter is Friday, September 16, 2022.

2. 2023 William L. Prosser Award

This is the first call for nominations for the 2023 William L. Prosser Award. The award recognizes “outstanding contributions of law teachers in scholarship, teaching and service” in torts and compensation systems. Recent recipients include Martha Chamallas, Jack Weinstein, Anita Bernstein, Ken Simons, Marshall Shapo, Steve Sugarman, Aaron Twerski, Mike Green, James Henderson, Jane Stapleton, Guido Calabresi, Robert Rabin, Richard Posner, Oscar Gray, and Dan Dobbs. Past recipients include scholars such as Leon Green, Wex Malone, and John Wade.

Any law professor is eligible to nominate another law professor for the award. Nominators can renew past nominations by resubmitting materials. Living tort scholars and those who have passed away within the last five years are eligible for the award. Selection of the recipient will be made by members of the Executive Committee of the Torts & Compensation Systems section, based on the recommendation of a special selection committee. The award will be presented at the annual AALS meeting in San Diego in January 2023.

Nominations must be accompanied by a brief supporting statement and should be submitted no later than Friday, September 16, 2022. Please email submissions to Thomas Kadri, tek@uga.edu<mailto:tek@uga.edu>.

Lahav to Cornell

Alexandra Lahav, an expert in mass torts, is moving to Cornell University.  

Brian Leiter's lateral hires list is here.

Karnaukh on the Territorial Tort Exception

Bohdan Karnaukh, a Ukrainian tort scholar, has written a note about a recent opinion of the Ukrainian Supreme Court on the availability of tort actions against Russia for torts/crimes against Ukrainian citizens.  The abstract provides:

The jurisdictional immunity of a state means that the state cannot be involved as a defendant in a case considered by a foreign court. In Ukraine, the rule on the jurisdictional immunity of a foreign state is enshrined in Art. 79 of the Law of Ukraine ‘On Private International Law’. Until 14 April 2022, the Ukrainian Supreme Court rigidly applied the provisions of the said article and recognised the Russian Federation’s immunity with regard to claims brought by Ukrainian citizens seeking compensation for harm caused by the armed conflict that commenced in 2014. Yet shortly after 24 February 2022, when Russia’s aggression against Ukraine entered a new phase, i.e., the phase of full-scale war, the Supreme Court changed its mind.

This note addresses the ruling of the Ukrainian Supreme Court of 14 April 2022 in case no. 308/9708/19, where the Court held that the Russian Federation could not plead immunity with regard to tort claims brought by the victims of the Russia-Ukraine war. In reaching this conclusion, the Court relied on the territorial tort exception enshrined in the European Convention on State Immunity (Basel, 16 May 1972) and the UN Convention on Jurisdictional Immunities of States and Their Property. Though neither of the two conventions has been ratified by either Ukraine or the Russian Federation, the Court found that these conventions indicate a general tendency in international customary law towards limiting the jurisdictional immunity of the states.

The reasoning of the Supreme Court is examined by scrutinising the authorities the Court adduced in support of its ruling, as well as by putting the ruling in the broader context of the jurisprudence of the International Court of Justice (ICJ) and European Court of Human Rights (ECtHR). 

It is concluded that what the Supreme Court utilised is not the territorial tort exception but rather the ‘human rights/jus cogens’ exception. Further, the case before the Ukrainian Supreme Court is distinguishable from the ICJ and the ECtHR cases, where it was held that notwithstanding gross violations of human rights, the respondent state should nevertheless enjoy immunity. Unlike those cases, the Ukrainian case was tried amid the ongoing war, when no reparation agreements had been concluded, the legitimate aim of ‘promoting comity and good relations between states’ had been frustrated, and it was no longer possible to justify the restriction of the plaintiff’s right of access to a fair trial.

Black, Traczynski, & Udalova on Pricing Med Mal Insurance

Bernard Black, Jeffrey Traczynski, & Victoria Udalova have posted to SSRN How Do Insurers Price Medical Malpractice Insurance?.  The abstract provides:

We study the factors that predict medical malpractice ("med mal") insurance premia, using national data from Medical Liability Monitor over 1990 to 2017. A number of core findings are not easily explained by standard economic theory. First, we estimate long run elasticities of premia to insurers' direct cost (payouts plus defense costs), allowing for lags of up to four years, of only around +0.40, when one might expect elasticities near one. Second, state caps on malpractice damages predict a roughly 50% higher ratio of premia to direct costs even though, in competitive markets, a damages cap should affect premia primarily through effect on cost. A difference-in-differences analysis of the "new cap" states that adopted caps during the early 2000's provides evidence supporting a causal link between cap adoption and the ratio of premium to direct cost. Third, the premium-to-cost ratio, which one might expect to be fairly constant over time, instead varies widely both across states at a given time and within states across time. Our results suggest that insurance companies do not fully adjust revenues to changes in direct costs even over long time periods. Insurers in new-cap states have been able to charge apparently supra-competitive prices for a sustained period.

Causation Conference at the University of Western Australia

On September 9, 2022, the University of Western Australia is having hosting "Causation Conference."  The overview:

Causation is one of the basic pillars of the law. Yet its nature, operation and relationship to other
foundational concepts remains uncertain and contested, across virtually every field of civil and
criminal law. This conference brings together a remarkable group of expert contributors to UWA
Law Reviews’ 2022 special issue on causation, to debate, elucidate and resolve some of the law’s most
pressing, and persistent, causal challenges. Speakers will bring their authoritative insights to bear
upon the spectrum of private, commercial and criminal law doctrines in which causation plays a
leading role, arising at common law, in equity and under statute

The brochure is here:  Download Causation Conference Program 2022

COVID-19 Business Interruption Claims

The Hollywood Reporter has an article on COVID-19 business interruption claims, relying heavily on Tom Baker.  An excerpt:

According to the COVID-19 insurance litigation tracker, 85 percent of cases considered for dismissal in federal court get tossed, compared with 66 percent in state court. “The federal courts have largely gone for the insurance industry,” Baker says. “In state court, it’s been much more variable. That’s where the action is, because at the end of the day, these are state law questions.”

The article is here.  Coverage from the ALI website is here.

Wendel on Punitive Damages for Corporate Wrongdoing

Bradley Wendel has posted to SSRN Malice or Snafu?  Punitive Damages and Organizational Culture Defects.  The abstract provides:

This paper was written for the annual Clifford Symposium on Tort Law and Policy at DePaul Law School. The theme for this year is tort law as a response to corporate wrongdoing. The paper was part of a panel on the Boeing 737-MAX disasters.

In engineering or risk-management (not tort) terms, the root cause of the Lion Air and Ethiopian Airlines crashes involving 737-MAX aircraft can be understood as a failure of Boeing’s organizational culture. A certain narrative has become accepted as conventional wisdom, described in journalistic accounts, reports of House and Senate investigative committees, and the Netflix documentary Downfall. For the purposes of this paper, let’s stipulate to the story: Boeing enjoyed a well-deserved decades-long reputation as a solid, engineering-driven company in which safety concerns were always paramount. Then came the merger with McDonnell-Douglas in 1996 which led to the adoption of an organizational culture that prioritized maximizing stock prices and shareholder value, subordinated engineering values to cost-cutting concerns, and reoriented internal reporting relationships to place bean-counting MBAs in charge of teams of engineers. Then the company was confronted by a market shock when Airbus introduced a fuel-efficient variant on its popular A320 narrowbody jetliner, risking a further loss of market share to Boeing’s European rival. Rather than develop a clean-sheet design to compete with the A320neo, Boeing hastily updated its venerable 737 airframe by adding new fuel-efficient engines. In order to attract customers who had an existing fleet of 737NG aircraft, Boeing committed itself to a goal of a redesign that would not require extensive additional training for flight crews. Thus, when a relatively minor aerodynamic issue – one that would not arise during normal airline operations – was discovered during flight testing, Boeing adopted a software fix known as MCAS for the purpose of certifying the design. However, it decided not to disclose the operation of the system in the Flight Operation Manual for the aircraft, for fear that the FAA would require simulator training for pilots transitioning from the 737NG to the MAX. The MCAS system proved to have significant design defects (in products liability terms), and these defects were the proximate cause of the Lion Air and Ethiopian Airlines accidents.

The dynamics of organizational cultural failures are by now fairly well understood. In some cases the failure is the result of top-down directives from senior leadership, sometimes driven by market pressures. Other situations, however, are more subtle, and sometimes are the result of the unintended consequences of either neutral or well-intentioned organizational decisions. There is a folklore version of the Challenger launch story, in which an engineer for Thiokol, one of the contracting firms, heroically tried to prevent the launch, but was shot down by managers at NASA and Thiokol, one of whom notoriously told the engineers to take off their engineering hat and put on their management hat. In fact the story is quite a bit more complicated, involving subtle psychological factors at work at the level of both individual and collective decisionmaking. As detailed in a report by Jenner and Block commissioned by company’s board of directors, the GM ignition switch response is almost entirely a story of dysfunctions in the company’s organizational culture that were the result of well-intended procedures and reporting structures that had the unintended effect of diffusing responsibility so thoroughly within the organization that no one really had any ability to respond effectively.

In my judgment Boeing is an intermediate case between GM, which I would characterize as a true SNAFU (emphasis on “situation normal” in a gigantic, decentralized organization), and the conscious imposition by upper management of unrealistic goals that foreseeably would reorient lower-level managers and employees away from goals like safety and social responsibility. Even granting the truth of some of the most damning allegations, such as reports by flight-test crews that MCAS behaved in surprisingly aggressive ways and calls by some engineers to include information about MCAS in the FAA-approved Flight Operation Manual for the plane, the ultimately fatal decisions did not arise from a state of mind that traded lives for dollars or ignored safety concerns. Rather, there were mistakes, miscommunications, perhaps excessive optimism (e.g. that flight crews would handle an inadvertent MCAS firing as an ordinary trim runaway), failures to be more proactive in managing risks, and above all a kind of blinkered obsession with not having to retrain flight crews which may have led to unconscious framing of some of the judgments regarding MCAS. In order words, the explanation is more in line with the findings of behavioral psychology, beginning with Kahneman and Tversky, than with an assumption that Boeing was a rogue actor that was consciously indifferent to safety. The damage is real – both the lives lost and the financial and reputational losses to the company. However, the underlying explanation bears more similarities to the Challenger launch decision or the GM ignition switch recall than to cases like Enron or Wells Fargo.

In doctrinal terms, the argument of this paper is that Boeing’s conduct, in the conventional wisdom story recounted above, does not rise to the level of malice, as required by the common law of punitive damages, or the reprehensibility required by the constitutional test from Gore and Campbell. The theoretical argument is that most defects in organizational cultures, although capable of producing serious harms, are not private wrongs that can justify the imposition of punitive damages in tort. They are governance failures or occasions for regulation, but not private wrongs. Obviously the second argument takes a position on a much-debated issue, so I will address briefly the New Private Law approach, with which I have some sympathy.

The company definitely screwed up and squandered a reputation earned, at least since World War II, for being a pilot’s and engineer’s kind of company. The conclusions of the paper should have implications beyond the case study of Boeing, however. To me at least, the most interesting question is how to understand the common law malice standard as applied to corporate actors where the explanation for wrongdoing rests largely on subtle effects known to social psychologists but very difficult to counteract. Good organizational cultures are extremely difficult to maintain, given the often-unconscious tendencies that underlie cultural declines. NASA and Thiokol weren’t bad actors in the Challenger case; they were pretty good organizations full of conscientious engineers and managers who just happened to get caught by some very sneaky psychological effects. Most failures of organizational cultures do not count as reprehensible private wrongs, however devastating the consequences of these failures.

Yousefi, Black, & Hyman on Med Mal Claim Risk Factors

Kowsar Yousefi, Bernard Black, & David Hyman have posted to SSRN Paid Medical Malpractice Claims:  How Strongly Does the Past Predict the Future?.  The abstract provides:

Using hazard analysis, we study whether various physician characteristics, including prior paid claim history, gender, specialty, years of experience, type of degree (M.D. versus D.O.), country of medical school attendance (U.S. versus non-U.S.), and gender) predict future paid medical malpractice (“med mal”) claims, using detailed data on all licensed physicians and all paid claims in Illinois over a 25-year period. This level of granularity is not available using national data. After controlling for other factors, physicians with a single prior paid claim have a four-fold higher risk of future claims than physicians with zero prior paid claims. Male gender, attending a non-U.S. medical school, and practicing in a high-malpractice-risk specialty all predict higher paid claim risk. Paid claim risk is also higher for physicians with 6-15 prior years of experience than for those who are either earlier or later in their careers. We find having an M.D. (rather than a D.O.) is associated with higher paid claim risk, but only in our multiple-failure models.

The appendix is here.

Rabin on Reducing Medical Error

Bob Rabin has posted to SSRN The Search for Strategies to Reduce Medical Error.  The abstract provides:

This essay is based on a book review of Closing Death’s Door: Legal Innovations to End the Epidemic of Healthcare Harm, by Michael J. Saks and Stephan Landsman. The book examines in precise detail the empirical evidence and policy dimensions of strategies for reducing medical error—both through analysis of data on medical malpractice litigation, and more centrally, through the organizational lens of the provision of medical care in the healthcare system.