- The Washington Times - Tuesday, July 23, 2002

Would you be gripped by empirically solid answers to the following punitive damages questions? Do juries follow instructions from judges? Are they fastidious in applying a global social cost/benefit analysis to their punitive damages awards? Do they overestimate the ability of business to predict public danger?
If you are tantalized by the questions, then you should read with alacrity the tightly but narrowly reasoned essays assembled in "Punitive Damages: How Juries Decide." Its academic contributors sparkle with Cass R. Sunstein of Chicago Law School; Reid Hastie at the University of Chicago; John W. Payne at Duke; George L. Priest at Yale Law School; David A. Schkade at the University of Texas; and, W. Kip Viscusi at Harvard Law School.
Their findings generally confirm the intuitive or anecdotal: that jury awards are erratic, hitting like lightening bolts; that juries favor local plaintiffs over carpetbaggers; that jurors routinely ignore the legal standards for punitive damages; that when injuries appear, no matter how serendipitous, jurors are inclined to find predictability by the defendant to alleviate plaintiff losses. And, defendants whose cases pivot on a cold cost/benefit appraisal of the worth of a human life are more harshly punished than the non-calculating businessman. (Most believe their lives are priceless, and balk if someone insinuates otherwise.)
None of these unstartling findings are likely to spark serious re-examination of punitive damages in civil litigation. They are valuable, nevertheless, because popular intuitions or impressions are frequently counterfactual. Now it can be said with supreme confidence that the prevailing system of punitive damages regularly deviates from express legal standards.
But does that mean the system should be thoroughly overhauled? The authors, despite their formidable brain power, are generally reticent on that score. Thus, the reader is left with the hungry feeling that a coveted eight-course meal was canceled after the hors d'oeuvres.
Punitive damages under the common law originated long before the regulatory state and full-time professional criminal prosecutors. They aimed largely to shore up government enforcement anemia or deficiencies by granting bounties to private parties willing to risk the time and resources to call egregiously wrongdoing defendants to account. The amount of the bounty, i.e., the sum in excess of the plaintiff's losses, was generally consigned to the unfettered discretion of the jury. Jurors keenly relished the opportunity to play Santa Claus to an aggrieved business-enterprise victim irrespective of the dampening effects on innovation and diffusion of prosperity.
The Supreme Court has remained aloof. Only the most stratospheric awards are constrained by the due process clause of the Fourteenth Amendment, the Supreme Court maintained in BMW of North America Inc. vs. Gore (1996). Here the neglect to address the professed justifications for punitive damages disappoints.
As the authors note, financially crippling awards diminishing competition and employment are non-trivial. In July 2000, a Florida jury rendered a staggering $144.8 billion punitive damages judgment in a class action instituted against cigarette manufacturers. In 1999, an Alabama jury awarded $580 million in punitive damages when economic damages were alleged as no greater than $600.
Punishment is customarily the field of the criminal law. Politically accountable officials, through citizen grand jurors, decide case-by-case the severity of the crimes to be charged. Prosecutors decide the severity of punishment to seek from sentencing jurors or judges. Exacting procedural protections, such as the right of cross-examination, proof beyond a reasonable doubt and a privilege against compulsory self-incrimination, are erected to guard against unjust verdicts.
In contrast, punitive-damages litigation is stripped of such reliability safeguards. At present, the trial-lawyers lobby makes abolition of punitive damages chimerical. But some lesser relief would seem politically promising. For example, state statutes and federal law might require 50 percent or more of punitive damages to augment public law enforcement, compensation schemes for victims of crime or charitable institutions. Judges might be instructed by statute to deflate any jury award that unreasonably threatens the public interest in enterprise, employment or innovation. Let's hope Mr. Sunstein et al. devote their considerable talents to a sequel that confronts these pressing ideas.

Bruce Fein is a founding partner of the law firm of Fein & Fein.

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