Vanderbilt university law school Public law legal Theory Norking Paper Number 04-14 aw economics Working Paper Number 04-20 TORT LAW FOR FEDERALISTS(AND THE REST OF US): PRIVATE LAW IN DISGUISE JOHN C P. GOLDBERG A revised version of this paper is forthcoming Harvard Journal of Law Public Policy (2004) aper can be downloaded without charge from the ocial Science Research Network Electronic Paper Collectic http://ssrn.com/abstract=565129
Vanderbilt University Law School Public Law & Legal Theory Working Paper Number 04-14 Law & Economics Working Paper Number 04-20 TORT LAW FOR FEDERALISTS (AND THE REST OF US): PRIVATE LAW IN DISGUISE JOHN C. P. GOLDBERG A revised version of this paper is forthcoming Harvard Journal of Law & Public Policy (2004) This paper can be downloaded without charge from the Social Science Research Network Electronic Paper Collection: http://ssrn.com/abstract=565129
Tort Law for Federalists(and the Rest of Us) Private law in disguise John C P Gold Vanderbilt law school (Forthcoming, 28 Harv. J. L& Pub. Policy_(2004)) Abstract This essay argues in favor of understanding tort law as a law of private redress, rather than public regulatory law. Part I uses the U. S. Supreme Court's 2003 decision on punitive damages in State Farm Mut. Ins CO. l: Campbell to demonstrate some of the with formalist reasoning, an elevation of common law over statute, or political conservatism Key words: torts, private law, common law, redress, public law, damages, punitive damages, formalism, Federalists, Supreme Court, pragmatic conceptualism
2 Tort Law for Federalists (and the Rest of Us): Private Law in Disguise John C. P. Goldberg Vanderbilt Law School (Forthcoming, 28 Harv. J. L. & Pub. Policy __ (2004)) Abstract This essay argues in favor of understanding tort law as a law of private redress, rather than public regulatory law. Part I uses the U.S. Supreme Court’s 2003 decision on punitive damages in State Farm Mut. Ins. Co. v. Campbell to demonstrate some of the weaknesses of public law conceptions of tort, and some of the strengths of a private law conception. Part II maintains that a private law model need not be associated with formalist reasoning, an elevation of common law over statute, or political conservatism. Key words: torts, private law, common law, redress, public law, damages, punitive damages, formalism, Federalists, Supreme Court, pragmatic conceptualism
Tort Law for Federalists(and the Rest of Us): Private Law in disguise John C P. Goldberg Forthcoming, 28 Harv. J. L.& Pub. Policy__(2004) The question posed for this panel reads as follows: "Should Tort Law be a form of Public Regulatory Law?" My answer is"No. What I mean by that will become clearer in a moment, but let me offer an immediate set of qualifications. I do not mean to dispute that there are certain respects in which tort law is "public. For one thing it is law, provided by government--no service, no sheriff, no tort law. For another, its operation can have widespread effects -a tort suit can change how cars are designed and how health care is delivered, for example. Finally, through its day to-day operation, tort law undoubtedly promotes public objectives including deterrence of risky or otherwise undesirable conduct, maintenance of social cohesion vindication of individual rights, affirmation of the equality of persons under law, and reinforcement of the ideal of limited government. I But now consider the following question: What, in the first instance, does tort law promise to do that warrants retaining it as a distinctive facet of our law?"'(Or: Professor, Vanderbilt Law School. Thanks to Mark Brandon, Rebecca Brown, Don Herzog, Richard Nagareda, Bob Rasmussen, Tony Sebok, and Ben Zipursky for their helpful comments. Remaining errors are my own i See John C. P. Goldberg Benjamin C. Zipursky, Acidents of The Great Society,_ Md. L. Rev.-(2004 (forthcoming)(identifying various political values served by tort law). To say that tort law serves certain values is not to say that each tort case is an occasion for judge and jury to fashion a result that will best serve those values, as opposed to following the rules and principles contained within tort law. Nor is it to say that tort law to promote these values, or that it consistently serves these values better than any onceivable alternative arrangements. Finally, it does not entail denying that tort law can generate socially undesirable consequences, such as litigiousness and waste
3 Tort Law for Federalists (and the Rest of Us): Private Law in Disguise John C. P. Goldberg* Forthcoming, 28 Harv. J. L. & Pub. Policy __ (2004). The question posed for this panel reads as follows: “Should Tort Law be a form of Public Regulatory Law?” My answer is “No.” What I mean by that will become clearer in a moment, but let me offer an immediate set of qualifications. I do not mean to dispute that there are certain respects in which tort law is “public.” For one thing it is law, provided by government -- no service, no sheriff, no tort law. For another, its operation can have widespread effects -- a tort suit can change how cars are designed and how health care is delivered, for example. Finally, through its dayto-day operation, tort law undoubtedly promotes public objectives including deterrence of risky or otherwise undesirable conduct, maintenance of social cohesion, vindication of individual rights, affirmation of the equality of persons under law, and reinforcement of the ideal of limited government.1 But now consider the following question: What, in the first instance, does tort law promise to do that warrants retaining it as a distinctive facet of our law?” (Or: * Professor, Vanderbilt Law School. Thanks to Mark Brandon, Rebecca Brown, Don Herzog, Richard Nagareda, Bob Rasmussen, Tony Sebok, and Ben Zipursky for their helpful comments. Remaining errors are my own. 1 See John C. P. Goldberg & Benjamin C. Zipursky, Accidents of The Great Society, __ Md. L. Rev. __ (2004) (forthcoming) (identifying various political values served by tort law). To say that tort law serves certain values is not to say that each tort case is an occasion for judge and jury to fashion a result that will best serve those values, as opposed to following the rules and principles contained within tort law. Nor is it to say that tort law always operates so as to promote these values, or that it consistently serves these values better than any conceivable alternative arrangements. Finally, it does not entail denying that tort law can generate sociallyundesirable consequences, such as litigiousness and waste
What is it about tort law that renders it capable of delivering public goods such as the ones just described?) Because of tort laws unique features- plaintiff-initiated complaints, the right to jury trial, litigation and adjudication turning on rules and concepts designed to help determine whether a person can be held responsible for having injured another, etc --its best justification is that, unlike all the other political and legal institutions we have for dealing with anti-social conduct and injuries (administrative regulation, criminal law, public welfare law, private insurance, bankruptcy, contract, etc. ) it provides a means by which those who have been wronged can seek redress against those who have wronged them. By contrast, the tort system is not well designed to function as a form of disaster relief for injury victims because of its high transaction costs and its tendency to produce feast-or- famine compensation. It is also not well-equipped to provide public safety regulation because of, among other things, judges' and jurors' lack of agenda control, their limited access to information, and their relative lack of expertise and accountability In this sense, I maintain, tort law is not defensible as public regulatory law In providing a negative answer to the panel question, I have already declared myself to be outside the mainstream among torts professors. Indeed, most would profess puzzlement at its having been asked in the first place. To inquire whether tort law "should be''public regulatory law supposes that it could be something else should' implies "can And very few of them believe that it can. Instead, they would say that the real issue is whether, ginen that tort law is of course regulatory law,it should be celebrated or condemned. On this question, my co-panelists split
4 What is it about tort law that renders it capable of delivering public goods such as the ones just described?) Because of tort law’s unique features -- plaintiff-initiated complaints, the right to jury trial, litigation and adjudication turning on rules and concepts designed to help determine whether a person can be held responsible for having injured another, etc. -- its best justification is that, unlike all the other political and legal institutions we have for dealing with anti-social conduct and injuries (administrative regulation, criminal law, public welfare law, private insurance, bankruptcy, contract, etc.), it provides a means by which those who have been wronged can seek redress against those who have wronged them. By contrast, the tort system is not well designed to function as a form of disaster relief for injury victims because of its high transaction costs and its tendency to produce feast-orfamine compensation. It is also not well-equipped to provide public safety regulation because of, among other things, judges’ and jurors’ lack of agenda control, their limited access to information, and their relative lack of expertise and accountability. In this sense, I maintain, tort law is not defensible as public regulatory law. In providing a negative answer to the panel question, I have already declared myself to be outside the mainstream among torts professors. Indeed, most would profess puzzlement at its having been asked in the first place. To inquire whether tort law “should be” public regulatory law supposes that it could be something else -- “should” implies “can.” And very few of them believe that it can. Instead, they would say that the real issue is whether, given that tort law is of course regulatory law, it should be celebrated or condemned. On this question, my co-panelists split
Professor Bogus comes to praise tort law, while Professor Priest aims to bury it. I will argue that tort law has been poorly served - and poorly serves us- by academic attempts to describe and defend it as public regulatory law Let me illustrate my point by discussing a famous tort suit that raised issues ultimately decided by the u.s. Supreme Court in 2003 --tate Farm t: Campbell. State Farm issued auto insurance to the Campbells. After Mr. Campbells careless driving caused a car accident, he was sued in negligence by the person he injured. State Farm took over the defense of the suit and did a very bad job of it. In particular,it declined an offer to settle the case at the rather modest limits of the Campbells policy. State Farms"bad faith breach'of the duty to defend resulted in a judgment against the Campbells that exceeded their coverage by $135,000, and put them in danger of losing their home. A Utah jury hearing the Campbells' claim against State Farm awarded them $2.5 million in compensatory damages(mostly for emotional distress). In addition based on evidence of questionable practices employed by State Farm in handling State Farm Mut. Auto Ins Co. v. Campbell, 538 U.S. 408(2003). My thinking on the subject of punitive damages has been heavily influenced by the work of Ben Zipursky and Tony Sebok. See Anthony J Sebok, Introduction: w hat Does it Mean to Say that A Remedy Punishes, 78 Chi. Kent L. Rev. 3(2003); Anthony J. Sebok, W hat Did Punitive Damages Do?: W ly Misunderstanding the History of punitive Damages Matters Today, 78 Chi. Kent L. Rev. 16.3(2003); Benjamin C. Zipursky, BMW r: Gore: A New Chestnut(unpublished manuscript on file with the author). See also Thomas B. Colby, Beyond the Multiple Punishment Problem: Punitive Damages as Punishment for Indiidual Prinate W rongs, 87 Minn. L. Rev. 583(2003). Martin Redish and Andrew Mathews have recently argued that, given modern instrumental justifications of punitive damages, their award necessarily amounts to an impermissible delegation of public regulatory authority to private actors. See Martin H. Redish Andrew L. Mathews, W by Punitive Damages are Unconstitutional 53 Emory L J. 1(2004 ). I would say instead that a given punitive damage award may be unconstitutional if it is the case that the onb justification for the award magnitude is that it serves public goals such as deterrence, as opposed to providing redress to the victim of a particularly egregious form of mistreatment committed by the tortfeasor upon the victim
5 Professor Bogus comes to praise tort law, while Professor Priest aims to bury it. I will argue that tort law has been poorly served -- and poorly serves us – by academic attempts to describe and defend it as public regulatory law. I Let me illustrate my point by discussing a famous tort suit that raised issues ultimately decided by the U.S. Supreme Court in 2003 -- State Farm v. Campbell. 2 State Farm issued auto insurance to the Campbells. After Mr. Campbell’s careless driving caused a car accident, he was sued in negligence by the person he injured. State Farm took over the defense of the suit and did a very bad job of it. In particular, it declined an offer to settle the case at the rather modest limits of the Campbells’ policy. State Farm’s “bad faith breach” of the duty to defend resulted in a judgment against the Campbells that exceeded their coverage by $135,000, and put them in danger of losing their home. A Utah jury hearing the Campbells’ claim against State Farm awarded them $2.5 million in compensatory damages (mostly for emotional distress). In addition, based on evidence of questionable practices employed by State Farm in handling 2 State Farm Mut. Auto Ins. Co. v. Campbell, 538 U.S. 408 (2003). My thinking on the subject of punitive damages has been heavily influenced by the work of Ben Zipursky and Tony Sebok. See Anthony J. Sebok, Introduction: What Does it Mean to Say that A Remedy Punishes, 78 Chi.-Kent L. Rev. 3 (2003); Anthony J. Sebok, What Did Punitive Damages Do?: Why Misunderstanding the History of Punitive Damages Matters Today, 78 Chi.-Kent L. Rev. 163 (2003); Benjamin C. Zipursky, BMW v. Gore: A New Chestnut (unpublished manuscript on file with the author). See also Thomas B. Colby, Beyond the Multiple Punishment Problem: Punitive Damages as Punishment for Individual, Private Wrongs, 87 Minn. L. Rev. 583 (2003). Martin Redish and Andrew Mathews have recently argued that, given modern instrumental justifications of punitive damages, their award necessarily amounts to an impermissible delegation of public regulatory authority to private actors. See Martin H. Redish & Andrew L. Mathews, Why Punitive Damages are Unconstitutional, 53 Emory L.J. 1 (2004). I would say instead that a given punitive damage award may be unconstitutional if it is the case that the only justification for the award or its magnitude is that it serves public goals such as deterrence, as opposed to providing redress to the victim of a particularly egregious form of mistreatment committed by the tortfeasor upon the victim
other claims by other insureds, the jury in addition awarded $145 million in punitive damages. Although the compensatory award was later reduced to S1 million, the punitive award was upheld by the Utah Supreme Court. The U.S. Supreme Court reversed, concluding that the punitive award was so excessive, as measured by the criteria set out in BMW m. Gore, as to violate State Farms Due Process rights Campbell presents a delicate set of issues for Federalist Society members Perhaps most fundamentally, it raises the question of whether the U.S. Supreme Court has any business invoking the vague guarantees of the Due Process Clause as a basis for second-guessing state common law. However, I wish here to consider a different aspect of the decision According to Justice Kennedy's majority opinion, the problem with the Utah Supreme Court's ruling was not that it permitted some punitive damages to be awarded to the Campbells. Based on the evidence presented at trial, the jury acted reasonably in concluding that State Farm had willfully mistreated the Campbells. Rather the problem was the magnitude of the jury award. Here is the key sentence explaining this 1nt: While we do not suggest there was error in awarding punitive damages based upon State Farm's conduct toward the Campbells, a more modest punishment for this reprehensible conduct conld have satisfied the State gitimate objectires, and the Utah courts should have gone no further. 5 3 BMW of North America, Inc V. Gore, 517 U.S. 559(1996 4 Hence Justices Scalia and Thomas have been pretty consistent in their rejection of the Gore line of See, eg, State Farm, 538 U.S., at 429( Scalia, J, dissenting); id. at 429-30(Thomas, ], dissenting); sf. Co Indus, Inc. V. Leatherman Tool Group, Inc, 532 U.S. 424, 443(2001)(Thomas, J, concurring)(noting continued objection to Gore's holding, but concurring that, in light of Gore, appellate review of punitive damage awards for constitutional excessiveness ought to be under a de noro standard id at 443-44 ( Scalia, J, concurring in the judgment)(same). The Chief Justice, by cont ms to have made his peace with this aspect of substantive due process. See State Farm, 538 U.S. at 41 1 Goining majority opinion) s State Farm, 538 U.S. at 419-20(emphasis added) 6
6 other claims by other insureds, the jury in addition awarded $145 million in punitive damages. Although the compensatory award was later reduced to $1 million, the punitive award was upheld by the Utah Supreme Court. The U.S. Supreme Court reversed, concluding that the punitive award was so excessive, as measured by the criteria set out in BMW v. Gore, 3 as to violate State Farm’s Due Process rights. Campbell presents a delicate set of issues for Federalist Society members. Perhaps most fundamentally, it raises the question of whether the U.S. Supreme Court has any business invoking the vague guarantees of the Due Process Clause as a basis for second-guessing state common law.4 However, I wish here to consider a different aspect of the decision. According to Justice Kennedy’s majority opinion, the problem with the Utah Supreme Court’s ruling was not that it permitted some punitive damages to be awarded to the Campbells. Based on the evidence presented at trial, the jury acted reasonably in concluding that State Farm had willfully mistreated the Campbells. Rather the problem was the magnitude of the jury award. Here is the key sentence explaining this point: While we do not suggest there was error in awarding punitive damages based upon State Farm’s conduct toward the Campbells, a more modest punishment for this reprehensible conduct could have satisfied the State’s legitimate objectives, and the Utah courts should have gone no further.5 3 BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996). 4 Hence Justices Scalia and Thomas have been pretty consistent in their rejection of the Gore line of cases. See, e.g., State Farm, 538 U.S., at 429 (Scalia, J., dissenting); id. at 429-30 (Thomas, J., dissenting); cf. Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 443 (2001) (Thomas, J., concurring) (noting continued objection to Gore’s holding, but concurring that, in light of Gore, appellate review of punitive damage awards for constitutional excessiveness ought to be under a de novo standard); id. at 443-44 (Scalia, J., concurring in the judgment) (same). The Chief Justice, by contrast, seems to have made his peace with this aspect of substantive due process. See State Farm, 538 U.S. at 411 (joining majority opinion). 5 State Farm, 538 U.S. at 419-20 (emphasis added)
In this one sentence resides a deep tension, a clue as to what makes modern punitive damages practices so seemingly suspect, and a suggestion for a better approach The tension resides in the evident shift of focus that takes place between the first two clauses of the sentence. In explaining why some punitive award was appropriate, the Court's focus is on the claim of the Campbells for what State Farm did to them. Yet, in assessing the size of the award, the majority opinion ceases to bo concerned with what was done to the campbells, and ask instead whether the award they stood to receive is necessary to further the interests of the State of Utah in punishing and deterring bad behavior. What is initially cast as an entitlement of the Campbells, is quickly recast as an interest of the State. What started out as a claim for private redress brought by the victim of a wrong, has become a claim brought on behalf of the public, to vindicate its interest in the maintenance of sound insurance practices. 6 I want to suggest that Campbell provides a clear example of the sort of slippage that legal academics have promoted, and that has led us into a bind in our thinking 6 The Court's focus on Utah's interest in enforcing punitive awards is driven in part by the need to paper over a serious problem that attends the constitutionalization of tort law, namely the problem of state action See redish Mathews, supra note at 25-27(noting the issue of state action raised by constitutional review of punitive damage awards). At least since New York Times Co r. Snllinan, the Court has simply assumed away the state action problem, essentially adopting the unsatisfactory position- unsatisfactory because it proves too much-that the judicial systems oversight of private litigation counts as state action. 376 U.S. 254, 265(1964) Gudicial application of state tort law counts as state action for purposes of constitutional analysis). I think it is the case that some applications of state tort law amount to state action. Suiran provides a particular striking xample of tort law as a form of state action, because there a public official was quite deliberately attempting to e state defamation law to silence his political critics. See John C. P. Goldberg, Judging Reputation: Realism an ommon Law in Justice W hite's Defamation Jurisprdence, 74 U. Col. L. Rev. 1471, 1477-78( 2003). Likewise, to the extent the result in a particular tort case suggests that the state judiciary is presiding over a system of tort law that is functioning as a regulatory scheme, and no longer functioning as a system of private law, then again the state action req may be met. Zipursky, supra note 2, at_(suggesting that the three-pronged Due Process test of Gore can be understood as a test for determining when a particular tort judgment crosses over the line between providing private redress and functioning as public regulatory law in disguise)
7 In this one sentence resides a deep tension, a clue as to what makes modern punitive damages practices so seemingly suspect, and a suggestion for a better approach. The tension resides in the evident shift of focus that takes place between the first two clauses of the sentence. In explaining why some punitive award was appropriate, the Court’s focus is on the claim of the Campbells for what State Farm did to them. Yet, in assessing the size of the award, the majority opinion ceases to be concerned with what was done to the Campbells, and ask instead whether the award they stood to receive is necessary to further the interests of the State of Utah in punishing and deterring bad behavior. What is initially cast as an entitlement of the Campbells, is quickly recast as an interest of the State. What started out as a claim for private redress brought by the victim of a wrong, has become a claim brought on behalf of the public, to vindicate its interest in the maintenance of sound insurance practices.6 I want to suggest that Campbell provides a clear example of the sort of slippage that legal academics have promoted, and that has led us into a bind in our thinking 6 The Court’s focus on Utah’s interest in enforcing punitive awards is driven in part by the need to paperover a serious problem that attends the constitutionalization of tort law, namely the problem of state action. See Redish & Mathews, supra note , at 25-27 (noting the issue of state action raised by constitutional review of punitive damage awards). At least since New York Times Co. v. Sullivan, the Court has simply assumed away the state action problem, essentially adopting the unsatisfactory position -- unsatisfactory because it proves too much -- that the judicial system’s oversight of private litigation counts as state action. 376 U.S. 254, 265 (1964) (judicial application of state tort law counts as state action for purposes of constitutional analysis). I think it is the case that some applications of state tort law amount to state action. Sullivan provides a particular striking example of tort law as a form of state action, because there a public official was quite deliberately attempting to use state defamation law to silence his political critics. See John C. P. Goldberg, Judging Reputation: Realism and Common Law in Justice White’s Defamation Jurisprudence, 74 U. Col. L. Rev. 1471, 1477-78 (2003). Likewise, to the extent the result in a particular tort case suggests that the state judiciary is presiding over a system of tort law that is functioning as a regulatory scheme, and no longer functioning as a system of private law, then again the state action requirement may be met. Cf. Zipursky, supra note 2, at __ (suggesting that the three-pronged Due Process test of Gore can be understood as a test for determining when a particular tort judgment crosses over the line between providing private redress and functioning as public regulatory law in disguise)
about punitive damages and many other subjects within torts. Many Federalist Society members will be unsympathetic with Professor Bogus's claim that large punitive awards are desirable from a regulatory perspective. But he is right about one thing, and the Supreme Court agrees with him in this particular instance: corporations and individuals commit egregious wrongs against others that justify a certain kind of punitive response via the legal system. Where he goes astray, in my view, is in hinking about the justification -as does the Supreme Court -in terms of the states regulatory objectives. What is at stake in Campbell is not the State of Utah's interests in obtaining retribution on behalf of its citizens, or in deterring sharp business practices, but the Campbells interest in vindicating their rights not to be mistreated in the way that they were. Thus, to my mind, the question is not: How much money may be extracted from State Farm in order to vindicate the laws of Utah or to promote better insurance-company behavior in Utah? Instead, the question is: How much money will it take to make things right for the Campbells, not just in the sense of compensating them for their losses, but in the sense of providing them with satisfaction-- a remedy adequate to acknowledge and avenge State Farms predatory conduct towards them. 7 7 I realize that this characterization puts a compensatory cast on punitive damages. Still, I do not think it ollapses the distinction between compensatory and punitive damages -a charge that has from time to time been leveled against the sort of view articulated here. See, e. g, Fay v. Parker, 53 N.H. 342(1872)(arguing that amages are just a form of emotional distress damages). All damage a tort context compensatory in the minimal or thin sense of being payments to which a tort victim has a right by virtue of having been victimized; they are payments that help make things right as between victim and tortfeasor. But they are not all compensatory in the sense of being paid to make up for harm caused to the victims body or psyche: they are not, in this sense, part of"make whole damages. Thus, I would argue that a tort plaintiff ca sometimes make out a valid claim for punitive damages even if the evidence shows that she was not physically injured and that she stoically withstood her mistreatment. 8
8 about punitive damages and many other subjects within torts. Many Federalist Society members will be unsympathetic with Professor Bogus’s claim that large punitive awards are desirable from a regulatory perspective. But he is right about one thing, and the Supreme Court agrees with him in this particular instance: corporations and individuals commit egregious wrongs against others that justify a certain kind of punitive response via the legal system. Where he goes astray, in my view, is in thinking about the justification -- as does the Supreme Court -- in terms of the state’s regulatory objectives. What is at stake in Campbell is not the State of Utah’s interests in obtaining retribution on behalf of its citizens, or in deterring sharp business practices, but the Campbells’ interest in vindicating their rights not to be mistreated in the way that they were. Thus, to my mind, the question is not: How much money may be extracted from State Farm in order to vindicate the laws of Utah or to promote better insurance-company behavior in Utah? Instead, the question is: How much money will it take to make things right for the Campbells, not just in the sense of compensating them for their losses, but in the sense of providing them with satisfaction -- a remedy adequate to acknowledge and avenge State Farm’s predatory conduct towards them.7 7 I realize that this characterization puts a compensatory cast on punitive damages. Still, I do not think it collapses the distinction between compensatory and punitive damages – a charge that has from time to time been leveled against the sort of view articulated here. See, e.g., Fay v. Parker, 53 N.H. 342 (1872) (arguing that punitive damages are just a form of emotional distress damages). All damage payments in a tort context are compensatory in the minimal or thin sense of being payments to which a tort victim has a right by virtue of having been victimized; they are payments that help make things right as between victim and tortfeasor. But they are not all compensatory in the sense of being paid to make up for harm caused to the victim’s body or psyche: they are not, in this sense, part of “make whole” damages. Thus, I would argue that a tort plaintiff can sometimes make out a valid claim for punitive damages even if the evidence shows that she was not physically injured and that she stoically withstood her mistreatment
The reader might be inclined to regard this is a game of semantics, but I dont think it is. Ask yourself: What sort of award will be sufficient to cause State Farm and other well-heeled insurance companies to take notice that, when in Utah, they had better behave themselves? A very big number might come to mind, perhap even one in the hundreds of millions. Now ask yourself: How much money are the Campbells entitled to extract from State Farm, on top of damages for any losses they suffered, in recognition of the fact that State Farm consciously shirked its duty to protect their interests so that it might serve its own? Monetizing is a subjective business, but whatever number we might come up with as an answer to the latter question, I cant believe that it's going to run into the multi-millions. $10,000, or S100,000, might constitute an appropriate number. But $10 million or $100 million? No way. In short, if we ask a different question about punitive damages -a question prompted by a conception of tort law as a law of private redress, we get a different order of answer than if we ask questions that presume a conception of tort law as public regulatory law Of course the Court in Campbell reached the conclusion that the $145 million award was excessive. So in that sense the hazards of treating tort law as public law were not realized. But why werent they? The answer may be that, despite its disparagement by legal academics, the notion of tort law as private law still has some hold on judges, even Supreme Court Justices The Court's principal stated reason for knocking down the punitive award was that the jury heard a lot of evidence about misconduct by other State Farm employees
9 The reader might be inclined to regard this is a game of semantics, but I don’t think it is. Ask yourself: What sort of award will be sufficient to cause State Farm and other well-heeled insurance companies to take notice that, when in Utah, they had better behave themselves? A very big number might come to mind, perhaps even one in the hundreds of millions. Now ask yourself: How much money are the Campbells entitled to extract from State Farm, on top of damages for any losses they suffered, in recognition of the fact that State Farm consciously shirked its duty to protect their interests so that it might serve its own? Monetizing is a subjective business, but whatever number we might come up with as an answer to the latter question, I can’t believe that it’s going to run into the multi-millions. $10,000, or $100,000, might constitute an appropriate number. But $10 million or $100 million? No way. In short, if we ask a different question about punitive damages – a question prompted by a conception of tort law as a law of private redress, we get a different order of answer than if we ask questions that presume a conception of tort law as public regulatory law. Of course the Court in Campbell reached the conclusion that the $145 million award was excessive. So in that sense the hazards of treating tort law as public law were not realized. But why weren’t they? The answer may be that, despite its disparagement by legal academics, the notion of tort law as private law still has some hold on judges, even Supreme Court Justices. The Court’s principal stated reason for knocking down the punitive award was that the jury heard a lot of evidence about misconduct by other State Farm employees
in other states with respect to other kinds of insurance policies and other insureds The Campbells' attorneys introduced this evidence to show that State Farms treatment of the Campbells was part of a nationwide policy of sharp practices by which the insurer sought to reduced payouts on claims and increase profits. This was error because it permitted the jury to award punitive damages to punish and deter conduct that bore no relation to the Campbells'harm. A defendant,'s dissimilar acts, independent from the acts upon which liability is premised, may not serve as the basis for punitive damages. A defendant should be punished for the conduct that harmed the plaintiff, not for being an unsavory individual or business. Due process does not permit courts, in the calculation of punitive damages, to adjudicate the merits of other parties' hypothetical claims against a defendant under the guise of .. reprehensibility Punishment on these bases creates the possibility of multiple punitive damage awards for the same conduct; for in the usual case nonparties are not bound by the judgment some other plaintiff obtains 8 Although I am inclined to agree with the initial sentiment expressed in the first full sentence of this passage, it seems hard to defend given the Court's analytic framework. Its basic conclusions are that unrelated misdeeds"may not serve as the basis of for [a given plaintiffs] punitive damages, "and that, a person may not be punished for being "an unsavory individual .. The latter assertion is a red herring. A punitive award is always predicated on the showing of a completed tort, so the defendant is not being punished merely for being unsavory. Meanwhile, the former seems hard to justify given the Court's nominally regulatory approach to punitive damages. If such damages are meant to serve a state's interest in deterring socially undesirable behavior 8 538 U.S. at 423(citations omitted
10 in other states with respect to other kinds of insurance policies and other insureds. The Campbells’ attorneys introduced this evidence to show that State Farm’s treatment of the Campbells was part of a nationwide policy of sharp practices by which the insurer sought to reduced payouts on claims and increase profits. This was error because it permitted the jury to award punitive damages to punish and deter conduct that bore no relation to the Campbells’ harm. A defendant’s dissimilar acts, independent from the acts upon which liability is premised, may not serve as the basis for punitive damages. A defendant should be punished for the conduct that harmed the plaintiff, not for being an unsavory individual or business. Due process does not permit courts, in the calculation of punitive damages, to adjudicate the merits of other parties’ hypothetical claims against a defendant under the guise of … reprehensibility analysis …. Punishment on these bases creates the possibility of multiple punitive damage awards for the same conduct; for in the usual case nonparties are not bound by the judgment some other plaintiff obtains.8 Although I am inclined to agree with the initial sentiment expressed in the first full sentence of this passage, it seems hard to defend given the Court’s analytic framework. Its basic conclusions are that unrelated misdeeds “may not serve as the basis of for [a given plaintiff’s] punitive damages,” and that, a person may not be punished for being “an unsavory individual ….” The latter assertion is a red herring. A punitive award is always predicated on the showing of a completed tort, so the defendant is not being punished merely for being unsavory. Meanwhile, the former seems hard to justify given the Court’s nominally regulatory approach to punitive damages. If such damages are meant to serve a state’s interest in deterring socially undesirable behavior, 8 538 U.S. at 423 (citations omitted)