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Catherine M. Sharkey - One of the best experts on this subject based on the ideXlab platform.
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The Future of Classwide Punitive Damages
University of Michigan Journal of Law Reform, 2013Co-Authors: Catherine M. SharkeyAbstract:Conventional wisdom holds that the Punitive Damages class action is susceptible not only to doctrinal restraints imposed on class actions but also to constitutional due process limitations placed on Punitive Damages. Thus, it would seem that the prospects for Punitive Damages classes are even grimmer than for class actions generally.This conventional picture misunderstands the role of Punitive Damages and, in particular, the relationship between class actions and Punitive Damages. It either ignores or underestimates the distinctly societal element of Punitive Damages, which makes them especially conducive to aggregate treatment. Furthermore, Punitive Damages classes offer a solution to the constitutional due process problem of juries awarding “classwide” Damages in a single-plaintiff case.Courts’ conceptualization of Punitive Damages as either individualistic or societal dictates how they decide the certification question. My survey of recent case law reveals that courts taking the plaintiff-focused individualistic view of Punitive Damages tend to deny class certification, while courts embracing the defendant-focused societal view are more likely to certify a Punitive Damages class, all else being equal. Therefore, the viability of the Punitive Damages class depends upon the persuasiveness of the societal conception of Punitive Damages.Based on this empirical grounding, I discuss two possibilities for reform. First, state legislatures and courts could affirmatively define the collectivized, societal rationale for Punitive Damages. Such state legislative measures would likely withstand constitutional scrutiny under Philip Morris USA v. Williams, given the U.S. Supreme Court’s reaffirmation of the primacy of the state’s role in defining the legitimate purposes of Punitive Damages. Second, federal courts — in the absence of definitive guidance from authoritative sources on state substantive law — could consider the underlying societal rationale for Punitive Damages in the course of their certification decisions. To do so would not only be permitted, but indeed warranted, by the Rules Enabling Act.
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The Exxon Valdez Litigation Marathon: A Window on Punitive Damages
University of St. Thomas law journal, 2010Co-Authors: Catherine M. SharkeyAbstract:The Exxon Valdez litigation marathon - a protracted, two-decade-long battle over the propriety and constitutionality of the jury’s $5 billion Punitive Damages award - provides a window into the past, present, and future of Punitive Damages. Acting akin to a common law court under federal admiralty jurisdiction, the U.S. Supreme Court provided a template for lower courts to follow. Free of constitutional constraints, the Court diagnoses the problem with Punitive Damages - unpredictability - and propose a solution: a 1:1 ratio of Punitive to compensatory Damages. The flaws in the Court’s statistical analysis provide a reminder that those “unsophisticated in statistics” should proceed with caution. The Court’s single-minded focus on unpredictability almost inexorably drives it to embrace and reinforce an exclusively retributive rationale for Punitive Damages. The Court invokes the analogy of the sentencing guidelines as a model for achieving greater predictability; once enamored with this model, the linkage between the guidelines and criminal retribution spills over to Punitive Damages as civil retribution. There is, moreover, an uncanny coincidence between the Court’s common law, policy-laden analysis, and the heavy-handed direction its constitutional excessiveness decisions had been taking. Three issues loom large on the horizon of Punitive Damages doctrine and policy. First, the Court’s fixation on unpredictability can be linked with a broader trend in the Court’s jurisprudence of circumscribing the role of the civil jury in the name of certainty, predictability, and efficiency. Second, the Court had before it a case in a unique procedural posture: the plaintiffs were part of a “limited fund,” mandatory, non-opt out class action for resolution of Punitive Damages only. Because that element of the case was not appealed to the Court, the Court left for another day resolution of the classwide determination of Punitive Damages. Third, the Court’s quest for a national solution to the Punitive Damages problem and its equation of Punitive Damages and criminal fines presage impending federalism battles. By elevating a single Punitive Damages goal - that of retributive punishment - the Court sets the stage for a clash with state courts and legislatures who might be inspired to define their legitimate state interests in Punitive Damages differently.
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Punitive Damages as societal Damages
Yale Law Journal, 2003Co-Authors: Catherine M. SharkeyAbstract:I. EXISTING CONCEPTIONS OF Punitive Damages AND PLAINTIFFS’ WINDFALL GAINS 356 A. Punishment and Retribution: The Individual Harm Paradigm.... 359 B. Deterrence: The Societal Harm Paradigm 363 1. Economic Theory: The Internalization of Full Costs 365 2. The Punitive Damages “Multiplier” and Its Limitations ...... 367 C. The Plaintiff’s Windfall as a Necessary Consequence 370
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Punitive Damages as Societal Damages
The Yale Law Journal, 2003Co-Authors: Catherine M. SharkeyAbstract:Jury awards of classwide Punitive Damages provide windfalls to individual plaintiffs, particularly in products liability, fraud, civil rights, and employment discrimination cases. This suggests a new angle from which to approach the ongoing Punitive Damages debate. Under current law, classwide assessment of widespread public harms has proceeded under the rubric of retributive punishment and deterrence the traditional justifications for Punitive Damages bypassing class action procedural requirements and unjustly enriching the plaintiff. In the wake of the Supreme Court's admonition in State Farm that such a practice can violate due process by exposing defendants to the risk of multiple Punitive Damages awards for the same conduct, the Article proposes explicit recognition of a distinct category of compensatory societal Damages for redress of third-party and societal harms. Up until now, this category has been quietly subsumed within Punitive Damages. But Damages for specific harms to third parties and more diffuse harms to society are actually compensatory (as opposed to Punitive) in nature, and should, once assessed, be distributed by legislatures, courts, and juries accordingly. Drawing upon heretofore unconnected trends in Punitive Damages and class action tort cases, and state-level legislative and judicial innovations with split-recovery schemes for distributing Punitive awards, the Article explores various mechanisms for transforming Punitive Damages into societal Damages, including the formation of an ex post class action at the remedial stage and the Punitive-Damages-only class at the liability stage. The theory of compensatory societal Damages whether or not embraced by legislatures and courts reveals more clearly the tradeoffs in transforming the doctrine of Punitive Damages to achieve the compensatory and deterrence goals of the tort system.
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Punitive Damages: Should Juries Decide?
SSRN Electronic Journal, 2003Co-Authors: Catherine M. SharkeyAbstract:How Juries Decide is a pathbreaking work of empirical scholarship based on experiments conducted with more than 8,000 jury-eligible citizens and more than 600 mock juries. Its basic premise - that cognitive flaws in human decisionmaking, especially those affecting the translation process by which moral judgments are transformed into dollar awards, lead to erratic and unprincipled Punitive Damages awards - has already had an important impact not only on scholarly literature but also on judicial decisionmaking in high profile suits. This Review offers a methodological, doctrinal, and institutional critique of this widely influential study, with particular emphasis on the discrepancies between the empirical data presented and the policy reforms advanced - which include, at the extreme, a call to banish the jury from Punitive Damages decisionmaking. The Review examines critically the authors' conclusions that jurors are intuitive retributionists and unable (or unwilling) to follow instructions based on the non-retributive optimal deterrence theory of Punitive Damages. More fundamentally, the Review challenges the authors' rigid separation between retributive-based Punitive Damages, which are linked to jurors' moral evaluations, from remedial-based compensatory Damages (including pain and suffering), which are not. Although the authors fashion a seemingly narrowly tailored attack on jurors' assessments of Punitive Damages, in fact they raise fundamental questions about the civil jury system as a whole, questions that are in no relevant way confined to Punitive Damages. Conversely, to the extent that there is any non-retributive component to Punitive Damages, their attack upon the jury's ability to assess Punitive Damages might not be warranted across the board. What emerges is the distinct possibility that a system of non-retributive Punitive Damages might survive the authors' empirical challenges. Finally, How Juries Decide pays too little attention to institutional context and wholly overlooks potentially effective reforms within the existing jury system, such as those that take into account anchoring effects and regional differences among jurors - reforms that are clearly supported by their empirical findings.
W. Kip Viscusi - One of the best experts on this subject based on the ideXlab platform.
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Taming Blockbuster Punitive Damages Awards
University of Illinois Law Review, 2018Co-Authors: Benjamin J Mcmichael, W. Kip ViscusiAbstract:Blockbuster Punitive Damages awards, i.e., those awards exceeding $100 million, attract attention based on their sheer size. While there have been fewer such awards in the last decade, they remain an important presence in the legal landscape. Taking notice of these and other large Punitive Damages awards, courts and state policymakers have taken steps to both constrain them and render them more predictable. States have enacted Punitive Damages caps to limit the amount of Punitive Damages courts can award, but these caps often contain a number of exceptions and apply only to Damages under a specific state’s law. At a broader level, the Supreme Court has announced a general limitation on Punitive Damages under the Due Process Clause of the Fourteenth Amendment, which applies to all cases and contains very few exceptions. Under State Farm v. Campbell, Punitive Damages awards that exceed the accompanying compensatory award by more than a factor of ten will generally violate due process. However, this limit is substantially higher than the Punitive Damages caps that some states have put in place. This Article provides the first empirical analysis of the effect of state Punitive Damages caps on blockbuster awards and offers the first comparison of the effect of these reforms with the effect of the Supreme Court’s current constitutional doctrine on Punitive Damages. Understanding the roles of these legal regimes in how the largest Punitive Damages awards are imposed provides unique insight into how different factors affect courts’ decisions to award Punitive Damages. Relying on this insight, as well as previously developed empirical evidence, we argue that it is time for a new constitutional doctrine on Punitive Damages. In particular, we argue that the Supreme Court should incorporate the lessons learned from the different effects of state Punitive Damages caps to lower the limit placed on Punitive Damages under the Due Process Clause. For cases involving financial loss, Punitive awards more than three times the size of the accompanying compensatory award will generally violate due process. For cases involving severe injuries, such as wrongful deaths, the total value of Punitive Damages and compensatory Damages should not exceed economic estimates of the value of a statistical life, which is an economic deterrence measure. This proposed structure would better achieve the Court’s goal of returning predictability to Punitive Damages awards, blockbuster and otherwise.
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The Punitive Damages Calculus: The Differential Incidence of State Punitive Damages Reforms
SSRN Electronic Journal, 2016Co-Authors: Benjamin J Mcmichael, W. Kip ViscusiAbstract:State Punitive Damages reforms have altered how courts award Punitive Damages. We model the decision to award Punitive Damages as a two-step process involving the decision to award any Punitive Damages and the decision of what amount to award. Using samples of trial court verdicts from the Civil Justice Survey of State Courts, we find that Punitive Damages caps reduce the amount of Damages awarded but do not affect whether they are initially awarded. Additionally, we find that maintaining lower evidentiary standards increases both the probability that Punitive Damages are awarded and the size of those awards.
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Saving Lives through Punitive Damages
Southern California Law Review, 2009Co-Authors: Joni Hersch, W. Kip ViscusiAbstract:This article proposes that the value of statistical life be used to set the total Damages amount needed for deterrence when Punitive Damages are warranted in wrongful death cases. The appropriate level of Damages should be achieved by adjusting the value of Punitive Damages. Compensatory Damages should not be distorted to establish the total Damages level needed for efficient deterrence. Attempts to introduce hedonic Damages as a compensatory Damages component and proposals to use the value of statistical life on a routine basis when setting compensatory Damages awards are misguided and will undermine the insurance and compensation function of compensatory Damages. The U.S. Supreme Court’s focus on Punitive Damages ratios is misplaced, as it is the total Damages amount, not the ratio, that is instrumental. The criteria for evaluating Punitive Damages in bodily injury cases should be different than for property Damages cases. The composition of compensatory Damages is especially important for bodily injury cases. Empirical analysis of current state court awards in bodily injury cases shows the desired positive relationship between Punitive Damages awards and the nonpecuniary loss.
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The Blockbuster Punitive Damages Awards
SSRN Electronic Journal, 2004Co-Authors: W. Kip ViscusiAbstract:This paper provides an analysis of 64 Punitive Damages awards of at least $100 million. Based on an inventory of these cases, there is evidence that these blockbuster awards are highly concentrated geographically, as two states account for 27 of the 64 awards. The awards also have been rising substantially over time, with the majority of these blockbuster awards taking place since 1999. An assessment of the current status of the blockbuster Punitive Damages awards indicates that most of these awards have been appealed, but the reversal of these Punitive Damages awards is the exception rather than the rule. Many large Punitive Damages awards are settled without any appeal. The ratio limits outlined in State Farm v. Campbell will affect over 90% of the blockbuster awards and over 90% of the Damages associated with these awards if a ratio of 1.0 becomes the upper limit on Punitive Damages.
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Punitive Damages: How Judges and Juries Perform
The Journal of Legal Studies, 2004Co-Authors: Joni Hersch, W. Kip ViscusiAbstract:Civil Justice Survey of State Courts, 1996, we find that juries are significantly more likely to award Punitive Damages than are judges and award higher levels of Punitive Damages. Jury awards are also less strongly related to compensatory Damages. The differential effect of juries is most pronounced among the largest awards. Juries also tend to award higher levels of compensatory Damages, which in turn boost the Punitive Damages award. The findings are robust with respect to controlling for self-selection of jury or bench trial.
Theodore Eisenberg - One of the best experts on this subject based on the ideXlab platform.
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The Decision to Award Punitive Damages: An Empirical Study
Journal of Legal Analysis, 2010Co-Authors: Theodore Eisenberg, Michael Heise, Nicole L. Waters, Martin T WellsAbstract:Empirical studies have consistently shown that Punitive Damages are rarely awarded, with rates of about three to five percent of plaintiff trial wins. Using the 2005 data from the Bureau of Justice Statistics Civil Justice Survey, this article shows that knowing in which cases plaintiffs sought Punitive Damages transforms the picture of Punitive Damages. Not accounting for whether Punitive Damages were sought obscures the meaningful Punitive Damages rate, the rate of awards in cases in which they were sought, by a factor of nearly 10, and obfuscates a more explicable pattern of awards than has been reported. Punitive Damages were surprisingly infrequently sought, with requests found in about 10% of tried cases that plaintiffs won. Punitive Damages were awarded in about 30% these trials. Awards were most frequent in cases of intentional tort, with a Punitive award rate of over 60%. Greater harm corresponded to a greater probability of an award: the size of the compensatory award was significantly associated with whether Punitive Damages were awarded, with a rate of approximately 60% for cases with compensatory awards of $1 million or more. Regression models correctly classify about 70% or more of the Punitive award request outcomes, Judge-jury differences in the rate of awards exist, with judges awarding Punitive Damages at a higher rate in personal injury cases and juries awarding them at a higher rate in nonpersonal injury cases. These puzzling adjudicator differences may be a consequence of the routing of different cases to judges and juries.
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THE DECISION TO AWARD Punitive Damages
2010Co-Authors: Theodore Eisenberg, Michael Heise, Nicole L. Waters, Martin T WellsAbstract:Empirical studies have consistently shown that Punitive Damages are rarely awarded, with rates of about 3 to 5 percent of plaintiff trial wins. Using the 2005 data from the Bureau of Justice Statistics Civil Justice Survey, this article shows that knowing in which cases plaintiffs sought Punitive Damages transforms the picture of Punitive Damages. Not accounting for whether Punitive Damages were sought obscures the meaningful Punitive Damages rate, the rate of awards in cases in which they were sought, by a factor of nearly 10, and obfuscates a more explicable pattern of awards than has been reported. Punitive Damages were surprisinglyinfrequentlysought,withrequestsfound inabout 10 percentoftriedcases that plaintiffs won. State laws restricting access to Punitive Damages were significantly associated with rates of seeking Punitive Damages. Punitive Damages were awarded in about 30 percent of the plaintiff trial wins in which they were sought. Awards were most frequent in cases of intentional tort, with a Punitive award rate of over 60 percent. Greater harm corresponded to a greater probability of an award: the size of the compensatory award was significantly associated with whether Punitive Damages were awarded, with a rate of approximately 60 percent for cases with compensatory awards of $1 million or more. Regression models correctly classify about 70 percent or more of the Punitive award request outcomes.
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Punitive Damages in Securities Arbitration: An Empirical Study
The Journal of Legal Studies, 2010Co-Authors: Stephen J Choi, Theodore EisenbergAbstract:This article provides the first empirical analysis of Punitive Damages in securities arbitrations. Using a data set of over 6,800 securities arbitration awards, we find that claimants prevailed in 48.9 percent of arbitrations and that 9.1 percent of those claimant victories included a Punitive Damages award. The existence of a Punitive Damages award was associated with claims that suggested egregious misbehavior and with claims that provided higher compensatory awards. The pattern of Punitive awards is more consistent with a traditional view of Punitive Damages that incorporates a retributive component than with a law and economics emphasis on efficient deterrence. We also report evidence that the relation between Punitive and compensatory awards did not differ substantially between the securities arbitrators’ data and data on juries available from periodic Civil Justice Surveys by the Bureau of Justice Statistics.
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Punitive Damages in securities arbitration an empirical study
2009Co-Authors: Stephen J Choi, Theodore EisenbergAbstract:This article provides the first empirical analysis of Punitive Damages in securities arbitrations. Using a data set of over 6,800 securities arbitration awards, we find that claimants prevailed in 48.9 percent of arbitrations, and that 9.1% of those claimant victories included a Punitive Damages award. The existence of a Punitive Damages award was associated with claims that suggested egregious misbehavior and with claims that provided higher compensatory awards. The pattern of Punitive awards is more consistent with a traditional view of Punitive Damages that incorporates a retributive component than with a law and economics emphasis on efficient deterrence. We also test whether securities arbitration results in different Punitive Damages compared with litigation before juries and judges. The relation between Punitive and compensatory awards did not differ substantially between the securities arbitrators’ data and data on juries available from periodic Civil Justice Surveys by the Bureau of Justice Statistics. The rate of Punitive awards by arbitrators was higher than the overall rates for juries and judges and slightly lower than the rate of Punitive awards by juries in cases lacking bodily injury.
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the predictability of Punitive Damages
The Journal of Legal Studies, 1997Co-Authors: Theodore Eisenberg, John Goerdt, Brian J Ostrom, David B Rottman, Martin T WellsAbstract:Abstract Using one year of jury trial outcomes from 45 of the nation's most populous counties, this article shows a strong and statistically significant correlation between compensatory and Punitive Damages. These findings are replicated in 25 years of Punitive Damages awards from Cook County, Illinois, and California. In addition, we find no evidence that Punitive Damages awards are more likely when individuals sue businesses than when individuals sue individuals. With respect to award frequency, juries rarely award Punitive Damages and appear to be especially reluctant to do so in the areas of law that have captured the most attention, products liability and medical malpractice. Punitive Damages are most frequently awarded in business/contract cases and intentional tort cases. The frequency‐of‐award findings are consistent with all major studies of Punitive Damages.
Robert J. Rhee - One of the best experts on this subject based on the ideXlab platform.
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a financial economic theory of Punitive Damages
Michigan Law Review, 2012Co-Authors: Robert J. RheeAbstract:This Article provides a financial economic theory of Punitive Damages. The core problem, as the Supreme Court acknowledged in Exxon Shipping Co. v. Baker, is not the systemic amount of Punitive Damages in the tort system; rather, it is the risk of outlier outcomes. Low frequency, high severity awards are unpredictable, cause financial distress, and beget social cost. By focusing only on offsetting escaped liability, the standard law and economics theory fails to account for the core problem of variance. This Article provides a risk arbitrage analysis of the relationship between variance, litigation valuation, and optimal deterrence. Starting with settlement dynamics, it shows that Punitive Damages create problematic risk arbitrage opportunities, which systemically produce under-and overvaluation of cases. These effects yield inefficient pricing in the litigation system. Properly conceptualized and applied, Punitive Damages can mitigate risk arbitrage that skews actual results from the prescriptions of optimal liability and deterrence. The modern Supreme Court jurisprudence is flawed because it is overbroad. Single-digit multiplier caps underdeter defendants in most cases of ordinary liability because Punitive Damages do not sufficiently offset a defendant's risk arbitrage opportunity gained from a lower litigation risk exposure. When liability is catastrophic, however, Punitive Damages overdeter defendants, even with a single-digit ratio limit, because they impart the severe economic cost of financial distress in addition to the monetary cost of the judgment. These additional economic costs must be credited toward the calculus of cost internalization and optimal deterrence. Thus, a calibrated risk-based theory is needed to support legal limitations on Punitive Damages.IntroductionIn the course of fundamentally reshaping the law on Punitive Damages,1 the Supreme Court came to accept the rhetoric that Punitive Damages are "out of control."2 This view justified constraining Punitive damage awards under the Due Process Clause of the Constitution in two landmark cases. In BMW of North America, Inc. v. Gore, the Court held that a 500x multiple of Punitive to compensatory Damages was a "grossly excessive award" that violated substantive due process.3 In State Farm Mutual Automobile Insurance Co. v. Campbell, the Court signaled that single-digit multipliers are more likely to satisfy due process.4The move toward bright-line quantitative caps has been criticized as "theoretically bankrupt,"5 "harmful,"6 and "extremely crude."7 The Court has well earned this criticism since it has not explained why single-digit multipliers satisfy constitutional or theoretical concerns aside from relying on an unfounded perception that Punitive Damages have spiraled out of control. The decisions in Gore and Campbell sought to reduce systemically the amount of Punitive Damages in the tort system by imposing quantitative caps as a disciplinary measure on state laws and by imposing standards governing the permissibility of Punitive awards.However, the suggestion that tort law redistributes excessive amounts of wealth is a Potemkin village.8 In Exxon Shipping Co. v. Baker, the Supreme Court's latest decision on Punitive Damages, the Court finally rejected the fallacious premise behind its venture into the workings of state tort law: "A survey of the literature reveals that discretion to award Punitive Damages has not mass-produced runaway awards, and... by most accounts the median ratio of Punitive to compensatory awards has remained less than 1:1."9 Bursting the myths advanced by tort reformists,10 Baker concluded that the tort system has exercised "overall restraint."11So what is the problem? According to Baker, the "real problem, it seems, is the stark unpredictability of Punitive awards."12 Although Punitive Damages are seldom awarded in tort cases and the median award is less than the median compensatory Damages award, the variance in awards "is great, and the outlier cases subject defendants to Punitive Damages that dwarf the corresponding compensatories. …
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A Financial Economic Theory of Punitive Damages
SSRN Electronic Journal, 2011Co-Authors: Robert J. RheeAbstract:This Article provides a financial economic analysis of Punitive Damages. The core problem, as the Supreme Court acknowledged in Exxon Shipping Co. v. Baker, is not the systemic amount of Punitive Damages in the tort system; rather, it is the risk of outlier outcomes. Low frequency, high severity awards are unpredictable, cause financial distress, and beget social cost. By focusing only on offsetting escaped liability, the standard law and economic theory fails to account for the core problem of variance. This Article provides a risk arbitrage analysis of the relationship between variance, litigation valuation, and optimal deterrence. Starting with settlement dynamics, it shows that Punitive Damages beget problematic risk arbitrage opportunities, which systemically produce under- and over-valuation of cases. These effects yield inefficient pricing in the litigation system. Properly conceptualized and applied, Punitive Damages can mitigate risk arbitrage that skews actual results from the prescriptions of optimal liability and deterrence. The modern Supreme Court jurisprudence is flawed because it is overbroad. Single-digit multiplier caps underdeter defendants in most cases of ordinary liability because Punitive Damages do not sufficiently offset a defendant’s risk arbitrage opportunity gained from a lower litigation risk exposure. When liability is catastrophic, however, Punitive Damages overdeter defendants, even with a single-digit ratio limit, because they impart severe economic cost of financial distress in addition to the monetary cost of the judgment. These additional economic costs must be credited toward the calculus of cost internalization and optimal deterrence. Thus, a calibrated risk-based theory is needed to support legal limitations on Punitive Damages.
Kip W Viscusi - One of the best experts on this subject based on the ideXlab platform.
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the Punitive Damages calculus the differential incidence of state Punitive Damages reforms
2016Co-Authors: Benjamin J Mcmichael, Kip W ViscusiAbstract:State Punitive Damages reforms have altered how courts award Punitive Damages. We model the decision to award Punitive Damages as a two-step process involving the decision to award any Punitive Damages and the decision of what amount to award. For the Civil Justice Survey of State Courts samples of trial court verdicts, Punitive Damages caps reduce the amount of Damages awarded but do not affect whether they are initially awarded. In contrast, the effect of Punitive Damages reforms on blockbuster Punitive Damages awards of at least $100 million is to reduce the incidence of these awards, but not their amount.
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Punitive Damages how judges and juries perform
The Journal of Legal Studies, 2004Co-Authors: Joni Hersch, Kip W ViscusiAbstract:Abstract This paper presents the first empirical analysis that demonstrates that juries differ from judges in awarding Punitive Damages. Our review of Punitive Damages awards of $100 million or more identified 63 such awards, of which juries made 95 percent. These jury awards are highly unpredictable and are not significantly correlated with compensatory Damages. Using data on jury and bench verdicts from the Civil Justice Survey of State Courts, 1996, we find that juries are significantly more likely to award Punitive Damages than are judges and award higher levels of Punitive Damages. Jury awards are also less strongly related to compensatory Damages. The differential effect of juries is most pronounced among the largest awards. Juries also tend to award higher levels of compensatory Damages, which in turn boost the Punitive Damages award. The findings are robust with respect to controlling for self‐selection of jury or bench trial.
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Punitive Damages how judges and juries perform
2002Co-Authors: Joni Hersch, Kip W ViscusiAbstract:A substantial recent literature has documented the inability of jurors to make sound decisions with respect to Punitive Damages, particularly for health, safety, and environmental torts. Included in this literature are experimental studies documenting the better performance of judges than jurors for the same case scenarios. Recent research by Eisenberg et al. (2002) has suggested, however, that there is no significant difference between the performance of judges and jurors with respect to Punitive Damages. Our paper provides a critical assessment of this finding as well as a detailed statistical analysis of the state court data upon which the Eisenberg et al. claim is based. Our analysis starts with a review of very large Punitive Damages awards. We found that 98 percent of the large Punitive Damages awards were made by juries and only two percent by judges. The jury awards in these large cases were highly unpredictable and were weakly correlated with compensatory Damages. We then analyze data from the Civil Justice Survey of State Courts, 1996, which is the data set used by Eisenberg et al. Our analysis of the state court data set contradicts Eisenberg et al.'s analysis. We find that juries are significantly more likely to award Punitive Damages than are judges; juries award higher levels of Punitive Damages; and juries are largely responsible for extremely large Punitive Damages awards. Juries also tend to award higher compensatory Damages, which in turn will often boost the Punitive Damages award. This paper also discusses the reasons why our results contradict the findings by Eisenberg et al.