July 14, 2008

CQ Politics Emphasizes Supreme Court's Observation that Punitive Damages Are Not "Out of Control"

CQ Politics has a post by columnist Kenneth Jost entitled "Courts & the Law: Damage Controlled." Jost writes that most commentators on Exxon Shipping Co. v. Baker have overlooked a fundamental premise of the Court's reasoning, namely, that most punitive damages awards are infrequent, have not increased in recent years, and are generally lower than the amount of compensatory damages.

Personally, I find this aspect of the Supreme Court's opinion very ironic. For years, a contingent of lawyers who oppose restrictions on punitive damages have written articles and published studies showing that punitive damages are rarely awarded, and when they are, the awards are usually modest. (See, e.g., the writings of Neil Vidmar and Michael Rustad.) I have always thought that such studies are effective in countering the perception that punitive damages are "out of control," but they really don't support the argument that the monster awards, rare as they may be, shouldn't be reined in.

Justice Souter, in his opinion in Exxon Shipping Co., actually turned these stats against the people who have long been touting them. He pointed to these stats as evidence that plaintiffs' advocates have no basis for complaining about a 1-to-1 ratio limit, because it will only affect a small subset of all punitive damages cases.