April 1, 2010

"Federal Incursions and State Defiance: Punitive Damages in the Wake of Philip Morris v. Williams "

Professor Catherine M. Sharkey of NYU Law has posted her forthcoming Willamette Law Review article on SSRN: "Federal Incursions and State Defiance: Punitive Damages in the Wake of Philip Morris v. Williams."

Here's the abstract:

For more than a decade, the United States Supreme Court has intervened in state courts to police outlier punitive damages jury awards. As an interloper in the domain of state common law, the Court walks a fine line. The Court has been forthright about its resolve to restrain what it deems to be grossly excessive punitive damages jury awards, invoking its constitutional authority under the Due Process Clause of the Fourteenth Amendment. At the same time, the Court treads gingerly to avoid trampling upon the legitimate state interests inherent in the award by juries, and subsequent appellate review by state courts, of punitive damages. The resultant partial “federalization” of punitive damages produces an inherently unstable equilibrium, with the Court’s federal excessiveness review superimposed on state substantive and procedural law of punitive damages. Fault lines have emerged in the federal-state punitive damages tectonics.
The tale of Philip Morris v. Williams is a hiccup in the unfolding story of increasing federalization of the law of punitive damages. It highlights some underappreciated inherent limitations, given our federal system, on federal court authority and power in the state law realm of punitive damages. It provides an example alternately of courage or of woeful defiance on the part of a state court that stood up to the U.S. Supreme Court. But, most significantly, it lays bare - and, more provocatively, may unleash - the untapped potential on the part of state courts and legislatures to stake out the metes and bounds of the legitimate state interests in punitive damages.

To date, states have not pressed non-retributive punishment rationales for punitive damages. But if a state were to articulate a societal compensatory or deterrence purpose in enacting a statutory multiplier for certain torts, or a split-recovery scheme (or a combination of both), the Court would be hard-pressed to strike down these legislative enactments as unconstitutional. Should Williams awaken the sleeping state giants, that would be an ironic twist of fate for a Court that has downplayed the federalism interests at stake in its unfolding punitive damages jurisprudence.