August 24, 2012

Law review article predicts the end of punitive damages in America

Law professor Jill Wieber Lens has posted “Justice Holmes’sBad Man and the Depleted Purposes of Punitive Damages” on SSRN.  The thesis of the article is that the U.S. Supreme Court’s opinion in ExxonShipping v. Baker contains the seeds of the destruction of punitive damages in America.  As I read the article, that thesis is based on the following logic:
  • Punitive damages have been held constitutional because, under common law, punitive damages are designed to punish and deter misconduct, which is a legitimate state interest 
  •  In the Exxon Shipping case, the Supreme Court identified a different common law purpose for punitive damages: informing a bad actor what price he will pay for misconduct
  •  By not relying on the traditional common law justifications for punitive damages, Exxon Shipping tacitly undermined those justifications 
  • Now that the Supreme Court has undermined the traditional justifications for punitive damages, state legislatures will move to eliminate punitive damages under state law and, if they don’t, state courts will declare punitive damages unconstitutional
 It’s certainly a bold prediction.  But I’m a bit skeptical, even from my perspective as an appellate lawyer who regularly challenges punitive damages awards on appeal.  There is no question that a growing number of state legislatures have enacted laws curtailing punitive damages.  That trend was in place well before Exxon Shipping and shows no signs of slowing any time soon.  But many holdout jurisdictions still permit punitive damages without any statutory limitations on amount (e.g., California), and I don’t think it likely that we’ll see a wave of proposed legislation to do away with punitive damages in those jurisdictions, much less decisions declaring punitive damages unconstitutional as a result of Exxon Shipping

Hat tip: Torts Prof Blog