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Friday, July 10, 2009

Sheila B. Scheuerman on Markel's "Retributive Damages"

Somewhat randomly, I just stumbled across this new essay on the Legal Workshop by Professor Sheila Scheuerman that takes my "Retributive Damages" piece in Cornell to task for a) conjuring a scheme that does not resemble punitive damages, and at the same time b) ostensibly suffers from due process questions arising from the SCT's punitive damages jurisprudence.  Hmmm.  

After the jump, I've reprinted her critique. I'll try to work up a response and share it next week. Though I guess the title of her response suggests something like I'm Alice in Wonderland, I'm nonetheless very grateful to Prof. Scheuerman for the attention she's paid to my work. I hope it withstands her scrutiny, at least when viewed in conjunction with the second piece in the series, How Should Punitive Damages Work?, which came out in final form a couple months ago. If you've read my piece(s), feel free to weigh in on the matter in the comments. Have a good weekend!

Through the Looking Glass: A Response to Professor Dan Markel’s Retributive Damages

In Retributive Damages: A Theory of Punitive Damages as Intermediate Sanction,1 Professor Dan Markel “reimagine[s]” the law and proposes an interesting theory of punitive damages.2 Unlike work by other scholars,3 Professor Markel intentionally situates his theory of “retributive damages” outside the historical framework and doctrinal limits of punitive damages.  Instead, Professor Markel argues that states should replace the current punitive damages framework with a new statutory scheme akin to the federal sentencing guidelines.  Though satisfying on a purely theoretical level, Professor Markel’s paradigm raises two initial questions.  First, can the “retributive damages” model properly be considered punitive damages?  Second, do “retributive damages” avoid the doctrinal problems that have plagued punitive damages for decades?  In my view, the answer to both questions is “no.”

It’s Not “Punitive Damages”

In this first article in a planned quartet, Professor Markel proposes using public retributive justice theory to frame a new system of punitive damages.  Under his proposal, state legislatures would define the conduct subject to retributive damages by statute.  Plaintiffs who were harmed by a defendant’s violation of the retributive damages statute could seek retributive damages as a remedy in a traditional tort action.  However, if the plaintiff chose to forgo retributive damages or if the statutory violation did not cause any harm, private attorneys general could bring an action for retributive damages alone.  In either case, the jury would use a set of legislative guidelines to determine a reprehensibility “score” for the defendant’s conduct.  In a structure similar to the criminal sentencing guidelines, the judge would then take the jury’s reprehensibility score and apply it to a statutorily defined table setting the amount of damages based on the defendant’s wealth.  Next, courts would evaluate the profitability of the defendant’s conduct.  If the reprehensibility-based damages combined with compensatory damages did not eliminate the profit from the defendant’s wrongdoing, courts also would impose a gain-elimination penalty.  The reprehensibility penalty and the gain-elimination penalty would both be paid to the state and could be credited against future criminal sanctions.  To encourage suits under this scheme, the defendant would be required to pay a fixed $10,000 award to the named plaintiff as well as the plaintiff’s attorney’s fees.  Finally, a plaintiff could not settle a retributive damages claim without state approval.

Putting aside the merits of Professor Markel’s retributive damages scheme as a type of damages, one thing is clear: it is not punitive damages.  Like Professor Markel’s “retributive damages,” punitive damages are “extra-compensatory” in that both types of awards exceed the plaintiff’s actual harm.4 But that’s where the similarities end.  Unlike the statutory scheme envisioned by Professor Markel, punitive damages are a type of common law damages available in a civil tort suit by a private plaintiff.5 In most states, juries are instructed to calculate the amount of punitive damages based on a variety of factors.6 Those factors include the reprehensibility of the defendant’s conduct, but they also include numerous other factors.7 Moreover, in most states, plaintiffs keep the bulk of a punitive damages award.8

Professor Markel would change so many of these characteristics that it is impossible to consider his proposal a form of “punitive damages.”  Consider just a few of the differences.  Retributive damages can be pursued by uninjured third parties or the state itself; punitive damages can be pursued only by the tort victim.  Retributive damages are awarded wholly to the state; punitive damages are awarded to the private plaintiff.  Retributive damages are calculated according to a statutorily defined table; punitive damages are calculated by a jury according to common law principles.  Retributive damages cannot be settled without the approval of the state; punitive damages can be settled at the will of the parties.

To be sure, scholars have criticized many of these features of punitive damages.9 And it is true that judicial opinions largely have failed to articulate a coherent rationale for punitive damages.  Nevertheless, despite the ongoing debate about the theoretical justifications for punitive damages, nearly all fifty states and federal courts have accepted the doctrine of punitive damages.10 Indeed, punitive damages have a long historical pedigree dating back to the Hammurabi Code in 2000 B.C.11

A Few Due Process Problems with “Retributive Damages”

The question then becomes whether “retributive damages” would be better than the current system of punitive damages.  Because Professor Markel’s article is only the first of a planned series, much is left unanswered at this stage, which makes a complete assessment of “retributive damages” difficult.  I’d like to consider a couple of threshold due process issues.

As an initial matter, tying the amount of the retributive damages award to the defendant’s wealth, as Professor Markel’s model would do, raises facial due process concerns.12 Under Philip Morris v. Williams, the Court held that “the Constitution’s Due Process Clause forbids a State to use a punitive damages award to punish a defendant for injury that it inflicts upon non-parties or those whom they directly represent, i.e., injury that it inflicts upon those who are, essentially, strangers to the litigation.”13 In addition, under State Farm v. Campbell, “[a] State cannot punish a defendant for conduct that may have been lawful where it occurred.”14 Nor can a state punish the defendant for unlawful conduct outside its jurisdiction.15 Basing a retributive damages award on a defendant’s wealth, however, risks punishing a defendant for harm to non-parties in violation of Philip Morris, and further risks punishing a defendant for lawful conduct and out-of-state conduct in violation of State Farm.16

Moreover, anchoring the amount of a penalty to the defendant’s wealth does not take into account the second BMW guidepost: the ratio between the extra-compensatory award and “the actual harm inflicted on the plaintiff.”17 Although Professor Markel correctly notes that “harm” is not per se limited to compensatory damages alone, his retributive damages scheme does not provide room for the jury—or judge on post-verdict review—to evaluate the reasonable relationship requirement.  In response, Professor Markel points to the legislative foundation of his new system and argues that the statutory nature of retributive damages justifies greater deference by courts.  Thus, he suggests that the reasonable relationship requirement would not apply to “retributive damages.”  As I previously have argued,18 however, legislative penalties are not immune from constitutional scrutiny.  Rather, the Supreme Court has applied the same constitutional excessiveness standards, including the reasonable relationship requirement, to jury awards of punitive damages as well as criminal fines and sentences.19 Thus, this constitutional requirement cannot be ignored.

Finally, allowing a private attorney general to sue based on harm to a non-party violates the black letter of Philip Morris. Professor Markel acknowledges this issue, but he argues that the retributive damages scheme survives constitutional scrutiny because the private attorney general “is not suing to recover for harm to the victim, but rather to initiate an intermediate sanction for the defendant’s wrongful conduct.”20 This argument misses the mark.  The Supreme Court stated unambiguously that the amount of a punitive damages award must be tied to the harm to the individual plaintiff: a punitive damages award cannot be used “to punish a defendant directly on account of harms it is alleged to have visited on nonparties.”21 Moreover, allowing a retributive damages award to be based on harm to non-parties would prevent the defendant from raising all possible defenses.  In Philip Morris, for example, the Court noted that other allegedly injured smokers might have known smoking was dangerous or might not have relied upon the defendant’s statements.22 Professor Markel’s retributive damages scheme raises similar concerns.


In short, Professor Markel does not suggest a new theory of punitive damages that harmonizes the rather confused law in this area.  Rather, he offers a new statutory civil penalty system, and it remains unclear whether this system will survive due process scrutiny.  Beyond these questions, I wonder about the inevitable issues that would arise from a system that combines aspects of the harshly criticized sentencing guidelines with the complexity of qui tam law added on top of existing punitive damages jurisprudence.  I look forward to seeing how Professor Markel addresses these and other underlying issues in his subsequent pieces.dingbat


Copyright © 2009 Cornell Law Review.

Sheila B. Scheuerman is Associate Professor of Law at Charleston School of Law.

Special thanks to Keith N. Hylton, Anthony J. Sebok, Christopher J. Robinette, and Benjamin C. Zipursky for comments.

This Editorial is a response to the following Legal Workshop Editorial:  Dan Markel, Retributive Damages as Intermediate Public Sanctions: A Synopsis, LEGAL WORKSHOP (May 12, 2009), based on A Theory of Punitive Damages as Intermediate Sanction, 94 CORNELL L. REV. 239 (2009).
Click Here for the Markel Legal Workshop Editorial.
Click Here for the full Markel Article.

  1. Dan Markel, Retributive Damages: A Theory of Punitive Damages as Intermediate Sanction, 94 CORNELL L. Rev. 239 (2009). 
  2. Id. at 246. 
  3. See, e.g., Keith N. Hylton, Reflections on Remedies and Philip Morris v. Williams, 27 REV. LITIG. 9 (2007); Christopher J. Robinette, Peace: A Public Purpose for Punitive Damages?, 2 CHARLESTON L. REV. 327 (2008); Anthony J. Sebok, Punitive Damages: From Myth to Theory, 92 IOWA L. REV. 957 (2007); Benjamin C. Zipursky, A Theory of Punitive Damages, 84 TEX. L. REV. 105 (2005). 
  4. E.g., Gertz v. Robert Welch, Inc., 418 U.S. 323, 350 (1974) (noting that punitive damages “are not compensation for injury”). 
  5. See, e.g., Catherine M. Sharkey, Punitive Damages as Societal Damages, 113 YALE L.J. 347, 357 (2004) (describing “individual-harm paradigm” of punitive damages). 
  6. Sheila B. Scheuerman & Anthony J. Franze, Instructing Juries on Punitive Damages: Due Process Revisited After Philip Morris v. Williams, 10 U. PA. J. CONST. L. 1147, 1165-99 (surveying jury instructions on punitive damages in state and federal courts). 
  7. Id. 
  8. See e.g., Sharkey, supra note 5, at 372-89 (noting only eight jurisdictions where plaintiffs share a portion of a punitive damages award with the state). 
  9. See, e.g., Hylton, supra note 3, at 22-24; Sebok, supra note 3, at 962-1002; Zipursky, supra note 3, at 167-70. 
  10. See Scheuerman & Franze, supra note 6, at 1166 n.130 (noting that all states except New Hampshire and Nebraska allow some form of punitive damages). 
  11. LINDA L. SCHLUETER, PUNITIVE DAMAGES 1 (5th ed. 2005). 
  12. Although Professor Markel acknowledges this issue with respect to his proposed gain elimination damages, Markel, supra note 1, at 297, he does not address the issue with respect to the use of wealth generally. 
  13. Philip Morris USA v. Williams, 549 U.S. 346, 353 (2007). 
  14. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 421 (2003). 
  15. Id. 
  16. Scheuerman & Franze, supra note 6, at 1206. 
  17. BMW of N. Am., Inc., v. Gore, 517 U.S. 559, 580 (1996). 
  18. Sheila B. Scheuerman, Due Process Forgotten: The Problem of Statutory Damages and Class Actions, 74 MO. L. REV. 103 (2009). 
  19. See id. at 122. 
  20. Markel, supra note 1, at 283 n.157. 
  21. Philip Morris USA v. Williams, 549 U.S. 346, 355 (2007). 
  22. Id. at 354-55 (”Yet a defendant threatened with punishment for injuring a nonparty victim has no opportunity to defend against the charge, by showing, for example in a case such as this, that the other victim was not entitled to damages because he or she knew that smoking was dangerous or did not rely upon the defendant’s statements to the contrary.”). 

Posted by Administrators on July 10, 2009 at 02:59 PM in Article Spotlight, Criminal Law, Dan Markel, Retributive Damages, Torts | Permalink


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