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Wednesday, March 26, 2008

Retributive Damages: How much and to whom?

In earlier posts gathered here, I laid out the Introduction and some relevant background regarding
punitive damages law, recent scholarship, and retributive justice. Yesterday's  post articulated some of the basic structure for retributive damages, focusing on what misconduct should be the subject of retributive damages and whether non-victims of wrongdoing should be empowered to bring claims for retributive damages (and if so, under what restrictions).

Today's post discusses a) how to bring rationality and fairness to determining the amount of retributive damages, b) how to allocate the retributive damages among the state, lawyer and plaintiff, and c) how this account offers prosaic justice, not poetic justice--and why that's ok, contra Luban, Galanter, Sebok, and Zipursky. The material below appears in unfootnoted and unformatted form, but you can read a draft of the whole article with apparatus on SSRN here. Feel free to send me your thoughts via email.

Implementing Fair Notice for Amounts of Retributive Damages

This section’s discussion lays out the key factors affecting the amount of retribu-tive damages. There are several elements that must be considered in determining the amount of retributive damages in a given case.

A concern for achieving even-handedness among similar cases is important from a variety of retributivist and rule of law perspectives. From this vantage point, a defendant should not face an award of retributive damages that varies substantially from another de-fendant’s punishment when both committed the same misconduct and are being punished by the same sovereign in the same jurisdiction. Consistent with the retributivist com-mitment to rule of law values, individuals should have some reasonable sense of not only what kind of conduct is prohibited by pain of retributive damages liability but also what kind of penalty and how much of a penalty they might predictably face as well. This section tries to provide a scheme that can help implement fair notice and horizontal equality regarding the scope of damages. It also addresses some of the difficult questions arising in the context of settlement.

1. Reprehensibility-Based Damages Based on Scaled Guidelines

The main feature of a retributive damages award is a reprehensibility-based fine. This fine’s amount requires two kinds of measurements. The first is a number on a repre-hensibility scale. The second measurement translates that reprehensibility score to an amount of damages.

Thus, as a preliminary matter, state legislatures or a sentencing commission should devise a set of guidelines for juries (or judges in bench trials) to help them assess how rep-rehensible the misconduct is. The guidelines would calibrate reprehensibility, perhaps on a scale of 1-20, with 20 being the worst, using the factors, discussed earlier, that courts currently use to evaluate the defendant’s reprehensibility. Some factors might increase rep-rehensibility, such as a defendant’s history of past adjudicated misconduct, and other factors might mitigate, such as pre-existing compliance programs or remedial actions and restitution measures taken by the defendant upon discovery of the misconduct. In addition, the guidelines would provide hypothetical examples of misconduct that fell on various places on the scale.

This kind of scaling approach would enhance not only fair notice and horizontal equality, but also rational decision-making by jurors. It would do so by reducing the risk of isolationism, which is a cognitive bias that arises when individuals are required to make judgments in isolation of other factors that provide a richer context. The scheme suggested here enables jurors to deliberate over and contextualize the conduct they are assessing in comparison to other types of conduct. For example, if viewed separately a jury may rank a given financial harm as a 6 and a given physical harm as a 7. But if the two scenarios are viewed together, the jury may rank the financial harm as a 5 and the physical harm as a 9. The rankings may be different when conduct is ranked alone because “judgments are spon-taneously normalized to the frame of reference implied by the category.” Sunstein et al. provide another example that may be easier to understand. When viewed separately, the answers to both the following questions may be “yes”: “is an eagle large?” and “is a cabin small?” But when viewed together, one’s answers may change because the frame of ref-erence is wider than one particular implied category. Hence, the examples of conduct pro-vided to juries should feature conduct from a wide spectrum of categories so that retribu-tive damages can be calibrated to be coherent across a broad array of conduct, instead of simply one separate category of conduct.

Bear in mind that determining reprehensibility along a scale is only part of the task. We must also determine how the reprehensibility translates to the amount of the pen-alty. According to Professors Sunstein et al., jurors in psychology experiments demonstrate great difficulty in translating their condemnation of defendants’ behavior into predictable scales of dollar amounts. (Some scholars, looking at real life data, contest that juries dis-pense unpredictable amounts of punitive damages. )

To reduce the difficulties juries or judges might encounter when called to translate “outrage into dollars,” the number on the reprehensibility scale would track some portion of the individual defendant’s net wealth. The precise tracking between reprehensibility and wealth would be decided ex ante by a legislature or a state sentencing commission, but that linkage need not be communicated to the jury. The jury’s focus instead would be on what happened and the moral evaluation of the defendant’s reprehensibility in light of the guidelines and commentary. With a corporation, we would look at the worth of the enter-prise as measured by valuation models used on Wall Street. Reliance on net wealth of enti-ties can be misleading because it would simply encourage corporations to use debt to fi-nance themselves instead of equity.

To illustrate, a finding of 2 on the scale could lead to a retributive damages award of 1% of defendant’s net wealth, and a finding of 20 could lead to 10% of the defendant’s value being assessed. Scaling the amount of the penalty to a percentage of wealth is a bit unorthodox in this country but it is not without precedent. Currently more than a dozen ju-risdictions use a similar program of day fines that are prevalent in


, by which a judge determines the severity of the offense with reference to a number, and that number is multiplied by the income a defendant has on a daily basis.

This kind of scaling to wealth or value is important for four reasons: it avoids emit-ting the wrong signals to the public about the worth of poor people in cases involving physical injury; it facilitates rational jury decision making; it helps reduce, but does not eliminate, the problem of the diminishing utility of money; and last, it provides reasonable incentives for plaintiffs’ lawyers to take cases even after Philip Morris. Let me elaborate each reason.

The first major advantage of a reprehensibility-scaled guidelines approach is that it ensures that the reprehensibility of the defendant’s misconduct is what is being measured and punished, rather than say, morally irrelevant facts about the underlying tort. As ex-plained in Part I.A., various jurisdictions have insisted that the amount of punitive damages be tethered tightly to the amount of compensatory damages awarded.

This tethering is unreasonable from a perspective of retributive punishment, espe-cially in cases involving or risking physical injury because doing so is inconsistent with the belief in the equal worth of human life under the law. When a defendant’s misconduct kills or injures a poor person – i.e., someone whose death or injury triggers smaller payouts in compensatory damages under conventional valuation models – such misconduct will yield a lower punitive damages award where there is a requirement that punitive damages be based on compensatory damages than if the defendant killed or injured a wealthy per-son. Not only is this outcome objectionable from a perspective that values equal respect for all persons before the law, it will encourage defendants to undertake unjustifiably risky conduct in a manner that will disproportionately affect the poor and disenfranchised. If leg-islatures have imposed caps on punitive damages through using a certain multiple of the compensatory damages or a certain flat dollar amount, then the wealthy defendant will simply view the punitive damages award as just a tax or a cost of doing business. By contrast, the assessment of a percentage of wealth would help rupture that sense.

The second benefit of using percentages of net wealth or net value is that a defen-dant’s wealth won’t be used to affect the jury’s decision-making. This approach protects defendants by preventing trial courts devolving into “a field day in which the financial standing of the defendant would become a major issue.” In other words, the plan here does not allow for the introduction of evidence regarding the financial condition of the de-fendant because such information might poison the jury’s decision; instead the jury is tasked simply with assessing the reprehensibility of the misconduct.

A third advantage to assessing retributive damages this way is it helps ensure that the sting of the punishment will be more consistent across persons and that similarly situ-ated defendants who commit similar types of misconduct within a given jurisdiction will be punished in a roughly similar way. Under the retributive damages scheme, the worse the conduct, the higher the percentage of net wealth that will be forfeited. Of course, given that the marginal utility of money diminishes, one might think there is a need for progressively staggered percentages that increase as a function of both reprehensibility and wealth (or value). It’s quite difficult, however, for legislatures or sentencing commissions to assess different marginal utility functions for different persons.

Moreover, there is a principled reason to treat similar offenders who commit simi-lar misconduct in similar manners, and thus the principle of equality under which retribu-tive punishment serves would likely be undermined by a progressively increasing punish-ment structure because the variability of marginal utility rates would be idiosyncratic across persons (or entities). At least with flat fines (dollar amounts) or flat percentages of wealth, the equality principle can be plausibly invoked to most people. Thus, because scal-ing retributive damages “progressively” is an issue whose outcome I don’t think retributive theory can resolve with firmness, I would counsel caution. Moving from fixed dollar amounts or multiples based on compensatory damages to fixed percentages of wealth re-gardless of the wealth of the defendant would itself be a substantial improvement.

Last, there might be some additional benefit to the approach described here, one that is especially salient after the Court’s Philip Morris decision. As mentioned earlier, the Court ruled that a jury may not award punitive damages based on the amount of harm caused to nonparties to the litigation. Although the reason for this holding makes good and under-appreciated sense from a retributivist perspective – a person ought not be punished for conduct that has not been clearly proven to be the defendant’s culpable misconduct, es-pecially if the defendant has various defenses that could be raised as against particular claimants – the new holding poses a substantial risk of reducing incentives to plaintiffs and their counsel because they cannot pursue a jackpot of punitive damages based on “total harm.” If a jurisdiction decided (against my advice offered below) to allocate the retribu-tive damages awards to the plaintiff and her counsel, then the reprehensibility-based guide-lines approach reduces the problem of diminished incentives in the aftermath of Philip Morris. (But to my mind a better solution is for the state to take the award and to simply provide that the defendant pay lawyer’s fees based on risk, time and expense.)

Some additional points warrant attention. Consistent with the virtue of retributive modesty, mentioned in Part II, in situations where a defendant has reason to doubt its vi-ability if required to pay one lump sum, legislatures may authorize courts to order defen-dants to pay the amount as a percentage of profits in coming years. Additionally, if one is concerned that a defendant committed grave misconduct and then undertook to restructure its finances to make it appear that it cannot pay its tab, the courts might adjust the retribu-tive damages based on the wealth or value of the defendant at the time the misconduct last occurred.

The scheme described above furnishes potential defendants little basis for com-plaint that the amount or award of retributive damages is a surprise, since the standards that would be applied to them are no different than the guidelines that have now become famil-iar in many jurisdictions when assessing criminal liability and sentencing issues. Of course, the defendants in criminal cases have more procedures in place, and thus, if we are deputiz-ing plaintiffs to facilitate punishment of the defendant through an intermediate sanction, this requires enhancing at least some of the procedural safeguards in place in retributive damages cases, an aspect of the argument I develop in greater detail in the next installment of this project.

2. Penalties for Gain-Stripping

In addition to the reprehensibility-based fine, courts should assess the net profit-ability of the misconduct, if any, toward the plaintiff involved. This determination is neces-sary because retributive damages awards signal two commitments: first, that misconduct of this sort should not occur, and second, if such misconduct does occur, the defendant should not profit from it. So, in addition to the reprehensibility-based fines, the amount of retribu-tive damages should also include the retrieval of whatever profits can be tied to the mis-conduct toward the plaintiff.

The gain-stripping penalty should be treated distinctly from the reprehensibility-based fine. Gain stripping alone puts the defendant at the status quo ante, which doesn’t communicate the wrongness of the action; adding the reprehensibility-based fine makes the defendant worse off for his culpable conduct, as he should be from a retributive perspec-tive. Thus, if the defendant were to pay a hypothetical reprehensibility fine of 200 and had gained from the misconduct 200, then the defendant should pay (at least) 400. That said, the gain of the defendant needs to be considered in light of the harms the defendant has been forced to compensate also. Thus, if the defendant gained 200 but is required to pay 100 to the plaintiff in compensatory damages, then the defendant really gained only 100, and so should be forced to pay the compensatory damages to the plaintiff (100), the extra profits (100), and then also pay a retributive damages award that puts the defendant in a worse position than earlier, based on how reprehensible the conduct was.

One caveat is necessary. Any gain-stripping penalty against the defendant will, in the aftermath of the Philip Morris decision, have to be limited to the gain the defendant made against the plaintiffs in the litigation rather than gains made against others who are strangers to the litigation. This also reduces the amount of potential reward to contingency fee-based plaintiffs’ lawyers, so states may need to enact provisions allowing for reason-able fees for plaintiffs’ lawyers in cases where retributive damages are warranted. I address this next.

3. Providing Litigation Fees and Expenses

In addition to gain-stripping and reprehensibility-based fines, the state must also consider the significance of having the defendant pay for litigation fees and expenses when determining retributive damages.

Though the state ought to receive the bulk of the retributive damages (for reasons I explain in the next Section), it needs to provide incentive for plaintiffs and their lawyers to bring retributive damages actions to the attention of the state. We need to determine how that general allocation strategy affects incentives for lawyers to bring retributive damages actions. If we assume that the state takes the lion’s share of the retributive damages penal-ties for the reprehensibility-based fine and the gain-stripping (in light of the public interest in retributive damages), we increase the likelihood that the plaintiff will have a difficult time in finding a lawyer to take the case absent compensation for fees and expenses. That’s because compensatory damages may not sufficiently motivate lawyers where the damages are insubstantial or uncertain. For cases where compensatory damages are uncertain or small, provision of lawyers’ fees provide motivation to tort lawyers who might not take these cases otherwise. Additionally, it incentivizes plaintiffs’ lawyers to find and promul-gate evidence of a defendant’s mens rea that they might not otherwise pursue if they were looking strictly for compensatory damages. Moreover, these issues cast a significant shadow over settlement discussions. So if we want to make sure high quality lawyers are marginally more attracted to this area of law than they would be under conditions that lead to compensatory damages only, we have to ensure fees are provided for to motivate private lawyers to invest in these cases.

If reasonable fees and expenses are awarded – and adjusted for risk, time, and ex-pertise – for all victorious plaintiffs in retributive damages claims, then that would create incentives for lawyers to bring good cases. It’s a good general rule, and reflects the same commitments to human values as when we make losing defendants in civil rights cases pay for the costs of litigation.

But it might also encourage suits with very little money at stake. Thus, the alloca-tion of lawyers’ fees will say a lot about how much should be spent on reducing Type II errors. If, for example, John maliciously stomps on exactly one of Neighbor Nancy’s prized roses in her presence, should Nancy have a retributive damages action against John for the sentimental and market value of the rose? If so, should John pay


’s lawyer and the court costs too? A lawyer will bring suit here only if she thinks she will get paid if she prevails, unless she works for an entity (perhaps governmental or non-profit) that sub-sidizes these actions. But if lawyers aren’t available, it may mean that John can stomp on


’s roses with impunity especially if he does it on the installment plan. There’s al-ways the threat of criminal sanctions to prevent John’s actions but prosecutors are also sometimes reluctant to charge low-value perpetrators.

Given its primary focus on the criminal justice system, retributive theory quite naturally doesn’t have a lot to say about the architectural design for solving this particular problem. The retributive interest is in encouraging high quality lawyers to invest in strong cases that vindicate the wrongs perpetrated against society. But various structures might be able to achieve this aside from a blanket rule awarding lawyers’ fees in successful retribu-tive damages awards. For instance, some jurisdictions might decide that the state prosecu-tor will seek retributive damages when the fear is that the defendant can’t afford to pay the lawyers’ fees. Alternatively, the state may decide to subsidize private lawyer’s fees out of the public fisc especially in cases susceptible to class treatment. One thing is clear. Juris-dictions facing competing moral obligations for scarce resources may decide that a conces-sion to administrative cost is necessary. Those that do make that choice will force a drag on the goal of using retributive damages to reduce Type II errors, but as stated in Part II, we can’t expect to spend every last unit of social resources on retributive justice. Trade-offs have to be made somewhere.

4. Rewards for Plaintiffs and the Risks of Collusion

Considering the interests of potential plaintiffs’ lawyers in this scheme is not enough. It would only create an incentive for enterprising lawyers to find plaintiffs. It would not do the job of channeling plaintiffs to lawyers, especially if the aggravation of a lawsuit coupled with the chance of not winning were otherwise sufficient to dissuade a plaintiff from bringing suit. The availability of retributive damages with some portion of it going to the plaintiff creates the conditions for more enforcement of the public values at stake. From the public’s perspective, then, the amount of retributive damages awarded to the plaintiff should be the amount necessary to reward the plaintiff for bringing the suit to the lawyer and the lawyer for bringing the suit to public attention. Thus, in addition to the fee structures discussed immediately above, jurisdictions could provide that plaintiffs in victorious retributive damages suits will receive, say, a $10,000 finder’s fee, in addition to compensatory damages if applicable.

The flat fee reward encourages all citizens to bring cases warranting retributive justice without making the windfall to the plaintiff contingent on morally arbitrary features such as the defendant’s wealth. The benefit of such a finder’s fee is it makes the project of retributive justice likely while being less susceptible to lottery effects that undermine re-tributivism’s commitment to fairness and equality across persons.

The flat fee award might create a risk of collusion such that defendants would try to “bribe” plaintiffs to settle for, per our example, $10,001 above their compensatory dam-ages. If we adopted the flat fee award under our current system, we would encourage de-fendants to pay for wrongs they might never have been committed to make suits go away. Meanwhile, secret settlements of this sort embolden the original wrongdoers who are never held liable – are never confronted with their wrongdoing – for wrongs that they actually did commit.

To avoid these problems, the litigation process should take three steps. First, plain-tiffs must signal in their initial complaint that they are seeking retributive damages; they must also lodge a copy of the initial complaint with a state attorney general’s representa-tive. Second, courts must scrutinize and make transparent all settlements of all suits where retributive damages claims are lodged in the initial complaint. Third, the state attorney general’s representative has to either agree to the settlement or buy the retributive damages claims of plaintiffs (for the finder’s fee) so that the state can prosecute the retributive dam-ages aspect of the litigation. These rules would prevent private parties from settling in a way that deprives the public potentially critical information involving public misconduct and conveys to the court (and the state) a basis for scrutinizing any settlements that arise regarding the nature of the misconduct. Moreover, it also encourages defendants to contest liability for retributive damages unless they actually did something wrong.

Thus if a plaintiff decided to go ahead and allege retributive damages in the initial complaint, he would not be prohibited from settling subsequently. But this scenario would require plaintiffs to secure governmental approval to settle and it would force defendants to either admit responsibility and pay some amount of retributive damages to the state or to deny responsibility. If the defendant denied responsibility, he would have to convince the state’s representative that this particular claim was not worth pursuing because of lack of merit. Otherwise, the state — or conceivably another PAG if the state declined — could decide to risk litigating against the defendant. Clearly, the dynamics of settlement would change because defendants would have little incentive to settle without admitting liability. Knowing these diminished incentives, plaintiffs will be unlikely to bring suits merely for the purposes of harassment.

In sum, where retributive damages are warranted, a defendant should pay repre-hensibility-based fines, attorneys’ fees (informed by risk, time, expertise, and expenses), a state-determined flat award going directly to the plaintiff, and the elimination of any net gains made by the defendant from his misconduct toward the plaintiff that was not part of the compensatory damages to the plaintiff. This structure creates a quid pro quo. The finders’ fee helps channel cases to lawyers; the lawyers who invest in these cases are paid for the risk and effort they take. Meanwhile, defendants are made worse off as a result of their culpable misconduct. But before that happens, they enjoy a set of procedural safe-guards and advance legislative notice of what conduct instigates retributive damages in ways that are more restrained and predictable than the extant regimes in most jurisdictions around the nation.

C. Allocating Retributive Damages Chiefly to the State

By virtue of their punitive, educative, and preventive effects, retributive damages serve a public purpose in effectuating the CCR’s values described earlier in Part II. This public nature indicates why the defendant should pay retributive damages, but it does not yet explain who should receive the retributive damages awarded. Indeed, both the retribu-tive and the cost-internalization functions are largely satisfied by extracting damages (or other relevant remedies) from the defendant. But neither function seems at first blush to re-quire the plaintiff to be the exclusive beneficiary of that penalty. Let me try to elaborate why, at least with respect to retributive damages, the state should capture the bulk of the retributive damages award.

To be sure, there are good arguments that tort victims should have an avenue of re-dress for compensation for their losses, though of course compensation could alterna-tively be achieved through social insurance schemes. Perhaps tort victims should addi-tionally be compensated through “aggravated damages” for the dignity harm they have personally endured, if, for some reason, their compensatory damages did not properly en-compass those harms. But if extra-compensatory damages are inflicted to achieve the pub-lic’s interest in retributive justice, then we must see the recovery by private plaintiffs of any “retributive damages” as merely a contingent result, not one that is necessary or neces-sarily desirable.

Indeed, it is wrong-headed to award plaintiffs the bulk of retributive damages. The quintessentially socio-legal interest underlying the CCR counsels in favor of awarding only that incentive to the plaintiff and her lawyer necessary to bring the suit to public attention, and to dedicate the balance of the retributive damages award to other pressing social obli-gations, including but not limited to remedial services for crime victims or other law en-forcement budgets.

In the world before the Supreme Court’s recent Philip Morris decision, the risk of giving the plaintiff—who might only be one of many victims of the defendant’s conduct—the entire punitive damages award was that it would more likely undermine the state’s in-terest in ensuring a fair distribution of both compensatory and retributive damages for oth-ers, since a crippling retributive damages award might impair the availability of adequate compensation funds (or punitive damages) for future claimants. In light of the Court’s pro-nouncement that punitive damages may not be calibrated based on the amounts of harm in-flicted on other victims who are non-parties to the litigation, this reason is admittedly weaker as a justification for the state to take the lion’s share of retributive damages, espe-cially in simple litigation where the defendant’s misconduct only hurts one party.

But even in the post-Philip Morris context, giving more than a reasonable award (say, of $10,000) in addition to compensatory damages and litigation expenses would make the system vulnerable to lottery effects that are incompatible with a scheme of retributive justice committed to condemning misconduct in the public’s name, rather than the vic-tim’s. As I explained in greater detail in Part III.B.4, why should plaintiffs benefit from re-tributive damages because they had the “good fortune” of a wealthy injurer?

There are two additional reasons — not intrinsic to retributive theory per se but re-lated to the fairness considerations that animate retributive justice nonetheless — to ensure that plaintiffs don’t enjoy windfalls through awards of retributive damages. First, as long as lawyers’ fees are sufficient to induce counsel to take worthy cases, the state should treat retributive damages as a vehicle by which revenue may be raised efficiently and fairly. That efficiency is enhanced when most of the retributive damages awards go to the state because plaintiffs don’t plan on being victims of punitive damages awards and they, for the most part, have other incentives to pursue compensatory damages. In other words, the state can collect revenue for valuable social projects without deterring plaintiffs and their law-yers “from bringing suits and deterring difficult-to-detect or intentional torts.” A second consideration is that awards of retributive damages are windfalls to plaintiffs that work a form of lottery, which a risk-averse population would reject ex ante in favor of lower taxes (or more services).

D. Retributive Damages: Prosaic Justice, not Poetic Justice

Looking backward now, I want to highlight how this structure for retributive dam-ages reflects the CCR’s values and not revenge or victim-vindication.

First, decisions about the pursuit of retributive damages claims and their settlement are not left solely in the hands of the victim. The state basically has a veto on settlements in cases alleging retributive damage. Moreover, either through a PAG alone or in the seg-mented strategy I endorsed earlier, a defendant’s misconduct is subject to retributive dam-ages even if the victim doesn’t pursue retributive damages. These rules work to reduce Type II errors resulting from too much control the victims might have. And by tempering the power of the victim, the CCR also makes retributive damages less like revenge.

Indeed, if we recourse back to the previously mentioned differences between retri-bution and revenge, and apply those conceptual differences to retributive damages, we see that retributive damages, properly implemented, look quite like the kinds of conven-tional criminal fines used around the world. As I conceive them, retributive damages are subjected to proportionality safeguards; impartially administered by the state; attached di-rectly to the offender; and serve as an expression of the state’s power to coerce the offender in particular ways, such that certain ideas can be communicated through that coercion. Where appropriate, retributive damages might also be accompanied by other measures short of criminal sanctions such as injunctive relief.

To be sure, the plaintiff seeking retributive damages might feel vengeful, and might take pleasure in the suffering of the defendant, but, per the regime I have described, the state won’t punish the defendant by extracting the fine without its customary – or aspi-rational — concern for the free and equal nature of the offender. Thus, unlike revenge, re-tributive damages would not be available if typical excuses and justifications apply to the defendant’s actions. Moreover, nothing about retributive damages is inconsistent with re-tributivism’s intent requirement, discussed earlier, which requires that the punishment not preclude the internalization of the “sense of justice” that would allow for an offender to demonstrate his respect for the norms of moral responsibility, equal liberty under law, and democratic self-defense. Retributive damages, properly constrained as an intermediate sanction, do not prevent the defendant from ongoing activity nor do they aim at the defen-dant’s destruction or social isolation.

And while the private plaintiff may have no interest in the general application of the law, the state, which extracts the retributive damages fine, does. Specifically, a retribu-tive damages action brought by one plaintiff does nothing to preclude the punishment of other defendants for similar wrongs; does nothing to preclude punishing the same defen-dant for other wrongs against other victims; and – through its information-generating ef-fects about a defendant’s mens rea – actually facilitates the pursuit of criminal sanctions against the same defendant within the criminal justice system for the same wrongdoing to the plaintiff-victim as well as for other wrongs the defendant may have perpetrated against others. So retributive damages, at least when properly constrained and conceived, might actually increase the likelihood of fair and general applications of the law.

This concern for fair and general applications of the law is manifested also by seeking to ensure the defendant is not over-punished (generally and relative to similar of-fenders). Unlike the current regime, the retributive damages structure would permit a de-fendant to credit any retributive damages paid against any fines imposed in subsequent criminal actions brought by the state for the same misconduct. Conversely, defendants would not face retributive damages awards for certain misconduct if they have already been criminally convicted in that jurisdiction for that particular misconduct. In that situa-tion, the state has already done the hard work of ferreting out the misconduct and proving it beyond a reasonable doubt. Thus there would be no reason to give lawyers or plaintiffs a reward for pursuing retributive damages against an already convicted defendant. (Whether indictments should suffice is a harder issue. )

Additionally, this structure reflects the CCR’s concern for equality, proportionality and even-handedness. Across the realm of cases, state-drafted guidelines and commentary are used to inform judicial or juries’ deliberations about the appropriate level of the defen-dant’s reprehensibility. The goal behind this is to reduce Type I over-punishment and Type II under-punishment problems (compared to others) because the guidelines will give juries a far more effective way to avoid the ad hoc determinations that afflict the common law method of portioning punitive damages. Indeed, because the correct interpretation of the guidelines would effectively be a legal question susceptible to much less deference from reviewing courts, the jury’s role would be more circumscribed. Moreover, by restricting plaintiff’s share of the punitive damages award to a flat “finder’s fee,” we avoid creating lottery effects or windfalls to plaintiffs lucky enough to have a wealthy injurer. Last, the sanctions imposed under a retributive damages scheme communicates that the misconduct is prohibited and not simply priced based on morally arbitrary features of the victim, such as his earning power. In other words, plaintiffs won’t receive windfalls because they have the good fortune of a wealthy injurer and defendants shouldn’t receive penalty discounts based on the good fortune of having a low-earning victim instead of a high-earning one.

Last, the CCR’s concerns for accuracy and modesty are reflected in the procedural and substantive safeguards defendants would be entitled to under a retributive damages scheme: a right to counsel, judicial review, and a higher burden of proof (clear and con-vincing evidence), and a right to credit retributive damages amounts against subsequent criminal sanctions would protect defendants from risks of duplicative or inaccurate pun-ishment (Type I errors). Defendants should enjoy certain procedural safeguards that elevate our confidence levels above what’s necessary for compensatory damages but below what’s expected for full-blown criminal sanctions. Moreover, a concern for modesty would entail limiting and structuring retributive damages payments so they operate as an intermediate sanction, and hence, won’t jeopardize the ability of the defendant to continue his life or business in compliance with the law’s dictates.

Taken together, these notions readily separate the retributive damages scheme from prior accounts of punitive damages emphasizing revenge, “poetic justice,” or victim-vindication through civil recourse, theories propounded with different emphases by Profes-sors Zipursky, Sebok, Galanter and Luban. For instance, notwithstanding its effectiveness in explaining part of the rationale for punitive damages, Galanter and Luban’s poetic jus-tice account is unpersuasive in defending the lack of procedural safeguards for defendants, the imposition of punishment for harms occurring to non-parties to the litigation, and the extension of great deference to a jury’s ad hoc determination of punitive damages. What we really need is prosaic justice, not poetic justice.

Moreover, like Professors Zipursky and Sebok, Galanter and Luban propose little in the way of trying to ensure any degree of proportionality or even-handedness in the sanctions imposed on comparable defendants. Last, Professors Sebok and Galanter and Luban exhibit hostility to punitive damages used to pursue cost-internalization, even though there is no principled reason that extra-compensatory damages could not be struc-tured to allow a state to pursue retributive damages alongside remedies designed to pursue other purposes, including both cost-internalization and compensating victims for uncom-pensated harms to their dignity.

It goes without saying that the entire design of a retributive damages scheme needs some explanation for why it would be useful beyond mere reliance on the tort system to provide compensation for victims and the criminal justice system to inflict retribution against criminals. The next Part tries to explain what makes retributive damages, as I’ve described them in this Part, attractive as an intermediate sanction falling between compen-satory damages and criminal penalties.

Posted by Administrators on March 26, 2008 at 12:12 AM in Article Spotlight, Dan Markel, Retributive Damages | Permalink


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