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Friday, March 28, 2008

Retributive Damages: Possible Jury Instructions

In earlier posts gathered here, I laid out the structure, rationale, and constitutional implications for a new way to think of punitive damages as an intermediate sanction designed to facilitate the public normative interest in retributive justice.

In today's post, after the jump, which is also the last post in this series, I've tried to distill many of the major policy prescriptions in this project in capsule quasi-jury instructions. I say quasi-jury instructions because I've had feedback suggesting that they are potentially too complicated for most juries. I've often been confounded by jury instructions so I'm not sure these are much more complicated than the kind normally approved, but I'm open to thinking about these instructions as a set of guidelines that may help legislatures or judges recraft their own punitive damages practice.

The material below appears in unfootnoted and unformatted form, but you can read a draft of the whole article with apparatus on SSRN here. After a busy expedite season, I'm happy to announce that the whole article will be coming out in January 2009 in the Cornell Law Review. Feel free to send me your thoughts via email.


What follows is a distillation of the principal conclusions of this punitive damages project, which could be used to craft jury instructions. These instructions are designed to take into account the Supreme Court’s recent decision in Philip Morris.

NB: These instructions are a substantially modified version of the kind found in Professor Polinsky and Shavell’s article in HLR 1998. In some places, having mostly to do with cost internalization, I expressly borrow the language from their proposed jury instructions.

* * *

In considering the amount of extra-compensatory damages on the defendant, you should determine whether three separate dollar amounts are necessary:  (A) an amount to accomplish retributive justice against the defendant; (B) an amount to accomplish cost-internalization; (C) and an amount to accomplish compensation for the plaintiff’s personal dignity harms. 

A.            Retributive Damages

Retributive damages fulfill the punishment objective of extra-compensatory damages. These instructions apply only to defendants who have committed misconduct that you have found to be malicious or reckless in nature.  If you do not think, based on clear and convincing evidence, that the conduct in question was malicious or reckless in nature, do not award retributive damages. 

Malicious conduct is that conduct which was done with a purpose or knowledge of causing harm, and no other legally recognized excuse or justification for the conduct is available as a defense.

A defendant acts recklessly when he consciously disregards a substantial and unjustifiable risk that harm will result from its conduct. The risk must be of such a nature and degree that, considering the nature and purpose of the actor’s conduct and the circumstances known to the defendant, his disregard involves a gross deviation from the standard of conduct that a law-abiding person would observe in the actor’s situation. If there are multiple defendants, you must undertake this analysis separately for each of the defendants based on each defendant’s misconduct. A defendant corporation will not be held legally responsible for all the misconduct of each of its employees. You must ask whether each defendant’s action was malicious or reckless.

If and only if you have determined that a particular defendant’s misconduct was undertaken with malice or recklessness, then the next step requires consultation of the chart prepared by the state legislature that should help you determine where on a scale of 1 to 20, with 20 being the most reprehensible and 1 being the least, the defendant’s misconduct lies.  The chart tells you whether to add points to the scale based on various factors and whether to subtract points based on other factors. Your job is to assess the wrongfulness of the defendant’s misconduct based on the reprehensibility chart. [It may also be your job to determine the wealth of the defendant, or its net value if the defendant is an entity.] It is not your job to assess how much harm the defendant’s misconduct has caused to society or other nonparties to this litigation. This finding should also be accompanied by an explanation of what facts you considered relevant to your determination.  Once you have deter-mined the level of reprehensibility, the court will use a different chart to determine the amount of retributive damages that the defendant will pay based on your assessment of reprehensibility. 

In determining the reprehensibility of the defendant’s misconduct, you may but are not required to consider “evidence of actual harm to nonparties” because that can help show “that the conduct that harmed the plaintiff also posed a substantial risk of harm to the general public, and so was particularly reprehensible.” Similarly, you may also consider the harm or potential harm the defendant’s conduct caused to others in determining whether the defendant’s misconduct was accidental or deliberate or part of a policy or pattern and practice. However, it is important that you not consider the mere fact that others were harmed as a basis for assessing retributive damages. Those others who are not plaintiff(s) in this case can bring their own suits for compensatory and other damages.   

Two facts are relevant to your task -- though they should not inform your actual assessment of the reprehensibility of the defendant’s misconduct.  First, the plaintiff will personally receive no more than $10,000 of the retributive damages award. The balance will go to the state [to advance law enforcement objectives, including but not limited to provide services necessary for victims and offender re-entry into society.] Second, the purpose of retributive damages is to make the defendant worse off than it would have been had it not undertaken its malicious or reckless misconduct. Thus, when determining the level of reprehensibility, do not consider the amount of other damages (whether compensatory, aggravated, or augmented, described below). [If the defendant has made such payments or has been otherwise punished through the criminal justice system of this jurisdiction, then you ought to forego making any reprehensibility assessment.] [Note to judges: civil penalties al-ready taken by the defendant for this misconduct against this plaintiff should be credited against retributive damages. No retributive damages are available if the government has already criminally prosecuted the defendant for the wrong to the particular plaintiff in this case.]

After you make your assessment of reprehensibility, the court [or you the jury] will determine whether any other gains or profits by the defendant need to be forfeited in addition to the reprehensibility-based retributive damages award.  The court may also make subsequent determinations regarding reasonable attorneys’ fees and costs (to be determined in light of the risk, time, expense and expertise related to this litigation).

B.            Aggravated Damages for Repairing Personal Dignity Harms

In deciding the remedy for personal dignity harms, please first make sure that you have not already figured this amount into your assessment of compensatory damages, perhaps based on what you attributed under pain and suffering or other non-economic damages endured by the plaintiff. Once you are certain that the amount of compensatory damages has not mistakenly included an amount for insult to the plaintiff’s dignity, consider what action or amount of money is appropriate to compensate the plaintiff for the injury to the plaintiff’s personal dignity.  Injuries to personal dignity, as understood here, are injuries where the defendant specifically targeted its misconduct toward this particular plaintiff. If the defendant is a corporation, consider whether the injury to the plaintiff was part of a larger course of conduct or whether it was specifically aimed at denigrating the dignity of this particular plaintiff. To facilitate review of your verdict and ensure even-handed con-sistency across similar cases, you are required to explain the basis for your reasoning in a few sentences or more.  The remedy you choose here may be an amount of money that you determine is appropriate to alleviate this particular injury to personal dignity.  Bear in mind that the plaintiff (and, depending on the circumstances, his/her counsel) will receive the entirety of the amount you decide under this heading.

Additionally, or alternatively, you may require the defendant to apologize to the plaintiff for the injury to the plaintiff’s dignity in person or via written communication. You may also suggest other possible actions that might repair the injury to the plaintiff’s dignity.

C.            Augmented Damages for Cost Internalization

In some cases, extra-compensatory damages are desirable to serve the function of making sure that defendants do not impose costs on others that the defendants do not pay for. In making your assessment for promoting cost internalization, bear in mind that you are not able to extract money from the defendant for harms that happened to persons or entities who are not parties to this litigation.  You may only consider what harm or potential harm the defendant’s conduct caused to the plaintiff(s) in this case. Other possible victims of the defendant’s misconduct may bring their own suits. 

Augmented damages fulfill the objective of making sure the defendant pays for the injuries it causes to the plaintiffs in the litigation. But augmented damages will undermine the cost internalization objective if they cause defendants to take wasteful steps to prevent harm, if they cause the prices of products and services to rise excessively, or if they cause firms to withdraw socially valuable products or services from the market.

Thus, ask yourself whether the defendant might have escaped having to pay for the harm for which he or she should be responsible to this plaintiff.  For example, if the harm was substantial and noticeable and likely to lead to a lawsuit, your estimate of the likelihood of escaping liability would be relatively low.  But if the harm might not have been attributed to the defendant, or if the defendant tried to conceal his or her harmful conduct, your estimate of the likelihood of escaping liability would be relatively high. You should use the table below to determine the augmented damages multiplier that corresponds to your estimated probability of escaping liability to this particular plaintiff.  Then multiply the compensatory damages amount [plus an amount, if any, for compensating personal dignity harms] by your augmented damages multiplier.  The resulting number is the base amount for augmented damages. 

The base augmented damages amount should not be adjusted upward or downward because of any of the following considerations:

  (a) reprehensibility of the defendant's conduct;

  (b) net worth or income of the defendant or net profits;

  (c) gain or profit that the defendant might have obtained from his or her harmful conduct;

  (d) litigation costs borne by the plaintiff;

  (e) whether the harm included physical injury.

Probability of                     Augmented Damages

Escaping Liability               Multiplier   

                  0%                    0

                 10%                  .11

                 20%                  .25

                 30%                  .43

                 40%                  .67

                 50%                 1.00

                 60%                 1.50

                 70%                 2.33

                 80%                 4.00

                 90%                 9.00


In sum, if you find the conduct at issue was undertaken with malice or recklessness, you should make a finding of reprehensibility (using the chart and its commentary and guidelines provided by the state) based on a scale of 1 to 20. Second, you should also determine an amount of aggravated damages necessary, if any, to compensate the plaintiff for personal dignity harms that were not already covered by the compensatory damages. This finding should be accompanied by an explanation of what facts you considered relevant to your determination. Finally, you should make, if necessary, a recommendation of the amount needed to pursue augmented damages for cost internalization of the harm and potential harm to this plaintiff.  Recall that other victims of the defendant’s conduct might bring their own suits and you do not need to punish the defendant or extract compensation from the defendant based on harms that happened to these non-parties.

Posted by Administrators on March 28, 2008 at 09:34 AM in Article Spotlight, Dan Markel, Retributive Damages | Permalink


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