Overcoming Under-compensation and Under-derrence in Interntional Tort Cases: Are Statutory Multiple Damages the Best Remedy? - Stephen J. Shapiro
| Publication year | 2011 |
Overcoming Under-Compensation and Under-Deterrence in Intentional Tort Cases: Are Statutory Multiple Damages the Best Remedy?
by Stephen J. Shapiro*
I. Introduction
There is a general agreement that the primary purpose of tort law is to compensate parties injured by the wrongful conduct of another.1 Typically, a prevailing plaintiff is awarded compensatory damages.2
* Professor of Law, University of Baltimore School of Law. Haverford College (B.A., 1971); University of Pennsylvania Law School (J.D., 1976). Member, State Bar of Maryland.
1. See Restatement (Second) of Torts § 901 (1979). The Restatement (Second) of Torts states that "the purpose[] for which actions of tort are maintainable . . . are: (a) to give compensation, indemnity[,] or restitution for harms." Id.; see also United States ex rel. Jones v. Rundle, 453 F.2d 147, 150 n.11 (3d Cir. 1971) (explaining that "[t]he underlying philosophy of tort law . . . is that the plaintiff should be compensated for the harm he has suffered"); Seattle First Nat'l Bank v. Shoreline Concrete Co., 588 P.2d 1308, 1312 (Wash. 1978) (stating that "[t]he cornerstone of tort law is the assurance of full compensation to the injured party"); Walter H. Beckham, Jr. et al., Towards a Jurisprudence of Injury: The Continuing Creation of a System of Substantive Justice in American Tort Law, 1984 A.B.A. Special Committee on the Tort Liability System 4-29 (naming compensation as "one of the main announced goals of tort law"); E. Alan Farnsworth, An Introduction to the Legal System of the United States 113 (1983) (explaining that "[t]he essential
purpose of the law of torts is compensatory"); W. Page Keeton et al., Prosser and Keeton on the Law of Torts § 4, at 20 (5th ed. 1984) (stating that "[a] recognized need for compensation is . . . a powerful factor influencing tort law").
2. See Farnsworth, supra note 1, at 113. Compensatory damages, also referred to as actual damages, see Black's Law Dictionary 445 (9th ed. 2009), are the most common form of damages in the tort-law system. Thomas C. Galligan, Jr., Disaggregating More-
450 MERCER LAW REVIEW [Vol. 62
The main purpose of tort law is to make the plaintiff whole, to the extent possible, in order to put the plaintiff in the same financial situation the plaintiff would have been in absent the defendant's actions.3 A prevailing plaintiff, however, will not normally be made whole by the award of a reasonable amount of compensatory damages.4 The primary reason for this insufficiency is that the plaintiff will have to pay her attorney out of the money received in the award.5
A secondary purpose of tort law is to deter wrongful, potentially harmful conduct.6 This purpose is especially pertinent to intentional conduct.7 A party will be less willing to engage in intentional tortious conduct if he knows he will have to pay for the harm; therefore, to the extent that a defendant can engage in tortious conduct and not be held fully accountable financially, the maximum deterrent effect of the law is not being realized.
Just as compensatory damages might not be adequate to compensate plaintiffs completely, they may also be insufficient to adequately deter intentional tortious conduct. Since not all injured parties can, or will,
Than-Whole Damages in Personal Injury Law: Deterrence and Punishment, 71 Tenn. L. Rev. 117, 119 (2003). These damages are awarded to restore the plaintiff to his or her position prior to commission of the tortious act and may include damages for pain and suffering, emotional distress, permanent injury, loss of enjoyment of life, medical expenses, lost wages, and impairment of earning capacity. Id.
3. Galligan, supra note 2, at 119. "The cornerstone of tort law is the assurance of full compensation to the injured party." Seattle First Nat'l Bank, 588 P.2d at 1312; see also Francisco v. United States, 267 F.3d 303, 316 (3d Cir. 2001) (quoting United States v. Burke, 504 U.S. 229, 235 (1992)) (internal quotation marks omitted) (stating that "one of the hallmarks of traditional tort liability is the availability of a broad range of damages to compensate the plaintiff fairly for injuries caused by the violation of his legal rights"). Courts have long recognized that in some instances, a plaintiff cannot be made whole in the absence of an interest award. See Gen. Motors Corp. v. Devex Corp., 461 U.S. 648, 65456 (1983); Waite v. United States, 282 U.S. 508, 508-09 (1931); Miller v. Robertson, 266
U.S. 243, 257-59 (1924).
4. See Restatement (Second) of Torts § 914 & cmt. a.
5. See id. Other reasons why compensatory damages do not make a plaintiff whole include the lack of pre-judgment interest to compensate for delay in payment and other collateral expenses of litigation. See infra text accompanying note 38.
6. Dan B. Dobbs, The Law of Torts 19 (2000) ("Courts and writers almost always recognize that another aim of tort law is to deter certain kinds of conduct by imposing liability when that conduct causes harm.") As to deterring negligent conduct, see Travelers Indem. Co. v. PCR, Inc., 889 So. 2d 779, 795 (Fla. 2004) (stating that "an equally basic aim of imposing liability for compensatory damages resulting from negligent conduct is to deter such conduct"); see also Villaman v. Schee, Nos. 92-15490, 92-15562, 1994 WL 6661, at *4 (9th Cir. Jan. 10, 1994) (stating that "Arizona tort law is designed in part to deter negligent conduct within its borders").
7. For a discussion of how tort damages are more effective at deterring intentional conduct, as opposed to negligent conduct, see infra text accompanying notes 52-54.
2011] STATUTORY MULTIPLE DAMAGES 451
successfully bring suit, the maximum amount ofcompensatory damages faced by a defendant will often be significantly less than the damage the defendant has caused and, in some cases, less than the benefits the defendant has reaped. In those cases when tortfeasors hope to gain more than they expect to pay in damages, the deterrent effect may fail.8 Several mechanisms exist in American law to help alleviate the problem: punitive damages, awards of attorney fees, and multiple-double or treble-damages.
Punitive damages were developed under the common law to punish and deter particularly egregious tortious conduct.9 For this reason, punitive damages have very little effect-either compensatory or deterrent-on intentional behavior that does not rise to this very high level of wrongfulness. Even in regard to the truly despicable conduct that punitive damages were designed to deter, a high level ofproof, wide jury discretion, and other factors have led to sporadic success and have made these damages less than effective.10 In addition, the occasional imposition of excessively high awards has led the Supreme Court ofthe United States and some state legislatures to significantly cut back on the availability of such awards.11
Awarding attorney fees to the prevailing party is another possibility for addressing the situation. Awarding fees to both prevailing plaintiffs and prevailing defendants under similar standards, however, would have the negative effect of discouraging plaintiffs from bringing meritorious claims for fear of financial ruin if they were to lose.12 There are a large number of federal and some state statutes that award attorney fees routinely to prevailing plaintiffs but to defendants only if the plaintiff's case was frivolous.13 These statutes have proven to be a very effective way to facilitate the bringing of private lawsuits to help further public goals, such as combating discrimination and consumer fraud.14
When public goals are not implicated, however, such one-way attorney-fees statutes generally have not been used to help compensate plain-tiffs.15 It might also be inappropriate to extend these statutes to a broad range of intentional torts. In addition, one-way attorney-fees
8. See id.
9. See infra text accompanying notes 64-65.
10. See infra text accompanying notes 101-03.
11. See infra text accompanying notes 78-92.
12. See infra text accompanying notes 125-27.
13. See infra text accompanying notes 133-46.
14. See infra text accompanying notes 147-49.
15. See id.
452 MERCER LAW REVIEW [Vol. 62
statutes generate considerable extra litigation over the fees them-selves.16
Statutory multiple damages are already being used by the federal government as well as state governments to deter many kinds of wrongful, intentional conduct.17 Multiple damages are also intended to provide additional compensation to plaintiffs, which facilitates the ability of more deserving plaintiffs to file suit and helps to fully compensate those who do so and prevail.18 While most attorneys are aware of a handful of federal statutes that provide for treble damages, most notably in the antitrust area, there are also a very large number of state statutes that allow double or treble damages.19 Taken as a whole, these cover a broad range of tortious activity, but within any one state, they are so narrow and scattered in their application that they have little overall impact.20
This Article advocates that states' statutes make greater and more systematic use of multiple damages by extending them to a much broader range of intentional, wrongful conduct. Part II of this Article will explain why extra-compensatory relief is called for when tortious conduct is intentional or malicious. Part III will compare punitive damages, attorney fees, and treble or other multiple damages as possible sources of additional relief. Part IV will focus on multiple damages. The Article will examine the range of existing state statutes and discuss why and how those statutes might be extended to a broader range of wrongful behavior.
II. Under-Compensation and Under-Deterrence in Intentional
TORT CASES
A. Under-Compensation
The primary goal of tort law is to compensate the plaintiff for any injuries or losses caused by the defendant's actionable conduct,21 and an important secondary goal is to deter and discourage such...
To continue reading
Request your trial