The 'monstrous heresy' of punitive damages: a comparison to the death penalty and suggestions for reform.

Author:Baron, Jeremy C.
 
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INTRODUCTION I. THEORIES AND CRITIQUES OF PUNITIVE DAMAGES A. The History and Theories of Punitive Damages Awards B. Critiques of Punitive Damages II. THE SUPREME COURT'S PUNITIVE DAMAGES JURISPRUDENCE III. THE SUPREME COURT'S EIGHTH AMENDMENT ARBITRARINESS JURISPRUDENCE A. Furman v. Georgia and Its Aftermath B. Properly Understood, Furman Is a Procedural Due Process Decision C. Criticisms of the Court's Death Penalty Regime IV. APPLYING FURMAN TO PUNITIVE DAMAGES A. The Requirements of Furman Should Apply to Punitive Damages B. Furman Should Apply to Punitive Damages Regardless of Criticisms of the Case C. How the Procedural, Substantive, and Behavioral Criticisms of Punitive Damages Should Influence New Statutes V. A PROPOSED JURY INSTRUCTION CONCLUSION INTRODUCTION

Of the many debatable features of the United States' civil justice system, punitive damages may be one of the most derided. Designed to punish defendants for especially egregious conduct or to provide optimum deterrence when compensatory damages are insufficient, punitive damages are often awarded in an incoherent manner* The high levels of variation in awards have led many scholars--and judges--to question whether punitive damages are appropriate in most cases. (1) In response to these concerns, the Supreme Court has recently attempted to rein in punitive damages, chiefly in BMW of North America, Inc. v. Gore, (2) State Farm Mutual Automobile Insurance Co. v. Campbell, (3) and Philip Morris USA v. Williams. (4) The holdings in the first two cases rest on the Fourteenth Amendment's doctrine of substantive due process--that is, that the excessiveness of some awards may offend the Constitution. (5) In Williams, however, the Court invoked procedural due process (i.e., the process through which juries decide punitive damages) as another limit on awards. (6) Although Williams's holding is arguably narrow, the case may signal the Court's willingness to reevaluate the problem of arbitrary punitive damages awards. (7)

One highly visible area in which the Court has evaluated the procedural requirements of a certain punishment is the death penalty, specifically in the context of the Eighth Amendment. In Furman v. Georgia, (8) the Court decided, in a brief per curiam opinion, that Georgia's death penalty statute violated the Eighth Amendment's ban on "cruel and unusual punishments" (9) as incorporated against the states through the Fourteenth Amendment. (10) This case in essence found death penalty statutes that lead to the arbitrary infliction of capital punishment to be "cruel and unusual." In other words, a constitutional death penalty statute should produce similar sentences for similar capital defendants. In response to Furman, Georgia developed a variety of procedural protections in capital sentencing cases, which the Court later held to meet the requirements of the Eighth Amendment in Gregg v. Georgia. (11)

The Eighth Amendment has no bearing on civil penalties, including punitive damages. (12) However, the Court in Furman did not follow typical Eighth Amendment reasoning; rather, the Court's focus on the arbitrariness of the death penalty appears more akin to a procedural due process analysis under the Fourteenth Amendment. Further, there is some support for the notion that Furman is properly understood as a Fourteenth Amendment procedural due process holding. (13) Thus, plaintiffs seeking to challenge the constitutionality of punitive damages have two arguments to make. First, plaintiffs can argue that Furman is a Fourteenth Amendment procedural due process case directly applicable to other types of jury verdicts. Second, plaintiffs can argue that, in any event, the rationale underlying Furman should serve as persuasive authority in the procedural due process realm. Since Furman at its core is concerned with the arbitrariness of capital punishment, the arbitrary imposition of punitive damages should pose procedural due process issues similar to the Eighth Amendment problem in Furman. If this is the case, the states' response to Furman can also provide constitutional insight into how states could repair their punitive damages statutes.

Two decades ago, the Court rejected an argument that one state's imposition of punitive damages was unconstitutionally arbitrary. (14) Thus, defendants seeking to mount a procedural due process challenge against punitive damages have an uphill battle. However, the existence of some support on the current Supreme Court for the notion that the Fourteenth Amendment's "basic guarantee of nonarbitrary governmental behavior" prevents the current arbitrary imposition of punitive damages is reassuring. (15) More importantly, whether punitive damages are being applied arbitrarily is an empirical question: either plaintiffs can show arbitrariness or they cannot. If mounting empirical evidence begins to show more convincingly that punitive damages are imposed in an arbitrary fashion, plaintiffs should ask the Court to reconsider whether the Fourteenth Amendment applies. If such a challenge were successful, it is unclear exactly what procedural requirements the Court would require for punitive damages. But Furman--in addition to the Court's current punitive damages jurisprudence and behavioral law and economics literature--may provide clues. More importantly, if such a challenge were unsuccessful (or if no plaintiff mounted such a challenge), states looking to reform their punitive damages law would be well served by a consideration of these factors.

Although some scholars have noted the similarities between Furman and punitive damages, (16) this Comment seeks to analyze these similarities in much greater depth. Specifically, this Comment argues that post-Furman changes provide the clearest example of states addressing a constitutionally flawed jury decisionmaking process, and that the successes and failures of this endeavor should guide states in the punitive damages field. Because recent research--particularly in the field of behavioral law and economics (17)--helps illustrate how and why punitive damages are being applied in a nonsensical fashion, states are in a unique position to use this research to craft new statutes with stronger procedural safeguards. Furthermore, the Court's punitive damages jurisprudence continues to provide a separate source of guidance for states. (18) This Comment seeks to describe these recent insights into the substantive and procedural problems with punitive damages and to use both frameworks to suggest a new model for punitive damages statutes.

Part I of this Comment describes the history of and economic justifications for punitive damages, as well as various arguments for why punitive damages awards are highly variable. Part II documents the Supreme Court's recent punitive damages case law. Part III discusses the Court's Furman jurisprudence and criticisms thereof. Part IV argues that the Court should reexamine the constitutionality of arbitrary punitive damages under procedural due process in light of Furman. Barring that possibility, Part IV also argues that states should consider all these sources of criticism--the variability of awards, the Court's BMW jurisprudence, and the analogy to the death penalty--in drafting new punitive damages statutes. Part V presents a model jury instruction based on those considerations.

  1. THEORIES AND CRITIQUES OF PUNITIVE DAMAGES

    1. The History and Theories of Punitive Damages Awards

      Punitive damages are hardly a recent development. Legal systems as ancient as the Code of Hammurabi have allowed plaintiffs to recover money above and beyond the measure of adequate compensation, especially when a defendant has acted in an especially culpable fashion. (19) Other ancient codes, such as the Bible, included provisions for punitive damages; these damages also figured heavily in Roman law. (20) By the eighteenth century, English common law provided "exemplary damages" to plaintiffs when defendants committed "intentional aggravated misconduct." (21) United States common law has featured punitive damages since at least 1784, (22) and the Supreme Court acknowledged the existence of punitive damages in 1818 in The Amiable Nancy. (23) Early state courts typically imposed punitive damages against defendants who committed violent torts. (24) However, courts later began to impose punitive damages more frequently against large corporations, such as railroad companies, whose gross negligence had the potential for serious harm but who could not be prosecuted under criminal law. (25)

      Punitive damages are an "anomaly" of the law, which usually awards damages to compensate victims for injuries that they have actually suffered. (26) The division of our justice system into tort and criminal law reflects the separate goals of each--compensation in the case of tort law and punishment in the case of criminal law. By including a punitive element in tort law, states blend these different functions, creating a hybrid remedy. When it banned punitive damages in Fay v. Parker, New Hampshire's Supreme Court called them "a monstrous heresy ... deforming the symmetry of the body of the law." (27) To the New Hampshire court, commingling the civil justice system with punitive aims was an absurd juxtaposition born out of "a zealous eagerness to visit justice and punishment for wrong upon a convicted offender, by means of the first judicial process which might happen to bring his sins to light." (28) Punitive damages are thus one of the numerous, odd intersections between our usually separate justice systems. (29)

      Punitive damages are justified in law and economics literature chiefly as a means of providing correct levels of deterrence. (30) Imagine a scenario in which a tortfeasor can evade liability for some harms she causes. If an individual is caught and sued every time she commits a tortious act, she will be correctly deterred from committing those acts in the future because she...

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