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Punitive Damages as Societal Damages |
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Catherine M. Sharkey [View as PDF]
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113 Yale L.J. 347 (2003)
Jury awards of "classwide" punitive damages provide windfalls
to individual plaintiffs, particularly in products liability, fraud, civil
rights, and employment discrimination cases. This suggests a new
angle from which to approach the ongoing punitive damages debate.
Under current law, classwide assessment of widespread public harms
has proceeded under the rubric of retributive punishment and
deterrence--the traditional justifications for punitive damages--
bypassing class action procedural requirements and unjustly
enriching the plaintiff. In the wake of the Supreme Court's admonition
in State Farm that such a practice can violate due process by exposing
defendants to the risk of "multiple punitive damages awards for the
same conduct," the Article proposes explicit recognition of a distinct
category of compensatory societal damages for redress of third-party
and societal harms. Up until now, this category has been quietly
subsumed within punitive damages. But damages for specific harms to
third parties and more diffuse harms to society are actually
compensatory (as opposed to punitive) in nature, and should, once
assessed, be distributed by legislatures, courts, and juries accordingly.
Drawing upon heretofore unconnected trends in punitive damages and
class action tort cases, and state-level legislative and judicial
innovations with "split-recovery" schemes for distributing punitive
awards, the Article explores various mechanisms for transforming
punitive damages into societal damages, including the formation of an
"ex post class action" at the remedial stage and the punitivedamages-
only class at the liability stage. The theory of compensatory
societal damages--whether or not embraced by legislatures and
courts--reveals more clearly the tradeoffs in transforming the
doctrine of punitive damages to achieve the compensatory and
deterrence goals of the tort system.
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