9 - Assessing Punitive Damages (With Notes on Cognition and Valuation in Law)

Summary

The award of punitive damages has become one of the most controversial and important uses of the tort law, extending well beyond the common law to such statutory areas as environmental protection and employment discrimination. In recent years many people have objected that punitive damages are unpredictable, even “out of control.” Consider, as possible examples, a punitive award of $4 million for nondisclosure of the fact that the plaintiff's new BMW had been repainted, a $6 million punitive award for tortious interference with contractual relations, a $400 million punitive award for fraud by an owner of funeral homes, a $30 million punitive award for anticompetitive conduct, and a $2.7 million award, later reduced to $480,000, to a woman who spilled coffee on herself that McDonald's knew to be too hot. These are mere anecdotes, but there is more systematic evidence as well, suggesting a far from trivial degree of randomness, especially at the high end.

Our principal interest here is in identifying some of the sources of unpredictability in jury judgments. On the basis of a study of 899 jury-eligible citizens, we offer the following major findings:

1. People have a remarkably high degree of moral consensus on the degrees of outrage and punishment that are appropriate for punitive damage cases. At least in the products liability cases we offer, this moral consensus, on what might be called outrage and punitive intent, cuts across differences in gender, race, income, age, and education.