Retributive Damages: A theory of punitive damages as intermediate sanction

Cornell Law Review

Volumn 94, Issue 2, 2009, Pages 239-340

  Markel, Dan ^a  

^a FLORIDA STATE UNIVERSITY   (United States)

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EID: 60349087960     PISSN: 00108847     EISSN: None     Source Type: Journal    
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References (369)

1. See David. G. Owen, Punitive Damages in Products Liability Litigation, 74 MICH. L. REV. 1257, 1278 (1976) (observing a "strong historical and functional nexus between tort and crime" and viewing punitive damages "as a particularly flexible tool in the overall administration of justice").
2. See Dorsey D. Ellis, Jr., Fairness and Efficiency in the Law of Punitive Damages, 56 S. CAL. L. REV. 1, 3 (1982) (noting that there are "at least seven purposes for imposing punitive damages," including: "(1) punishing the defendant; (2) deterring the defendant from repeating the offense; (3) deterring others from committing an offense; (4) preserving the peace; (5) inducing private law enforcement; (6) compensating victims for otherwise uncompensable losses; and (7) paying the plaintiffs attorneys' fees").
3. Exxon Shipping Co. v. Baker, 128 S. Ct. 2605, 2621 (2008) (citing sources).
4. See Keith N. Hylton, Punitive Damages and the Economic Theory of Penalties, 87 GEO. L.J. 421, 421 (1998). The retributive and the complete deterrence messages both insist that the punished or deterred conduct be "prohibited" radier than "priced."
5. See id.
6. Edward L. Rubin, Punitive Damages: Reconceptualizing the Runcible Remedies of Common Law, 1998 WIS. L. REV. 131, 142.
7. Cf. Thomas C. Galligan, Jr., Augmented Awards: The Efficient Evolution of Punitive Damages, 51 LA. L. REV. 3, 10-12 (1990) ("[I]nefficient behavior can be deterred by forcing actors to accurately take account of all the costs of their activities. An award in excess of compensatory damages may efficiently deter wherever compensatories ... understate the costs the relevant activity imposes upon society.").
8. See A. Mitchell Polinsky & Steven Shavell, Punitive Damages: An Economic Analysis, 111 HARV. L. REV. 869 (1998) (using economic analysis to demonstrate that punitive damages should be imposed if and only if the injurer has a significant chance of escaping liability);
9. see also Robert D. Cooter, Punitive Damages for Deterrence: When and How Much?, 40 ALA. L. REV. 1143, 1148 (1989) ("In the absence of punitive damages, enforcement errors enable injurers to externalize a portion of expected social costs that they cause. Punitive damages should be set ... at a level that eliminates the advantage of noncompliance and forces potential injurers to internalize the expected social costs of their actions."). One article in this genre has extended the cost internalization paradigm by urging that punitive damages be configured to provide for "societal damages"-that is, to use split recovery schemes to compensate society for costs the defendant externalized onto society, independent of the costs borne by particular plaintiffs. Catherine M. Sharkey, Punitive Damages as Societal Damages, 113 YALE L.J. 347, 389-91 (2004). Sharkey views her theory as providing a " 'nonpunitive' rationale" for punitive damages that focuses on compensation and, implicitly, cost internalization. See id. at 389-90.
10. See Polinsky & Shavell, supra note 8, at 906 ("That a defendant's conduct can be described as reprehensible is in itself irrelevant. Rather, the focus in determining punitive damages should be on the injurer's chance of escaping liability."). Professor Catherine Sharkey's account requires fact finders to make a predicate finding of malice or recklessness, but this aspect of her account is inconsistent with the overall goal of cost internalization. Compare Sharkey, supra note 8, at 405 ("I envision a bifurcated trial process. In phase one, the jury would consider individual compensatory liability and damages. In [phase two], the same jury would determine whether the threshold requirement of recklessness on the part of the defendant was met."), with Galligan, supra note 7, at 62-63 ("[F]ocus on the evil defendant is ... not consistent with the deterrence justification for augmented awards.... [I]n augmented damages cases the court should not focus on the reprehensibility of the defendant's conduct, but on whether compensatory damages are too low.").
11. 127 S. Ct. 1057 (2007) (prohibiting fact finders from imposing punitive damages awards based on the amount of harm the defendant caused to nonparties).
12. To be sure, cost internalization is still possible after Philip Morris when a defendant's misconduct affects only the plaintiffs. But for torts that sweep more broadly, it will be considerably harder to achieve cost internalization through piecemeal litigation because not all injured victims bring suit and because not all harms have identifiable victims. One scholar, however, argues that states could constitutionally pursue damages meant only to achieve cost internalization so long as the state claimed there was nothing "punitive" to this cost internalization approach. Thomas B. Colby, Clearing the Smoke from Philip Morris v. Williams: The Past, Present, and Future of Punitive Damages, 118 YALE L.J. (forthcoming 2009) (manuscript at Part V, on file with author). Colby's conclusion provides a correct inference from the logic of cost internalization. But the problem with this exceptionally narrow reading of Philip Morris is that it effectively nullifies the Court's holding: it gives with one hand a right that defendants would want and then with the other hand strips away the value of that right. It is hard to believe that an issue with such an apparent lack of consequence would divide the Court and litigants so sharply. And unlike United States v. Booker, 543 U.S. 220 (2005), which recognized a defendant's right only to demolish its significance, see id. at 244, 248, there aren't separate opinions about the merits and the remedy in Philip Morris. That renders the Philip Morris opinion less susceptible to charges of schizophrenic reasoning. In any event, I should add that I don't particularly have a dog in the fight; if it turns out Professor Colby's reading of Philip Morris is correct, then I would be happy to have the jury instructions I have appended dealing with cost internalization adjusted accordingly.
13. Anthony J. Sebok, What Did Punitive Damages Do? Why Misunderstanding the History of Punitive Damages Matters Today, 78 CHI.-K ENT L. REV. 163, 163 (2003) ("The more basic question-what are the purposes or rationales for punitive damages-has not played as great a role as one might think.").
14. For challenges raised about the constitutionality of punitive damages, see Thomas B. Colby, Beyond the Multiple Punishment Problem: Punitive Damages as Punishment for Individual, Private Wrongs, 87 MINN. L. REV. 583, 643-57 (2003);
15. John Calvin Jeffries, Jr., A Comment on the Constitutionality of Punitive Damages, 72 VA. L. REV. 139 (1986);
16. Martin H. Redish & Andrew L. Mathews, Why Punitive Damages Are Unconstitutional, 53 Emory L.J. 1 (2004).
17. For overviews of empirical studies of punitive damages, see Brief for Neil Vidmar et al. as Amici Curiae in Support of Respondent at 2-21, Philip Morris, 127 S. Ct. 1057 (2007) (No. 05-1256) [hereinafter Vidmar Amicus Brief]; Theodore Eisenberg et al., Juries, Judges, and Punitive Damages: An Empirical Study, 87 CORNELL L. REV. 743 (2002) (analyzing state court data on punitive damages and developing a model of the decision to award punitive damages); Anthony J. Sebok, Punitive Damages: From Myth to Theory, 92 IOWA L. REV. 957, 961 (2007) (ANALYZING RECENT EMPIRICAL STUDIES AND PUNCTURING VARIOUS OVERBLOWN CLAIMS ABOUT THE DANGERS OF EXTANT PUNITIVE DAMAGES LITIGATION). FOR STUDIES ON JURIES AND PUNITIVE DAMAGES, SEE CASS R. SUNSTEIN ET AL., ASSESSING PUNITIVE DAMAGES (WITH NOTES ON COGNITION AND VALUATION IN LAW), 107 YALE L.J. 2071, 2085 (1998);
18. W. Kip Viscusi, The Challenge of Punitive Damages Mathematics, 30 J. LEGAL STUD. 313 (2001) (analyzing a proposal giving juries a mathematical formula for setting punitive damages).
19. Sunstein et al., supra note 13, at 2085;
20. see also Ronen Perry, The Role of Retributive Justice in the Common Law of Torts: A Descriptive Theory, 73 TENN. L. REV. 177, 177 (2006) (noting the "usually neglected" nature of retributive justice in tort law theory). Pace Sunstein et al., however, there have been some valuable efforts in this direction, see infra note 16, but these accounts have shortcomings described infra Parts I.B and II.D.
21. As the Appendix to this Article shows, my scheme requires juries to disaggregate the purposes of extra-compensatory damages and segregate the amounts needed to achieve cost internalization or victim vindication from retributive justice.
22. Some scholars have, in the course of interpreting our current punitive damages law, emphasized the plaintiffs putative personal right to be vindictive, see Benjamin Zipursky, A Theory of Punitive Damages, 84 TEX. L. REV. 105, 170 (2005), or a plaintiffs putative right to "state-sanctioned revenge," see Sebok, supra note 13, at 961;
23. see also Colby, supra note 11 (manuscript at 62.). The interpretive aim of these victim vindication accounts differs from my normative account. Cf. John Finnis, Natural Law: The Classical Tradition, in THE OXFORD HANDBOOK OF JURISPRUDENCE AND PHILOSOPHY OF LAW 1, 55-58 (Jules Coleman & Scott Shapiro eds., 2002) (arguing that recourse theorists like Zipursky fail to engage in "full-blooded normative justification"). Moreover, my own account, which I develop in Parts II-III, is not predicated on vindicating the victim's interest in autonomy or dignity as much as it is focused on the relationship of obligation between the state and the wrongdoer. Another piece worth substantial attention is Marc Galanter & David Luban, Poetic Justice: Punitive Damages and Legal Pluralism, 42 AM. U. L. REV. 1393 (1993). The Galanter and Luban article is more self-consciously normative, and putatively concerned with retributive justice in various respects, but I view most of its rationale and recommendations as indicative of victim vindication. See infra Parts LB and II.D.
24. Some accounts stressing victim vindication may also be viewed as consistent with the Philip Morris holding. See, e.g., Sebok, supra note 13, at 1024.
25. But see Galanter & Luban, supra note 16, at 1436-38 (endorsing the punitive damage awards that punished defendants for wrongs to nonparties to the litigation).
26. See, e.g., Galanter & Luban, supra note 16, at 1439, 1440;
27. David A. Hoffman & Kaimipono D. Wenger, Nullificatory Juries, 2003 WIS. L. REV. 1115, 1119 (defending the role of juries in "protect[ing] us from rule by legal economists" through "relatively unconstrained punitive awards"); Sebok, supra note 13, at 1020-23.
28. Prior works of mine have addressed how this theory applies to other policy issues such as executive discretion, alternative sanctions, the death penalty, and transitional justice in recovering states. E.g., Dan Markel, Against Mercy, 88 MINN. L. REV. 1421, 1445-53 (2004) [hereinafter Markel, Against Mercy];
29. Dan Markel, Are Shaming Punishments Beautifully Retributive? Retributivism and the Implications for the Alternative Sanctions Debate, 54 VAND. L. REV. 2157, 2183-215 (2001) [hereinafter Markel, Shaming Punishments];
30. Dan Markel, State, Be Not Proud: A Retributivist Defense of the Commutation of Death Row and the Abolition of the Death Penalty, 40 HARV. C.R.-C.L. L. REV. 407, 425-40 (2005) [hereinafter Markel, Be Not Proud];
31. Dan Markel, The fustice of Amnesty? Towards a Theory of Retributivism in Recovering States, 49 U. Toronto L.J. 389, 421-40 (1999). More recently, I have extended aspects of this theory to the Supreme Court's Eighth Amendment jurisprudence, see Dan Markel, Executing Retributivism, NW. U. L. REV. (forthcoming 2009) [hereinafter Markel, Executing Retributivism];
32. and the role of a defendant's family status in his criminal liability and punishment, see DAN MARKEL, JENNIFER M. COLLINS, ETHAN J. LEIB, PRIVILEGE OR PUNISH: CRIMINAL JUSTICE AND THE CHALLENGE OF FAMILY TIES (forthcoming 2009).
33. Dan Markel, How Should Punitive Damages Work'?, 157 U. PA. L. REV. (forthcoming 2009) (on file with author) [hereinafter Markel, How Should Punitive Damages Work?];
34. Dan Markel, Punitive Damages and Complex Litigation (unpublished manuscript, on file with author) [hereinafter Markel, Punitive Damages and Complex Litigation]. In those works, I address various questions given little attention here: Are retributive damages schemes compatible with vicarious liability and the punishment of private or public entities? Which procedural safeguards should defendants and plaintiffs have and why? How should retributive damages be taxed or viewed with reference to bankruptcy? Should an insurance market for retributive damages be permitted? What are the dynamic effects a retributive damages scheme might trigger with respect to criminal prosecutions? How does one avoid the "multiple punishment" problem under a retributive damages regime? What can be done to prevent settlements that hide information about misconduct warranting retributive damages from the state? The project as a whole will come together as a book, tentatively titled Fixing Punitive Damages.
35. The discussion of how retributive damages work alongside cost internalization and victim vindication appears in Markel, How Should Punitive Damages Work?, supra note 20, Part II.
36. See Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 25-27 (1991) (Scalia. J., concurring) (furnishing a brief history of punitive damages).
37. See Exxon Shipping Co. v. Baker, 128 S. Ct. 2605, 2620-21 (2008) (providing sources); Redish & Mathews, supra note 13, at 13-16 (discussing early English cases where plaintiffs showed dignitary harms that would otherwise remain uncompensated in the absence of exemplary damages).
38. See Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 437-438 n. 11 (2001).
39. But see Sebok, supra note 12, at 205 ("If punitive damages served a compensatory function [in early cases], it would have been for a category of injury that is still not considered compensable by contemporary tort law, namely the injury of insult that wounds or dishonors.").
40. For example, in Philip Morris, the jury awarded the decedent's wife $21,000 in economic compensatory damages and $800,000 in non-economic compensatory damages. Philip Morris USA v. Williams, 127 S. Ct. 1057, 1061 (2007). Additionally, the jury awarded the decedent's wife $79.5 million in punitive damages. Id. After remand from the U.S. Supreme Court, id. at 1062, the Oregon Supreme Court recendy upheld the jury verdict, claiming diere were adequate and independent state grounds for the decision, Williams v. Philips Morris Inc., 176 P. 3d 1255, 1260 (Or. 2008). Subsequently, the U.S. Supreme Court agreed, once again, to rehear an appeal brought by Philip Morris-but only on the issue of whether the Oregon Supreme Court failed to abide by the instructions of the remand, not whether the punitive award was constitutionally excessive. See Philip Morris USA v. Williams, 128 S. Ct. 2904, 2904 (2008).
41. Cooper Indus., 532 U.S. at 432;
42. Gem v. Robert Welch, Inc., 418 U.S. 323, 350 (1974). That said, if a state passed an enabling statute authorizing punitive damages for the express purpose of compensating a plaintiff or society, the Supreme Court would not likely hold that such a purpose was inherendy unconstitutional.
43. See, e.g., Exxon Shipping, 128 S. Ct. at 2621;
44. Cooper Indus., 532 U.S. at 432;
45. Gertz, 418 U.S. at 350.
46. See 1 LINDA L. SCHLUETER, PUNITIVE DAMAGES § 2.2(A)(1) (5th ed. 2005);
47. see also RESTATEMENT (SECOND) of TORTS § 908(1) (1979).
48. See Sharkey, supra note 8, at 375-80 (citing statutes).
49. See 2 SCHLUETER, supra note 28, § 20.1 (providing state summaries).
50. Five states prohibit or substantially restrict punitive damages. See Michael L. Rustad, The Closing of Punitive Damages' Iron Cage, 38 LOY. L.A. L. REV. 1297, 1304 (2005). Professor Rustad's article provides a comprehensive empirical survey of the punitive damages landscape across the country.
51. RONALD W. EADES, JURY INSTRUCTIONS ON DAMAGES IN TORT ACTIONS §§ 2-6 to 2-8 (4th ed. 1998). Some variety exists regarding the required level of the defendant's culpability. For example, Ohio requires a finding of actual malice. E.g., Rice v. Certainteed Corp. 704 N.E.2d 1217, 1220-21 (Ohio 1999). Texas, by contrast, allows punitive damages for "gross negligence," but its definition approximates what other jurisdictions call recklessness. See, e.g., Gen. Motors Corp. v. Sanchez, 997 S.W.2d 584, 595 (Tex. 1999).
52. See 1 SCHLUETER, supra note 28, § 5.3 (H), (H) (2).
53. But cf. George L. Priest, Introduction to CASS R. SUNSTEIN ET AL., PUNITIVE DAMAGES: HOW JURIES DECIDE 1, 12 n. 14 (2002) (indicating skepticism toward the suggestion that these different standards are treated differently by jurors).
54. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 419 (2003) (citing Gore, 517 U.S. at 575).
55. Id. (citing Gore, 517 U.S. at 576-77). The "existence of any one of these factors weighing in favor of a plaintiff may not be sufficient to sustain a punitive damages award; and the absence of all of them renders any award suspect." Id.
56. Id. at 418.
57. Id. at 425.
58. Id. at 418 (citing Gore, 517 U.S. at 575).
59. Philip Morris USA v. Williams, 127 S. Ct. 1057, 1063 (2007). Some members of the Court have expressed the view that if the state captured part of the punitive damages award it might trigger review under the Eighth Amendment's Excessive Fines Clause. See Browning-Ferris Indus, of Vt., Inc. v. Kelco Disposal, Inc., 492 U.S. 257, 275 & n. 21 (1989). However, the Utah and Oregon statutes considered in State Farm and Philip Morris both involved a split-recovery scheme and the Court did not address that issue in either case. See, e.g., Or. Rev. Stat. § 31.735(b) (2007) (requiring that 60 percent of punitive damages go to a crimevictims fund). In his dissent in Philip Morris, Justice Stevens stated his continued belief that the Excessive Fines Clause should regulate punitive damages regardless of who receives the award. See 127 S. Ct. at 1066 n. 1.
60. See State Farm, 538 U.S. at 421.
61. See Honda Motor Co., Ltd. v. Oberg, 512 U.S. 415, 424-25 (1994) (referencing trial and appellate level review).
62. See Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 436 (2001).
63. See Slate Farm, 538 U.S. at 416-17.
64. See Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 13-15 (1991).
65. In Hudson v. United States, the Supreme Court stated that it has "long recognized that the Double Jeopardy Clause does not prohibit the imposition of all additional sanctions that could... be described as punishment. The Clause protects only against the imposition of multiple criminal punishments for the same offense." 522 U.S. 93, 98-99 (1997) (citation omitted).
66. Some federal courts have rejected the "overkill" argument that fundamental fairness protects a defendant from facing limidess multiple punishments. E.g., Cathey v. Johns-Manville Sales Corp., 776 F. 2d 1565, 1571 (6th Cir. 1985). However, "the vast majority of courts that have addressed the issue have declined to strike punitive damages awards merely because they constituted repetitive punishment for the same conduct." Dunn v. Hovic, 1 F.3d 1371, 1385 (3d Cir. 1993).
67. See, e.g., TXO Prod. Corp. v. Alliance Res. Corp., 509 U.S. 443, 464-65 (affirming the trial court's unelaborated ruling that the large punitive damages award was acceptable).
68. See, e.g., Jeffrey W. Grass, The Penal Dimensions of Punitive Damages, 12 HASTINGS CONST. L.Q. 241, 242-43 (1985) ("Ostensibly, a determination that punitive damages are penal would activate procedure safeguards available to defendants in criminal proceedings."); Malcolm E. Wheeler, The Constitutional Case for Reforming Punitive Damages Procedures, 69 VA. L. REV. 269, 276-77 (1983). Professor Colby, by contrast, thinks that punitive damages that aim to punish only "the private wrong" instead of "the public wrong" can survive this constitutional concern. See Colby, supra note 11, Part IV. I think this is a problematic inference. See Markel, How Should Punitive Damages Work?, supra note 20, Part III.
69. Of course, to the extent the Court's jurisprudence avoids gross disproportionality and unfair surprise, then those are goals that Benthamite utilitarians might embrace too. JEREMY BENTHAM, AN INTRODUCTION TO THE PRINCIPLES OF MORALS AND LEGISLATION 142 (Batoche Books 2000) (1781) ("The punishment should be adjusted in such manner to each particular offence, that for every part of the mischief there may be a motive to restrain the offender from giving birth to it.").
70. Haslip, 499 U.S. at 42 (O'Connor, J., dissenting) ("Punitive damages are a powerful weapon. Imposed wisely and with restraint, they have the potential to advance legitimate state interests. Imposed indiscriminately, however, they have a devastating potential for harm. Regrettably, common-law procedures for awarding punitive damages fall into the latter category.").
71. See supra note 11 and accompanying text.
72. In the sequel to this article, Markel, How Should Punitive Damages Work?, supra note 20, 1 analyze the desirability of procedural safeguards relevant to any basic retributive damages case, including: double jeopardy; access to counsel; bifurcated proceedings; trial by jury; confrontation of adverse witnesses; standards of review; and standards of proof. In the third installment of the trilogy, I address the procedural safeguards necessary for cases involving wrongdoing to multiple persons arising from a single course of culpable action or inaction. See Markel, Punitive Damages and Complex Litigation, supra note 20;
73. see also infra note 123.
74. Polinsky & Shavell, supra note 8, at 873-75.
75. But see Hylton, supra note 4 (arguing that in most cases complete deterrence is the better way to approach such damages from an economic perspective). With optimal deterrence/cost internalization, there is deemed an appropriate non-zero number of instances of misconduct because the net social benefit of the activity outweighs its net social costs. In large part, the decision to seek optimal deterrence for an activity is predicated on a determination that the gains to the violator are socially licit. Conceptually it is worth separating optimal deterrence (or cost internalization) from other goals, such as complete deterrence, which is a goal that, if realized, means no instances of the particular misconduct would occur. It is also important to see the difference between complete deterrence, which is supposed to remove the incentive to perform such misconduct, and complete enforcement, which calls for enough resources to detect and enforce a sanction for each violation.
76. See supra note 9 and accompanying text.
77. Id.
78. See Thomas C. Galligan, Jr., The Risks of and Reactions to Vnderdeterrence in Torts, 70 MO. L. REV. 691, 695 (2005).
79. See generally Galligan, supra note 7 (advocating a re-casting of punitive damages for optimal deterrence as "augmented" damages).
80. See generally Colby, supra note 11 (arguing that punitive damages vindicate insult or moral injury to plaintiff); Sebok, supra note 13 (arguing that punitive damages should be viewed as "state-sanctioned revenge" for citizens who have suffered wrongs in private laws); Zipursky, supra note 16 (arguing that punitive damages can be understood as a remedy that allows victims a right to be punitive against those who have wronged them).
81. See Bruce Chapman & Michael Trebilcock, Punitive Damages: Divergence in Search of a Rationale, 40 ALA. L. REV. 741, 763 (1989).
82. At times, the works of Marc Galanter and David Luban, see generally Galanter & Luban, supra note 16 (discussing how juries can punish wrongdoers and express community norms through monetary damages), and David Hoffman and Kaimipono Wenger, see generally Hoffman & Wenger, supra note 18 (explaining how juries can act as policymakers as well as fact finders), speak in this register. For example, Galanter and Luban endorse imposing punitive damages in a single case against a defendant for all the harm the defendant's misconduct caused in similar situations even if the defendant may have had viable defenses against those other parties. See Galanter & Luban, supra note 16, at 1436-38 (providing examples of "expressive defeat" of defendant through punitive damages). They also think judges should extend "great deference" to juries' determinations because of their special competence in sending "the community's message through the medium of damages." Id. at 1439. The view I take circumscribes jury decision making considerably more.
83. See, e.g., THOMAS H. KOENIG & MICHAEL L. RUSTAD, IN DEFENSE OF TORT LAW 38-40 (2001) (providing a paradigmatic account of the social justice theory of tort law as weapon against profit-focused corporations);
84. Richard L. Abel, Questioning the Counter-Majoritarian Thesis: The Case of Torts, 49 DEPAUL L. REV. 533, 540-43 (1999) (providing examples of how organized defendants have persuaded legislatures to limit corporate tort liability); Rustad, supra note 31, at 1301 (arguing that tort reform of punitive damages is "special legislation to help corporate America").
85. See Colby, supra note 11, Part IV; Galanter & Luban, supra note 16, at 1432. At times, Colby understands the distinction between the public aspects of retributive justice and the private aspects of revenge but nonetheless his account mistakenly conflates these values by suggesting that his private revenge account can give a satisfactory response to what I earlier referred to as Professor Sunstein's challenge. See supra text accompanying note 14. As to Galanter and Luban, notwithstanding their stated professions of fidelity to and inspiration from retributivist theory, I view Galanter and Luban's account of punitive damages as primarily a victim vindication account, and only secondarily as an account about vindicating the public's interest in retributive justice. They rely chiefly on the victim vindication account of punishment provided by Jean Hampton, Galanter & Luban, supra note 16, at 1432-33;
86. they consider the wrong by offenders as injuries "to the honor" of the victim, see id. at 1433;
87. they urge no additional procedural safeguards for defendants because punitive damages suits are privately initiated, see id. at 1455-60; they fail to see the tension created by a plaintiff's right to settle or forbear from seeking punitive damages and the public interest in retributive justice; and they envision plaintiffs as the appropriate recipient of punitive damages, even in cases involving multiple punitive damages awards, see id. at 1460 n. 302. Indeed, they pay almost no attention to reducing mistaken punishment or over-punishment relative to comparable offenders (Type I errors) and they provide little basis for reducing non-punishment or under-punishment relative to comparable offenders (Type II errors) other than the increased incentive to litigate created by extracompensatory damages for the plaintiff.
88. See generally Sebok, supra note 13, at 1005 ("Plaintiffs who may have a valid legal claim for punitive damages are under no obligation to pursue them. In theory, a plaintiff could request a sanction smaller than what justice might otherwise require the wrongdoer to repay.");
89. Benjamin Zipursky, Civil Recourse, Not Corrective Justice, 91 GEO. L.J. 695 (2003).
90. See supra note 62.
91. See infra Part II.
92. To its credit, however, Professor Anthony Sebok's state-sanctioned revenge account is consistent with a desire to reduce "piling on" (or Type I over-punishment) errors that occur through introducing evidence apart from that which relates to the plaintiff's injury. See Sebok, supra note 13, at 1032-36. But he does not address the public's interest in reducing Type II errors of either sort, or the procedural safeguards necessary to prevent Type I errors of the mistaken punishment sort. Similarly, Professor Colby's recent efforts to defend punitive damages for private wrongs exhibits little concern for the reduction of Type II errors or Type I errors associated with inconsistency across cases.
93. See, e.g., Jeffrey Grogger, Certainty vs. Severity of Punishment, 29 ECON. INQUIRY 297, 308 (1991).
94. See generally Daniel S. Nagin & Greg Pogarsky, Integrating Celerity, Impulsivity, and Extralegal Sanction Threats into a Model of General Deterrence: Theory and Evidence, 39 CRIMINOLOGY 865 (2001) (analyzing the varying deterrent effects of certainty, severity, and celerity of punishment).
95. See sources cited supra note 8 (works urging the use of punitive damages to pursue cost internalization); sources cited supra note 16 (works urging the use of punitive damages to allow for victim vindication).
96. I have elsewhere begun to work out how this theory applies to other issues in criminal justice. See sources cited supra note 19. On account of space constraints, this Article will not address some questions raised by a theory of retributive justice, but I invite curious readers to consult my other works for further explanation of my views regarding the theory presented here and how it relates to issues including victims, deterrence, failures of the state, proportionality, discretion, and unjust laws.
97. My goal here is only to explain the attractiveness of retributive punishment within liberal democracies against offenders who have violated laws that have a just and reasonable basis for their enactment.
98. These differences with other theorists are largely insignificant with respect to the scheme of retributive damages that I propose, except in some of the details associated with whether non-victims should be able to bring claims and recover more than a reward for bringing the claims to adjudication. As far as I can tell, Professor Jean Hampton is the other retributivist whose work has been relevant to working out an understanding of what is punitive about punitive damages. See, e.g., Galanter & Luban, supra note 16, at 1432-33;
99. Sebok, supra note 13, at 961 & n. 9. Hampton's work has had a profound influence on my own work, but there are places where I depart from her work or view it as insufficiendy developed to provide a complete normative defense of retributive justice in a political context. See, e.g., Markel, Be Not Proud, supra note 19, at 431 n. 109.
100. John Rawls, Two Concepts of Rules, 64 PHIL. REV. 3, 4-5 (1955).
101. Michael S. Moore, The Moral Worth of Retribution, in RESPONSIBILITY, CHARACTER AND THE EMOTIONS: NEW ESSAYS IN MORAL PSYCHOLOGY 179, 179 (Ferdinand Schoeman ed., 1987). For Moore, moral culpability is the same as desert. Id. at 181-82;
102. cf. also H.L.A. HART, Postscript: Responsibility and Retribution, in PUNISHMENT AND RESPONSIBILITY: ESSAYS IN THE PHILOSOPHY OF LAW 210, 231 (2d ed. 2008) (identifying premises of a moral retributivist theory).
103. See, e.g., Robert Blecker, Rethinking the Death Penalty: Can We Define Who Deserves Death?, 24 PACE L. REV. 107, 123-24 (2003) (providing an example of retributivist intuitionism).
104. E.g., TED HONDERICH, PUNISHMENT: THE SUPPOSED JUSTIFICATIONS 81-89 (1969);
105. Henry Weihofen, Punishment and Treatment: Rehabilitation, in THEORIES OF PUNISHMENT 255, 255-61 (Stanley E. Grupp ed., 1971).
106. See, e.g., David Dolinko, Three Mistakes of Retributivism, 39 UCLA L. REV. 1623, 1627-28 (1992).
107. See supra text accompanying note 72.
108. See, e.g., Russ Shafer-Landau, Retributivism and Desert, 81 PAC. PHIL. Q. 189, 189 N. 1 (2000) (PROVIDING CITATIONS TO THE RELEVANT PHILOSOPHICAL LITERATURE);
109. OWEN MCLEOD, DESERT, IN STANFORD ENCYCLOPEDIA OF PHILOSOPHY (rev. ed. 2003), http://plato.stanford.edu/entries/desert.
110. Assessments of culpability are driven by analysis of mens rea and mental competence. Context constraints look at whether the defendant's conduct was excused or justified by factors such as duress or self-defense.
111. By "ex ante" I refer to a situation of decision making where a person internalizes all available information about possible outcomes except what position she will occupy after the decision is made. Balancing and choosing should be done through the ex ante perspective to ensure that the rules
112. See Philip Pettit, Responsibility Incorporated, 117 ETHICS 171, 173-77 (2007) (discussing conditions of responsibility in context of punishment).
113. Without that understanding, the punishment might still serve contingent goals such as incapacitation, but it then loses its retributive character because it loses its intrinsic worth and is performed for contingently achieved goals.
114. This point is developed in greater detail in Markel, Executing Retributivism, supra note 19.
115. Moore, supra note 73, at 180-81.
116. For a discussion of how this account sidesteps the criticisms of the "fair-play" theory of punishment associated with Herbert Morris's famous essay, Persons and Punishment, in PUNISHMENT AND REHABILITATION 40, 42 (Jeffrie G. Murphy ed., 1973),
117. see Dan Markel, Misguidedly Merciful? A Reply To Professor Meyer (unpublished manuscript, on file with author).
118. On the point of diminishing the plausibility of an offender's claims to superiority, see generally Jean Hampton, The Retributive Idea, in FORGIVENESS AND MERCY 111 (Jeffrie G. Murphy & Jean Hampton eds., 1988) [hereinafter Hampton, The Retributive Idea];
119. Jean Hampton, Correcting Harms Versus Righting Wrongs: The Goal of Retribution, 39 UCLA L. REV. 1659 (1992) [hereinafter Hampton, Righting Wrongs].
120. See Guido Calabresi & A. Douglas Melamed, Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, 85 HARV. L. REV. 1089, 1126-27 (1972) (discussing the need for punitive sanctions to discourage the flouting of property and inalienability rules).
121. See JEFFRIE G. MURPHY & JULES L. COLEMAN, PHILOSOPHY OF LAW 116 (1990).
122. See Gerard V. Bradley, Retribution: The Central Aim of Punishment, 27 HARV. J.L. & PUB. POL'Y 19, 25-26 (2003);
123. John Finnis, Retribution: Punishment's Formative Aim, 44 AM. J. JURISPRUDENCE 91, 99-101 (1999) (analyzing the nature of the public's interest in retribution);.
124. E.g., 5 U.S.C. § 3331 (2006) (setting forth the requirement that public officials swear to support and defend the Constitution).
125. I am grateful to Brian Tamanaha for pushing me on this point.
126. See Hugo Adam Bedau, An Abolitionist's Survey of the Death Penalty in America Today, in DEBATING THE DEATH PENALTY 15, 34-35 (Hugo Adam Bedau & Paul G. Cassell eds., 2004) (discussing the principle of Minimum Invasion, which states that societies ought to abolish any lawful practice that imposes more violation of liberty, privacy, or autonomy than necessary "when a less invasive practice is available and is sufficient" to satisfy the objective).
127. See Markel, Be Not Proud, supra note 19, at 425-40 (collecting sources that locate desire to punish in these "hot" emotions).
128. See generally Colby, supra note 11 (arguing that "punitive damages are a form of legalized private revenge");
129. Sebok, supra note 13 (suggesting that "the point of punitive damages can be understood as a form of private retribution").
130. Cf. Michael T. Cahill, Retributive Justice in the Real World, 85 WASH. U. L. REV. 815, 861-69 (2008) (extending, in part, my work in the area of consequentialist retributivism).
131. See, e.g., Brandon L. Garrett, Judging Innocence, 108 COLUM. L. REV. 55 (2008) (presenting a study of two hundred DNA exonerations).
132. However, as Professors Ronald Allen and Larry Laudan demonstrate, an "innocentristic" social concern for eliminating only Type I errors cannot be justified. Ronald J. Allen & Larry Laudan, Deadly Dilemmas, 3-4 (June 24, 2008), available at http://ssrn.com/abstracts 150931.
133. But cf. Daniel Medwed, Innocentrism, 2008 U. ILL. L. REV. 1549 (defending innocentristic social movements).
134. Markel, Be Not Proud, supra note 19, at 462-65. Of course, the Type II errors are also a concern: if a wrongly released offender kills an innocent person, the state is also deprived of the opportunity to exhibit contrition to the victim for its indirect role in creating the threat to the victim. However, if the state acted upon reasonable information, it should not be blamed for its indirect role in the harm caused by the released offender.
135. See Hampton, Righting Wrongs, supra note 86, at 1666-71 (identifying preventionoriented measures as sharing retributivist concern for the value of persons);
136. cf. Ernest J. Weinrib, Deterrence and Corrective Justice, 50 UCLA L. REV. 621, 629-40 (2002) (arguing that deterrence has a place within corrective justice institutions).
137. See Morris, supra note 85, at 76.
138. See Hampton, The Retributive Idea, supra note 86, at 138-42 (discussing retribution as "vindicating value through protection"); see also Hampton, Righting Wrongs, supra note 86, at 1687-89 (arguing, through example, that large punitive damage awards serve an important retributive purpose by communicating to the wrongdoer that the avoidance of harm to others must be superior to profits). On expressing commitments through state action, see Richard H. Pildes & Cass R. Sunstein, Reinventing the Regulatory State, 62 U. CHI. L. REV. 1, 66 & n. 228 (1995).
139. I develop this point more in Dan Markel, Ex Ante Retributivism (unpublished manuscript, on file with author).
140. See Paul H. Robinson & John M. Darley, Does Criminal Law Deter? A Behavioural Science Investigation, 24 OXFORD J. LEGAL STUD. 173, 178-82 (2004). That said, it is also a mistake to assume that all organizations are scrupulously sensitive to the signals the law emits.
141. See Markel, Shaming Punishments, supra note 19, at 2209-10;
142. cf. R.A. Duff, Penance, Punishment and the Limits of Community, 5 PUNISHMENT & SOC'Y 295, 302 (2003);
143. cf. also Ezekiel 33:11 ("I have no pleasure in the death of the wicked; but that the wicked turn from his way and live....").
144. See ROBERT NOZICK, PHILOSOPHICAL EXPLANATIONS 377 (1981). See generally Markel, Executing Retributivism, supra note 19 (discussing implications of communicative retributivism for Eighth Amendment review of capital and noncapital punishments).
145. Markel, Be Not Proud, supra note 19, at 410 n. 13 (providing citations).
146. I qualify this discussion by reference to ideal types because there have often been cultural or social norms involving revenge that fall somewhere in between. See generally WILLIAM IAN MILLER, EYE FOR AN EYE (2006) (presenting a detailed discussion of the cultural history of revenge).
147. See NOZICK, supra note 105, at 366-68.
148. This is not to deny that retributive punishment may result in third-party harms, nor is it to suggest that revenge is always targeted at third parties close to the offender. My point is narrow: retributive justice does not aim to punish third parties, and in some cases, the kind of retribution imposed should take into account innocent third-party harms.
149. Cf., e.g., Dan Markel, Jennifer M. Collins & Ethan J. Leib., Criminal Justice and the Challenge of Family Ties, 2007 U. ILL. L. REV. 1147, 1220-24 (urging greater use of time-deferred sentencing to mitigate third party harms).
150. An avenger who sees his antagonist experience suffering from some other source, such as disease, may decline to follow through on the revenge, whereas the state's retributive interest would not be satisfied merely by having an offender suffer.
151. See Markel, Shaming Punishments, supra note 19, at 2216-17.
152. This notion might resonate more for some through the thought experiment of the "secret but fair punishment." See id. at 2211-12.
153. See supra Part II.B.1.
154. See Markel, How Should Punitive Damages Work?, supra note 20, Part III; cf. also Issachar Rosen-Zvi & Talia Fisher, Overcoming Procedural Boundaries, 94 VA. L. REV. 79, 133-51 (2008) (proposing a model that tracks standard of proof to the balance of power between the parties and the severity of the remedy/sanction).
155. See Philip Morris USA v. Williams, 127 S. Ct. 1057 (2007).
156. See Vidmar Amicus Brief, supra note 13, at 4-8 (discussing, with extensive citations to empirical studies, how rarely juries award punitive damages).
157. See Tom Baker, Transforming Punishment into Compensation: In the Shadow of Punitive Damages, 1998 WIS. L. REV. 211, 230-31. But see generally Thomas A. Eaton et al., The Effects of Seeking Punitive Damages on the Processing of Tort Claims, 34 J. LEGAL STUD. 343 (2005) (presenting an empirical study of punitive damages claims, which concludes that punitive damages have no statistically significant effect on most phases of the tort process).
158. See Exxon Shipping Co. v. Baker, 128 S. Ct. 2605, 2626 n. 17 (2008) (noting that the defendant had funded academic research on punitive damages); Kenneth J. Cheesebro, Galileo's Retort: Peter Huber's Junk Scholarship, 42 AM. U. L. REV. 1637, 1707-15 (1993).
159. The chief significance of a retributive damages award is that the defendant loses money, and, in some cases, suffers reputational harm. The same is true, but to a smaller extent, when a defendant loses, for example, a generic negligence tort case.
160. See, e.g., TXO Prod. Corp. v. Alliance Res. Corp., 509 U.S. 443, 472 (1993) (O'Connor, J., dissenting); Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 42 (1991) (O'Connor, J., dissenting); Browning-Ferris Indus. of Vt. v. Kelco Disposal, Inc., 492 U.S. 257, 282 (1989) (O'Connor, J., concurring in part and dissenting in part); 143 CONG. REC. 26, 236 (1997) (statement of Sen. Hatch) ("Excessive, unpredictable, and often arbitrary punitive damage awards jeopardize the financial well-being of many individuals and companies, particularly the Nation's small businesses."); A. Mitchell Polinsky, Are Punitive Damages Really Insignificant, Predictable, and Rational? A Comment on Eisenberg et al., 26 J. LEGAL STUD. 663, 671-77 (1997); Viscusi, supra note 13, at 384-87.
161. See Vidmar Amicus Brief, supra note 13, at 2; Eisenberg, supra note 13, at 744-45; Sebok, supra note 13, at 962-63; see also Exxon Shipping, 128 S. Ct. at 1624-25 (stating that punitive damage awards are not as excessive or out of control as many critics have argued).
162. See, e.g., KOENIG & RUSTAD, supra note 61, at 213-19; Galanter & Luban, supra note 16, at 1428; see also, e.g., John C.P. Goldberg, Twentieth Century Tort Theory, 91 GEO. L.J. 513, 560-63 (2003) (describing some scholars' enthusiasm for current punitive damages practice).
163. xhe safeguards I call for include (but are not limited to): guidelines that both inform and limit the penalties defendants face on account of their misconduct; a heightened standard of proof such as "clear and convincing evidence"; de novo appellate review of defendants' reprehensibility scores with deferential review to their factual predicates; increased protection against duplicative punishment from the criminal justice system; and the procedural bifurcation of evidence of wealth from evidence of liability. See Markei, How Should Punitive Damages Work?, supra note 20; Markel, Punitive Damages and Complex Litigation, supra note 20.
164. On this view, malicious conduct exhibits "circumstances of aggravation or outrage, such as spite or 'malice,' or a fraudulent or evil motive on the part of the defendant, or such a conscious and deliberate disregard of the interests of others that the conduct may be called willful or wanton." W. PAGE KEETON ET AL., PROSSER AND KEETON ON THE LAW OF TORTS § 2 (5th ed. 1984). A defendant has engaged in reckless conduct when circumstances show that he was aware from his "knowledge of existing conditions that it is probable that injury would result from his... acts and omissions, and nevertheless proceeded with reckless indifference as to the consequences and without care for the rights of others." Id:, see also MODEL PENAL CODE § 2.02 (1985); RESTATEMENT (SECOND) OF TORTS § 500 cmt. a (1965) ("Recklessness may consist of either of two different types of conduct. In one the actor knows, or has reason to know... of facts which create a high degree of risk of... harm to another, and deliberately proceeds to act, or to fail to act, in conscious disregard of, or indifference to, that risk. In the other the actor has such knowledge, or reason to know, of the facts, but does not realize or appreciate the high degree of risk involved, although a reasonable man in his position would do so."). These formulae each have pros and cons, but they have the virtue of being used in a variety of jurisdictions over a significant period of time, and have withstood various forms of critical scrutiny.
165. David G. Owen, The Moral Foundations of Punitive Damages, 40 ALA. L. REV. 705, 730 (1989) (emphasis omitted).
166. It is worth noting that certain liberal conceptions of tort law don't view a simple negligence claim as simply "pricing" conduct in an economic sense; instead, these tort standards, as articulated to juries, perform a sanctioning function by communicating to the defendant that his conduct in question is prohibited because he undertook unjustifiable risks without sufficient regard for others. See, e.g., Kenneth W. Simons, The Hand Formula in the Draft Restatement (Third) of Torts: Encompassing Fairness as well as Efficiency Values, 54 VAND. L. REV. 901, 905 (2001) [hereinafter Simons, The Hand Formula]; Kenneth W. Simons, Jules Coleman and Corrective Justice in Tort Law: A Critique and Reformulation, 15 HARV. J.L. & PUB. POL'Y 849, 868-69 (1992). One thing worth asking about accounts like these is whether a defendant's violation of his primary duty to act non-negligently toward others warrants a condemnation such that all tort actions for negligence ought to trigger a retributive sanction.
167. See, e.g., Rita v. United States, 127 S. Ct. 2456, 2459 (2007) ("The federal courts of appeals review federal sentences and set aside those they find 'unreasonable.'"); Patterson v. New York, 432 U.S. 197, 210 (1977) ("[T]he Due Process Clause requires the prosecution to prove beyond a reasonable doubt all of the elements included in the definition of the offense of which the defendant is charged."); People v. Navarro, 99 Cal. App. 3d Supp. 1, 10-11 (Cal. App. Dept. Super. 1979) (holding that the trial court erred in instructing the jury that the defendant was guilty even though his misconduct constituted a good faith mistake).
168. See generally G. EDWARD WHITE, TORT LAW IN AMERICA: A N INTELLECTUAL HISTORY 12-19 (expanded ed. 2003) (discussing close identification between torts as an independent branch of law and negligence theory).
169. Cf. Wainwright v. Stone, 414 U.S. 21, 22-23 (1973) (upholding convictions under a Florida statute previously voided for vagueness because defendants had sufficient notice of the criminal nature of their conduct).
170. See PAUL H. ROBINSON, DISTRIBUTIVE PRINCIPLES OF CRIMINAL LAW: WHO SHOULD BE PUNISHED HOW MUCH? 139-40 (2008).
171. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 419 (2003).
172. See, e.g., Green Oil Co. v. Hornsby, 539 So. 2d 218, 223-24 (Ala. 1989).
173. Memorandum from Paul J. McNulty, Deputy Att'y Gen., U.S. Dep't of Justice to the Heads of Dep't Components, U.S. Att'y Office 4 (Dec. 12, 2006), available at http://www.usdoj.gov/dag/speeches/2006/mcnulty-memo.pdf.
174. Legislatures or courts will have to consider whether to assess that threat's magnitude from the defendant's perspective or an objective perspective.
175. Galanter & Luban, supra note 16, at 1432.
176. See, e.g., Joel Feinberg, Equal Punishment for Failed Attempts: Some Bad But Instructive Arguments Against It, 37 ARIZ. L. REV. 117, 119 (1995); Stephen J. Morse, Reason, Results and Criminal Responsibility, 2004 U. ILL. L. REV. 363, 409; Stephen Schulhofer, Harm and Punishment: A Critique of Emphasis on the Results of Conduct in the Criminal Law, 122 U. PA. L. REV. 1497, 1600-03 (1974). While most retributivists focus on culpability and not harm, at least one prominent retributivist believes that there is additional moral significance to wrongs that cause harm. See Michael S. Moore, The Independent Moral Significance of Wrongdoing, 5 J. CONTEMP. LEGAL ISSUES 237, 267-71 (1994).
177. See generally John Calvin Jeffries, Jr., Legality, Vagueness, and the Construction of Penal Statutes, 71 VA. L. REV. 189 (1985) (explaining the requirement that a court cannot impose punishment on a defendant unless a previous penal statute authorizes such punishment for the conduct in question).
178. To be sure, courts sometimes circumvent the requirement of causation of harm by vindicating the plaintiff's rights even when the harm was trivial or nominal. See Jacque v. Steenberg Homes, Inc., 563 N.W. 2d 154, 158-62 (Wis. 1997) (imposing $1 in nominal compensatory damages and $100,000 in punitive damages for trespass on land).
179. I am, for now, assuming that state legislatures have the power to confer such standing on private attorneys general. I recognize that, in the federal context, the standing question is considerably more complex, although as a general matter, "Congress may enact statutes creating legal rights, the invasion of which creates [constitutional] standing, even though no injury would exist without the statute." Linda R.S. v. Richard D., 410 U.S. 614, 617 n. 3 (1973).
180. Cf. RESTATEMENT (SECOND) OF TORTS §§ 313(2), 436(3) (1965) (allowing a plaintiff to seek redress for relational emotional harm caused by the defendant's actions injuring a third party only if the plaintiff was physically endangered by the defendant's misconduct).
181. See William B. Rubenstein, On What a "Private Attorney General" Is-and Why it Matters, 57 VAND. L. REV. 2129, 2144 (2004).
182. See id. at 2146-54.
183. See Trevor W. Morrison, Private Attorneys General and the First Amendment, 103 MICH. L. REV. 589, 598-602 (2005).
184. See id. at 608-10.
185. But see id. at 631-46 (arguing that the Solicitor General's concern to this effect in Nike, Inc. v. Kasky, 539 U.S. 654 (2003), was misplaced).
186. See Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 258-59 (1975); Jane P. Mallor, Punitive Attorneys' Fees for Abuses of the Judicial System, 61 N.C. L. REV. 613, 614-15, 631-53 (1983).
187. See Morrison, supra note 143, at 614-17 (arguing for legislative choice in these trade-offs).
188. An alternative regime would leave these actions in private hands but subject to government approval, much like an EEOC right-to-sue letter in the employment discrimination context.
189. Cf., e.g., MICH. COMP. LAWS ANN. § 767.41 (West 2008) (requiring prosecutors to file an explanatory statement when declining to file charges against a defendant); NEB. REV. STAT. ANN. § 29-1606 (LexisNexis 2003) (same).
190. Those concerned about the courts being flooded with weak non-harm-based claims can take some comfort in the fact that the scrutiny of plaintiffs counsel, when deciding whether to take on a case that the government has already declined, will probably filter out many weak cases. Another feedback effect is that (potential) juries may think that the claims are weak if the government declined to pursue them.
191. The legislature might also decide to disallow suits by pro se plaintiffs who are not attorneys if it is worried that there will be too many frivolous claims. Additionally or alternatively, the state can place a burden on the PAG pro se plaintiff to incur the risk of paying the defendant's legal fees or some portion thereof if the defendant wins or if the court deems the plaintiffs case unmeritorious.
192. See Colby, supra note 11, (manuscript at 2) (developing constitutional claim that punitive damages are best understood as vindicating private wrongs to individuals, not public wrongs); Galanter & Luban, supra note 16, at 1436-37 (justifying punitive damages as punishment for defendant's treatment of the plaintiff as having "merely a price, not a dignity"); Sebok, supra note 13, at 1015-22 (arguing that awarding punitive damages in tort cases is appropriate to redress an invasion of a private right); Zipursky, supra note 16, at 105 (arguing that some punitive damages cases implicate the plaintiff's "right to be punitive" in response to the wrong suffered).
193. See, e.g., Zipursky, supra note 63, at 738-39.
194. See infra Part IV.C.
195. Cf. ARTHUR RIPSTEIN, EQUALITY, RESPONSIBILITY, AND THE LAW 77 (1999) (arguing that the moral point of view requires hostility to outcome disparity driven purely by moral luck). But cf. John C.P. Goldberg & Benjamin C. Zipursky, Tort Law and Moral Luck, 92 CORNELL L. REV. 1123, 1131-32 (2007) (explaining the rationale for allowing luck to affect outcomes in typical tort actions involving civil recourse for compensation).
196. a few years ago, voters passed an initiative to curtail California's private attorney general regime for ferreting out unfair business conduct; that law did not restrict standing to those injured by the conduct. See Jordan Rau, Key Ballot Measures Go Governor's Way, L.A. TIMES, Nov. 3, 2004, at A1.
197. Might a PAG violate the terms of Philip Morris? Technically speaking, a PAG-enforcement system contemplates punishing a defendant for harms to nonparties to the litigation. See Philip Morris USA v. Williams, 127 S. Ct. 1057, 1063 (2007). Nonetheless, my sense is this would be an incorrect inference to draw. The PAG is not suing to recover for the harm to the victim, but rather to initiate an intermediate sanction for the defendant's wrongful conduct, and is doing so as an informally deputized agent of the state. Moreover, reading Philip Morris to suggest that it precludes a PAG scheme could suggest that the decision also precludes the state from punishing a defendant if the state is not a direct victim. Since that conclusion is inconsistent with a settled convention that the state could properly initiate punishment proceedings, it suggests a misreading of Philip Morris. The real goals of Philip Morris are to ensure that defendants can avoid duplicative punishments for the same wrong to the same victim and that defendants have an opportunity to present defenses to the wrong being adjudicated. The PAG scheme I have described is consistent with those goals.
198. Markel, How Should Punitive Damages Work?, supra note 20.
199. See Chapman & Trebilcock, supra note 59, at 744.
200. See Jennifer M. Collins, Ethan J. Leib, & Dan Markel, Punishing Family Status, 88 B.U. L. REV. 1327, 1368 (2008) (discussing a liberal minimalism approach to scrutinize criminal law legislation); Ethan J. Leib, Dan Markel, & Jennifer M. Collins, Voluntarism, Vulnerability, and Criminal Law: A Response to Professors Hills and O'Hear, 88 B.U. L. REV. 1449, 1459 (2008) (elaborating liberal minimalism approach).
201. See generally Larry Laudan, The Social Contract and the Rules of Trial Procedure (Feb. 25, 2008) (unpublished manuscript), available at http://ssrn.com/abstract=1075403 (arguing that an increased emphasis on convicting the guilty, as opposed to the current emphasis on protecting the innocent from false convictions, could have huge crime reduction effects without unduly increasing the number of false convictions).
202. Although criminal laws not targeting "fundamental rights" are only subjected to rational basis scrutiny under the Constitution, there are good reasons to think that a coercive condemnatory deprivation should trigger heightened scrutiny. See Douglas Husak, The Criminal Law as Last Resort, 24 OXFORD J. LEGAL STUD. 207, 211 (2004).
203. See Markel, Against Mercy, supra note 19, at 1453-64 (explaining the retributivist and liberal case against clemency systems encouraging or permitting unwarranted sentencing outcome disparity); Dan Markel, Luck or Law? The Constitutional Case Against Indeterminate Sentencing (unpublished manuscript, on file with author) (developing constitutional argument for same position as above); see also ROBINSON, supra note 130, at 62-66 (explaining why there might be crime-control benefits accruing from such evenhandedness across defendants).
204. Cf. Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 46-48 (1991) (O'Connor, J., dissenting) (arguing that the Court should have held that the Alabama punitive damages scheme, which allows juries virtually unfettered discretion to impose penalties on defendants, violates Due Process).
205. Exxon Shipping Co. v. Baker, 128 S. Ct. 2605, 2627 (2008) ("Thus, a penalty should be reasonably predictable in its severity, so that even Justice Holmes's 'bad man' can look ahead with some ability to know what the stakes are in choosing one course of action or another. And when the bad man's counterparts turn up from time to time, the penalty scheme they face ought to threaten them with a fair probability of suffering in like degree when they wreak like damage.") (citation omitted).
206. Professor Mark Geistfeld has recendy articulated a different strategy worth considering in cases involving fatal risks. See Mark A. Geistfeld, Punitive Damages, Retribution, and Due Process, 81 S. CAL. L. REV. 263 (2008) (advocating use of government regulatory data and methodologies for monetizing fatal risks). I also acknowledge that a multiplier of compensatory damages may permissibly be used for wrongs involving purely financial harms. See infra note 181. Taken together, these would be plausible alternative measures to achieve some of the goals of the proposed fines based on reprehensibility and wealth.
207. See supra text accompanying notes 131-32.
208. Retributivists, however, might differ on whether enhancements for past misconduct should apply. My own view is that enhancements are justified for previously adjudicated misconduct. See Dan Markel, Connectedness and Its Discontents: The Difficulties of Federalism and Criminal Law, 4 OHIO ST. J. CRIM. L. 573, 575-76 (2007) (presenting the virtues of a system in which a state applies sentence enhancements for recidivism based on prior outof-state convictions); Dan Markel, Retribution and Recidivism passim (unpublished manuscript, on file with author).
209. See Cass R. Sunstein et al., Predictably Incoherent Judgments, 54 STAN. L. REV. 1153, 1172-73 (2002).
210. Id. at 1173-78.
211. Id. at 1171.
212. Id.
213. See id. at 1179.
214. See Sunstein et al., supra note 13, at 2074.
215. See, e.g., Neil Vidmar, Experimental Simulations and Tort Reform: Avoidance, Error, and Overreaching in Sunstein et al. 's Punitive Damages, 53 EMORY L.J. 1359, 1366 (2004).
216. See Cass R. Sunstein, On the Psychology of Punishment, 11 SUP. CT. ECON. REV. 171, 178 (2004).
217. Markel, Punitive Damages and Complex Litigation, supra note 20.
218. Mathias v. Accor Econ. Lodging, Inc., 347 F.3d 672, 677-78 (7th Cir. 2003) (Posner, J.) ("'[N]et worth' is not the correct measure of a corporation's resources. It is an accounting artifact that reflects the allocation of ownership between equity and debt claimants. A firm financed largely by equity investors has a large 'net worth' (= the value of the equity claims), while the identical firm financed largely by debt may have only a small net worth because accountants treat debt as a liability.").
219. See BUREAU OF JUSTICE ASSISTANCE, HOW TO USE STRUCTURED FINES (DAY FINES) AS AN INTERMEDIATE SANCTION 1 (1996), available at http://www.ncjrs.gov/pdffiles/156242.pdf; NORA V. DEMLEITNER ET AL., SENTENCING LAW AND POLICY: CASES, STATUTES, AND GUIDELINES 598-99 (2d ed. 2007). Another way we use wealth in the criminal justice system is to scale the amount of bail required to the value of the defendant's assets.
220. See BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 615 (1996) (Ginsburg, J., dissenting) (listing sixteen states that cap punitive damages in general as a function of compensatory damages).
221. This issue is admittedly less of a concern when defendants' misconduct only threatens financial injury. In that context, a structure of retributive damages tethered to compensatory damages does not encourage defendants to seek out the poor as their victims except to the extent that the poor are also less likely to seek and gain redress through the tort system.
222. Of course, this might raise questions about whether compensatory damages are also sending these false signals of unequal worth. But using Geistfeld's approach in the realm of compensatory damages might ameliorate that problem in at least some cases. See Geistfeld, supra note 166, at 284-95 (advocating the use of government regulatory data and methodologies to quantify social costs).
223. *378 ("[The] quantum, in particular, of pecuniary fines neither can, nor ought to be, ascertained by any invariable law. The value of money itself changes from a thousand causes; and at all events, what is ruin to one man's fortune, may be a matter of indifference to another's."); Perry, supra note 14, at 188 n. 57 ("Imposing a $1,000 fine on a hard working proletarian may be enough as punishment for accidentally injuring the property of another, but it will not be enough if the injurer is a very wealthy man who will not feel the loss of $1,000.").
224. See Mathias v. Accor Econ. Lodging, Inc., 347 F.3d 672, 677 (7th Cir. 2003).
225. See CGB Occupational Therapy, Inc. v. RHA Health Servs., Inc., 499 F.3d 184, 192 (3d Cir. 2007) ("Wealth is also relevant because '[a] rich defendant may act oppressively and force or prolong litigation simply because it can afford to do so and a plaintiff may not be able to bear the costs and the delay.'") (quoting Cont'l Trend Res., Inc. v. OXY USA Inc., 101 F.3d 634, 642 (10th Cir. 1996) (alteration in original)).
226. But cf. Kenneth S. Abraham & John C. Jeffries, Jr., Punitive Damages and the Rule of Law: The Role of Defendant's Wealth, 18 J. LEGAL STUD. 415, 421-24 (1989).
227. Gombos v. Ashe, 322 P. 2d 933, 940 (Cal. App. 1958).
228. In this respect, the plan ameliorates the primary arbitrariness concerns raised by scholars about having evidence of the defendant's financial condition admitted into trial. See generally Abraham & Jeffries, supra note 186, at 421-24.
229. But cf. Adam J. Kolber, The Subjective Experience of Punishment, 109 COLUM. L. REV. (forthcoming 2009) (manuscript at 40-41, on file with author) (arguing for a system of punishment that takes into account the subjective experience of the particular offender). Chad Flanders and I are writing a paper responsive to this line of inquiry, tentatively entitled Must Retributivism Care About the Subjective Experience of Punishment'?
230. See supra notes 10-11 and accompanying text.
231. See infra Part III.B. 3.
232. See Abraham & Jeffries, supra note 186, at 423; see also Zazú Designs v. L'Oréal, S.A., 979 F. 2d 499, 508-09 (7th Cir. 1992) (Easterbrook, J.).
233. See, e.g., Brief Amicus Curiae of the Business Roundtable in Support of Appellant Urging Reversal, White v. Ford Motor Co., 500 F.3d 963 (9th Cir. 2005) (No. 05-15655) (arguing that use of shareholder equity in determining punitive damages violates defendant's Due Process rights).
234. Id. at 7 n. 1 (citing Bell v. Clackamas County, 341 F.3d 858, 868 (9th Cir. 2003)); see also Bell, 341 F.3d at 868 (noting that it may be "appropriate to reduce the punitive damages awards as so 'grossly excessive' in violation of due process on the basis of the individual defendants' ability to pay").
235. If a defendant committed grave misconduct and then restructured its finances to make it appear that it cannot pay its tab, the courts might adjust the retributive damages based on the defendant's wealth or value at the time the misconduct occurred.
236. See Abraham & Jeffries, supra note 186, at 423.
237. Cf. Zazú Designs, 979 F. 2d at 508-09 (excoriating uncritical use of defendant's wealth to assess punitive damages).
238. I address the punishment of entities at further length in the third installment of this series: Markel, Punitive Damages and Complex Litigation, supra note 20.
239. E.g., Honda Motor Co. v. Oberg, 512 U.S. 415, 432 (1994) ("[T]he presentation of evidence of a defendant's net worth creates the potential that juries will use their verdicts to express biases against big businesses, particularly those without strong local presences.").
240. See supra note 123; see also sources cited supra note 20.
241. See Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 21-22 (1991) (finding that juries may consider the wrongful conduct's profitability to the defendant in determining punitive damage awards).
242. See supra note 11 and accompanying text.
243. See supra Part LB.
244. See Markel, How Should Punitive Damages Work?, supra note 20, Part II.
245. See Thomas H. Koenig, The Shadow Effect of Punitive Damages on Settlements, 1998 WIS. L. REV. 169, 172 ("The empirical evidence suggests that the business community's fear of runaway punitive damages is exaggerated. However, what litigators 'define as real, becomes real in their consequences.' A belief that punitive damages are 'out of control' and randomly assessed may create a self-fulfilling prophesy as parties negotiate claims according to their perceptions of the populist behavior of juries."); see also Baker, supra note 117, passim (finding that the possibility of punitive damage affects how lawyers approach their cases).
246. The PAG plaintiffs who represent themselves pro se would have to do the same and face the same exposure if they lost; but if they won, the PAG pro se plaintiffs would collect comparable reasonable fees and expenses as well as a flat finder's award, as discussed in the next sub-section.
247. For example, if a state gives either all or most of the retributive damages award to plaintiffs and their lawyers, it should recognize that these schemes tend to reward plaintiffs and their lawyers based on the wealth of the injurer. This exacerbates the distortionary effect on which cases are brought against whom. Moreover, most split-recovery schemes do not do much to curtail the collusion risks associated with setdement.
248. Notice, however, that while this proposal introduces an apparent asymmetry between fines based on percentages of defendant's wealth and flat fee awards to plaintiffs, the goal behind both these techniques is to reduce the relevance of the financial position of the offender from the perspective of retributive justice.
249. See Markel, supra note 20, Part IV.
250. This would be in contrast to those jurisdictions that permit claims for punitive damages only after a hearing. See Rustad, supra note 31, at 1313.
251. When the state settles with defendants, they will have to make a formal record of that settlement and its scope to prevent PAGs from needlessly filing suit. PAGs will have to check these records before they can proceed with their suit. By including in the Class Action Fairness Act (CAFA) a provision that requires defendants to notify the state attorneys general of settlements affecting citizens of their state, Congress has created an example from which we can emulate or depart for the retributive damages structure. 28 U.S.C. § 1715 (2006). For a trenchant analysis of this CAFA provision, see Catherine M. Sharkey, Settlement Notice Provision: Optimal Regulatory Policy?, 156 U. PA. L. REV. 1971, 1991-98 (2008).
252. See supra note 123.
253. See, e.g., John C. P. Goldberg, The Constitutional Status of Tort Law: Due Process and the Right to a Law for the Redress of Wrongs, 115 YALE L.J. 524, 590-626 (2006) (arguing for recognition of a right to a body of law that empowers people to seek redress against those who have wronged them).
254. See Stephen D. Sugarman, Doing Away with Tort Law, 73 CAL. L. REV. 555, 642-64 (1985). Professor Sugarman's preference for abolishing the tort system is consistent with retention of an improved punitive damages scheme. See id. at 660.
255. In principle, I have no objection to using retributive damages funds for other socially valuable purposes, but the legitimacy of the practice is likely enhanced if the funds go to law enforcement (broadly understood) rather than, say, legislative pay raises. But this is one area where the CCR underdetermines the policy outcome and other considerations are properly raised.
256. Eric Kades, Windfalls, 108 YALE L.J. 1489, 1564 (1999).
257. Id.
258. See Markel, How Should Punitive Damages Work?, supra note 20, Part III.
259. Those concerned about federalism and reducing Type I errors of over-punishment in complex cases will find some comfort in the subsequent installments of this project. See sources cited supra note 20.
260. See supra note 123.
261. See Colby, supra note 11, (manuscript at 25-66) (arguing that punitive damages are a legal form of private revenge); Galanter & Luban, supra note 16, at 1432-38; Sebok, supra note 13, at 1006-29 (arguing that punitive damages law is best explained by concepts of victim vindication and legalized revenge); Goldberg, supra note 16; Zipursky, supra note 16, at 733-40 (arguing that punitive damages law makes sense based in part on the notion that victims are entitled to seek recourse against their injurers).
262. See Markel, How Should Punitive Damages Work?, supra note 20, Part III.
263. See Galanter & Luban, supra note 16, at 1436-40.
264. Consider the following: crimes are often prosecuted because private parties have come forward and reported their status as victims, survivors, allies of a victim, or witnesses to a crime. In this respect, a private party seeking retributive damages against another person is not differendy situated from the private party seeking state punishment of another person for his unlawful action. They are both complainants. Not only may private parties serve as complainants in the criminal law, they also may serve as facilitators for enforcing public laws. The government often encourages "private law enforcement" by providing bounties or rewards for information leading to the capture or conviction of offenders. Under the scheme here, the civil system would do something similar by making a bounty available for plaintiffs as part of the retributive damages structure. Cf. e.g., Hambarian v. Superior Court, 44 P. 3d 102, 104 (Cal. 2002) (victim paid for an accountant to be used by the prosecutor's office); Commonwealth v. Ellis, 708 N.E. 2d 644, 649 (Mass. 1999) (upholding a statutory regime requiring funding by the insurance industry to root out insurance fraud); see also, e.g., WIS. STAT. ANN. § 968.02 (West 2007) (providing for privately initiated criminal complaint); W. VA. CODE ANN. §§ 48-27-902, 62-3-39a (Lexis- Nexis 2004) (same); State v. Culbreath, 30 S.W. 3d 309, 314 (Tenn. 2000) (noting that "many jurisdictions still allow a private attorney to be retained or appointed to assist in the prosecution of a criminal case").
265. See, e.g., ARIZ. REV. STAT. ANN. § 13-4408 (West 2001). See generally DOUGLAS E. BELOOF ET AL., VICTIMS IN CRIMINAL PROCEDURE (2d ed. 2006).
266. MARC L. MILLER & RONALD F. WRIGHT, CRIMINAL PROCEDURES: PROSECUTION AND ADJUDICATION 165 (3d ed. 2007) ("Throughout much of the eighteenth and nineteenth centuries, it was common for private citizens to bring complaints to a grand jury or a magistrate, and to hire private attorneys to assist the public prosecutor or to prosecute the criminal case alone. Only at the turn of the twentieth century did the public prosecutor become the primary method for initiating criminal charges."); Morrison, supra note 143, at 601-02 (noting that "privately initiated criminal prosecutions" have long been practiced in this country).
267. Gertz v. Robert Welch, Inc., 418 U.S. 323, 350 (1974).
268. Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 47 (1991) (O'Connor, J., dissenting).
269. Exxon Shipping Co. v. Baker, 128 S. Ct. 2605, 2633 n. 27 (2008); Philip Morris USA v. Williams, 127 S. Ct. 1057, 1062 (2007).
270. See generally JEFFREY REIMAN, THE RICH GET RICHER AND THE POOR GET PRISON: IDE OLOGY, CRIME, AND CRIMINAL JUSTICE (8th ed. 2007) (discussing the obstacles to securing punishment against the wealthy and powerful).
271. For now, I am using the term "white-collar" misconduct here somewhat loosely for reasons Professor Stuart Green correctly adumbrates. See STUART P. GREEN, LYING, CHEATING, AND STEALING: A MORAL THEORY OF WHITE-COLLAR CRIME 14-20 (2006).
272. See Darryl K. Brown, The Problematic and Faintly Promising Dynamics of Corporate Crime Enforcement, 1 OHIO ST. J. CRIM. L. 521, 526-28 (2004).
273. See, e.g., William J. Stuntz, The Distribution of Fourth Amendment Privacy, 67 GEO. WASH. L. REV. 1265, 1267 (1999) ("Different crimes are committed by different classes of criminals. As it happens, the kinds of crimes wealthier people tend to commit require greater invasions of privacy by the police to catch perpetrators. By raising the cost of the tactics that most intrude on privacy, Fourth Amendment law lowers the cost of other tactics, and those are the tactics that are most useful in uncovering the crimes of the poor.").
274. Brown, supra note 232, at 528 n. 16 (quoting Kurt Eichenwald, White-Collar Defense Stance: The Criminal-less Crime, N.Y. TIMES, Mar. 3, 2002, § 4, at 3).
275. See Galanter & Luban, supra note 16, at 1440-45.
276. David G. Owen, Civil Punishment and the Public Good, 56 S. CAL. L. REV. 103, 103 & n. 4 (1982) (stating that criminal law coverage is "spotty, to say the least" in some areas and "[m]anufacturing decisions" are "largely beyond the reach of the criminal law").
277. For examples of this, see KOENIG & RUSTAD, supra note 61, at 82-101; Owen, supra note 1, at 1325-61.
278. Galanter & Luban, supra note 16, at 1441.
279. See Grimshaw v. Ford Motor Co., 174 Cal. Rptr. 348, 382-83 (Cal. Ct. App. 1981) ("Governmental safety standards and the criminal law have failed to provide adequate consumer protection against the manufacture and distribution of defective products. Punitive damages thus remain as the most effective remedy for consumer protection against defectively designed mass produced articles. They provide a motive for private individuals to enforce rules of law and enable them to recoup the expenses of doing so which can be considerable and not otherwise recoverable.") (citations omitted). For an overview of Grimshaw, see DAVID LUBAN, LAWYERS AND JUSTICE: AN ETHICAL STUDY 206-13 (1988). But see Gary T. Schwartz, The Myth of the Ford Pinto Case, 43 RUTGERS L. REV. 1013, 1020-26 (1991) (addressing misconceptions about the Ford documents in the Pinto case).
280. Galanter & Luban, supra note 16, at 1441. Of course, even assuming Schwartz's debunking of the specifics of the Pinto case is accurate, see supra note 239, at 1020-35, the point Galanter & Luban are making might still apply in other contexts.
281. See TIMOTHY D. LYTTON, HOLDING BISHOPS ACCOUNTABLE: HOW LAWSUITS HELPED THE CATHOLIC CHURCH CONFRONT CLERGY SEXUAL ABUSE 42-54 (2008).
282. See PHILIP JENKINS, PEDOPHILES AND PRIESTS: ANATOMY OF A CONTEMPORARY CRISIS 14 (1996) ("Before 1984, there was a conspicuous lack of public agencies with the desire or ability to intervene officially in cases, and police and prosecutors were usually reluctant to offend so powerful a constituent as the local Catholic church.").
283. See LYTTON, supra note 241, at 49-54 (demonstrating that the publicity surrounding certain sexual abuse cases correlates to increases in new case files).
284. Id.
285. See George J. Stigler, The Theory of Economic Regulation, 2 BELL J. ECON. & MGMT. SCI. 3, 3 (1971); see also THEODORE J. LOWI, THE END OF LIBERALISM: THE SECOND REPUBLIC OF THE UNITED STATES 77-78, 90-91 (2d ed. 1979) ("The Departments of Commerce and Labor... are organized around an identifiable sector of the economy and are legally obliged to develop and maintain an orientation toward the interests that comprise this sector."); cf. Abel, supra note 61, at 535-46 (explaining that disorganized individuals lose to organized special interests in the making of tort law).
286. See KOENIG & RUSTAD, supra note 61, at 175-76 (criticizing the decades-long legacy of lax oversight by Consumer Product Safety Commission and other safety-regulating agencies such as OSHA and the FDA); STEPHANIE MENCIMER, BLOCKING THE COURTHOUSE DOOR: HOW THE REPUBLICAN PARTY AND ITS CORPORATE ALLIES ARE TAKING AWAY YOUR RIGHT TO SUE passim (2006) (describing the role of the OCC in blocking state-level consumer protection activity); Gardiner Harris, Advisers Say F.D.A.'s Flaws Put Lives at Risk, N.Y. TIMES, Dec. 1, 2007, at A12 (discussing a report blasting the inadequacy of the FDA's resources to ensure public health regulation); see also David Barstow, U.S. Rarely Seeks Charges for Deaths in Workplace, N.Y. TIMES, Dec. 22, 2003, at A1 (reporting the failure of OSHA to prosecute employers and others responsible for workplace deaths).
287. See Stephen Labaton, Businesses Seek New Protection on Legal Front, N.Y. TIMES, Oct. 29, 2006, at A1 (quoting former SEC Chairman Harvey Goldschmid); see also J.I. Case Co. v. Borak, 377 U.S. 426, 432 (1964).
288. See KENNETH MANN, DEFENDING WHITE-COLLAR CRIME: A PORTRAIT OF ATTORNEYS AT WORK 4, 8-13, 22-23, 200, 204, 218, 231 (1985) (describing advantages that white-collar defense lawyers have over street-crime defense lawyers).
289. See Galanter & Luban, supra note 16, at 1441.
290. See KOENIG & RUSTAD, supra note 61, at 176 ("The tort system ensures that Americans need not depend solely upon the government to enforce product safety.").
291. Cf. Tom Baker, Blood Money, New Money and the Moral Economy of Tort Law in Action, 35 LAW & SOC'Y REV. 275, 314 (2001) (showing that plaintiffs' lawyers are already prone to settling quickly for whatever coverage liability insurance provides).
292. See Brown, supra note 232, at 524 ("White-collar wrongdoing poses far greater barriers to government investigation and information gathering efforts.").
293. This structure will admittedly not work as well in practice against the non-wealthy and relatively powerless for reasons illuminated by Professor Tom Baker's research: plaintiffs' lawyers are reluctant to take cases where there is no liability insurance or deep pocket to pay the damages. See Baker, supra note 117, at 219-20, 222; see also Tom Baker, Liability Insurance as Tort Regulation: Six Ways that Liability Insurance Shapes Tort Law in Action, 12 CONN. INS. L.J. 1, 4-6 (2005) ("Liability by itself is not enough. The defendant must have the ability to pay.").
294. Cf. Mathias v. Accor Econ. Lodging, Inc., 347 F.3d 672, 677 (7th Cir. 2003) (noting that a defendant's wealth permits it "to mount an extremely aggressive defense against suits such as this and by doing so to make litigating against it very costly").
295. See Mann, supra note 248, passim.
296. See GREEN, supra note 231, at 28-29 (explaining that white-collar defense teams are particularly skilled at "exploiting the moral ambiguity of white-collar crime").
297. Galanter & Luban, supra note 16, at 1443 (summarizing findings in MANN, supra note 248, at 3-18, 231-40); see also John Braithwaite & Gilbert Geis, On Theory and Action for Corporate Crime Control, in ON WHITE-COLLAR CRIME 189, 189-94 (Gilbert Geis ed., 1982) (discussing difficulties of prosecuting white collar crime); Brown, supra note 232, at 526-27 (same).
298. See Kathleen F. Brickey, In Enron's Wake: Corporate Executives on Trial, 96 J. CRIM. L. & CRIMINOLOGY 397, 419 (2006) (concluding that in recent years, the government has prosecuted many corporate fraud cases and has "enjoy[ed] a respectable, if not spectacular, conviction rate"). Since 2002, the federal government has established the Corporate Fraud Task Force; additionally, the Sarbanes-Oxley Act both enhanced penalties under federal sentencing laws for existing crimes of corporate misconduct and created new criminal offenses. See Christine Hurt, The Undercivilization of Corporate Law, 33 J. CORP. L. 361, 373-75, 378-79 (2008).
299. See Hurt, supra note 258, at 404 (noting that the value to government of charging conspiracy "cannot be overstated").
300. See Samuel W. Buell, Criminal Procedure Within the Firm, 59 STAN. L. REV. 1613, 1616 (2007). But see Press Release, Dep't of Justice, Justice Department Revises Charging Guidelines for Prosecuting Corporate Fraud (Aug. 28, 2008), available at http://www.usdoj.gov/opa/pr/2008/August/08-odag-757.html (announcing revision of federal guidelines for prosecuting corporate misconduct that alter practices discussed in Buell's article).
301. Hurt, supra note 258, at 364-65 ("Due to incremental changes in both federal and state law, victims of corporate misconduct, former and current shareholders, face substantial obstacles in obtaining relief based on investor losses, which are increasingly seen as foreseeable costs of investing in a risky environment.").
302. See id. at 371-73.
303. Id.
304. See Galanter & Luban, supra note 16, at 1443 (citing a study by Amitai Etzioni of Fortune 500 companies).
305. See Cary Segall, Bill Would Ease Punitive Damages, WIS. ST. J., Nov. 29, 1987, at 12 (referenced in Galanter & Luban, supra note 16, at 1426-27).
306. See id.
307. See KOENIG & RUSTAD, supra note 61, at 69-101 (relating several cases that demonstrate the ubiquity of the low/high problem).
308. For instance, the federal government only introduced sentencing guidelines for organizations in 1991. Before the sentencing guidelines were introduced, most federal statutes did not distinguish the amount of fine based on whether a defendant was a poor individual or a wealthy entity. See Timothy A. Johnson, Note, Sentencing Organizations After Booker, 116 YALE L.J. 632, 641 n. 47 (2006) (citing a report of the Senate Judiciary Committee that notes the existence of "low and inconsistent fines"). The majority of states, however, retain indeterminate sentencing schemes and/or antiquated criminal codes that do not address differences across entities or between individuals and entities.
309. See Hurt, supra note 258, at 373-77 (discussing, for example, criminal provisions of the Sarbanes-Oxley Act and amendments to federal sentencing guidelines aimed at securities fraud).
310. See Assaf Hamdani & Alon Klement, Corporate Crime and Deterrence, 61 STAN. L. REV. (forthcoming 2009) (manuscript at 3, on file with author).
311. See Joseph A. Grundfest, Over Before It Started, N.Y. TIMES, June 14, 2005, at A23 (noting that corporate indictments are very dangerous because "[t]he prosecutor's decision to indict is largely immune from judicial review. The prosecutor acts as judge and jury.... The innocent can therefore be punished as though they are guilty, and penalties imposed in settlements need not bear a rational relationship to penalties that would result at a trial that will never happen."); see also Hamdani & Klement, supra note 270 (manuscript at 18) (noting that because firms can rarely eliminate all wrongdoing, "[a] firm may... go out of business even for a single violation that took place despite its monitoring effort"). Arthur Andersen's demise is a good example. See generally Elizabeth K. Ainslie, Indicting Corporations Revisited: Lessons of the Arthur Andersen Prosecution, 43 AM. CRIM. L. REV. 107, 107 (2006) (describing how the conviction of the firm at trial led to the termination of 28,000 jobs). The indictment of the firm for its role in the Enron debacle precipitated the collapse of the company even though its legal claims were eventually vindicated at the Supreme Court. See Arthur Andersen LLP v. United States, 544 U.S. 696, 708 (2005) (finding erroneous jury instructions and reversing conviction).
312. See Hamdani & Klement, supra note 270 (manuscript at 2).
313. Kathleen F. Brickey, Andersen's Fall from Grace, 81 WASH. U. L.Q. 917, 929 (2003) (citations omitted).
314. INTERIM REPORT OF THE COMMITTEE ON CAPITAL MARKETS REGULATION xii (2006), available at http://www.capmktsreg.org/research.html ("[C]riminal enforcement against companies, in light of the experience of Arthur Andersen, should truly be a last resort reserved solely for companies that have become criminal enterprises from top to bottom.").
315. See, e.g., Larry E. Ribstein, Perils of Criminalizing Agency Costs 2 (U. Ill. L. & Econ. Working Paper No. LE06-021, 2006), available at http://ssra.com/abstract=920140 (discussing the "problems with criminalizing agency costs"); cf. Miriam Hechler Baer, Insuring Corporate Crime, 83 IND. L.J. 1035 (2008) (contending that insurance markets can serve as a way to regulate and reduce corporate misconduct).
316. See Galanter & Luban, supra note 16, at 1444 ("[T]he punitive damages system... stands out as the best hope for protection from wealthy and formidable wrongdoers."); see also Darryl K. Brown, Street Crime, Corporate Crime, and the Contingency of Criminal Liability, 149 U. PA. L. REV. 1295, 1331 (2001) (indicating that some prosecutors are less zealous against white-collar offenders on the assumption that civil sanctions are available and sufficient).
317. Cf. David M. Cutler & Lawrence H. Summers, The Costs of Conflict Resolution and Financial Distress: Evidence from the Texaco-Pennzoil Litigation, 19 RAND J. ECON. 157, 158 (1988) (exploring the economic inefficiency of the Texaco-Pennzoil litigation).
318. With apologies to Michael Cahill. See supra note 95.
319. But see supra note 224.
320. See Gabriel J. Chin, Race, The War on Drugs, and the Collateral Consequences of Criminal Conviction, 6 J. GENDER RACE & JUST. 253, 255 (2003).
321. See Charles T. McCormick, Some Phases of the Doctrine of Exemplary Damages, 8 N.C. L. REV. 129, 130 (1929) (explaining that punitive damages allow for punishment of "minor oppressions and cruelties, which [are] theoretically criminally punishable, but which in actual practice go[] unnoticed by prosecutors occupied with more serious crimes").
322. See Mathias v. Accor Econ. Lodging, Inc., 347 F.3d 672, 676 (7th Cir. 2003) (Posner, J.) ("[O]ne function of punitive-damages awards is to relieve the pressures on an overloaded system of criminal justice by providing a civil alternative to criminal prosecution of minor crimes.").
323. See supra note 123.
324. See Polinsky & Shavell, supra note 8, at 945-47 (explaining how punitive damages serve to encourage market transactions with respect to misconduct). By recognizing the virtue of encouraging market transactions, Polinsky and Shavell are actually straying from the cost internalization paradigm. They recognize that to encourage market transactions, punitive damages must be set substantially higher than the value of the property taken. See id. at 947. But by conceding that, the rationale of encouraging market transactions requires that property rules be viewed with respect, rather than the indifference permitting someone to violate the law so long as he agrees to pay if the victim chooses to sue.
325. See David D. Haddock, Fred S. McChesney, & Menahem Spiegel, An Ordinary Economic Rationale for Extraordinary Legal Sanctions, 78 GAL. L. REV. 1, 20 (1990). If damages were set simply at the level necessary for cost internalization, then that amount would not discourage violations of property rights and the "opportunistic" use of courts. But if the gain is stripped and the condemnation is made through a retributive sanction, the property rights are likelier to be respected by defendants capable of understanding these messages emitted by law. See id. at 20-21.
326. See Richard A. Posner, An Economic Theory of the Criminal Law, 85 COLUM. L. REV. 1193, 1195, 1204 (1985) (explaining that the threat of criminal punishment "makes the completed crime more costly... and therefore less likely to be committed").
327. See id. at 1195 (noting that "because transaction costs are low, the market is a more efficient method of allocating resources than forced exchange").
328. See Hylton, supra note 4, at 423 (advancing a gain-stripping theory of punitive damages when defendant's activity is illicit); Polinsky & Shavell, supra note 8, at 946 ("Copyright violators, for example, will devote resources to copying others' protected material, and copyright owners will take steps to stop such illicit copying. Such efforts are socially wasteful.").
329. See V.S. Khanna, Corporate Criminal Liability: What Purpose Does It Serve?, 109 HARV. L. REV. 1477, 1485-86 (1996) (citation omitted) ("[P]ublic enforcement was necessary to ensure that the corporation and its actors properly internalized the cost of their activities to society."); Kenneth Mann, Punitive Civil Sanctions: The Middleground Between Criminal and Civil Law, 101 YALE L.J. 1795, 1798 (1992) ("[S]ince [punitive civil sanctions] are not constrained by criminal procedure, imposing them is cheaper and more efficient than imposing criminal sanctions.").
330. This rationale has its limits. For example, it does not apply to violations of inalienability rules. Nor does it apply to justify more damages for harms that defendants have hidden or covered up.
331. FRIEDRICH NIETZSCHE, ON THE GENEALOGY OF MORALS 80-81 (Walter Kaufmann & R.J. Hollingdale trans., 1989) (1887).
332. Indeed, even when courts apply a negligence standard, they may not always credit the defendant's personal valuation of the burden associated with taking a given precaution. See Simons, The Hand Formula, supra note 126, at 905.
333. Markel, How Should Punitive Damages Work?, supra note 20.
334. See MILLER & WRIGHT, supra note 226, at 165-74.
335. See id. Such a proposal would be not be constitutionally required, see Heckler v. Chaney, 470 U.S. 821, 837 (1985), but a state could constitutionally or legislatively require prosecutorial staff to provide reasons for declining cases.
336. See infra Appendix.
337. Markel, How Should Punitive Damages Work?, supra note 20.
338. See supra note 39.
339. See supra Part LA.
340. Justice Stevens expressed befuddlement at the line drawn by the majority in Philip Morris between punishing a defendant based on harms to nonparties to the litigation (impermissible) and considering the scope of the defendant's wrongdoing in determining the reprehensibility (permissible). See id. at 1066-67 (Stevens, J., dissenting). The basic idea, however, is evidentiary. Evidence of harm to others could be relevant to determining the defendant's reprehensibility under a Federal Rule of Evidence 404(b)-type analysis; that is, when such evidence establishes "proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident." FED. R. EVID. 404(b).
341. State Farm Mut. Auto Ins. Co. v. Campbell, 538 U.S. 408, 419 ("[T]he most important indicium of the reasonableness of a punitive damages award is the degree of reprehensibility of the defendant's conduct.") (emphasis added).
342. Id. at 418.
343. Id.
344. Id.
345. The empirical data shows that punitive damages awards are rarely awarded and upheld. See, e.g., Vidmar Amicus Brief, supra note 13, at 4-8. Of course, this data is only a moderately useful predictor of the future frequency of retributive damages since the retributive damages scheme significandy reworks current practice.
346. See Nat'l Bank of Monticello v. Doss, 491 N.E. 2d 106, 111-12 (111. App. 1986) (affirming punitive award that was "more than twice defendant's net worth"); In re New Orleans Train Car Leakage Fire Litig., 795 So. 2d 364, 388 (La. App. 2001) (upholding punitive damages award of $850 million or 18 percent of defendant's net worth).
347. State Farm, 538 U.S. at 425.
348. Id. at 418.
349. See Alexandra B. Klass, Punitive Damages and Valuing Harm, 92 MINN. L. REV. 83, 86 (2007) (discussing unvalued harms in various punitive damages cases that look only at compensatory damages).
350. From a cost internalization perspective, what matters is whether there is a probability of defendants avoiding compensating victims for the harms they caused, not the amount of compensatory damages they might pay. See Polinsky & Shavell, supra note 8, at 887-96; see also Hylton, supra note 4, at 454 (explaining that, in light of economic gainstripping theory, the "presumption that the punitive award must stand in some reasonable numerical ratio to the compensatory award... has been harmful").
351. *10-13 (S.D.N.Y. Feb. 23, 2007) (giving an analysis of a 2.8:1 ratio that was essentially limited to whether the punitive award "shock[ed] the conscience of the Court").
352. See, e.g., Bennett v. Am. Med. Response, Inc., 226 Fed. App'x. 725, 728-29 (9th Cir. 2007) (striking down punitive award in an emotional distress case that had a 6.49:1 ratio and remanding for an award "not [to] exceed a 4:1 ratio"); Bach v. First Union Nat'l Bank, 486 F.3d 150, 156 (6th Cir. 2007) (recognizing that although the defendant deserved to be punished for repeated statutory violations, intentionally inflicting emotional distress, and defaming the plaintiff, a 6.6:1 ratio of punitive to compensatory damages should still be reduced to a 1:1 ratio on grounds that plaintiff's compensatory damages award was large); Bridgeport Music, Inc. v. Justin Combs Publ'g, 507 F.3d 470, 487-90 (6th Cir. 2007) (striking down punitive damages award on grounds that 9.5:1 ratio was excessive in light of the large compensatory award, even though defendant acted with malice and deceit); Morris v. Flaig, 511 F. Supp. 2d 282, 309-13 (E.D.N.Y. 2007) (striking down jury award of 20.8:1 in action where, among other tilings, defendant did not fix lead paint problem despite defendant's representations to the contrary); Jet Source Charter, Inc. v. Doherty, 55 Cal. Rptr. 3d 176, 178 (Cal. Ct. App. 2007) (reducing a $26 million punitive damages award for repeated fraud and breach of fiduciary duty to $6.5 million-a 1:1 ratio-because plaintiff's compensatory award was "substantial"); Walker v. Farmers Ins. Exch., 63 Cal. Rptr. 3d 507, 513 (Cal. Ct. App. 2007) (holding that a 1:1 ratio was the constitutional maximum where plaintiff received substantial emotional compensation and award of attorneys' fees, which were compensatory but had a "punitive" effect).
353. See Anthony J. Sebok, After Philip Morris v. Williams: What Is Left of the "Single-Digit" Ratio?, 2 CHARLESTON L. REV. 287, 296 (2008).
354. *6 (Mass. App. June 13, 2007) (affirming 20:1 ratio); Mission Res., Inc. v. Garza Energy Trust, 166 S.W. 3d 301, 319 (Tex. App. 2005) (upholding 20:1 ratio because trespass was "highly unlawful").
355. See Sebok, supra note 313, at 293 (citing cases where court included lawyers' fees as actual damages in calculating ratio); see also Action Marine, Inc. v. Cont'l Carbon Inc., 481 F.3d 1302, 1321 (11th Cir. 2007); Willow Inn, Inc. v. Pub. Serv. Mut. Ins. Co., 399 F.3d 224, 235 (3d Cir. 2005).
356. See Sebok, supra note 313, at 296.
357. See Erwin Chemerinsky, The Constitution and Punishment, 56 STAN. L. REV. 1049, 1051 (2004); Adam M. Gershowitz, Note, The Supreme Court's Backwards Proportionality Jurisprudence: Comparing Judicial Review of Excessive Criminal Punishments and Excessive Punitive Damage Awards, 86 VA. L. REV. 1249, 1252-53 (2000).
358. See, e.g., JUDICIAL COUNCIL OF CAL., CIVIL JURY INSTRUCTIONS § 3940 (June 2008)+ (court may instruct a jury in a non-bifurcated trial that it can consider the defendant's Financial position in figuring the amount of punitive damages.); FLA. STANDARD JURY INSTRUCTIONS (CIVIL) § 2.d. 2 (2007) ("You should consider the... defendant's financial resources."); N.Y. PATTERN JURY INSTRUCTIONS-CIVIL § 2:278 (2008) ('You may also consider the [defendant's] financial position and the impact your punitive damages award will have on [him/her].").
359. Indeed, the Court acknowledged that consideration of wealth was permissible in Pacific Mutual Life Insurance Co. v. Haslip, 499 U.S. 1, 22 (1991).
360. BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 585 (1996).
361. See Redish & Mathews, supra note 13, at 5-6; Grass, supra note 48, at 241-43; Wheeler, supra note 48, at 276-77. To my mind, because the state reserves the adjudication and punishment functions for itself, the scheme of retributive damages as an intermediate sanction sidesteps the basic challenge advanced by Redish and Mathews. Redish and Mathews might insist that public prosecutors have a disinterestedness that private parties do not. See id. at 6. However, for over a hundred years our national legal experience accepted that private parties could initiate and collect criminal fines. See, e.g., Steel Co. v. Citizens for Better Env't, 523 U.S. 83, 127-28 (1998) (Stevens, J., concurring) (explaining the historical role of private parties in the criminal justice system); supra note 226 and accompanying text. Thus, it is hard to understand what makes Redish and Mathews's claim about the requirement of "adversarial neutrality" in the context of punishment a compelling constitutional claim as opposed to a normative claim about the proper allocation of authority to pursue intermediate sanctions on the public's behalf. It will not do to argue that all the safeguards that apply to incarceration also apply to fines. See Redish & Mathews, supra note 13, at 20 (claiming that "the same special constitutional protections apply in criminal cases seeking only the imposition of financial penalties as apply in cases in which imprisonment is at issue"). For one thing, there is no right to counsel for criminal fines, nor is there a right to a jury trial in that context. See generally Argersinger v. Hamlin, 407 U.S. 25 (1972) (holding that counsel is only required where actual imprisonment is imposed); Duncan v. Louisiana, 391 U.S. 145 (1968) (holding that ajury trial is not constitutionally required for cases where penalty is incarceration less than six months). Zipursky provides further reasons for skepticism toward their argument. See Zipursky, supra note 16, at 137-40.
362. See Colby, supra note 11, (manuscript Part IV.A).
363. See Zipursky, supra note 16, at 141-45 (critiquing Colby, supra note 13, regarding the nature of "private wrong"). Colby's more recent efforts are an attempt to overcome some of the criticisms lodged by Professors Sebok, Zipursky, Akhil Amar, Arthur McEvoy, and others. See Brief of Akhil Reed Amar and Arthur McEvoy as Amici Curiae in Support of Respondent at 9 n. 10, Philip Morris v. Williams, 127 S. Ct. 1057 (2007) (No. 05-1256). I offer my critical assessment of Colby's latest effort in Markel, How Should Punitive Damages Work?, supra note 20, at Part III.
364. Markel, How Should Punitive Damages Work?, supra note 20.
365. See sources cited supra note 20.
366. See sources cited supra note 61.
367. Markel, How Should Punitive Damages Work?, supra note 20; Markel, Punitive Damages and Complex Litigation, supra note 20.
368. See generally Philip Morris USA v. Williams, 127 S. Ct. 1057 (2007) (holding that punitive damage awards may not include amounts of harms caused to nonparties). These instructions are a substantially modified version of the kind found in Polinsky & Shavell, supra note 8, at 957-62. In some places, having mostly to do with cost internalization, I expressly borrow the language from their proposed jury instructions. In other places, I borrow language from the Supreme Court.
369. See Markel, How Should Punitive Damages Work?, supra note 20, Part IV; Dan Markel & Gregg Polsky, Taxing Punitive Damages (manuscript in progress, on file with the authors).