How should punitive damages work?

University of Pennsylvania Law Review

Volumn 157, Issue 5, 2009, Pages 1383-1484

  Markel, Dan ^a  

^a FLORIDA STATE UNIVERSITY   (United States)

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EID: 62549088089     PISSN: 00419907     EISSN: None     Source Type: Journal    
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References (490)

1. See Dan Markel, Retributive Damages: A Theory of Punitive Damages as Intermediate Sanction, 94 CORNELL L. REV. 239 (2009) [hereinafter Markel, Retributive Damages].
2. 549 U.S. 346 (2007). In Philip Morris, die Court held diat the Due Process Clause forbids juries from figuring in the harms to nonparties in determining die amount of punitive damages that a defendant must pay. The Court also addressed punitive damages more recendy in Exxon Shipping Co. v. Baker, 128 S. Ct. 2605 (2008). Because the Exxon case was resolved under federal maritime law, however, its significance for this project is not nearly as substantial as the Court's constitutional decision in Philip Morris.
3. Cf. Marc Galanter & David Luban, Poetic Justice: Punitive Damages and Inegal Pluralism, 42 AM. U. L. REV. 1393, 1451 (1993) ("Efficiency plays no role in the normative universe of punitive damages as we conceive of it.").
4. I use the terms "deterrence damages" and "aggravated damages" in ways that might seem idiosyncratic to some readers. Deterrence damages signify those damages meant to facilitate optimal deterrence or "cost internalization," not "complete deterrence." Aggravated damages are meant to account for, and thereby vindicate, that part of a victim's injury, not already compensated in all jurisdictions, for insults to one's personal dignity. See infra Part II.
5. See, e.g., Ciraolo v. City of N.Y., 216 F.3d 236, 244-47 (2d Cir. 2000) (Calabresi, J., concurring) (advocating nonpunitive extracompensatory damages for the sake of cost internalization);
6. Bruce Chapman & Michael Trebilcock, Punitive Damages: Divergence in Search of a Rationale, 40 ALA. L. REV. 741, 805-26 (1989) (discussing cost internalization and aggravated damages for compensation of dignity harms);
7. Thomas C. Galligan, Jr., Augmented Awards: The Efficient Evolution of Punitive Damages, 51 LA. L. REV. 3, 12-13 (1990) (describing cost internalization damages);
8. A. Mitchell Polinsky & Steven Shavell, Punitive Damages: An Economic Analysis, 111 HARV. L. REV. 869, 873-76 (1998) (developing a set of principles for determining cost internalization damages);
9. Catherine M. Sharkey, Punitive Damages as Societal Damages, 113 YALE LJ. 347, 401-02 (2003) (discussing how a "compensatory societal damages" framework improves upon limitations of Polinsky and Shavell's method for ensuring cost internalization) ;
10. Mark A. Geistfeld, Punitive Damages, Retribution, and Due Process, 81 S. CAL. L. REV. 263, 269-74, 296-309 (2008) (conceiving the role of punitive damages primarily in terms of individual victim vindication and proposing methods to ensure that such vindication satisfies due process);
11. AndionyJ. Sebok, Punitive Damages: From Myth to Theory, 92 IOWA L. REV. 957, 961, 1023-29 (2007) (arguing that punitive damages should be regarded as "a form of statesanctioned revenge");
12. Benjamin C. Zipursky, A Theory of Punitive Damages, 84 TEX. L. REV. 105 (2005) (offering a conceptual and interpretive account of punitive damages as victim vindication).
13. More recendy, Tom Colby has joined the group defending a victim vindication interpretation. See Thomas B. Colby, Clearing the Smoke from Philip Morris v. Williams: The Past, Present, and Future of Punitive Damages, 118 YALE LJ. 392, 434 (2008) ("Punitive damages vindicate the dignity of an individual victim by allowing her to punish the defendant for committing a humiliating or insulting tort upon her.").
14. See Cass R. Sunstein et al., Assessing Punitive Damages (with Notes on Cognition and Valuation inlaw), 107 YALE LJ. 2071, 2085 (1998) ("Regrettably, the legal culture lacks a full normative account of the relationship between retributive goals and punitive damages.").
15. My goal in Retributive Damages, supa note 1, was primarily to address that lacuna.
16. See, e.g., Thomas B. Colby, Beyond the Multiple Punishment Problem: Punitive Damages as Punishment for Individual, Private Wrongs, 87 MLNN. L. REV. 583, 643-50 (2003) (arguing that punitive damages for public purposes and without procedural safeguards would be "indistinguishable from criminal punishment") ;
17. Jeffrey W. Grass, The Penal Dimensions of Punitive Damages, 12 HASTINGS CONST. L. Q 241, 242 (1985) ("By punishing defendants radier than compensating plaintiffs [the] purpose [of punitive damages] falls squarely under die ambit of criminal law." (footnote omitted))
18. ¡John Calvin Jeffries, Jr., A Comment on the Constitutionality of Punitive Damages, 72 VA. L. REV. 139, 139 (1986) (noting die lack of procedural safeguards in awarding punitive damages);
19. Malcolm E. Wheeler, The Constitutional Case for Reforming Punitive Damages Procedures, 69 VA. L. REV. 269, 270 & n.5 (1983) (citing sources that discuss the application of criminal procedural safeguards to defendants facing the imposition of punitive damages).
20. See infra Section III.A.
21. Dan Markel, Punitive Damages and Complex Litigation (unpublished manuscript, on file with author) [hereinafter Markel, Punitive Damages]; see also Dan Markel & Gregg Polsky, Taxing Punitive Damages (unpublished manuscript, on file with author) (addressing proper taxation policies associated with this proposed punitive damages scheme and other related tax issues).
22. See Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 25-28 (1991) (Scalia, J., concurring in the judgment) (furnishing a brief history of punitive damages).
23. This Section draws upon the discussion in Part I of Markel, Retributive Damages, supa note 1. Readers familiar with that work may skim or skip this Section.
24. Those seeking a more comprehensive introduction to the topic might also consider looking at Anthony J. Sebok, Punitive Damages in the United States, in PUNITIVE DAMAGES (Helmut Koziol & Vanessa Wilcox eds., forthcoming 2009).
25. See Martin H. Redish & Andrew L. Mathews, Why Punitive Damages Are Unconstitutional, 53 EMORY L.J. 1, 13-16 (2004) (discussing early English cases in which the plaintiff demonstrated a dignitary harm that would therwise remain uncompensated in the absence of exemplary damages).
26. See Exxon Shipping Co. v. Baker, 128 S. Ct. 2605, 2620 (2008) (providing examples of the application of this punitive damages function).
27. Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 438 n.ll (2001).
28. See Andiony J. Sebok, What Did Punitive Damages Do? Why Misunderstanding the History of Punitive Damages Matters Today, 78 CHI.-KENTL. REV. 163, 205 (2003) ("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, n amely the injury of insult that wounds or dishonors.").
29. See, e.g., Cooper Indus., 532 U.S. at 432; Gertz v. Robert Welch, Inc., 418 U.S. 323, 350 (1974) (describing punitive damages as "private fines" designed to punish and deter "reprehensible conduct"). Nevertheless, if a state passed an enabling statute authorizing punitive damages expressly for the purposes of compensating a plaintiff or society, the Supreme Court would probably not say that such purposes are inherendy improper or unconstitutional.
30. Cf. Sharkey, supra note 5, at 391-92 (elaborating a proposal for compensatory societal damages).
31. See, e.g., Exxon Shipping Co., 128 S. Ct. at 2621 (2008) ("[T]he consensus today is that punitives are aimed not at compensation but principally at retribution and deterring harmful conduct.");
32. Philip Morris USA v. Williams, 549 U.S. 346, 352 (2007) ("This Court has long made clear that '[p]unitive damages may properly be imposed to further a State's legitimate interests in punishing unlawful conduct and deterring its repetition.'"
33. (alteration in original) (quoting BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 568(1996))).
34. For those unfamiliar with these terms, under an optimal deterrence or cost internalization regime, a defendant who pays the costs of her tortious activity should be able to continue pursuing that activity. The decision to seek cost internalization for an activity is predicated on a determination that the gains to the defendant are socially licit. The basis for concerns about cost internalization is further described by Judge Calabresi in Ciraolo v. City of New York. See infra note 68.
35. By contrast, complete deterrence endeavors to remove the incentive for the defendant to undertake diat conduct altogether because the gains from such conduct are deemed illicit. See Keith N. HyIton, Punitive Damages and the Economic Theory of Penalties, 87 GEO. LJ. 421, 421 (1998). Complete deterrence is a goal that, if realized, would entail that zero instances of the particular misconduct would occur. Others have used different terms to distinguish between optimal and complete deterrence.
36. See, e.g., GUIDO CALABRESI, THE COSTS OF ACCIDENTS: A LEGAL AND ECONOMIC ANALYSIS 68-69 (1970) (distinguishing between general (permissive) deterrence and specific (prohibitory) deterrence);
37. Robert Cooter, Prices and Sanctions, 84 COLUM. L. REV. 1523, 1524-31 (1984) (distinguishing between the "pricing" and "sanctioning" of different types of behavior). Lasdy, it is worth noting that complete deterrence, which calls for a sentence designed to signal that the conduct is prohibited, should not be confused with complete enforcement, which would call for sufficient resources to reduce the misconduct to zero.
38. See State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 419 (2003) (restating the rule that punitive damages only be awarded where a defendant's conduct is so reprehensible that it justified an award in addition to compensatory damages). The Court has further specified a number of factors that contribute to a determination of reprehensibility.
39. See BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 575-77 (1996) (listing factors that indicate a greater degree of reprehensibility).
40. State Farm, 538 U.S. at 418.
41. Id. at 425.
42. Id. at 428
43. (quoting Gore, 517 U.S. at 575).
44. See Philip Morris USAv. Williams, 549 U.S. 346, 353 (2007).
45. State Farm, 538 U.S. at 421.
46. See Honda Motor Co. v. Oberg, 512 U.S. 415, 432 (1994) (holding that Oregon's denial of adequate judicial review of punitive damages violated the Fourteenth Amendment Due Process Clause).
47. Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 435-36 (2001).
48. See State Farm, 538 U.S. at 416-17.
49. See Markel, Retributive Damages, supra note 1, at 249-53.
50. See Michael L. Rustad, The Closing of Punitive Damages' Iron Cage, 38 LOY. L.A. L. REV. 1297 app. A (2005) (surveying punitive damages practices across states and the District of Columbia).
51. See Markel, Retributive Damages, supra note 1, at 242-43 nn.4-9 (citing different approaches taken by scholars in considering extracompensatory damages).
52. See Polinsky & Shavell, supra note 5, at 897-98 (arguing that courts should use damages determinations to facilitate optimal deterrence by applying the "punitive damages multiplier" developed by the audiors). I recognize that by conflating deterrence with optimal deterrence (or cost internalization), I am implicidy obscuring the work of some economists who view this law through the prism of complete deterrence.
53. See, e.g., Hylton, supra note 18, at 423 (arguing diat the optimal deterrence model should be used in limited cases and that complete deterrence should be the goal in most situations).
54. See infra note 58 for a partial explanation of the reasons for this move.
55. See Polinsky & Shavell, supa note 5, at 887-96 ("[I] fa defendant can sometimes escape liability for the harm for which he is responsible, the proper magnitude of damages is the harm the defendant has caused, multiplied by a factor reflecting the probability of his escaping liability." (emphasis omitted)).
56. But see Keith N. Hylton & Thomas J. Miceli, Should Tort Damages Be Multiplied?, 21 J.L. ECON. & ORG. 388 (2005) (registering skepticism toward the use of the multiplier approach in the context of civil damages based on concerns regarding the supply of lawsuits and the cost of litigation). Professor Sharkey's proposal for compensatory societal damages was designed to address perceived shortcomings with the Polinsky-Shavell model for achieving cost internalization.
57. See Sharkey, supra note 5, at 368-70 (identifying problems with the use of a strict punitive damages multiplier, such as the failure to include cases involving "diffuse" harms). The suggestions for compensating society for defendants' more diffuse harms to society, however, are not likely to survive Philip Morris for reasons similar to the argument that I make about Professor Colby's claims in Part II. That is, notwithstanding the avowedly nonpunitive rationale behind compensatory societal damages, my sense is diat the Supreme Court is unlikely to diink that such an approach satisfies due process because it allows an award of damages for harms against persons or entities that a defendant cannot litigate against specifically.
58. See Michael B. Kelly, Do Punitive Damages Compensate Society?, 41 SAN DIEGO L. REV. 1429, 1433-35 (2004) (raising concerns that Sharkey's proposal will founder on due process grounds).
59. See Sharkey, supra note 5, at 372 n.7l (collecting cases in which courts have expressed their approval of the multiplier approach).
60. See id. at 390-91;
61. see also infra note 91.
62. See, e.g., Colby, supra note 5, at 434;
63. Galanter & Luban, supra note 3, at 1432 (discussing the view that culpably wronging a person expresses that the victim is of less value than the wrongdoer);
64. Geistfeld, supa note 5, at 269-74 (advancing the idea of punitive damages primarily in terms of the private interest in victim vindication of "tort rights");
65. John CP. Goldberg, Tori Law for Federalists (and the Rest of Us): Private Law in Disguise, 28 HARV. J.L. & PUB. POL'Y 3, 7 (2004) ("What is at stake in [punitive damages] is not [a state's] interests in obtaining retribution on behalf of its citizens or in deterring sharp business practices, but the [plaintiffs'] interest in vindicating their rights not to be mistreated in the way that they were.. .. [These rights include] providing [the plaintiffs] with satisfaction-a remedy adequate to acknowledge and avenge [the defendant's] predatory conduct towards them.");
66. Sebok, supa note 5, at 1007-15 ("[T] he private right whose violation grounds [a punitive damages] award is the private right not to have one's dignity violated.") ;
67. Zipursky, supa note 5, at 151-53 (discussing the plaintiffs right "to be punitive" toward a defendant liable for a willful wrong).
68. See Chapman & Trebilcock, supra note 5, at 763 ("Where there is already injury in place that the law recognizes as damages, this added 'insult' to injury would count more accurately as 'aggravated,' than as punitive, damages.").
69. See Kaimipono David Wenger & David A. Hoffman, Nullificatory Juries, 2003 WIS. L. REV. 1115, 1119 (defending the role of juries in "protectfing] us from rule by legal economists" through "relatively unconstrained punitive awards"). Galanter and Luban also endorse (at least implicitly) a jury's imposing punitive damages against a defendant, in a single case, for all the harm that the defendant's misconduct caused persons in similar situations.
70. See, e.g., Galanter & Luban, supra note 3, at 1436-38 (providing examples of "expressive defeat" of defendants through punitive damages). Galanter and Luban also think that judges should extend "great deference" to jury determinations because of juries' special competence in articulating "the community's 'message' through the medium of damages."
71. Id. at 1439. My view circumscribes jury decision making considerably more.
72. See Rustad, supra note 29, at 1301 (characterizing tort reform of punitive damages as "special legislation to help corporate America").
73. See generally THOMAS H. KOENIG & MICHAEL L. RUSTAD, IN DEFENSE OF TORT LAW (2001) (providing a paradigmatic account of the social justice theory of tort law) ;
74. Richard L. Abel, Questioning the Counter-Majoritarian Thesis: The Case of Torts, 49 DEPAUL L. REV. 533 (1999) (arguing that legislatures are beholden to special interests, while courts are more likely to be focused on the common good in the tort law context);
75. see also David F. Pardett, The Republican Model and Punitive Damages, 41 SAN DIEGO L. REV. 1409 (2004) (defending a robust role for juries in punitive damages awards on the basis of republican theory).
76. See Jean Hampton, Correcting Harms Versus Righting Wrongs: The Goal of Retribution, 39 UCLAL. REV. 1659, 1685-98 (1992) (arguing that conduct that expresses disrespect and does damage to "the value of a victim" warrants a punitive response to vindicate the victim's moral worth).
77. See Galanter & Luban, supra note 3, at 1432-35. For reasons that I explained in the first article in this series, I view Galanter and Luban's account of punitive damages as primarily (though not exclusively) a victim vindication account, not a retributive justice account.
78. See Markel, Retributive Damages, supra note 1, at 255 n.62.
79. I note also that a number of other punitive damages scholars, including Professors Colby, Sebok, Zipursky, and Geistfeld, have claimed to be influenced by Professor Hampton's work and, to varying degrees, have identified themselves as interested in developing the re-lationship between punitive damages and retributive justice. My own view is that their interests and values are better described as consistent with "victim vindication," and less so with retributive justice, properly understood as a practice of state punishment interested in developing institutions that promote equality and rule-of-law values in the reduction of Type I and Type II punishment errors. For discussion of my view of the proper role of victims in retributive theory, see, for example, Dan Markel, State, Be Not Proud: A Retributivist Defense of the Commutation of Death Row and the Abolition of the Death Penally, 40 HARV. C.R.-C.L. L. REV. 407, 452-57 (2005)
80. [hereinafter Markel, State, Be Not Proud].
81. See Sebok, supa note 5, at 1005-06 ("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." (footnote omitted));
82. id. at 1028-29 ("[O]ne element of the repair of wrongful losses in tort is the active role of the victim in determining the appropriate remedy for her case of wrongful loss.");
83. Benjamin C. Zipursky, Civil Recourse, Not Corrective Justice, 91 GEO. L.J. 695, 733 (2003)
84. [hereinafter Zipursky, Civil Recourse] ("[T] ortcases ultimately require courts to respond to demands by plaintiffs....");
85. Zipursky,supa note 5, at 152 ("The state permits the plaintiff to seek and to receive [punitive damages], but the state is not in the driver's seat.").
86. See Markel, Retributive Damages, supra note 1, at 247, 266.
87. To its credit, Professor Sebok's state-sanctioned revenge account is consistent with a desire to reduce "piling on" (or Type I overpunishment) errors that occur through introducing evidence of harms to strangers to the litigation. See Sebok, supra note 5, at 1031-35. But Sebok doesn't 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.
88. Similarly, for cases involving fatal risks, the methodology proposed by Professor Geistfeld, see Geistfeld, supra note 5, is helpful in ensuring some evenhandedness across cases involving certain tort victims. That said, this methodology says title about how to reduce the gamut of Type I and Type II errors outside the relatively narrow but important context of victims facing fatal risks; moreover, even in the context of fatal risks, Geistfeld's account is quiet about the need for reducing Type II errors involving nonpunishment.
89. Such Type II errors leathng to underenforcement are rife. See Michael J. Saks, Do We Really Know Anything About the Behavior of the Tort Litigation System-And Why Not?, 140 U. PA. L. REV. 1147, 1183 (1992) ("One of the most remarkable features of the tort system is how few plaintiffs there are. A great many potential plaintiffs are never heard from by the injurers or their insurers.");
90. see also Richard L. Abel, The Real Torts Crisis- Too Few Claims, 48 OHIO ST. L.J. 443 (1987);
91. Marc Galanter, Real World Torts: An Antidote to Anecdote, 55 MD. L. REV. 1093, 1159 (1996) (stating that "relatively few" tort claims are brought to court and that, even if more claims were filed, the tort system may not have the capacity to handle them).
92. See ANDREW VON HIRSCH ET AI., CRIMINAI. DETERRENCE AND SENTENCE SEVERITY: AN ANALYSIS OF RECENT RESEARCH 45-48 (1999) (examining empirical literature and noting that there exists a correlation between increased certainty of punishment and decreased crime rates but that the evidence showing a correlation between severity of punishment and crime rates is comparatively weaker) ;
93. Jeffrey Grogger, Certainty vs. Severity of Punishment, 29 ECON. INQUIRY 297, 308 (1991) ("The results point to large deterrent effects emanating from increased certainty of punishment, and much smaller, and generally insignificant effects, stemming from increased severity of sanction.").
94. Punitive damages might be thought to pursue a mixture of other goals as well. See generally Dorsey D. Ellis, Jr., Fairness and Efficiency in the Law of Punitive Damages, 56 S. CAL. L. REV. 1, 3 (1982) ("At least seven purposes for imposing punitive damages can be gleaned from judicial opinions and the writings of commentators: (1) punishing the defendant; (2) deterring the defendant from repeating the offense; (3) deterringothers from committing an offense; (4) preserving the peace; (5) inducing private law enforcement; (6) compensating victims for otherwise uncompensable losses; and (7) paying the plaintiff's attorneys' fees.").
95. Ellis, however, subjects these possible purposes to close scrutiny and finds some of them lacking. See id. at 76.
96. While I adopt certain scholars' views on how to conceptualize and implement what I am calling aggravated and deterrence damages, I don't necessarily present the most comprehensive or sophisticated version of those particular approaches. This caveat seems necessary in light of the fact that there are disagreements within the cost internalization school and within the victim vindication camp over various details. In designing a pluralistic structure, I have simply tried to draw on the ideas that seemed most feasible and attractive for a post-Philip Morris world of extracompensatory damages.
97. See Markel, Retributive Damages, supra note 1, at 304-09.
98. See Galanter and Luban, supra note 3, passim.
99. See Colby, supra note 5, at 433 ("[T] he desire for revenge burns bright in the human heart-too bright for the law to ignore.");
100. Sebok, supra note 5, at 1031 ("[S]tate-sanctioned revenge is the best interpretation of [punitive damages].").
101. See Wenger & Hoffman, supra note 37, at 1138-40 (explaining that jurors often reject efficiency rationales for punitive damages and instead base their awards in part on their level of moral outrage).
102. See Markel, Retributive Damages, supra note 1, pt. II. My prior works have addressed how this theory applies to other policy issues.
103. See generally Dan Markel, Against Mercy, 88 MINN. L. REV. 1421 (2004)
104. [hereinafter Markel, Against Mercy] (providing a retributivist critique of sites of unreviewable discretion for grants of mercy by executive figures);
105. Dan Markel, Are Shaming Punishments Beautifully Retributive? Retributivism and the Implications for the Alternative Sanctions Debate, 54 VAND. L. REV. 2157 (2001) (considering alternative criminal sanctions through the lens of retributive justice theory);
106. Markel, State, Be Not Proud, supra note 40, at 457-77 (arguing that retributive justice is incompatible with the deadi penalty);
107. Dan Markel, The Justice of Amnesty? Towards a Theory of Retributivism in Recovering States, 49 U. TORONTO L.J. 389, 392 (1999) (arguing that the particularized amnesty utilized by some recovering states as part of a transitional justice program can be "compatible with justice, even when justice is understood as retributive in nature").
108. More recendy, I have extended this theory to the Supreme Court's Eighth Amendment jurisprudence, see Dan Markel, Executing Retributivism: Panetti and the Future of the Eighth Amendment, 103 NW. U. L. REV. (forthcoming Spring 2009), available at http://srn.com/abstract=1263683 (arguing that the Supreme Court's holding in Panetti v. Quarterman, 551 U.S. 930 (2007), is predicated on an understanding of retributive punishment as a communicative action directed at the offender and that this conception of punishment diminishes the constitutional justification for the death penalty). I also have extended the theory to the role that a defendant's family status should play in her criminal liability and punishment.
109. See DAN MARKEL, JENNIFER M. COLLINS & ETHAN J. LEIB, PRIVILEGE OR PUNISH: CRIMINAL JUSTICE AND THE CHALLENGE OF FAMILY TIES (2009) (examining and often challenging the current use of family status in the criminal justice system).
110. The victim vindication accounts say little about how to achieve consistency and predictability across cases. Furthermore, the dominant cost internalization accounts do not typically require inquiry into and judgment of the reprehensibility of the defendant's actions, so cost internalization proponents are not really interested in communicating condemnation to offenders. See, e.g., Galligan, supra note 5;
111. Polinsky & Shavell, supra note 5.
112. In Retributive Damages, I explained why and how nonvictims should have a role in facilitating the punishment of misconduct that involved harmless wrongdoing or wrongs that victims themselves did not seek to vindicate (fully).
113. See Markel, Retributive Damages, supra note 1, at 279-86.
114. See generally Paul H. Robinson & Robert Kurzban, Concordance and Conflict in Intuitions of Justice, 91 MLNN. L. REV. 1829 (2007) (providing research on widely shared intuitions regarding the scaling of reprehensibility);
115. Sunstein et al., supra note 6, at 2077-78 (noting consistency in moral judgments but inconsistency in translating outrage into dollars).
116. Legislatures and courts might also look to Michael Welner's research on the "Depravity Scale." See Michael Welner, The Depravity Scale, http:// www.depravityscale.org (last visited Mar. 15, 2009).
117. This scaling approach addresses some of the concerns raised by Cass Sunstein. See, e.g., Cass R. Sunstein, On the Psychology of Punishment, 11 SUP. CT. ECON. REV. 171, 179-81 (2004) (recognizing the value of guidelines and benchmarks for improved cognition and fairness in punitive damages awards across cases).
118. Cf. Markel, Retributive Damages, supra note 1, at 290-96 (offering rationales for "scaling fines to the defendant's financial position").
119. The gain-stripping aspect of the retributive damages structure makes this approach broadly consistent with the "complete deterrence" approach advocated by economists like Keith Hylton. See Hylton, supra note 18, at 464-67 (stressing that anoptimal-penalty system would eliminate the prospect of gain by the offender) ;
120. see also David D. Haddock et al., An Ordinary Economic Rationale for Extraordinary Legal Sanctions, 78 CAL. L. REV. 1, 20 (1990) ("Enforcing property rules requires stripping all gain (or more) from a taking."). The retributive damages penalty also includes a wealth- and reprehensibility-informed monetary penalty that puts the defendant in a worse position than she was at the status quo ante. Complete-deterrence models permit but do not require that setback, which is part of how the retributive message of condemnation is communicated.
121. See Markel, Retributive Damages, supra note 1, at 242-43 (contrasting the messages of complete deterrence and retribution).
122. Such a flat fee avoids the lottery effects that a plaintiff would enjoy from having the good "fortune" of having a wealthy injurer.
123. Other valuation methodologies might also be consistent with retributive justice values. See Geistfeld, supra note 5, at 286-92, 306 (proposing for torts involving fatal risks a damages valuation that examines government data regarding the monetization of fatal risks);
124. Markel, Retributive Damages, supra note 1, at 287 n.166, 290 n.181 (explaining why a multiplier of compensatory damages for torts involving purely financial losses might also comply with retributive justice values). Despite my open-mindedness toward these alternative methods of assessing retributive damages, I should clarify that if they were to be used, the amounts imposed would also need to satisfy the retributive goals of stripping the gain and imposing an adequate, proportionate, and parsimonious setback on the defendant.
125. Indeed, depending on the circumstances, the restructuring to evade payment could arguably be a factor used to raise one's reprehensibility score.
126. See generally Richard S. Frase, State Sentencing Guidelines: Diversity, Consensus, and Unresolved Policy Issues, 105 COLUM. L. REV. 1190, 1194-1208 (2005) (summarizing states' use of sentencing guidelines).
127. See, e.g., supra note 3.
128. I am obviously not the first person to note that punitive damages serve different purposes; my hope is that the discussion here advances the ball by explaining in greater detail what a disaggregated scheme of extracompensatory damages would look like if implemented with care. Others who have contemplated disaggregation and pluralism include Professors Galligan, Sharkey, Calabresi, Polinsky & Shavell, Rustad, and Salbu. See, e.g., Ciraolo v. City of N.Y., 216 F.3d 236, 2446 (2d Cir. 2000) (Calabresi, J., concurring) ("Indeed, it would not be inappropriate to disaggregate the retributive and deterrent functions of extracompensatory damages altogether and allow separate awards to further the two separate goals.");
129. Thomas C. Galligan, Jr., Disaggregating MoreThan-Wliole Damages in Personal Injury Law: Deterrence and Punishment, 71 TENN. L. REV. 117 (2003);
130. Polinsky & Shavell, supra note 5;
131. Michael L. Rustad, Happy No Morep: Federalism Derailed by the Court that Would Be King of Punitive Damages, 64 MD. L. REV. 461, 46893 (2005) (adumbrating the plural goals that punitive damages serve);
132. Steven R. Salbu, Developing Rational Punitive Damages Policies: Beyond the Constitution, 49 FLA. L. REV. 247 (1997) (recognizing different rationales for punitive damages and noting that diose rationales can be used separately or jointly to calculate damages); Sharkey, supra note 5, at 363 ("Notwithstanding the fact that the retributive-based and deterrence-based components of punitive damages are not fully separable, and indeed have potentially synergistic or overlapping effects, there are significant gains to be achieved from treating them as conceptually distinct."). In various respects, my account builds on and departs from these earlier efforts, most significantly in terms of distinguishing between the public interest in retributive justice and the private interest in victim vindication, and also in explaining how cost internalization intersects with these goals, especially after Philip Morris.
133. See, e.g., Galanter & Luban, supra note 3, at 1439-40 (urging jurisdictions to require jury explanations). The jury-explanation device undermines the confidentiality of jury deliberations, but it is hard to understand why that confidentiality should be a higher priority than the achievement of the public's interest in the fair and accurate imposition of justice. The concern of judicial interference with the jury's role is especially exaggerated given thatjudges perform various gatekeeping roles.
134. 216 F.3d 236, 244-46 (2d Cir. 2000) (Calabresi, J., concurring). Calabresi drew on the work of other scholars in endorsing cost internalization and urging the separation of cost internalization from punishment. See, e.g., Polinsky Sc Shavell, supra note 5, at 906 ("[T] he imposition of damages equal to harm, appropriately multiplied to reflect the probability of escaping liability, achieves proper deterrence.");
135. see also Galligan, supra note 5. Galligan's account is very instructive regarding the deterrence function, but it does not work through the details of implementing the public's interest in retributive justice. It also fails to separate the public interest in retributive justice from the victim's private interest in vindicating the injury to her dignity. Nonetheless, the points that Galligan makes about the proper way to determine optimal deterrence are useful in a context where "total cost internalization" damages would be permissible.
136. See id. at 128-34 (proposing for the calculation of punitive damages the use of averagepotential harm-rather than the plaintiffs actual harm-subject to a multiplier so that the plaintiff more accurately serves as a proxy for all who are damaged but do not sue).
137. However, because of the way at Philip Morris makes "total cost internalization" constitutionally problematic, see infra subsection II.A.2.1 do not think that there is a constitutionally permissible basis for structuring deterrence damages in the way that Professor Galligan suggests.
138. See City of Newport v. Fact Concerts, Inc., 453 U.S. 247, 259-66 (1981) (affirming the common law absolute immunity of municipalities against punitive damages actions for the bad-faith misdeeds of their officials).
139. Judge Calabresi wrote that [c]osts may not be sufficiendy reflected in compensatory damages for several reasons, most of which go to the fact that not all injured parties are in fact compensated by the responsible injurer. For example, a victim may not realize that she has been harmed by a particular actor's conduct, or may not be able to identify the person or entity who has injured her. Where the injurer makes active efforts to conceal the harm, this problem is of course exacerbated. Moreover, even if a victim is aware of her injury and is able to identify its cause, she may not bring suit. A person will be unlikely to sue if the costs of doing so-including the time, effort, and stress associated with bringing a lawsuit-outweigh the compensation she can expect to receive. A victim is especially unlikely to sue, therefore, in cases where the probable compensatory damages are relatively low. As a result, a harm that affects many people, but each only to a limited degree, will generally be given inadequate weight if only compensatory damages are assessed. In addition, some victims will not sue even if the damages they could expect to receive would exceed the costs of suing. Victims will differ gready in their knowledge of and access to the legal process, and those who are relatively poor and unsophisticated, as a practical matter, are frequently unable to bring suit to redress their injuries even if those injuries are grave. A harm that disproportionately affects such victims, therefore, is also particularly likely not to be accurately reflected in compensatory damages. Ciraolo, 216 F.3d at 243-44 (Calabresi, J., concurring) (citations omitted).
140. According to their supporters, optimal deterrence damages should be set at a level such that the expected damages of defendants equal the harm they have caused, for then their damage payments will, in an average sense, equal the harm. This implies a simple formula for calculating punitive damages, according to which harm is multiplied by a factor reflecting the likelihood of escaping liability. Polinsky & Shavell, supra note 5, at 954.
141. Some law and economics scholars have registered skepticism with the multiplier principle. See, e.g., Richard Craswell, Deterrence and Damages: The Multiplier Principle and Its Alternatives, 97 MICH. L. REV. 2185, 2191-98 (1999) (contending that the use of a static multiplier misapprehends the variable probabilities of punishment, which generally correlate with the seriousness of a crime);
142. see also Sharkey, supra note 5, at 368-69 (raising concern that the Polinsky-Shavell approach doesn't achieve adequate cost internalization). I should note that my proposal largely brackets the skepticism towards the deterrence damages multiplier, but if economists converge on a different metfiod of achieving cost internalization in a way that is compatible with Philip Morris, I am certainly open to it.
143. See Thomas C. Galligan, Jr., The Risks of and Reactions to Underdeterrence in Torts, 70 MO. L. REV. 691, 692 2005 arguing that rules developed for individual actions do not deter effectively in the mass tort context.
144. Again, I note that my use of "deterrence" damages may seem idiosyncratic to those who think of deterrence in terms of complete deterrence. Here I simply mean to describe damages meant to realize cost internalization to the extent that I view permissible in a post-Philip Morris world.
145. See Polinsky & Shavell, supra note 5, at 905-10 (arguing that deterrence damages should be calculated as the amount of the plaintiff's harm multiplied by the reciprocal of the probability that the defendant will escape liability, and maintaining that the reprehensibility of the defendant's conduct is irrelevant for deterrence damage purposes);
146. Kenneth W. Simons, Deontology, Negligence, Tort, and Grime, 76 B.U. L. REV. 273, 273 (1996) (explaining that, under an optimal deterrence regime, one is "entitied to harm the victim so long as he pays for the harm (with the expectation that this entidement will induce him to take optimal care)").
147. But see Sharkey, supra note 5, at 405 (requiring a threshold finding of at least recklessness before such nonpunitive extracompensatorydamages can be imposed). For reasons explained elsewhere, Sharkey's threshold requirement of recklessness stands in tension with a better understanding of cost internalization.
148. See Galligan, supra note 5, at 62-63 (arguing that augmented awards are intended to deter and not to punish-therefore making focus on the defendant's state of mind irrelevant to calculating these awards);
149. Kelly, supra note 32, at 1440 n.36 (explaining that Sharkey's proposal of limiting "societal" damages to instances where defendants engage in conduct that is at least reckless "seems to move the justification back toward retribution, letting state of mind, not undercompensation, differentiate the cases where additional deterrence is needed");
150. Markel, Retributive Damages, supra note 1, at 243 & n.9, 244 (explaining that the issue of reprehensibility is separate from the issue of whether a defendant has been forced to bear the costs of her actions).
151. See Polinsky & Shavell, supra note 5, at 905-10. To be sure, one might still have residual anxieties about whether deterrence damages would perform an adequate compensatory and norm-projection function-especially in cases where the payment of deterrence damages will not readily be commensurable with the harm suffered. In other words, there is a legitimate concern that "compensation never compensates" in the tort context because the plaintiff never wanted to "earn" that compensation.
152. See JOSEPH WILLIAM SINGER, ENTITLEMENTS: THE PARADOX OF PROPERTY 282 (2000). But that concern indicates only why deterrence damages should not be the exclusive purpose of extracompensatory damages.
153. TXO Prod. Corp. v. Alliance Res. Corp., 509 U.S. 443 (1993). For a discussion of the Supreme Court's infidelity to precedent in this context, see Posting of Dan Markel to PrawfsBlawg, Philip Morris: Up in Smoke?, http://prawfsblawg.blogs.com/ prawfsblawg/2007/02/philip-morris-u.html Feb. 20, 2007.
154. See TXO Prod. Corp., 509 U.S. at 460-62;
155. see also BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 582 n.35 (1996) (indicating, implicidy, that punitive damages awards might be permitted to reflect the harm caused to all in-state purchasers of BMWs and not just the harm caused to the individual plaintiff bringing suit);
156. Kirkland v. Midland Mortgage Co., 243 F.3d 1277, 1280 (11th Cir. 2001) ("[P]unitive damages... [are] measured to reflect, not the wrong done to a single individual, but the wrongfulness of the conduct as a whole.").
157. Philip Morris USA v. Williams, 549 U.S. 346, 353-54 (2007). The jury had awarded the decedent's wife $21,000 in economic compensatory damages, $800,000 in noneconomic compensatory damages, and $79.5 million in punitive damages.
158. Id. at 350. Recendy, on remand from the U.S. Supreme Court, the Supreme Court of Oregon upheld the jury verdict, claiming that there was an adequate and independent state ground for the decision.
159. See Williams v. Philip Morris Inc., 176 P.3d 1255, 1260-61 (Or. 2008). Subsequendy, the United States 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 damages in the case were constitutionally excessive. Philip Morris USA Inc. v. Williams, 128 S. Ct. 2904 (2008). The Supreme Court, however, recendy announced that its grant of certiorari on this issue was improvidendy granted, leaving the decision by the Oregon courts to stand. Philip Morris USA Inc. v. Williams, No. 07-1216, slip op. U.S. Mar. 31, 2009.
160. By "total cost internalization," I mean the full scope of harm caused by a defendant's wrongdoing, and not just the harm caused to the plaintiff in the instant litigation.
161. See Colby, supra note 5, passim.
162. Id. at 467-79. Because cost internalization refers to a different kind of deterrence (optimal) than the one probably intended under the Court's pronouncements (complete deterrence), Colby's conclusion is plausible as a matter of theory and logic. But because I think that this conclusion is realistically at odds with the gravamen of the Philip Morris decision, I doubt that the Philip Morris Court meant that one could pursue statewide cost internalization with little to no constitutional oversight, for reasons I explain shortiy.
163. See id. at 476 ("Williams does not stand in the way of implementing an extracompensatory remedy that seeks optimal deterrence."). My sense is that Professor Sharkey's social-damages proposal would similarly seek to restrain the reach of Philip Morris so that it would not apply to nonpunitive extracompensatory damages.
164. Professor Colby posits that a public interest in retributive justice cannot constitutionally be pursued outside the criminal law because of the absence of constitutional criminal procedural safeguards in civil suits. Id. at 440-57. For reasons I will explain in Part III, I find this view to be mistaken.
165. Unsurprisingly, other scholars supportive of cost internalization damages have also suggested that the Supreme Court's Due Process jurisprudence may not apply in its entirety to nonpunitive damages designed simply to compensate society for various harms to nonparties within state lines. See, e.g., Sharkey, supra note 5, at 428-33 (rejecting the argument that due process extraterritoriality and multiple-punishment concerns would prevent the implementation of a societal-damages scheme);
166. Ciraolo v. City of N.Y., 216 F.3d 236, 246 n.8 (2d Cir. 2000) (Calabresi, J., concurring) (suggesting by implication that, in contrast to truly punitive damages, socially compensatory damages do not require additional procedural protections).
167. 543 U.S. 220 (2005).
168. See Michael W. McConnell, The Booker Mess, 83 DENV. U. L. REV. 665 (2006) (discussing the doctrinal chaos embedded in Booker's two separate opinions).
169. Cf. BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 592-94 (1996) (Breyer, J., concurring) (discussing the use of a multiplier as a potentially constitutionally plausible limit on punitive damages).
170. See, e.g., State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 422 (2003) ("A basic principle of federalism is that each State may make its own reasoned judgment about what conduct is permitted or proscribed within its borders, and each State alone can determine what measure of punishment, if any, to impose on a defendant who acts within its jurisdiction.").
171. I reiterate that I don't have a dog in this particular fight; if it turns out that Professor Colby's reading of cost internalization after Philip Morris is correct, a view which seems similar to Professor Sharkey's view articulated pre-Philip Morris, then I would be happy to have the jury instructions and potentially the procedural safeguards dealing with cost internalization adjusted accordingly.
172. Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 432-36 (2001).
173. Cf. Gore, 517 U.S. at 592-94 (Breyer, J., concurring) (alluding to the possibility of "more deferential review" of damages designed to perform a "constraining" role of cost internalization);
174. Sharkey, supra note 5, at 446 (suggesting deferential review for compensatory societal damages but stringent de novo review for "'morally'-based retributive 'punitive' damages"). I agree with Sharkey's endorsement of deferential review for cost internalization, but I think that it is important to further decouple review of victim vindication from review of the public retributive function. I say more about that infra subsection III.B.2. Also, since Sharkey's proposal is for "total cost internalization," whereas mine permits only what I might call Philip Moms-compatible cost internalization, I think that deferring to the jury for these damages is a bit easier to justify because there are fewer challenges to jury competence when juries are limited to the inquiry of the likelihood that the defendant would have evaded compensation to the plaintiff (s) /victim (s) only.
175. See id. at 447-50 (raising and deftly addressing objections to juries' competence to calculate compensatory societal damages).
176. See Galligan, supra note 5, at 140-41 (discussing die potential use of placing "societal compensatory damages" in a public fund) ;
177. see also Sharkey, supra note 5, at 402 (suggesting the possibility of using "augmented damages" to establish a fund, for the benefit of nonparties to the case, "to offset the type of harm at issue in the case");
178. id. at 392 ("Societal damages, as envisioned in this Article, would redress the harms inflicted by the defendant upon parties not before the court." (emphasis added)).
179. Theoretically, cost internalization advocates might encourage a cost internalization strategy that avoids conferring upon a plaintiff a monopoly to seek recourse or settle. In other words, where underdeterrence is a concern because of victims who fail to bring sufficient cases, one might want to permit a private attorney general (or a public agency) to ensure that the defendant fully internalizes the costs of tortious conduct that a victim decides not to pursue (to the full extent). The same desire to decouple deterrence from compensation might be true where one is concerned about overcompensation to plaintiffs or insufficient precautions taken by victim-plaintiffs. For examples of arguments in favor of decoupling compensatory damages awarded to plaintiffs from deterrence damages paid by defendants, see A. Mitchell Polinsky & Yeon-Koo Che, Decoupling Liability: Optimal Incentives for Care and Litigation, 22 RANDJ. ECON. 562 (1991),
180. and David Rosenberg, Decoupling Deterrence and Compensation Functions in Mass Tort Class Actions for Future Loss, 88 VA. L. REV. 1871, 1873-74 (2002).
181. See Polinsky & Shavell, supra note 5, app. (detailing model jury instructions that contend that the amount of cost internalization damages should offset the amount of damages for the purposes of retribution).
182. See id. 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.").
183. Cf. Ciraolo v. City of N.Y, 216 F.3d 236, 246 (2d Cir. 2000) (Calabresi, J., concurring) ("But a separate award of punitive damages would be allowed only in cases where the defendant's conduct was sufficiendy reprehensible to deserve punishmentapart from whatever assessment was required to compensate the individual victim or society as a whole." (emphasis omitted)).
184. By respecting the distinctive values associated with retributive justice and cost internalization, the proposal here departs from those of both Galanter & Luban and Polinsky & Shavell. See Galanter & Luban, supra note 3, at 1451 (arguing that decoupling punitive awards and moral judgments "simply misses the point");
185. Polinsky & Shavell, supra note 5, app. (presenting model jury instructions that advocate the subtraction of cost internalization damages from the amount of damages meant to achieve retributive punishment).
186. See infra Section II, B for further discussion on the intersection of deterrence damages and aggravated damages.
187. Economists disagree about the precise architecture for punitive damages. Compare Robert D. Cooter, Economic Analysis of Punitive Damages, 56 S. CAL. L. REV. 79 (1982) (arguing that punitive damages should be used only in cases of gross, inten-tional fault and should be determined based on the costs of compliance or benefits of noncompliance that motivated the violation), with Polinsky and Shavell, supra note 5 (advocating the multiplier approach).
188. See Markel, Retributive Damages, supra note 1, at 257-66.
189. My inspiration for this term came from two commonwealth scholars. See Chapman & Trebilcock, supra note 5, at 746-47 (discussing an English case, Rookes v. Barnard, [1964] All E.R. 367, 407 (Eng.), that distinguished aggravated from punitive damages).
190. I am not claiming that my proposed use of the term "aggravated damages" captures historical, extant, or emerging practices in Canadian and English cases. However, for illuminating descriptions of aggravated damages in comparative perspective, see Anthony J. Sebok & Vanessa Wilcox, Aggravated Damages, in PUNITIVE DAMAGES (Helmut Koziol & Vanessa Wilcox eds., forthcoming 2009).
191. Sebok, supra note 15, at 204-05 (emphasis added).
192. See supra subsection I.A.2.
193. Sebok, supra note 5, at 1023-29.
194. See Colby, supra note 5, at 423-40 (arguing that punitive damages are best understood as a form of punishment for "private wrongs").
195. For example, as a descriptive matter, Sebok's account acknowledges the difficulty of incorporating the State Farm Court's presumptive single-digit ratio into his theory.
196. See Sebok, supra note 5, at 1029-36 (criticizing Justice Kennedy's opinion that "[s] ingle-digit multipliers are more likely to comport with due process," State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 425 (2003), as lacking a "principled foundation," as justified merely by a desire for simplicity, and as "impossible to square with a post-Lochner theory of due process").
197. Of course, to the extent that victim vindication models do supplement insufficient compensatory damages, punitive damages are not the appropriate way to remedy these problems; instead, we should address the problematic rules of lawyer compensation. See Kelly, supra note 32, at 1441 (arguing that punitive damages merely "dodge" problems with class actions and other difficulties of litigation, while also "undermin[ing] efforts to correct these problems").
198. Indeed, scholars like Arthur Ripstein, Sebok, and now Colby specifically reject the equation between "vindicating" the plaintiff's interest in dignity repair and "compensating" the plaintiff for the injury to her dignity, claiming that dignity is not something that is "compensable." See, e.g., Colby, supra note 5, at 435-36, 436 n.187 (citing Ripstein and Sebok with approval).
199. But see Ernest J. Weinrib, Punishment and Disgorgement as Contract Remedies, 78 CHI.-KENT L. REV. 55, 91 (2003) ("The courts properly regard such [aggravated] damages as compensatory rather than punitive, since they repair a loss, albeit an intangible one.").
200. See Markel, Retributive Damages, supra note 1, at 270-71 (explaining the differences between retributive justice and revenge).
201. See, e.g., Circles-Restorative Justice, http://www. restorativejustice.org/intro/ tutorial/processes/circles (last visited Mar. 15, 2009) (explaining the use of "healing circles" as a way to address harm to a victim caused by an offender);
202. see also Dan Markel, Wrong Turns on the Road to Alternative Sanctions: Reflections on the Future of Shaming Punishments and Restorative Justice, 85 TEX. L. REV. 1385 (2007).
203. In the successor article to this one, Punitive Damages and Complex Litigation, supra note 9, I discuss the intelligibility of punishing a corporation for its misconduct. As a result, it might seem inconsistent to deny corporations access to dignity-based aggravated damages while at the same time thinking that they have sufficient independent identity to warrant retributive condemnation. I think that one can reduce this inconsistency by looking at the nature of the misconduct: for example, it might be that the insult to dignity is defamation of the corporate plaintiff (e.g., "the managers of X Corporation intentionally sell spoiled food"). There, the misconduct injures the dignity of the entity as a team, in which case the team arguably should be able to collect aggravated damages on top of other losses.
204. I therefore find myself likely to disagree with those jurisdictions that have prohibited juries from finding out what portion of the extracompensatory damages goes to the state on account that such information will invariably and unduly inflate the amount of damages awarded. See Sharkey, supra note 5, at 438-39 & nn.358-60 (citing cases and statutes establishing that jurors are not informed of the division of extracompensatory damages). At least under my scheme, however, there are a number of robust safeguards and review mechanisms to ensure that this undue inflation of damages is less likely to occur. I share Professor Sharkey's skepticism toward the rationales for keeping juries in the dark about allocation.
205. See id. at 439-40, 440 n.366
206. (citing Michelle Chernikoff Anderson & Robert J. MacCoun, Goal Conflict in Juror Assessments of Compensatory and Punitive Damages, 23 LAW & HUM. BEHAV. 313, 320-22 (1999) (finding both that jurors were actually more likely to award punitive damages when those damages went directiy to plaintiffs, rather than to the government, and that the amount of damages was unaffected by the recipient of the award) ).
207. See Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 436 (2001) (requiring de novo review of the amount of punitive damages awarded in federal cases).
208. And, of course, legislatures may decide to impose caps or multiplier limits on aggravated damages in the way that some jurisdictions do for other damages. See Rustad, supra note 29, at 1300 (listing different types of "tort reform").
209. But see Markel, Retributive Damages, supra note 1, at 330-32 (providing a critique of the use of caps and multipliers in various cases).
210. This limited use of the evidence of wrongs to other persons makes sense in situations where the plaintiff needs to show that the misconduct in question was not an accident or mistake, but rather a malicious denigration of the plaintiff's dignity interests.
211. See Exxon Shipping Co. v. Baker, 128 S. Ct. 2605, 2614 2008.
212. See In re Exxon Valdez, 296 F. Supp. 2d 1071, 1077 (D. Alaska 2004) ("Exxon officials knew that it was dangerous to have a captain with an alcohol problem commanding a supertanker... [and] knew that carrying huge volumes of crude oil through Prince William Sound was a dangerous business, yet they knowingly permitted a relapsed alcoholic to direct the operation of the Exxon Valdez... ."), vacated and remanded, 490 F.3d 1066 (2007), vacated and remanded sub nom., Exxon Shipping Co. v. Baker, 128 S. Ct. 2605 (2008).
213. There are some interesting questions relating to time and punishment. The penalty could be based on the net financial condition of the individual/entity at the time of the misconduct (adjusted for inflation) in order to deter the defendant from trying to reengineer its finances to its apparent detriment at adjudication. The goal behind benchmarking the defendant's value or financial condition this way is to ensure that the defendant is not penalized for growth or wealth independent of the tort. On the other hand, if there is a reason to suspect that the defendant's growth or current wealth is driven by the results of the underlying misconduct-say a person profits from wrongfully accessing another's trade secrets-that would be a good reason for instead using the defendant's financial condition at the time of adjudication, assuming it is higher than at the time of the commission of the tort.
214. See Markel, Retributive Damages, supra note 1, at 290-96.
215. BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 563-64 1996.
216. See id. at 570-73.
217. See supa subsection II.B.2.
218. Cf. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 433-43 (2003) (Ginsburg, J., dissenting) (discussing how the defendant targeted the '"weakest of the herd'-'the elderly, the poor, and other consumers who are ... most vulnerable to trickery and deceit,'" including persons like the Campbells and those "unlikely to defend themselves" and therefore unlikely to take action that would force the defendant to compensate them).
219. In Pacific Mutual Life Insurance Co. v. Haslip, 499 U.S. 1, 12-14 (1991), the defendant was vicariously liable for the embezzlement of plaintiffs' insurance payments, but the company also was on notice that it had a rogue agent, much like in Exxon. The defendants in Haslip and Exxon could plausibly be said to have exercised manifesdy insufficient care to ferret out misconduct by their agents. However, those cases would warrant lower reprehensibility scores than the defendants in TXO Production Corp. v. Alliance Resources Corp., 509 U.S. 443 (1993), and State Farm, where the wrongs by the tortfeasors were purposeful and deceitful. Those four cases involved economic torts, however, and should be considered less reprehensible than the misconduct perpetrated by the defendant in Philip Morris, where the defendant's outrageous misconduct years ago effectively amounted to mass manslaughter.
220. See supra text accompanying notes 55-57 (proposing that states create guidelines that would allow juries to measure reprehensibility more objectively).
221. For a discussion of safeguards primarily related to wrongs involving torts and complex litigation, see Markel, Punitive Damages, supra note 9.
222. Galanter & Luban, supra note 3, at 1457-58.
223. Id. at 1457.
224. Id. at 1457-58.
225. See Grass, supra note 7 (concluding that punitive damages are penal in nature and therefore are essentially criminal law sanctions);
226. Redish & Mathews, supra note 12 (arguing that the seeking of punitive damages is, in effect, a state function that demands constitutional protections);
227. Wheeler, supra note 7 (contending that where the government authorizes private individuals to seek damages for the purposes of punishment-punitive damages-the Constitution requires that criminal law constitutional protections apply);
228. see also Colby, supra note 7, at 606 n.73 (providing citations to courts and commentators noting that defendants subject to punitive damages lack the protections provided in criminal trials).
229. Colby, supra note 5, at 415-16.
230. Id. at 396.
231. In this respect, Professor Colby is basically embracing the approach endorsed by Professor Sebok, supra note 5.
232. See Colby, supra note 5, at 396 ("Williams thus allows the states to address the underdeterrence concern by implementing the recommendation of law and economics scholars to create a category of extracompensatory damages designed to ensure optimal deterrence.").
233. Some scholars have questioned whether we in fact need more due process protection for the review of compensatory damages awards. See, e.g., Mark A. Geistfeld, Due Process and the Determination of Pain and Suffering Tort Damages, 55 DEPAUL L. REV. 331 (2006) (arguing that constitutional due process constraints on punitive damages should also apply to pain and suffering damages).
234. See Michael P. Allen, The Supreme Court, Punitive Damages and State Sovereignly, 13 GEO. MASON L. REV. 1, 21-25 (2004) (reading State Farm through a federalism lens and finding that the holding rests upon respect for state sovereignty).
235. See Colby, supra note 5, at 455-56 n.281.
236. Somewhat relatedly, Professor Romero argues that legislatures should impose limits on all punitive damages. Leo M. Romero, Punitive Damages, Criminal Punishment, and Proportionality: The Importance of Legislative Limits, 41 CONN. L. REV. 109 (2008).
237. See Sebok, supra note 5, at 1029 (describing the ratio rule as regrettable and lacking in principle).
238. See Markel, Retributive Damages, supra note 1, at 290-91 (explaining that such income-based practices undermine commitments to human equality).
239. See Geistfeld, supra note 132, at 342 (noting that plaintiffs "with similar painand-suffering injuries often are awarded significantly different amounts of damages").
240. For references to other scholars who share my view on Philip Morris's implications, see Colby, supra note 5, at 469 n.337, and sources cited therein.
241. Specifically I'd imagine that such a reading of Philip Morris would warrant applying the kind of searching appellate review that the Court employed in BMWv. Gore and State Farm, though with less attention to concerns about reprehensibility and more focus on fidelity to the federalism and fair-notice concerns. Colby himself is expressly noncommittal on what constitutional limits would apply to deterrence damages under this scenario.
242. Id. at 476 n.371.
243. If Professor Sharkey's proposal for nonpunitive com-pensatory societal damages is compatible widi Philip Morris, then it is also a useful place to look for guidance on some of the constitutional issues regarding what I have called deterrence damages. See Sharkey, supra note 5, at 428-40.
244. Colby, supra note 5, at 469.
245. Galanter & Luban, supra note 3, at 1454-60.
246. See Colby, supra note 5, at 445-46 (raising the concern that my view of retributive damages basically creates an end-run around the Constitution).
247. See, e.g., Murphy v. Hobbs, 5 P. 119, 121 (Colo. 1884) (criticizing a judge's punitive damages instructions to a jury on the grounds that, inter alia, "punishment by fine is inflicted" without the defendant being afforded the protections of criminal procedure);
248. Spokane Truck & Dray Co. v. Hoefer, 25 P. 1072, 1074 (Wash. 1891) ("It seems to us that there are many valid objections to interjecting into a purely civil action the elements of a criminal trial, intermingling into a sort of a medley or legal jumble two distinct systems of judicial procedure.");
249. Grass, supra note 7 (arguing that punitive damages perform the same function as criminal law and therefore demand the same constitutional protections);
250. Wheeler, supra note 7, at 322-51 (outlining the constitutional provisions suggesting that punitive damages should trigger the protections of criminal procedure).
251. See Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 432 (2001) (acknowledging that punitive damages have been labeled "quasi-criminal" (citing Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 19 (1991)));
252. Gertz v. Robert Welch, Inc. 418 U.S. 323, 350 (1974) (stating that punitive damages "punish reprehensible conduct" and "deter its future occurrence").
253. Gertz, 418 U.S. at 350.
254. Haslip, 499 U.S. at 47-48 (O'Connor, J., dissenting)
255. (citing Gertz, 418 U.S. at 350);
256. see also Browning-Ferris Indus, of Vt., Inc. v. Kelco Disposal, Inc., 492 U.S. 257, 275 (1989) ("[P]unitive damages are imposed through the aegis of courts and serve to advance governmental interests ....").
257. See Exxon Shipping Co. v. Baker, 128 S. Ct. 2605, 2621 (2008) ("The consensus today is that punitives are aimed not at compensation but principally at retribution and deterring harmful conduct."); Philip Morris USA v. Williams, 549 U.S. 346, 352 (2007) ("This Court has long made clear that '[p]unitive damages may properly be imposed to further a State's legitimate interests in punishing unlawful conduct and deterring its repetition.'" (quoting BMW of N. Am. v. Gore, 517 U.S. 559, 568 (1996))).
258. After I showed Colby a draft of this paper, he revised his paper,
259. See, e.g., Redish & Mathews, supra note 12, at 20 ("Financial penalties imposed for no purpose other than to punish are appropriately categorized as coercive, just as imprisonment is. This conclusion is reinforced by the simple fact 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.");
260. Wheeler, supra note 7, at 337 ("Either the purpose of the sanction is punitive, in which case all of the procedural safeguards apply, or the purpose is not punitive, in which case none applies."). But these views are, to my mind, incorrect. As illuminated in the text, there is no right to counsel for criminal fines, nor is there a right to a jury trial in that context.
261. See generally Scott v. Illinois, 440 U.S. 367 (1979) (holding that counsel is only required where actual imprisonment results); Duncan v. Louisiana, 391 U.S. 145, 159 (1968) (holding that a jury trial is not constitutionally required for cases where the maximum penalty is incarceration of less than six months). Moreover, these accounts similarly fail to contemplate the possibility, developed in the text, that retributive damages could serve as a designated civil and intermediate sanction, thus warranting a smaller or otherwise different bundle of safeguards than would exist if criminal fines were applied.
262. Some constitutional safeguards may also be scaled to the severity of the misconduct involved. See Eugene Volokh, Crime Severity and Constitutional Line-Drawing, 90 VA. L. REV. 1957 (2004) (outlining potential approaches to balancing the strength of constitutional protections against the crime that the government actor is seeking to prevent).
263. See generally 1 WAYNE R. LAFAVE ET AL. CRIMINAI. PROCIEDURE §1.8(e) (3d ed. 2008) (discussing special constitutional rules in the capital punishment context);
264. Stuart P. Green, Rationing Criminal Procedure: A Comment on Ashworth and Zedner, 2 CRIM. L. & PHIL. 53, 54 (2008) ("[Defendants charged with capital offenses are entitled to additional protections not generally available to defendants in non-capital cases, including a bifurcated trial at which guilt and sentencing are decided separately, special jury se-lection procedures, special rules regarding the introduction of aggravating and mitigating evidence, and an automatic right of appeal.").
265. See generally 1 LAFAVE ET AI.., supra note 150, §1.8(c) (discussing special constitutional rules applying only to crimes involving a certain period of time in prison).
266. See Scott, 440 U.S. 367 (holding that defendants may not be imprisoned absent the enjoyment of a right to counsel but that no right to counsel exists for less severe punishments);
267. Callan v. Wilson, 127 U.S. 540 (1888) (guaranteeing a jury trial only for nonpetty criminal offenses);
268. Mackin v. United States, 117 U.S. 348, 351 (1885) (requiring a grand jury indictment for crimes punishable by imprisonment);
269. LAFAVE ET AI.., supra note 150 (discussing special constitutional rules applying only to crimes involving some time in prison).
270. Scott, 440 U.S. at 373-74 (appointed counsel); Codispoti v. Pennsylvania, 418 U.S. 506, 512 (1974) (jury trial);
271. Duncan, 391 U.S. at 159 (jury trial).
272. See Green, supra note 150, at 57 n.13 (citing cases where, inter alia, the Court either has given the government more leeway in construing what counts as a search or seizure in cases involving relatively insignificant offenses or has limited the obligation to read a defendant her Miranda rights in minor cases).
273. See generally Gabriel J. Chin, Race, the War on Drugs, and the Collateral Consequences of Criminal Conviction, 6 J. GENDER RACE &JUST. 253 (2002) (providing an overview of the range of collateral consequences).
274. Cf. Comment, Criminal Safeguards and the Punitive Damages Defendant, 34 U. CHI. L. REV. 408, 411-12 (1967) (arguing that the stigma from a criminal fine is more apparent than the reputational loss from punitive damages even though the amount of a punitive damages award might exceed that of a fine for comparable conduct). Admittedly, some criminal offenses are "strict liability" in nature and thus might not be viewed as conveying as much condemnation as a retributive damages finding that says that one acted with malice or recklessness, but the broader point still holds that criminal sanctions are generally viewed as more condemnatory than those currently associated with punitive damages (or retributive damages, per this proposal).If retributive damages are truly going to be intermediate in nature, then jurisdictions adopting retributive damages schemes may also have to adjust fines in the criminal context to always be some amount greater than the amount awarded in retributive damages for similar misconduct. But it is not clear that a conventional fine needs to be higher than a retributive damages award in order to signal that it is a steeper penalty; the mere fact of a criminal conviction (and the process leading to and consequences flowing from that conviction) may do the work of ensuring that the social meaning of a fine remains more distinctively condemnatory than the intermediate sanction associated with a retributive damages award.
275. The Supreme Court extends great deference to a legislative determination that a penalty is civil or criminal, but occasionally, a multifactor test is used to illuminate (but not decide dispositively) whether a civil law intends and effects a criminal punishment instead:Whether the sanction involves an affirmative disability or restraint, whether it has historically been regarded as a punishment, whether it comes into play only on a finding of scienter, whether its operation will promote the traditional aims of punishment-retribution and deterrence, whther the behavior to which it applies is already a crime, whether an alternative purpose to which it may rationally be connected is assignable for it, and whether it appears excessive in relation to the alternative purpose assigned are all relevant to the inquiry....Kennedy v. Mendoza-Martinez, 372 U.S. 144, 168-69 (1963) (footnotes omitted). Under this test, retributive damages would likely qualify as some form of punishment, but they do not involve the "affirmative disability or restraint" typically associated with criminal punishment through incarceration. See Hudson v. United States, 522 U.S. 93, 104 (1997). Nonetheless, retributive damages do share many characteristics with criminal sanctions: they are only assessed upon a finding of malice or recklessness; they promote the distinct end of retribution; they involve conduct that is frequendy the trigger of criminal sanction; and they have no alternative purpose as compensation, first, because the structure for extracompensatory damages specifically contemplates the plaintiff's receiving compensation for traditional and aggravated damages, and second, because the only money that a defendant pays in retributive damages to the plaintiff, per my proposal, is a small "reward" (not compensation) for channeling awareness of undetected misconduct into the public eye. With all of that said, in Hud- son the Court nevertheless found that the civil penalties of both fines and debarment were not sufficiendy "criminal" in nature to trigger the double jeopardy protection against multiple criminal punishments for the same conduct. Id. at 105. If Hudson is still good law, retributive damages would permissibly operate as only a moderate form of civil sanction for several reasons: first, the legislature's explicit characterization of the sanction as civil will carry great weight; second, the liability for retributive damages will not be equivalent to the status of a conviction; and third, per my proposal, they would not be intended to trigger any collateral consequences.
276. For an earlier instructive overview of punitive-civil-sanctions jurisprudence focusing primarily on agencyinitiated civil punishment, see Kenneth Mann, Punitive Civil Sanctions: The Middleground Between Criminal and Civil Law, 101 YALE LJ. 1795, 1800 (1992).
277. See also Jonathan I. Charney, The Need for Constitutional Protections for Defendants in Civil Penally Cases, 59 CORNELL L. REV. 478 (1974);
278. Mary M. Cheh, Constitutional Limits on Using Civil Remedies to Achieve Criminal Law Objectives: Understanding and Transcending the CriminalCivil Law Distinction, 42 HASTINGS L.J. 1325 (1991).
279. See l LAFAVE ET AL., supra note 150, §1.8(c);
280. see also Mann, supra note 157, at 1870 (noting the constitutional idea that "the more severe the sanction, the more the procedure must protect against the sanctioning of the innocent").
281. See Galanter & Luban, supra note 3, at 1461 ("The appropriate measure to control punitive damages consists of a requirement that juries provide a plausible rationale for the size of punitive awards, coupled with a large dollop of judicial deference to the retributive sentiments jurors express in those awards.").
282. Id. at 1457-58;
283. cf. Darren Weirnick, Punitive Damages Against Corporations: Functionalist Retributivism (2001) (unpublished manuscript, on file with author) ("Because punitive damages exact only monetary penalties and are filed by private plaintiffs, it is not at all obvious that a higher standard of proof, or constitutional rights ... should apply even when individuals are the defendants in punitive damages cases.... When corporations are the defendants, the parallels are even less obvious.").
284. The violence might also apply to criminal fines or forfeitures if the defendant's noncompliance triggers a court's contempt-the same outcome that might occur in the context of civil punitive damages.
285. Galanter & Luban, supra note 3, at 1457-58.
286. A judge presides over and rules on matters of law (and, in some cases, fact), and appellate courts subject damages awards to searching review. Moreover, it is the state that enforces the judgment against the losing party. So the state's role is by no means insignificant or radically different from the role that the state plays in a criminal law case; this overlap was even more pronounced during the hundreds of years in which private litigants prosecuted criminal cases and would even capture the fines imposed against a defendant. See, e.g., Steel Co. v. Citizens for a 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).
287. See Zipursky, supra note 5, at 146 ("If the private plaintiffs are really delegees of state power, then the awesome power of the state is being used, albeit in a decentralized way.").
288. Eg., United States v. Ely, 142 F.3d 1113, 1121-22 (9th Cir. 1997) (holding that the government could still criminally prosecute the defendants, even though the Federal Deposit Insurance Commission (FDIC), acting as receiver for a failed bank, had already sued for punitive damages).
289. An analogy might be found by reference to privacy intrusions. If a private investigator for a plaintiff comes rummaging (with no notice or temporary audiorization) through my garage, I am reasonably upset or resentful. I can imagine I may reasonably be even more upset when the government is the intruder instead of a private investigator for a third party-after all, the government purports to act in my name. But to the extent that my choice is to shield something from exposure to public view, the legitimacy of the interest that I have in keeping that information private doesn't hinge simply on whether the intruder wears a government badge. Galanter and Luban seem to think that the Bill of Rights is normatively relevant only in actions where the state is also the prosecutor (and not just the punisher) and they rely for support on the expressly political fears that classical liberals had about the government's capacity to use its prosecutorial force to marginalize or attack political dissidents. Galanter & Luban, supra note 3, at 1457. That might be a basis for limiting the government's investigative powers through something like the Fourth Amendment, but it is not a basis for limiting the reach of procedural safeguards during trial or punishment where the fear that a person has about abuse sis predicated on what the government does as judge or enforcer of punishment.
290. 167I should note that collateral consequences are sometimes products of regulatory decisions as opposed to "punitive" ones, and in some contexts, they appear as a result of proof of misconduct, not of conviction. However, the dominant recent approach to the imposition of collateral consequences is to look at the defendant's convictions, rather than other sources of evidence regarding the defendant's misconduct. See Gabriel J. Chin, Are Collateral Sanctions Premised on Conduct or Conviction?: The Case of Abortion Doctors, 30 FORDHAM URB. L.J. 1685 (2003).
291. See also Markel, Punitive Damages, supra note 9 (addressing the appropriate safeguards for complex litigation).
292. Cf. Sebok, supra note 5, at 1002 (discussing the claim that the full panoply of constitutional safeguards should apply to punitive damages).
293. See Markel, Retributive Damages, supra note 1, at 287-89 (calling for sentencing guidelines and commentaries to inform the finding of a defendant's reprehensibility on a scale, which would ensure that determinations of the amount of retributive damages are not made on an ad hoc basis, jury by jury).
294. See id at 250-51 (noting this traditional rule but also explaining that most states now require proof of mens rea by clear and convincing evidence). The Supreme Court has not yet required a heightened standard of proof for punitive damages.
295. See Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 22 n.11 (1991).
296. See In reWinship, 397 U.S. 358, 364 (1970) (confirming that due process mandates the beyond a reasonable doubt standard).
297. 1 LINDA L. SCHLUETER & KENNETH R. REDDEN, PUNITIVE DAMAGES, §5.3 (H)(2) (5th ed. 2005). One state, Colorado, requires juries to find that the proof establishes culpability beyond a reasonable doubt for punitive damages to attach. COLO. REV. STAT. §13-25-127(2) (2008).
298. Cf. Santosky v. Kramer, 455 U.S. 745, 756 (1982) (discussing the use of the clear and convincing evidence standard for civil cases involving the potential imposition of stigma or deprivation of liberty). Whether all jurors differentiate among the different standards is hard to know, but inasmuch as it is a problem, clear instructions about the different standards along with examples may help.
299. See Galanter & Luban, supra note 3, at 1459-60;
300. Weirnick, supra note 160.
301. Those who view aggravated damages as "private punishment," rather than as compensation for uncompensated injuries to dignity, may welcome a higher standard of proof, though they have not all said as much.
302. See generally Paul Horwitz, Three Faces of Deference, 83 NOTRE DAME L. REV. 1061, 1085-90 (2008) (analyzing epistemic superiority as the basis for deference).
303. See Rustad, supra note 29, at 1305 (labeling as "radical" the idea of allowing judges to assess punitive damages).
304. See id. at 1305-06.
305. Compare David G. Owen, Punitive Damages in Products Liability Litigation, 74 MLCH. L. REV. 1257, 1320-22 (1976) (suggesting that the trial judge, rather than the jury, should measure awards of punitive damages, in order to protect against excessive awards),
306. with Pardett, supra note 38, at 1411-12 (defending a robust role for juries in punitive damages cases on the basis of republican theory),
307. arad Wenger & Hoffman, supra note 37, at 1148 (arguing that juries should continue to measure punitive damages awards).
308. See Michael T. Cahill, Punishment Decisions at Conviction: Recognizing the Jury as Fault-Finder, 2005 U. CHI. LEGAL F. 91, 96-108 (arguing that criminal juries already play a significant role, through their determinations of guilt or innocence, in the punishment process and that this role in punishment should be made more explicit);
309. Richard E. Myers II, Requiring a Jury Vote of Censure to Convict, 88 N.C. L. REV. (forthcoming 2009) (proposing, as a means of reinforcing criminal law's condemnatory role, a requirement that juries vote to "censure" a defendant before convicting her).
310. This view might underlie the rule adopted in federal criminal cases that requires both the prosecution and the court to consent to a defendant's waiver of a jury trial. FED. R. CRIM. P. 23(a).
311. Blanton v. City of N. Las Vegas, 489 U.S. 538, 541-42 (1989);
312. see also United States v. Nachtigal, 507 U.S. 1, 4-5 (1993) (per curiam) (holding that an offense was not constitutionally "serious" even though it carried a penalty of up to six montfis' incarceration, a $5,000 fine, a five-year term of probation as an alternative to incarceration, and other penalties).
313. See Chauffeurs, Teamsters and Helpers Local No. 391 v. Terry, 494 U.S. 558, 573-74 (1990) (holding that the monetary damages sought were "the type of relief traditionally awarded by courts of law" and that the Seventh Amendment therefore created an entidement to a jury trial).
314. 530 U.S. 466, 490 (2000). The Apprendi Court held that, outside of a prior conviction, any factual finding that increases the statutory-maximum penalty for an offense must be proven beyond a reasonable doubt.
315. 542 U.S. 296, 313 (2004). Blakely affirmed and extended Appendts holding.
316. See, e.g., Grass, supra note 7, at 243 n.13.
317. 406 U.S. 404 (1972).
318. 406 U.S. 356 (1972).
319. See Williams v. Florida, 399 U.S. 78,103 (1970) (holding that a six-person jury is sufficient). The Court did later clarify that, in cases involving nonpetty crimes, if a sixperson jury were used, it would have to reach a unanimous verdict to convict.
320. Burch v. Louisiana, 441 U.S. 130,138 (1979).
321. See Ethan J. Leib, Supermajoritarianism and the American Criminal Jury, 33 HASTINGS CONST. L.Q. 141, 142-45 (2006) (arguing against "the obsession with unanimity" in the criminal justice system's decision rules).
322. U.S. CONST, amend. VI.
323. See Scott v. Illinois, 440 U.S. 367, 373-74 (1979) (holding that counsel is only required under the Constitution if the defendant had "actual imprisonment" imposed). For the most part, there is no constitutional right to appointed counsel in the civil context, but some states do provide appointed counsel in some civil contexts, such as where indigent parents face termination of their parental rights.
324. E.g., In re K.L.J., 813 P.2d 276 (Alaska 1991).
325. Compare, e.g., Gideon v. Wainwright, 372 U.S. 335, 344 (1963) (describing contributions of lawyers to truth seeking),
326. with WILLIAM TWINING, THEORIES OF EVIDENCE: BENTHAM AND WLGMORE 75-79 (1985) (describing Bentham's view that lawyers impede the factfinding mission of courts).
327. See 4 WILLIAM BLACKSTONE, COMMENTARIES *352 ("[I]t is better that ten guilty persons escape, than that one innocent suffer.");
328. cf. In re Winship, 397 U.S. 358, 372 (1970) (Harlan, J., concurring) (relying on the "fundamental value determination of our society that it is far worse to convict an innocent man than to let a guilty man go free").
329. See, e.g., TWINING, supra note 194, at 75 (identifying, as one of Bentham's primary concerns, "the sinister interests of the legal fraternity").
330. See Larry Laudan, The Social Contract and the Rules of Trial: Re-Thinking Procedural Rules 31-43 (2008) (unpublished manuscript), available at http:// ssrn.com/abstract=1075403 (noting that the social contract requires the state to reduce aggregate risk under the Laplace-Nozick thesis).
331. But see Posting of Dan Markel to PrawfsBlawg, "Legal Epistemology Is Ninety Per Cent Quantitative. The Odier Half Is Qualitative.," http://prawfsblawg.blogs.com/prawfsblawg/2008/08/legal- epistemol.html (Aug. 10, 2008) (urging greater granularity in the comparisons that Laudan makes and more mindfulness toward the potentially unjust distributive patterns associated with who bears the consequences of tradeoffs between Type I and Type II error-reduction strategies).
332. See generally Tom Baker, Blood Money, New Money, and the Moral Economy of Tort Law in Action, 35 LAW & SOC'Y REV. 275 (2001) (analyzing the incentives of plaintiffs' lawyers in tort cases).
333. See Markel, Retributive Damages, supra note 1, at 297-300 (suggesting various permutations for institutional design that would reduce Type I and Type II errors).
334. U.S. CONST, amend. V.
335. Hoffman v. United States, 341 U.S. 479, 486 (1951);
336. see also Carlson v. United States, 209 F.2d 209, 214 (1st Cir. 1954) (stating that a person invoking the privilege in bad faith may be found guilty of perjury).
337. See Lefkowitz v. Turley, 414 U.S. 70, 77 (1973) ("The [Fifth] Amendment... privileges [the individual] not to answer official questions put to him in any other proceeding, civil or criminal, formal or informal....").
338. See Spevack v. Klein, 385 U.S. 511, 515-16 (1967) (finding a threat of disbarment sufficient to invoke privilege).
339. See United States v. Ward, 448 U.S. 242, 251-55 (1980) (finding that in establishing a civil penalty, Congress did not impose a scheme that was so punitive as to allow invocation of the privilege).
340. See Baxter v. Palmigiano, 425 U.S. 308, 318 (1976) (declaring "the prevailing rule" to be that "the Fifth Amendment does not forbid adverse inferences against parties to civil actions when they refuse to testify in response to probative evidence offered against them").
341. See, e.g., Hale v. Henkel, 201 U.S. 43, 67 (1906);
342. see also 18 U.S.C. §6003 (2006) (providing the procedure for granting immunity).
343. See Ronald J. Allen, Theorizing About Self-incrimination, 30 CARDOZO L. REV. 729, 730-39, 734 n.25 (2008) (canvassing much of the literature and demonstrating why most efforts to explain or justify the privilege against self-incrimination are "uniformly unconvincing");
344. William J. Stuntz, Self-incrimination and Excuse, 88 COLUM. L. REV. 1227, 1228 (1988) ("It is probably fair to say that most people familiar with the doctrine surrounding the privilege against self-incrimination believe that it cannot be squared with any rational theory.").
345. Ward, 448 U.S. at 248
346. (quoting U.S. CONST, amend. V).
347. To be sure, there are other values important to retributivism, but I will limit my discussion to these core issues.
348. 5 JEREMY BENTHAM, RATIONALE OF JUDICIAL EVIDENCE 1 (Littleton, Colo., Fred B. Rothman & Co. 1995) (1827).
349. For a particularly incisive analysis of this point, see Allen, supra note 207, at 734-36.
350. 149 U.S. 60, 66 (1893).
351. See Daniel J. Seidmann & Alex Stein, The Right to Silence Helps the Innocent: A Game-Theoretic Analysis of the Fifth Amendment Privilege, 114 HARV. L. REV. 430, 430 (2000) ("Because the right to silence is available, innocent defendants still tell the truth while guilty defendants may rationally exercise the right. Thus, guilty defendants do not pool with innocent defendants by lying, and as a result, triers of fact do not wrongfully convict innocent defendants.").
352. See Stephanos Bibas, The Right to Remain Silent Helps Only the Guilty, 88 IOWA L. REV. 421, 421 (2003) ("Though [the Seidmann-Stein] theory predicts that rational suspects remain silent, roughly eighty to ninety percent of suspects talk to the police.").
353. See id. at 432 (casting doubt on the Seidmann-Stein theory by exposing as flawed the assumptions on which the theory is based and by identifying the factors that it overlooks).
354. But see Alex Stein, The Right to Silence Helps the Innocent: A Response to Critics, 30 CARDOZO L. REV. 1115 (2008).
355. See Palko v. Connecticut, 302 U.S. 319, 326 (1937) (Cardozo, J.) ("Justice ... would not perish if the accused were subject to a duty to respond to orderly inquiry.").
356. There is obviously much more to be said on the policies underlying the privilege embedded in the Fifth Amendment. A good starting point would be the recent symposium in the Cardozo Law Review. See Symposium, The Future of Self-incrimination: Fifth Amendment, Confessions, & Guilty Pleas, 30 CARDOZO L. REV. 717 (2008).
357. In the successor article, supra note 9, I will address, among other things, concerns of duplicative punishment arising from multiple injuries inflicted by the same course of conduct.
358. United States v. Halper, 490 U.S. 435, 440 (1989), overruled on other grounds by Hudson v. United States, 522 U.S. 93, 95-96 (1997). The Court has also made clear that notwithstanding the text of the Fifth Amendment's reference to "life or limb," it also covers monetary penalties and incarceration.
359. See Dep't of Revenue v. Kurth Ranch, 511 U.S. 767, 769 n.l (1994) ("[I]t is well settled that the [Fifth] Amendment covers imprisonment and monetary penalties.").
360. See, e.g., Helvering v. Mitchell, 303 U.S. 391, 399 (1938) (holding that a legislature can "impose both a criminal and a civil sanction in respect to the same act or omission; for the double jeopardy clause prohibits merely punishing twice, or attempting a second time to punish criminally, for the same offense");
361. United States v. Ely, 142 F.3d 1113, 1121 (9th Cir. 1997) (finding that a prior recovery of punitive damages by the FDIC against bank directors for federal bank fraud did not preclude subsequent criminal prosecution);
362. Hansen v. Johns-Manville Prods. Corp., 734 F.2d 1036, 1042 (5th Cir. 1984) (holding that because punitive damages awards are not criminal sanctions, multiple awards of punitive damages are consistent with the Double Jeopardy Clause of the Fifth Amendment);
363. cf. Hudson, 522 U.S. at 99 (holding that double jeopardy only protects against "multiple criminal punishments for the same offense").
364. See, e.g., Shore v. Gurnett, 18 Cal. Rptr. 3d 583, 586-87 (Ct. App. 2004) (finding that double jeopardy did not apply to punitive damages awarded in a wrongful-death suit following the conviction of the defendant for vehicular manslaughter).
365. See State v. McDowell, 699 A.2d 987, 989 (Conn. 1997) ('Jeopardy attaches only to proceedings which are 'essentially criminal.'"
366. (quoting Breed v. Jones, 421 U.S. 519, 528 (1975))).
367. See Halper, 490 U.S. at 451 ("The protections of the Double Jeopardy Clause are not triggered by litigation between private parties.");
368. see also Hudson, 522 U.S. at 110-11 (Stevens, J., concurring) (observing that the purpose of the Double Jeopardy Clause is to prevent the State from "mak[ing] repeated attempts to convict an individual").
369. See Ely, 142 F.3d at 1121;
370. United States v. Beszborn, 21 F.3d 62, 67-68 (5th Cir. 1994) (allowing a federal agency first to pursue punitive damages against defendants and then to pursue criminal indictments).
371. See Dep't of Revenue v. Kurth Ranch, 511 U.S. 767, 784 (1994) ("This drug tax is not the kind of remedial sanction that may follow the first punishment of a criminal offense. Instead, it is a second punishment within the contemplation of a constitutional protection . ...").
372. See Colby, supra note 5, at 452-53 (noting that punitive damages only call for criminal procedural protection when they are understood as punishment for public, not private, wrongs);
373. Wheeler, supra note 7, at 272 (concluding that the procedural safeguards in the Fourth, Fifth, and Sixth Amendments could apply to punitive damages where the action is criminal in substance).
374. See, e.g., Roginsky v. Richardson-Merrell, Inc., 378 F.2d 832, 841 (2d Cir. 1967) (Friendly, J.) (discussing the danger of overkill from multiple punishments).
375. See Blockburger v. United States, 284 U.S. 299, 304 (1932) ("[T]he test to be applied to determine whether there are two offenses or only one, is whether each provision requires proof of a fact which the other does not.").
376. See MARC L. MILLER & RONALD F. WRIGHT, CRIMINAL PROCEDURES 1002-05 (3d ed. 2007) (providing a survey of double jeopardy doctrines around the states).
377. Cf. Paul H. Robinson & Michael T. Cahill, The Accelerating Degradation of American Criminal Codes, 56 HASTINGS L.J. 633, 635 (2005) (lamenting "legislative hyperactivity" culminating in "unnecessary and often inconsistent" statutes).
378. SeeBartkus v. Illinois, 359 U.S. 121, 132-33 (1959) (holding that state and federal prosecutions based on the same actions do not violate the Fifth Amendment);
379. United States v. Lanza, 260 U.S. 377, 382 (1922) ("[A]n act denounced as a crime by both national and state sovereignties is an offense against the peace and dignity of both and may be punished by each.").
380. See Headi v. Alabama, 474 U.S. 82, 88 (1985) (applying the dual sovereigns doctrine to permit prosecution in two states for the murder of a victim who was kidnapped in one state and killed in another).
381. See MILLER & WRIGHT, supra note 229, at 1002-05 (discussing the various ways that states define double jeopardy provisions).
382. Galanter and Luban recognize that multiple punitive damages awards are "extremely troublesome" from their perspective because "if each award has been appropriately scaled to the heinousness of the deed, multiple awards amount to overpunishment." Galanter & Luban, supra note 3, at 1455 n.302. Nonetheless, Galanter and Luban fail to address how punitive damages might also raise similar concerns of unfairness vis-à-vis the criminal justice system.
383. See Markel, Retributive Damages, supra note 1, at 280-86 (discussing the private attorney general (PAG) structure). One might fairly question whether the PAG benefits are as strong in the context of a retributive damages action following a defendant who was acquitted in a criminal case.
384. I leave aside for now concerns that persons might reasonably raise about being punished in polities with universal jurisdiction over certain forms of extreme wrongdoing.
385. This position is consistent with, and expressive of, the institutional account of retributivism discussed in Part II of Markel, Retributive Damages, supra note 1, which acknowledges that the same conduct can be subject to sanction in several jurisdictions, even consecutively. A pure "moral" retributivist might think that punishments for the same conduct that separately are proportional would in the aggregate be an unfair "piling on" because they offend a prepolitical conception of desert. For some discussion of the shortcomings of a purely moral, as opposed to political, account of retributivism,
386. see Markel, Against Mercy, supra note 52, at 1451-53.
387. As I explain in Markel, Punitive Damages, supra note 9, defendants worried about the dangers of seriatim punishment by different plaintiffs should be able to obtain a defensive class action that would aggregate all plaintiffs for retributive damages purposes arising from specific misconduct.
388. See generally Exxon Shipping Co. v. Baker, 128 S. Ct. 2605, 2611 (2008) (dealing with the aggregate claims for punitive damages of the plaintiff and "others, including commercial fisherman and Native Alaskans"). These aggregative strategies would ultimately offer more protection than criminal defendants receive now because if a defendant commits a crime with a jurisdictional nexus available to twenty states, she can be punished separately and consecutively twenty times.
389. Markel, Retributive Damages, supra note 1, at 320.
390. Cf. Peter J. Boyer, The Bribe, NEW YORKER, May 19, 2008, at 44, 54 (describing how employees of State Farm Insurance, suspicious of the company's fraudulent practices, shared inculpatory information with private plaintiffs' lawyers who then passed that information on to law enforcement officers).
391. See, e.g., Ann M. Simmons, Metrolink Killer Is Sentenced to 11 Life Terms in Prison, L.A. TIMES, Aug. 21, 2008, at B5 (reporting on a defendant who faced eleven consecutive counts of incarceration for the murders of eleven people caused by one action).
392. The advantage to the state gained by making X litigate in two fora simultaneously is an unfair one, achieved only through the chance of having the wrongdoer distracted by two simultaneous proceedings.
393. It will be the defendant's responsibility to bring information of prior adjudications to the court's attention, since the defendant will be in the best position to inform a civil plaintiff that she has already been indicted. If there is a "block" because of coincidental criminal prosecution, the courts should allow the relevant statute of limitations to equitably toll in the event that the prosecution fails.
394. See MILLER & WRIGHT, supra note 229, at 1002-05.
395. Browning-Ferris Indus, of Vt., Inc. v. Kelco Disposal, Inc., 492 U.S. 257 (1989).
396. Id. at 275-76.
397. Id. at 275 n.21.
398. If there were such review, it would likely follow the framework established under United States v. Bajakajian, 524 U.S. 321 (1998). That doctrinal framework, by emphasizing whether the punishment is "grossly disproportionate" to the underlying offense,
399. id. at 334, is not so strikingly different from the
400. See UTAH CODE ANN. §78B-8-201(3) (a) (2008) (granting to the plaintiff the first $50,000 of a punitive damages award and one-half of the excess of punitive damages over $50,000);
401. OR. REV. STAT. §31.735(a) (2007) (granting forty percent of the punitive damages award to the plaintiff).
402. See Markel, Retributive Damages, supra note 1, at 327-32. That said, when the state collects damages from private entities, other practical problems worthy of attention can arise.
403. See, e.g., Hanoch Dagan & James J. White, Governments, Citizens, and Injurious Industries, 75 N.Y.U. L. REV. 354 (2000).
404. See Ewing v. California, 538 U.S. 11, 29-31 (2003) (finding that the defendant's "history of felony recidivism" helped to justify his sentence under a three-strikes law).
405. Cf. Bajakajian, 524 U.S. at 336 (observing the need for deference to the legislative penalty scheme and a willingness to strike down only those fines that are grossly disproportionate to the severity of the offense).
406. See Tom Baker, Reconsidering Insurance for Punitive Damages, 1998 WIS. L. REV. 101, 115 ("[T]here is little dispute that, on their face, most primary general and automobile policies provide coverage for punitive damages."). Nonetheless, insurers employ a variety of strategies to limit their exposure to paying punitive damages claims.
407. See id. at 116-25 (describing how insurance companies use underwriting practices, policy limits, contract provisions, and refusals to pay based on public policy claims to control such payments). The analysis in this Section applies principally to those risks that insurance companies want to insure ex ante; their claims about why their contracts should not be enforced ex post in particular cases is a problem primarily of contract interpretation that I leave aside.
408. See Catherine M. Sharkey, Revisiting the Noninsurable Costs of Accidents, 64 MD. L. REV. 409, 430 (2005) ("[T] he legislative and judicial trend in the past several decades has been squarely in the direction of expanded insurability.");
409. id. at 456-60 (presenting results from a recent fifty-state survey).
410. Id. at 428-29.
411. See id. at 430-31 (collecting cases referring to this deterrence rationale);
412. see also George L. Priest, Insurability and Punitive Damages, 40 ALA. L. REV. 1009, 1031 (1989).
413. Eg., Nw. Nat'l Cas. Co. v. McNulty, 307 F.2d 432, 440 (5th Cir. 1962) ("The policy considerations in a state where . .. punitive damages are awarded for punishment and deterrence, would seem to require that the damages rest ultimately as well [as] nominally on the party actually responsible for the wrong."),
414. superseded by statute, VA. CODE ANN. §38.2-227 (2007) (providing that it is not against Virginia public policy to obtain insurance providing coverage for punitive damages owed due to "negligence, including willful and wanton negligence," but that it is contrary to public policy to obtain insurance covering punitive damages owed because of intentional misconduct),
415. as recognized in United Servs. Auto. Ass'n v. Webb, 369 S.E.2d 196, 197 (Va. 1988).
416. Priest, supra note 255, at 1029;
417. see also Baker, supra note 252, at 114-25 (detailing insurance company mechanisms for coping with the moral hazard problem associated with punitive damages). Moral hazard has been defined as the phenomenon by which injury and activity rates increase as a response to a decrease in the expected costs of injury.
418. See, e.g., Priest, supra note 255, at 1023 n.55.
419. See, e.g., Priest, supra note 255, at 1015 (noting that in every insurance and punitive damages case studied by the author, the insurance policy excluded intentional acts and covered only harms "neither expected nor intended from the standpoint of the insured"
420. (quoting Am. Home Assurance Co. v. Safeway Steel Prods. Co., 743 S.W.2d 693, 695 (Tex. App. 1987))). Priest also explains how the exclusion of intentional conduct from insurance policies works to the benefit of lowering premiums for those "insureds not intentionally engaging in acts causing harm" and prevents losses to those who would suffer from intentional harms if insurance for such harms were permitted.
421. Id. at 1026.
422. Sharkey, supra note 253, at 432 n.118 (listing these states).
423. The same complexity attaches when a state predicates retributive damages liability on a mens rea formula like "wanton disregard."
424. See, e.g., Am. Sur. Co. of N.Y. v. Gold, 375 F.2d 523, 525 (10th Cir. 1966) ("[W]e are convinced from the weight and logic of the case law that Kansas would hold a policy insuring against punitive damage awards to be violative of the public policy of that state . . ..");
425. McNulty, 307 F.2d at 433-34 (holding that an insurance policy providing coverage for punitive damages would "contravene public policy");
426. Crull v. Gleb, 382 S.W.2d 17, 23 (Mo. Ct. App. 1964) ("We hold that to allow a motorist to insure himself against judgments imposed against him for punitive damages, which were assessed against him for his wanton, reckless or willful acts, would be contrary to public policy.").
427. To be sure, the line between reckless misconduct and malicious misconduct can be hard to draw at times. Drunk driving-the conduct that motivates many punitive damages cases involving insurance coverage-might be thought of as a hard case. In most cases, the defendant's state of mind is understood to be reckless because there is a substantial and unjustifiable risk of serious injury to both the defendant (which thereby lessens the moral hazard effect) and to others. The defendant usually does not intend to or know that she will crash and hurt someone, and the risk of harm caused might not result in actual harm. Still, the conduct, even when harmless, is itself condemnable as a serious wrong because of the manifestly insufficient regard for the well-being of others that such conduct evinces. And if someone died as a result of the defendant's drunk driving, prosecutors might plausibly say that the defendant acted with such depraved-heart recklessness that the mens rea for common law murder would be satisfied.
428. See Priest, supra note 255, at 1021-22 (explaining the math and reasoning of the law of large numbers).
429. But see Tom Baker & Sean J. Griffith, The Missing Monitor in Corporate Governance: The Directors' & Officers' Liability Insurer, 95 GEO. L.J. 1795, 1807-17 (2007) (providing some empirical qualitative evidence of instances in which insurers did not seek to invest in monitoring during the life of the insurance policy).
430. Id. at 1022. Contrary to some views informed by modern portfolio theory, which would counsel insurers simply to acquire a diversified portfolio of risk, recent empirical evidence confirms that, in the context of entities, insurance companies do in fact analyze a prospective insured's corporate culture to assess risks of misconduct.
431. See Tom Baker & Sean J. Griffith, Predicting Corporate Governance Risk: Evidence from the Directors' & Officers'Liability Insurance Market, 74 U. CHI. L. REV. 487, 517 (2007) (noting that directors' and officers' liability insurance underwriters repeatedly told the authors that corporate culture and character are important considerations in assessing risk). Perhaps the insurers are making an economic mistake, but they would not be doing this risk sorting unless they thought that it was to their advantage to do so; in making the risk-selection choices, they are pricing the expected cost of punitive damages vis-àvis a particular client into the premium they charge. That said, Baker and Griffith argue that, at least in the context of directors' and officers' insurance, the levels of insurance purchased by management for the benefit of the shareholders will be inefficient and strongly influenced by agency costs.
432. See Baker & Griffith, supra note 264, at 1800 (arguing that managers buy certain forms of directors' and officers' insurance for "selfserving" reasons).
433. As Professor Miriam Baer rightly pointed out in a comment on an earlier draft, the possibility of experience-rating the insured should not obscure the fact that other factors (whether there is a hard or soft market for insurance, for example) can drown out the experience aspect of the premium. In other words, many market entrants might lower the premiums even for those who are prone to driving recklessly. Conversely, it is possible that the reduction in premium that one gets from driving extremely carefully might be overcome by the overall increase in car insurance when a major insurer goes belly-up and the insurance markets contract suddenly.
434. As discussed supra note 265, however, insurers often have incentives to reduce information costs associated with specific investigations and simply follow the portfoliotheory views of insurance or actuarial tables associated with particular kinds of risk borne by particular buyers of insurance.
435. See also Lawrence A. Cunningham, Too Big to Fail: Moral Hazard in Auditing and the Need to Restructure the Industry Before It Unravels, 106 COLUM. L. REV. 1698, 1743 (2006) ("Most insurance underwriting exercises involve classifying risks using general actuarial tools rather than specific investigation.").
436. But see id. at 1743-44 (discussing the types of insurance products that typically involve specific investigations). The fact that insurance companies choose to conduct their business this way is relevant; under my proposal, one is not mandating the availability of an insurance policy for retributive damages, but rather is permitting it. And if it is permitted, the insurance company should be able, within reason, to set the terms of the agreement and how it thinks it should proceed. Thus, I am not especially concerned that insurance companies might lose money by failing to monitor insureds closely during the life of the policy.
437. See Baker & Griffith, supra note 264, at 1813.
438. Should a legislature require that insurers only be able to write insurance policies that have a coinsurance scheme? It would be a practical concession to the negative appearance that some judges and scholars have said is created by permitting insurance for punitive damages. But it would also ensure that there is a direct, rather than muted, setback to the defendant's interests that would be independendy justifiable and warranted.
439. See generally Paul H. Robinson & John Darley, Does Criminal Law Deter? A Behavioural Science Investigation, 24 OXFORD J. LEGAL STUD. 173 (2004) (providing reasons for skepticism about defendants' amenability to deterrence signals).
440. See CALABRESI, supra note 18, at 269-70 (arguing that in cases such as careless driving, when "normal individuals can choose whether or not to engage in wrongful conduct before an accident, an appropriate noninsurable penalty is necessarily a more effective deterrent than an already paid insurance premium").
441. Say a law student sees her drunk professor leaving the bar, stumbling into a car, and starting that car; the student then follows the professor (with a camcorder) for a mile, watching the professor swerve across the road. The professor ultimately drives off the road into some grass, hurting no one, and falls asleep. My scheme would have legislatures authorize persons to bring actions for retributive damages in instances like this. See Markel, Retributive Damages, supra note 1, at 279-86.
442. Cf. Baker, supra note 252, at 129 (concluding that insurance availability will increase the likelihood that plaintiffs will bring suit).
443. In the context of purchasers of insurance, we also need to think carefully about the differences in treatment of defendants who are individuals versus those that are partnerships, and between public- versus private-firm defendants. First, with corporate entities, there is an agency-cost problem worth spotting: managers may underpurchase-or overpurchase-the amount of insurance needed to protect the interests of the owners. Second, the determination of how much insurance to purchase and who makes that decision may not relate well to who can nimbly respond to the appropriate signals established through insurance markets and who deserves the attribution of blame for failing to make good decisions. Thanks to Dave Hoffman for helping me recognize this. Additionally, the idea of moral hazard in the publicly held corporation has a different valence than when applied to an individual, for example. In the public corporation, the shareholders are indirectly paying for the insurance, while some risk manager is arranging for the corporation's yearly insurance policy, and some manager or director violates the law. In that case of disaggregation, insurance for retributive damages may be creating a hazard, but it is not necessarily a "moral" one, in the sense that the purchaser of the insurance is trying to benefit unduly through its lack of adequate care. For more on this,
444. see Miriam Hechler Baer, Insuring Corporate Crime, 83 IND L.J. 1035, 1083-84 (2008). Of course, ex ante, it is unclear why shareholders should be benefiting from structures that would insulate them from punishment for the wrongs that these structures of ownership and management perpetrate.
445. See Markel, Punitive Damages, supra note 9.
446. See RICHARD V. ERICSON ET AL., INSURANCE AS GOVERNANCE ch. 8 (2003) (detailing ways in which insurers actively encourage those that they insure to adopt measures to limit risk and prevent loss);
447. Sharkey, supra note 253, at 413 ("Insurance companies, as private regulators, are well positioned to achieve deterrence through experience rating of firms and other actors, as well as by providing risk management services.").
448. See Baker, supra note 252, at 110-11 (discussing how philosopher Jean Hampton's retributive theory incorporates concerns for prevention);
449. Markel, Retributive Damages, supra note 1, at 268 (arguing that under the theory of confrontational retributivism, the establishment of institutions furthering retributive justice will in practice facilitate the prevention of future wrongdoing).
450. Whether such an insurance market is likely to develop in practice or to become too concentrated are questions left for another day. Cf. Baer, supra note 273, at 1092-94 (addressing these questions).
451. This concern for prevention is an aspect of the ex ante function of retributivism, discussed in Part II of Markel, Retributive Damages, supra note 1, and this rationale applies, quite naturally, to permitting insurance for compensatory, aggravated, and deterrence damages purposes too.
452. Baker, supra note 252, at 112. Baker wrote this paragraph under the inspiration of Galanter and Luban's account of punitive damages as victim vindication.
453. See id. at 110 ("As Galanter and Luban explain, the retributive purpose of punitive damages 'is to reassert the truth about the relative value of wrongdoer and victim by inflicting a publicly visible defeat on the wrongdoer.'"
454. (quoting Galanter & Luban, supra note 3, at 1432)). But with the right adjustment-replacing "the value of the victim" with the "value of the social interest in equal liberty under law"-I think the rest of the paragraph is exacdy correct in reflecting the public values of the retributive account in this project
455. But cf. Nw. Nat'l Cas. Co. v. McNulty, 307 F.2d 432, 440 (5th Cir. 1962) (Wisdom, J.) ("It is not disputed that insurance against criminal fines or penalties would be void as violative of public policy. The same public policy should invalidate any contract of insurance against the civil punishment that punitive damages represent"),
456. superseded by statute, VA. CODE ANN. §38.2-227 (1986), as recognized in United Servs. Auto. Ass'n v. Webb, 369 S.E.2d 196, 197 (Va. 1988). Judge Wisdom, however, goes too far, for reasons that I hope my account explains.
457. See, e.g., id. at 440 ("Where a person is able to insure himself against punishment he gains a freedom of misconduct inconsistent with the establishment of sanctions against such misconduct.").
458. To facilitate the likelihood of greater monitoring and reduce the possibility of this kind of collusion, it might make sense for a jurisdiction to prefer insisting on an "occurrence" policy over a "claims made" policy. Under the former, the insurer at the time of the occurrence is required to pay, while under the "claims made" policy, the insurer who pays is the insurer at the time the claim is made. See Baer, supra note 273, at 1087 & n.255
459. (citingjames D. Cox, Private Litigation and the Deterrence of Corporate Misconduct, LAW & CONTEMP. PROBS., Aug. 1997, at 1, 33).
460. See Polinsky & Shavell, supra note 5, at 932 (expressing general support for insurance for the purpose of cost internalization damages);
461. id. at 932 n.194 (citing others who share the authors' view).
462. But see supra note 91.
463. See generally Tom Baker, Transforming Punishment into Compensation: In the Shadow of Punitive Damages, 1998 WIS. L. REV. 211, 234-45 (listing factors that may alter incentives in allocating damages);
464. Thomas Koenig, The Shadow Effect of Punitive Damages on Settlements, 1998 WIS. L. REV. 169, 172 ("[H]yperbole and simple confusion may shape settlements in a more powerful way than empirical truths.").
465. But see Polinsky & Che, supra note 91, at 568 (noting that from an optimal deterrence perspective, settlements are good because they reduce litigation costs).
466. The clergy sex-abuse scandal manifested these problems. See TIMOTHY D. LYT-TON, HOLDING BISHOPS ACCOUNTABLE: HOW LAWSUITS HELPED THE CATHOLIC CHURCH CONFRONT CLERGY SEXUAL ABUSE pt. 2 (2008) (describing the use of sealed setdements);
467. see also Scott Moss, Illuminating Secrecy: A New Economic Analysis of Confidential Settlements, 105 MICH. L. REV. 867, 870 (2007) ("With so many lawsuits beginning with allegations of grievous social harm but ending with the legal equivalent of 'never mind,' confidential setdements have drawn increasingly fierce criticism recendy, attacked as ways defendants conceal serious misdeeds such as dissemination of hazardous products, discrimination, pollution, or sexual abuse." (footnotes omitted));
468. Adam Liptak, Judges Seek to Ban Secret Settlements in South Carolina, N.Y. TIMES, Sept. 2, 2002, at Al ("South Carolina's 10 active federal trial judges have unanimously voted to ban se-cret legal settlements, saying such agreements have made the courts complicit in hiding the truth about hazardous products, inept doctors and sexually abusive priests.").
469. The compensatory part of personal-injury awards is not taxable income for the victim, but most federal courts have said that punitive damages awards are taxable income. See I.R.C. §104(a) (2006) (providing that compensation received, whether by suit or agreement, on account of personal injuries or physical sickness is not included in gross income, with the exception of punitive damages). All the money in a settlement, however, would likely be described as "compensatory," which creates a reason for the plaintiff to try to collude with the defendant against the state (or the insurance company).
470. Cf. Baker, supra note 284, at 227-28 ("[B]oth plaintiffs' and defense lawyers would prefer to see those aggravated damages 'in the guise of compensatory damages' rather than 'in the guise of punitive damages.' ⋯ For plaintiffs, the state share, the possibility of remittitur or reversal on appeal, and tax law are all important factors ...." (footnotes omitted)).
471. Iowa has a split-recovery scheme in which the state plays an active role, for example, in monitoring litigation. For a description of this scheme, see Sharkey, supra note 5, at 435.
472. Perhaps the state should be able to sell the action to a third party too. See generally Michael Abramowicz, On the Alienability of Legal Claims, 114 YALE L.J. 697, 699 (2004) ("Courts increasingly have tolerated claim sales and have begun to view restraints on alienation skeptically.");
473. cf. David Rosenberg, Deregulating Insurance Subrogation: Towards an Ex Ante Market in Tort Claims 307 (Harvard Law Sch. Pub. Law Research Paper No. 043, 2002), available at http://ssrn.com/abstract= 350940 ("Competitive ex ante claims markets (including secondary markets for claim re-sale and aggregation) provide the most efficient and effective means of achieving the deterrence ends of tort liability and generating the highest clearance price for sellers of potential tort claims.").
474. There is a risk that the government will not obtain all the information that it needs to make a good decision, but the government has various civil and criminal strategies to ensure that there is a full reporting by the lawyers involved.
475. But cf. Sharkey, supra note 5, at 445 (noting that the risk of sham litigation in the context of the author's proposal for compensatory societal damages still "looms large"). On setdement pressure generally,
476. see Charles Silver, "We're Scared to Death": Class Certification and Blackmail, 78 N.Y.U. L. REV. 1357 (2003).
477. See Markel, Retributive Damages, supra note 1, at 279-86.
478. Once the defendant admitted to wrongdoing and settled with the state, such information could be stored in a registry of the sort described by Jim Gash, Solving the Multiple Punishments Problem: A Call for a National Punitive Damages Registry, 99 NW. U. L. REV. 1613, 1617 (2005), though some modifications would need to be made to be compatible with the structure proposed here.
479. One might think that this supervisory role would necessitate large-scale hiring efforts on the part of government bureaucracies, but such fears seem overstated in light of the relative infrequency with which punitive damages are awarded in most jurisdictions. See Sebok, supra note 5 (surveying empirical literature on the infrequency of punitive damages). That said, the structure proposed here would change the litigation game substantially, so it is inappropriate to dismiss these fears altogether.
480. For discussions of the of the problems associated with concealing settlements, see generally Owen M. Fiss, Against Settlement, 93 YALE L.J. 1073 (1984);
481. Susan P. Koniak & George M. Cohen, Under Cloak of Settlement, 82 VA. L. REV. 1051 (1996);
482. Liptak, supra note 286.
483. See, e.g., Moss, supra note 286 (arguing that the economic perspective on sealed settlements is more ambiguous than previously conceived).
484. Judges already have a heightened obligation to supervise settlement classes, but they should not shirk their responsibility to consider nonclass setttlments that may have profound effects on similarly situated litigants in the future.
485. See Adam Liptak, Pain-and-Suffering Awards Let Juries Avoid New Limits, N.Y. TIMES, Oct. 28, 2002, at A14 (analyzing ways in which lawyers and juries circumvent state limits on punitive damages, and noting a particular case where a jury awarded a woman who endured sexual harassment at work $20 million in compensatory damages for pain and suffering).
486. See Markel, Retributive Damages, supra note 1, pt. IV (discussing the rationale of retributive damages as a tool to counteract misconduct by wealthy and powerful persons and entities).
487. These instructions are a substantially modified version of the kind found in Polinsky & Shavell, supra note 5, app. In some places, having mostly to do with cost internalization, I expressly borrow the language from their proposed jury instructions.
488. Philip Morris USA v. Williams, 549 U.S. 346, 355 (2007).
489. Note that these instructions accord with what I view to be the correct reading of Philip Morris, not what I think would logically be entailed by an unbridled prioritization of cost internalization.
490. These amounts should ultimately be adjusted to reflect appropriate taxsensitivity judgments, as developed in a subsequent article on the taxation of punitive damages that I am writing with Gregg Polsky. Markel & Polsky, supra note 9.