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Tag Archives: Remedies

Conceptions of Privacy Shouldn’t Stand in the Way of Privacy Standing

Ignacio Cofone, Privacy Standing, 2022 U. Ill. L. Rev. __ (forthcoming 2022), available at SSRN.

Data breaches abound, but not every breach results in a cognizable claim. Which violations should constitute actionable injuries? What injury allegations satisfy standing requirements in federal courts? How should courts articulate sufficient cognizable injuries to warrant relief? Professor Ignacio Cofone, in a forthcoming article titled Privacy Standing, offers a framework for answering these questions and guiding courts to more consistent opinions for similarly situated victims.

Standing challenges confound courts resulting in inconsistent rulings. As Cofone notes, “No standing means unenforced rights.” Identifying privacy harms, however, is difficult. The primary obstacle lies in assessing privacy harms, for which Cofone proposes a conceptual solution. Cofone first notes the doctrinal woes of the courts. Courts tend to conflate the issue of privacy loss with Article III standing analysis. The Supreme Court, in Spokeo v. Robins, clarified that plaintiffs seeking relief for privacy injury must pose a cognizable real-world harm. The Court emphasized that the harm must be concrete, but did not further guide lower courts in rendering this assessment. Some circuits find standing doctrines satisfied based on a violation of a statutory privacy right, while other courts find standing not met unless plaintiff shows an additional kind. Examples of additional harm are financial harm or reputational harm. Cofone asserts that both approaches have flaws and should be replaced by a three-step framework that considers the fact-dependent nature of privacy injuries.

With useful illustrations from Urban Outfitters to real-world controversies like Grindr, Cofone guides readers through the proposed framework. First, a judge must identify the loss of privacy. Next, the judge should identify the privacy harm, and last, the judge should determine when the harm rises to an actionable privacy injury. Cofone suggests that the second step of whether a privacy loss constitutes a privacy harm is to examine any intrusion on normative values. For example, the jurist must ask whether the privacy loss violated normative privacy values such as the right to be let alone, autonomy, secrecy, control over personal information, protection of one’s dignity, and intimacy. For the final step, the judge must determine whether the privacy harm is actionable based on judicial precedent and the existence or nonexistence of statutes granting standing. Cofone asserts that the synthesis of both equates to applying a reasonable person standard.

The core problem, and Cofone’s solution, matter because of increased collection of personal information and data breaches. The increased risk and occurrence of privacy loss necessitate clearly defined standards by which parties may seek remedies for violations of common law and statutory privacy rights. Still courts must engage in proper line-drawing to determine which claims are actionable. Implementing Cofone’s solution will enable courts to hear and redress meritorious claims of privacy violations without opening the door to unfounded or incognizable claims.

Cofone’s framework is purposefully narrow to alleviate the concern that finding standing for every privacy injury case would open the floodgates to all kinds of privacy complaints. By judiciously excluding cases in which no privacy loss occurred, or the loss of privacy was not a privacy harm, or the harms are reasonable under the circumstances, courts will be free to recognize some injuries as constituting standing while avoiding the slippery slope of recognizing any privacy loss as an actionable claim. The shift to a nuanced conception of privacy loss and privacy injury—rather than a binary notion—is a central theme of Cofone’s project.

To conceptualize the harms inherent to mass data collection, aggregation, and potential data breaches, Cofone introduces the idea of a probabilistic privacy injury. To illustrate the point, the Article uses a graph to show two normal distribution curves: one relatively flat and wide representing an individual in low danger of suffering a privacy injury, another steep and narrow in grave danger of suffering a privacy injury. This illustration includes Bayesian statistical analysis, and Cofone helpfully explains the graph and its underlying bases.

Cofone likens privacy harms to environmental torts, which Cofone argues, suffer from similar problems of temporal and evidentiary separation of cause and effect. The comparison provides a lens through which Cofone advocates for establishing enhanced legal protections of statutory privacy rights. Cofone explores the common law recognition of probabilistic standing as a useful model. According to Cofone’s contention, recognizing probabilistic privacy injuries the same way the law recognizes diffuse environmental harms would overcome challenges that probabilistic privacy injuries are too general to meet standing doctrine’s particularized harm requirement.

This article demonstrates that privacy injuries should be independently assessed. Courts should not require an additional showing of another kind of harm (like financial or reputational harm) because doing so misses the point of privacy rights. The normative values of privacy, Cofone explains, are what Congress sought to protect when it created statutory rights of privacy. Citing Justice Thomas’s dissent in TransUnion v. Ramirez, Cofone argues that Courts should defer to Congress’s power to create and define rights.

With Privacy Standing, Cofone renders valuable contributions to collective legal knowledge. Namely, Cofone creates opportunity for scholarly and judicial advancement from the article’s conceptualization of privacy harm as a probabilistic injury, its three-step framework for identifying actionable privacy injuries, and its synthesis of the misguided rationale underlying the circuit split on standing doctrine pertaining to privacy injuries. Overall, Cofone’s work will inure to the benefit of federal court standing doctrines. It also will ensure that those with proven violations of privacy rights do not go without a remedy. With luck, Cofone’s work will foster further scholarship developing privacy law and refining judicial treatment of similar difficult-to-prove injuries.

Cite as: Caprice Roberts, Conceptions of Privacy Shouldn’t Stand in the Way of Privacy Standing, JOTWELL (July 22, 2022) (reviewing Ignacio Cofone, Privacy Standing, 2022 U. Ill. L. Rev. __ (forthcoming 2022), available at SSRN),

Private State Actions to Disgorge the Wrongful Gains of Insider Trading

Jeanne L. Schroeder, Taking Misappropriation Seriously: State Common Law Disgorgement Actions for Insider Trading (Feb. 11, 2021) Cardozo Legal Stud. Rsch. Paper No. 625, available at SSRN.

The disgorgement remedy strips a defendant of unjust profits. Disgorgement is gaining prominence as a civil remedy across a varied body of substantive laws, including intellectual property, contracts, fiduciary duties, as well as in government enforcement litigation to battle fraud and corruption. Disgorgement’s provenance ties to restitution and the equitable accounting for profits remedy. Even as memory of its equitable history fades, modern and novel applications of disgorgement flourish. Disgorgement relies on restitutionary principles because its primary goal is to undo unjust gain. It also deters opportunism and disincentivizes misconduct.

But if not applied properly, the danger is that disgorgement may punish, which is explicitly not a goal of the law of unjust enrichment and restitution. The Securities and Exchange Commission (SEC) has faced, and continues to face, an array of criticisms for aggressive uses of its disgorgement remedy pursuant to statutory authorization. Such concerns led to several Supreme Court rulings requiring adjustments to the SEC’s approach to disgorgement—most recently in Kokesh v. SEC, 137 S. Ct. 1635 (2017) and Liu v. SEC, 140 S. Ct. 1936 (2020). Congress subsequently amended the remedy to solidify the SEC’s authority to seek disgorgement, though the clarification oddly appears to classify the statutory disgorgement remedy as legal rather than equitable. This congressional revision is housed in a massive piece of unrelated legislation, the 2021 National Defense Authorization Act (“NDAA”), which Congress passed over a presidential veto. A parallel expansion of disgorgement remedies by the Federal Trade Commission (FTC) faced increased judicial scrutiny and ultimately a rebuff by the Supreme Court in AMG v. FTC, No. 19-508 (April 22, 2021) (narrowly interpreting the statute’s injunction power as not encompassing FTC authority to seek equitable disgorgement), with congressional restoration of full disgorgement power anticipated.

Much is changing rapidly, and it is unclear how successful the SEC will be at navigating new strictures while advancing enforcement goals. To be clear, the landscape is complex. In a forthcoming article, Taking Misappropriation Seriously: State Common Law Disgorgement Actions for Insider Trading, Professor Jeanne Schroeder seeks a solution to the complexities. She advances private state common law actions for disgorgement as a cleaner way to remedy insider trading violations. The potential advantages of private state-based litigation with application of the disgorgement remedy are worth serious consideration. And the notion of parallel pursuit of state common law remedies may well be a wise approach for other governmental enforcement regimes.

To lend credence to this proposal, Professor Schroeder argues that a state common law disgorgement action would align with the Supreme Court’s “largely property-based theory of insider trading.” Regardless of the asserted narrative fit, Professor Schroeder offers six compelling reasons why an action at common law for restitution would avoid many of the complexities of federal insider trading enforcement actions. For example, the Supreme Court’s insider trading jurisprudence requires fraud, violation of a fiduciary duty, as well as misappropriation of information. Under state law, each of those elements provides an independent ground for private redress.

The common law of restitution therefore streamlines the inquiry to “the person to whom the duty is owed or the owner of the information who should have a cause of action.” In highlighting such improvements, Professor Schroeder provides a useful, thorough overview of federal and state insider trading jurisprudence. According to Professor Schroeder, state common law of restitution would simplify remedying insider trading wrongs. Specifically, a state disgorgement approach would eliminate the Supreme Court’s multi-factor standard for insider trading and provide much greater flexibility in proof thresholds. For restitution and disgorgement, state common law standards are less onerous than federal statutory requirements and the Supreme Court’s strictures. Still, federal law leaves space for concurrent jurisdiction and the continuation of common law efforts to disgorge improper gains.

Of course, to suggest that this alternative approach could replace the SEC’s enforcement regime would be extreme. Professor Schroeder wisely notes that her solution of private disgorgement actions should supplement SEC enforcement, not supplant it entirely. The SEC would remain responsible for a host of remedial efforts including injunctions, bars, suspensions, penalties, and more. Meanwhile, state courts could continue to develop the contours of the common law of restitution and the important remedy of disgorgement.

The force of Professor Schroeder’s approach is that it offers viable alternatives with much simpler proof requirements. Additional benefits may flow from a state common law restitution approach. Such benefits are not the focal point of the article but include the potential avoidance of Liu constraints. For example, a state law approach would obviate the mandate to present evidence of concerted wrongdoing in order to obtain joint and several disgorgement liability as well as the Supreme Court’s directive to return funds to victims, both of which present unique challenges in insider trading cases.

Still, it is worth considering whether the Supreme Court’s commands are wise policy. Though not bound by those strictures, state common law decisions would be free to engage in parallel tightening. But any such efforts can vary by state and would tie to the goals of restitution and unjust enrichment rather than the language of federal statutes. No matter what the underlying frame of the cause of action and remedy sought, courts must balance the law’s mission against concerns about overreach, plaintiff windfalls, and punitive results.

Professor Schroeder emphasizes a core restitution principle: that her approach will restore the private claimant to the status quo ante. In some of these cases though, courts should conduct more refined analysis to evaluate whether the application of restitution works if the property—material nonpublic information—is of less value when it is not traded than when it is. In some cases, the inside trader’s proceeds may not be “the fungible equivalent of personal property previously transferred to the other party,” because material nonpublic information that has not been traded upon does not (yet) have monetary value to the issuer. Still, as Professor Schroeder’s work demonstrates, meaningful and powerful remedies for wrongdoing such as insider trading are worthy state law aims. Thus, Professor Schroeder’s work will still resonate as the state common law continues to honor the goals of restitution while working in the shadows of federal statutes.

Professor Schroeder’s scholarship is vital in that it reminds readers to consider forgotten remedies and lesser worn paths. Federal enforcement should not be the sole vehicle to strip gain, deter wrongdoing, and benefit victims. If private litigants can effectively pursue remedies on the state level, the SEC may be able to direct its resources to more challenging or important targets. Not only might those paths be easier in the pursuit, but the seeker may also more likely reach the ultimate goal of disgorging the improper gain from insider trading.

Cite as: Caprice Roberts, Private State Actions to Disgorge the Wrongful Gains of Insider Trading, JOTWELL (May 6, 2021) (reviewing Jeanne L. Schroeder, Taking Misappropriation Seriously: State Common Law Disgorgement Actions for Insider Trading (Feb. 11, 2021) Cardozo Legal Stud. Rsch. Paper No. 625, available at SSRN),

Rethinking National Injunctions

Russell L. Weaver, Nationwide Injunctions, 14 FIU L. Rev. 103 (2020).

In a delightful article recently published in the Florida International Law Review, Professor Russell Weaver has done a great service to us all by helpfully summarizing the current state of the law concerning nationwide injunctions, drawing on and summarizing recent scholarship and numerous cases in the field. His article should prove to be of great value to the practitioner and the professor alike and, given its length and clarity (at seventeen pages, Prof. Weaver’s article packs quite a punch), those teaching in the area may even consider assigning it to their students. I probably will, because although many of my students seem to grasp the logic of compensatory damages due to some exposure in their first-year contracts and torts classes, they often seem mystified, at least initially, when it comes to injunctions, which is to say nothing of nationwide injunctions!

Part of this mystery, it seems, stems from the fact that injunctions grew up in courts of equity, whereas damages (primarily) grew up in common law courts, and the first-year curriculum (outside of a few contracts cases on specific performance) largely focuses on the latter at the expense of the former. This means that although students are familiar with the idea that compensatory damages should generally try to return an injured party to the position it would have occupied but for the wrongful harm inflicted by the wrongdoer, they have a harder time understanding why an injunction should be issued before a wrongful harm has ever come to pass. But the difficulties do not stop here. Unlike damages, which can be measured in dollars, they also find measuring the “amount” of an injunction to be counterintuitive. In theory, a court should award the “amount” of injunction needed to prevent the plaintiff from suffering from a potential future wrongful harm. But even talking about injunctions in this way seems odd, for injunctions cannot be “counted” in the same way that dollars can, and therefore determining the proper scope of an injunctive remedy is incredibly difficult.

Which brings us to another point: in theory, the scope of an injunction should not exceed the scope of the threatened harm, so that (for example) a company-wide injunction would only be appropriate where a company-wide wrong is taking place. In practice, however, it is easy to game the system, especially in the area of national injunctions, which has seen tremendous growth over the past several decades. This is so because plaintiffs can (and frequently do) seek, for example, a nationwide injunction in one jurisdiction, fail to obtain it, and then bring suit in another jurisdiction several years later. Then, in this new jurisdiction, plaintiffs win, and have their “win” extended throughout the United States (including, it should be noted, the jurisdiction in which their original suit previously failed). Although these cases are extremely interesting, productive, and fun to talk about in class, they are difficult to summarize (much less make sense of) for the students, not to say anything of the professor’s ability to understand them!

Enter Professor Weaver. Not only does his article do a fabulous job summarizing the current state of the law, but he helpfully spends a good deal of space discussing the policy implications of nationwide injunctions, canvassing the pros and cons of allowing district and circuit courts to set policy on the national legal stage.

So, for instance, against the argument that nationwide injunctions might be necessary to promote uniform laws designed to protect large numbers of otherwise powerless individuals from “unconstitutional” government policies, Prof. Weaver balances the argument that these lower-court decisions are sometimes found to have been “wrong,” in that the actions deemed “unconstitutional” by a district or circuit court is found to have been, according to the Supreme Court, perfectly legal, with the result that the uniformity that was imposed by lower courts was, in point of fact, without a legal basis. Similarly, Prof. Weaver discusses how, on the one hand, allowing a lower court to make a decision for the entire nation may promote “judicial economy” by having a “single judge hear and decide the issue” before it, which, in turn, can save the judicial resources of all the other courts around the country who no longer need to “consider and decide the same issue.” (P. 111.) On the other hand, however, Prof. Weaver points out that such judicial economy comes at a price: specifically, allowing the precipitous review of important national issues without adequately developing the issue in other districts and circuits. Sometimes, as where a more complete and thorough understanding of the issues can be developed in multiple district and circuit courts, a little inefficiency can be a good thing!

Prof. Weaver discusses a number of other important issues created by nationwide injunctions as well (the potential for nationwide injunctions to politicize courts, encourage forum shopping by litigants, and over-empowering individual district and circuit judges), and I would encourage any interested readers to check out and read his entire article. Not only is it a quick and delightful read, but it is one that I your remedies students will likely enjoy as well. It is probably the most accessible summary of these issues I have seen in a single place.

Cite as: Marco Jimenez, Rethinking National Injunctions, JOTWELL (October 14, 2020) (reviewing Russell L. Weaver, Nationwide Injunctions, 14 FIU L. Rev. 103 (2020)),

Wrongful Gains from Data Breaches

Bernard Chao, Privacy Losses as Wrongful Gains, (forthcoming), available at SSRN.

Here’s the problem: data breaches are on the rise, but they may not cause provable losses. This gap exists because traditional legal theories do not adequately protect the privacy interests at stake. Should the law have a method for identifying and capturing wrongful gain from those breaches? If so, should private plaintiffs be able to strip such gains in order to undo unjust enrichment and deter opportunism? Bernard Chao articulates why the law of unjust enrichment and restitution present a viable pathway for plaintiffs to hold data breachers accountable by disgorging gains earned from the breach. As Chao’s article shows, the law of unjust enrichment will provide both a basis for a more viable cause of action and a preferred remedy. The preferred remedy is disgorgement of profits.

Chao effectively shows the need for this paper as well as the justification for the lure of restitution. The lack of familiarity with and misconceptions about this body of law make Chao’s task a difficult one. Redesigning the solution requires an appreciation of law that is beyond the working knowledge of countless law professors, litigators, and judges. Scholars bemoan data breach laws as insufficient. Some scholars and judges see data breach problems as governed by common doctrinal boxes such as tort, privacy, and contract law, and assume one or more of those boxes forecloses any ability to pursue unjust enrichment paths.  This limited conception needs to change. Unjust enrichment and restitution law is equally applicable, and ultimately, more advantageous as a pathway to recovery. Restitution has the ability to address the wrong, and shape an ideal remedy that overcomes otherwise insurmountable obstacles for the victims of data breach. It is not without limits. Once raised properly, judges and juries can effectively fashion the relief to avoid unjust enrichment. Chao’s work will go far in achieving this critical repositioning of the law of restitution.

Existing scholarship suggests broadening conceptions of privacy harms. Rethinking what constitutes harms adds value to the scholarly dialogue. But, as Chao demonstrates, those theories will continue to encounter obstacles of proof given the elements of such causes of action. It is true that judicial interpretations of harm are sometimes restricted unnecessarily to financial losses. Incorporating intangible harms is a step in the right direction, but it does not solve all of the possible proof problems. Unjust enrichment law avoids this roadblock by removing the focus from compensating for plaintiff’s losses to preventing the wrongdoer’s unjust gains made as a result of the data breach.

The first part of Chao’s article describes typical privacy losses and how establishing the proof of those losses will be the downfall of most plaintiffs. Both the law of contract and tort pose barriers to recovery for victims: The goals of such causes of action have traditionally been to compensate victims for loss. As he wisely notes, these barriers have no real connection to the underlying merits of the privacy victims’ allegations of wrongdoing. Conventional bodies of law view plaintiffs’ intangible or hard-to-prove damages as not cognizable. If an individual can’t sell her own data, how can she prove that misuse of that data has caused her to sustain a financial loss? Further, the fact that she has not sold her own data shows that she values it above the market price; thus  demonstrating that a market-price measure of damages would also be inadequate. This is the problem the classic doctrines of compensatory remedies pose for plaintiffs.

Further, Chao addresses the obstacle of constitutional standing as it relates to plaintiff’s need to show actual injury. He usefully explores Clapper v. Amnesty International, and Spokeo, Inc. v. Robins. Chao builds on the critiques raised by other scholars such as Felix Wu who criticize standing doctrine’s current strictures. As Chao notes, standing requirements continue to pose significant hurdles for plaintiffs. Chao then suggests the law of unjust enrichment and restitution as the best solution to all these problems. Gain-based theories add a wrinkle to standing jurisprudence, but unjust enrichment claims meet standing strictures, as the Spokeo amicus brief filed by restitution and remedies scholars demonstrated.

Instead of focusing on plaintiff’s harm, unjust enrichment keys to defendant’s wrongful gain. Chao asserts that privacy scholars have ignored unjust enrichment and forgotten restitution remedies. According to Chao, Daniel Solove and Danielle Keats Citron’s important contribution on data breach harms only notes unjust enrichment in passing as one possible way to address the injury. Unfortunately, they are not alone. Lawyers and courts, too, fail to treat restitution seriously. As Chao explains, the law of unjust enrichment and restitution disappeared from the American legal mindset. Doug Laycock documented this lamentable absence from our collective imaginations in his important work: Restoring Restitution to the Canon. Chao is correct that there is much work needed to rebuild this foundation.

It starts with education. Chao’s article offers definitions to assist readers with both the underlying theories of restitution as well as its remedies including disgorgement. He also explores exactly how the law of restitution applies to privacy breaches, and how it overcomes many of the doctrinal hurdles found in tort, contract, and constitutional law. The incredible work of the American Law Institute’s Restatement (Third) of Restitution and Unjust Enrichment (2011) is another amazing resource with over 1,400 pages of applications and related commentary. American law schools should offer courses in restitution again. Andrew Kull, the Reporter for the Restatement, and Ward Farnsworth authored a wonderful restitution casebook in the hopes that if you build it, they will come. I was lucky enough to teach this material in an advanced course at the University of Florida Levin College of Law. My students frequently wondered why they hadn’t studied any of the restitution cases before. They appreciated the variety of scenarios that could raise unjust enrichment, and the ways that the law of unjust enrichment and its remedies could offer relief where other bodies of law failed. The remedial power of restitution’s disgorgement and its constructive trust have undeniable appeal. We also spent much time discussing viable defenses to restitution claims and remedies. The law of unjust enrichment contains its own doctrinal hurdles, and company defendants will raise a host of defenses including efforts to offset profits with those it had every right to make. Courts are capable of balancing the interests of justice with doctrines of limitation such as attribution. But unjust enrichment will go far to open more access to claims and remedies than more traditional claims covering data breaches.

Until more are able to offer courses in restitution, we are fortunate to have thoughtful articles like Bernard Chao’s that conduct inquiries in the forgotten corners of the law. Restitution may not be a panacea, but restitution has more than enough to offer to solve many thorny problems raised by privacy and data breaches. If a company improperly uses a victim’s data and profits from that wrongful use, why shouldn’t the law honor a claim to disgorge that unjust gain? Chao concludes that the law should, and I agree.

Cite as: Caprice Roberts, Wrongful Gains from Data Breaches, JOTWELL (April 21, 2020) (reviewing Bernard Chao, Privacy Losses as Wrongful Gains, (forthcoming), available at SSRN),

Making Punitive Damages More Predictable

Benjamin J. McMichael & W. Kip Viscusi, Taming Blockbuster Punitive Damages Awards, 2019 U. Ill. L. Rev. 171.

As tort reform heated up in the United States late in the last century, so too did the debate over the appropriateness of punitive damages awards, especially where those damages were seen to be excessive. Complicating the picture, of course, is what it means for such damages to be excessive in the first place, for, unlike traditional damages intended to compensate the injured party, punitive damages are intended to punish and deter the wrongdoing party. As a starting point, most courts and scholars are in agreement that the reprehensibility of the wrongdoing party and the amount needed to deter similar conduct in the future are important considerations that should be taken into account before awarding punitive damages. After this, however, all bets are off. For instance, scholars disagree with one another as to whether punitive damages are really out of control in the first place (most, but not all, seem to think that they are), and even if they are, they further disagree on what should be done about the problem. For instance, how predictable should punitive damages awards be, and what role, if any, should be played by the defendant’s wealth, or by other civil or criminal penalties the wrongdoer might be subject to, or by the probability of the defendant’s behavior escaping detection, or by the ratio between the compensatory and punitive damages, or by whether the claim is being reviewed as excessive on common law grounds or as unconstitutional on due process grounds, and how does all of this tie in to the twin (but frequently at odds) goals of punishment and deterrence? Indeed, there are few principles in all of remedies more contentious (and confusing!) than those governing the current punitive damages landscape, as a stack of recently-graded remedies exams sitting next to my desk will readily attest.

It is in part due to this confusion that hundreds of law review articles have been written on punitive damages since the 1980s alone—just when tort reform started to find its feet under the Reagan administration—initiating a cataclysmic shift in the punitive damages landscape whose aftershocks are still being felt today. Fortunately, one of the newest contributions to the literature—a well-researched, enjoyably-written, and cogently-argued Article called Taming Blockbuster Punitive Damages Awards by Professors Benjamin J. McMichael and W. Kip Viscusi—has found something new to say. The Article not only provides “the first empirical analysis of the effect of state punitive damages caps on blockbuster awards” (i.e., those awards exceeding $100 million, which arguably pose the biggest threat to fundamental notions of fairness), but also is the first to explore the dynamic interplay between the attempt of individual states to rein in and render more predictable punitive damages awards “with the effect of the Supreme Court’s current constitutional doctrine on punitive damages.” (P. 171.)

First, a little background. When it comes to federal constitutional law, the Supreme Court in State Farm tried to rein in the excessiveness of punitive damages award by holding that “few awards exceeding a single-digit ratio (i.e., 10:1) between punitive and compensatory damages … will satisfy due process,”1 and even suggested in Haslip that an award exceeding a 4:1 ratio between punitive and compensatory damages might come close to stepping over the line of constitutional impropriety.2 However, most state legislatures have dealt with the problem of excessive punitive damages awards quite differently. On the one hand, many have tried to rein in punitive damages by passing legislation capping the total amount of punitive damages (e.g., to $1 million) and/or by setting the ratio of punitive to compensatory damages much lower than that of the Supreme Court (e.g., 3:1 and 2:1 ratios are fairly typical). On the other hand, many legislatures have also provided statutory exceptions to these ratios to provide for larger awards in certain cases. Until Professors McMichael and Viscusi, nobody has thought to explore how these very different regulatory regimes have interacted with one another, especially as concerns blockbuster awards. So, what did they find?

Applying multivariate regression models, the authors found several interesting things worth the price of admission. First, they found that since State Farm, both the frequency and the size of blockbuster punitive damages awards has been reduced. This was about what one would expect: the combination of State Farm and Haslip suggests that a punitive award in excess of $100 million would typically only be available where compensatory damages already exceeded $25 million, but historically, where compensatory damages were this significant, courts and juries more frequently than not demonstrated a general reluctance to impose punitive awards with high punitive-compensatory ratios.3 More surprising, however, was the authors’ second finding that although state punitive damages caps reduced the frequency of blockbuster punitive damages awards (as should be expected), they had “no effect on the size of the awards that [did] cross this threshold,” a result that contrasted both with “earlier evidence suggest[ing] that State Farm ha[d] little effect on either the frequency with which punitive damages are imposed or the size of these awards” and with evidence suggesting that “caps ha[d] a statistically significant and negative impact on award size.” (P. 175.)

Based on their findings, the authors quite sensibly argue that if the Court really is serious about reining in outlier awards and rendering punitive damages awards that are more predictable, they should “take advantage of the available empirical evidence to formulate a new approach to governing punitive damages under the Due Process Clause.” (P. 175.) Specifically, they argue that because State Farm tends to do a better job of policing larger punitive awards while caps tend to do a better job policing smaller awards, they should combine these two approaches and reduce the punitive-compensatory ratio to 3:1 while providing an exception for wrongful death cases. But even here, the authors argue, the combined value of the punitive and compensatory damages should be set to “equal the value of a statistical life,” a proposal designed to “enable punitive damages to fulfill their proper deterrence role.” (P. 210.) Such a proposal, it is true, will limit the Court’s ability to punish and deter particularly egregious conduct (a fact that the authors are careful to point out at several places in their article), but if we are willing to trade off these goals for more predictability in the law, a step the Supreme Court seems already to have taken,4 then the authors’ provide a sensible way of accomplishing this goal. The Article is highly recommended!

Cite as: Marco Jimenez, Making Punitive Damages More Predictable, JOTWELL (August 14, 2019) (reviewing Benjamin J. McMichael & W. Kip Viscusi, Taming Blockbuster Punitive Damages Awards, 2019 U. Ill. L. Rev. 171),