Tag Archives: Remedies
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,” 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. 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. 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, then the authors’ provide a sensible way of accomplishing this goal. The Article is highly recommended!
Pamela Samuelson & Mark P. Gergen, The Disgorgement Remedy of Design Patent Law
, 108 Calif. L. Rev.
__ (forthcoming, 2020), available at SSRN
The law of design patents continues to evolve in dramatic ways. The law of remedies must also adapt to serve the underlying goals of design patent law and restitution. In creating and interpreting the disgorgement remedy, Congress and the Supreme Court have caused a crisis with unintended consequences. They have provided insufficient guidance on how to construe the remedy. Congress added this remedy to cure a perceived remedy deficit, but Congress crafted it too bluntly—authorizing disgorgement of “total profit” from one who sells, without a license from the owner, articles of manufacture that apply a patented design or colorable imitation. Meanwhile, the Court splintered the design patent right into smaller fragments without suggesting how to align the remedy.
In a thought-provoking critique, Professors Pamela Samuelson and Mark Gergen present a compelling, detailed argument for applying causation and apportionment to limit restitutionary disgorgement awards in partial design patent cases. This narrowing is essential to maintaining the utility of restitution in design patent law. The authors’ proposed solution also advances the normative purposes of restitution and its disgorgement remedy in design patent cases.
As Samuelson and Gergen demonstrate, a total-profits remedy risks overserving patent purposes and failing to adhere to restitution’s boundaries. The fragmentation of design patent rights calls for more precisely tailored remedies. The modern trend, as examined by Sarah Burstein, is to issue design patents on small parts of complex products and also on functionality more than ornamental designs. Samuelson and Gergen offer a thoughtful method of interpretation of the total-profits disgorgement remedy of § 289 of U.S. patent law.
But first they explore the flaws of recent judicial interpretation. They focus on the Apple v. Samsung case to reexamine the history and use of the disgorgement of total-profits remedy in design patent law. The Samsung Court construed “article of manufacture” for determining § 289’s disgorgement remedy so that it could be a component of the marketplace product rather than simply the end product. In other words, the infringement and remedy may be key to an element such as the Apple-inspired shape of the flat face of the smartphone rather than the Samsung phone itself. In so ruling, the Court vacated the lower court’s $399 million award that was intended to constitute Samsung’s total profit from sales of its phones that included infringing elements. The lower court judge had already remitted the jury verdict that exceeded $1 billion, which was the jury’s assessment of Samsung’s total profits. The Court vacated the award as remitted, but either award would be problematic under the Court’s new interpretation. It remanded for determination of the proper disgorgement amount in light of its narrowing of the right to the infringed elements (even if not separately salable) rather than the end product.
But as Samuelson and Gergen note, the Court fails to guide adjudicators on how to evaluate the relevant article of manufacture if not sold on the market and on how to determine the profits to disgorge where the infringement is partial rather than whole. On remand, the jury awarded $533 million in disgorgement of profits for Samsung’s infringement of Apple’s design patents. The parties settled after this verdict. Another case, Columbia Sportswear, raises similar concerns about a $3 million total-profits jury award for sales of gloves that infringed on a design patent on the lining material. The law remains unsettled and is also inconsistent with a Federal Circuit ruling.
The various awards during the Apple v. Samsung litigation process demonstrate the lack of precision in assessing the proper amount for disgorgement of profits under the Court’s new frame. Samuelson and Gergen forcefully critique the Court’s decision as “historically ill-informed and normatively unpersuasive.” (P. 3.) They lament that these flaws will lead to unsatisfying inquiries in complex technology cases. Further, the elusiveness of the examination will cause unpredictable, inconsistent, and occasionally grossly excessive awards. Instead, they advocate a more complete and detailed method for honoring the normative goals of restitution law that underlie the disgorgement remedy for design patent infringements.
Courts and scholars would be wise to incorporate restitution concepts to better protect the rights at stake. Restitution is not compensatory, but instead seeks to undo unjust benefits and deter wrongful behavior without punishing the infringer. A restitutionary disgorgement remedy like the one adopted by Congress for design patents alleviates proof problems for design patent owners who cannot prove actual damages with reasonable certainty and might otherwise be left with nominal recoveries. As Samuelson and Gergen’s article details, the legislative history confirms that Congress desired a meaningful remedy for design patent owners, but Congress did not intend the total profit remedy to be punitive.
It is key that a gain-based remedy of disgorgement of profits conform to restitution’s purposes—preventing unjust enrichment by stripping profits from wrongful infringement but not by punishing. The lack of guidance coupled with the greater fragmentation of the right is likely to result in inflated disgorgement awards. As the authors aptly state, disgorgement’s function is not compensatory but rather to erase the incentive to act wrongfully by stripping “from a wrongdoer profit that is causally attributable to his wrong, but not more than this (and sometimes less if apportionment is warranted).” (P. 3.) Accordingly, under a restitution frame using a counterfactual analysis, “wrongdoers are allowed to retain costs of committing the wrong and profits they would have made had they chosen to behave lawfully.” (P. 3.)
Proper calibration of disgorgement requires careful causation and apportionment analysis. Samuelson and Gergen acknowledge that determining causation and apportionment with precision will be challenging and inherently discretionary. For the interested reader, the authors meticulously explore the Solicitor General’s suggested test and VW Beetle design-patent hypothetical, and they compare various scenarios through a thought experiment with the famous restitution case of The Great Onyx Cave. This exploration demonstrates the distinction between causation and apportionment, the importance of alternative framing, and the correlation of these doctrines to goals such as fairness, efficiency, and desert. The legislative history does not foreclose this analysis, and if it does, Congress should amend this section to allow this inquiry especially for partial design infringement cases.
Who should conduct this remedial inquiry? The authors maintain that judges are better suited to make these assessments and attain more reasonable approximations than juries. Further, they show historical markers that support characterizing the remedy as equitable in this context. Despite the practice of using juries in determining design patent disgorgement awards, Samuelson and Gergen are convinced that a jury is not constitutionally required. The wise exercise of equitable discretion will go far in maintaining disgorgement as a powerful, yet restrained remedy to deter taking without asking, while preventing only the enrichment that is truly unjust.
Stephen A. Smith, Rights-Threats, Wrongs and Injustices: The Common Law Causes of Action
, 27 N.Z.U.L. Rev.
1033 (2017), available at SSRN
It is a familiar quip that a right without a remedy is no right at all. A recent article by Stephen A. Smith shows, however, that there is such a thing as a remedy with no right—something I might call a “rightless remedy.” In Rights-Threats, Wrongs and Injustices: The Common Law Causes of Action, Smith explicates a category of judicial orders (i.e., remedies) that are not tied to any underlying legal right or wrong. In doing so, Smith tells us something important about both rights and remedies.
To appreciate Smith’s insights, it is first important to understand his taxonomy. The phrase “cause of action” can mean many things, but to Smith and other scholars writing in this area, a “cause of action” is a set of facts that justify a judicially-administered remedy. Understood as such, a cause of action is not necessarily co-extensive with substantive law. The substantive law contains instructions for citizens (e.g., “do not hit others,”) but cause-of-action law (sometimes called “remedial law”) contains instructions for courts (e.g. “if a person proves to you that she has been hit, order the hitter to pay her damages”). Causes of action will usually track the substantive law closely, and for that reason we often take it for granted that, where a wrong has been committed, a court will issue a remedy. But there are certainly situations in which remedial law does not authorize judicial intervention, even when a wrong has been committed (such as, for example, when a court declines to issue an injunction because it will impose an undue hardship on the defendant). Far less common (or even ignored until Smith showed otherwise) are situations in which a remedy issues where no wrong has been committed—but that is an issue we will get to in a bit.
Smith’s project is to explain, as a categorical matter, the circumstances in which courts will issue a remedy. Two of these—rights-threats and wrongs—are easily recognizable to legal scholars and practitioners. When your neighbor threatens to cut down your tree (i.e., threatens to infringe one of your rights), a court will put down this threat by ordering your neighbor not to do so. Relatedly, if your neighbor cuts down your tree before you can make it to court (i.e., commits a legal wrong), a court will order the neighbor to pay you damages. Neither of these grounds for relief upsets our common understanding of remedial law. But Smith’s third ground—injustice—introduces a new variation of remedial law.
An injustice, in Smith’s telling, is a judicially administered remedy that is not based on a rights-threat or a wrong. Smith offers several examples, but a useful one for our purposes is restitution in the case of defectively transferred funds. If I mistakenly transfer money to your account, a court will order you to return the money—even though you have done nothing wrong. One might counter that retaining money mistakenly transferred to you is wrongful, but Smith convincingly shows why that is false. There is no underlying duty to return such money because people who receive such money often have no knowledge of it, or even if they do, have no way to determine with any certainty—short of judicial intervention—to whom to return the money. Thus, in the case of mistakenly transferred funds, the traditional role of the court is not to enforce an underlying duty through a remedy, but simply to correct the injustice by ordering the money be returned.
Having shown that a remedy in injustice cases is, to use my term, a “rightless remedy,” Smith turns to the question of why such a phenomenon should exist in private law. Part of the reason is contained in the point above: people frequently cannot be expected to have sufficient knowledge to comply with such a duty. Thus, if society wishes the money to be returned (to continue with the example from above), it can only accomplish this by a judicial order.
Perhaps. Or perhaps not. Instead of an order, we could accomplish the same result with a judicial declaration that a certain sum of money was mistakenly transferred. The declaration would thus trigger a substantive duty to return the funds—but only if we recognize a substantive duty to correct injustices. So the real nub of the issue is: why we don’t recognize an underlying duty to correct an injustice?
Smith’s answer, which I find the most interesting part of his paper, is as follows:
To say that someone has a duty to do X is to say, roughly, that regardless of how costly or inconvenient X is, X must be done. Duties are correlative to rights, and rights, to borrow Ronald Dworkin’s terminology, are trumps. Thus we say (and the law confirms) that we have rights to physical integrity—and correlative duties to respect physical integrity—because we believe that, with rare exceptions, non-consensual interferences with another’s physical integrity are never permissible.
“Correcting injustices” is different than “not injuring”: it is a valuable thing to do, but it is not, or at least should not be, a duty. Private law duties are basically duties not to interfere with others’ persons, property, or liberty, and duties to keep contractual promises. The actions that are required to correct injustices have a different orientation. A failure to compensate a loss or to reverse an enrichment is not an interference with the beneficiary’s personal property or liberty; nor is it breaking a promise. It is simply a failure to correct an injustice. Correcting an injustice is valuable but failing to do so is not a wrong in the sense that stealing or lying or breaking promises is wrong. As a society, we regularly trade off the value of correcting injustices against other values. The courts clearly play a crucial role in correcting injustices….Yet it is clear that criminals are often not brought to court (or not pursued at all) because courts and prosecutors are in short supply.…[I]f our goal was to ensure that every injustice was corrected, there would be almost no limit to the number of courts, judges, lawyers, police officers and so on that the State ought to provide.” (P. 29.)
Summing up his point, Smith puts it thus: “Private law duties correlate to individual rights, but no one has a right that justice be done, and certainly not a right that another private individual ensure that justice be done.” (P. 30) This is not to say that the state may not concern itself with injustices, or that it may not refer them to the courts for resolution when it finds them. The fact that restitution cases are resolved by courts is enough to prove this point. But such adjudication is not, in a fundamental sense, the adjudication of rights. Instead, it is something that Smith calls the provision of “justice services”—the correction of an unjust circumstance that has arisen without any wrong being committed.
Smith’s article is both enlightening and thought-provoking. In explaining the phenomenon of rightless remedies—i.e., court orders untethered to underlying substantive rights—Smith shows us something important about both rights and remedies. In particular, he shows us how substantive rights are correlated with wrongs but always correlated with remedies. In doing so, Smith deepens our understanding of the complex relationship between the common law itself and institutions that both create and maintain it (i.e., the courts).
Cite as: Jack Preis, Rightless Remedies
(May 6, 2019) (reviewing Stephen A. Smith, Rights-Threats, Wrongs and Injustices: The Common Law Causes of Action
, 27 N.Z.U.L. Rev.
1033 (2017), available at SSRN), https://lex.jotwell.com/rightless-remedies/
Sarah Dadush, Identity Harm
, 89 U. Col. L. Rev.
__ (forthcoming, 2018), available at SSRN
You’re the kind of person who cares about protecting the environment, improving working conditions for the poor, and achieving sustainable growth. Indeed, your identity as a socially-conscious consumer is so important to you that you are often willing to pay more for a product if it is sold by a company who claims to share your values, to reflect the kind of person you want to be in this world. Attracted by this premium, more and more companies are making sustainability promises to target such consumers through commercials, print and electronic advertisements, and product labeling (often employing third-party certifications) to signal to the consumer that its products align with the consumer’s values and identity as a socially- and environmentally-conscious global citizen.
So what should happen when you find out that you were duped—that the “clean diesel” car you bought because it was advertised as being “low on emissions” actually pumped into the environment 10-40 times the nitrogen oxide pollution allowed by law (as in Volkswagen’s “Dieselgate” scandal), or where the clothes you purchased at a premium because they came affixed with a “Good Working Conditions” label were actually made in sweat shops, or where the expensive “Fair-trade” chocolate you bought for your daughter was made with the labor of beaten and enslaved children? What harm have you suffered, and what remedies, if any, should be available for your unintentional support of a system of production that polluted the environment, exploited workers, and enslaved children—practices that go against your very identity as a person?
The traditional answer is simple and straightforward: if the wrongdoer’s broken promise caused you economic harm, the wrongdoer should compensate you for that harm by putting you in the position you would have occupied but for the wrong. So, for example, if the $25,000 car you were driving yesterday is practically worthless today (which is what happened in the United States when Volkswagen’s fraudulent “Dieselgate” scheme was revealed), a court would require the wrongdoer to pay compensatory damages of $25,000. But is this the only type of harm you have suffered? Have you not also suffered from a sense that your identity as a socially-responsible consumer has been compromised when you were induced, through another party’s promises, lies, and misrepresentations, to buy or use a product that harms the environment or other human beings against your will?
According to Professor Sarah Dadush in her wonderful article Identity Harm, the answer is a resounding “yes.” (“Financial loss is not the only dimension along which harm is experienced, nor is it the only dimension along which harm should be measured.”) In this important and timely article, which is the first in a proposed series, Professor Dadush makes a significant contribution to remedies by introducing the concept of identity harm, along with a conceptual framework for recognizing such harm where it occurs. Indeed, I was fortunate to have been at a conference recently in which Professor Dadush argued persuasively that courts should be more willing to recognize identity harm, a type of non-economic harm that may be “generated when, as a result of a company’s unsubstantiated or broken sustainability promises, a disconnect materializes between a person’s idea of who they want—and try—to be in the world, and who they have unwittingly been made to be in the world.” These harms, which are felt most acutely by socially-conscious consumers (i.e., “those who care not just about the physical or price attributes of a given product, but also its environmental and social-humanitarian impact”), may “arise upon discovering one’s unwitting complicity in a scheme that hurts other beings” or harms the planet in a way that is contrary to one’s own values—contrary, in short, to the consumer’s identity, to the way in which the consumer sees itself situated in the world as a socially-conscious and responsible person.
Professor Dadush is no mere idealist, however. She recognizes that, unlike economic harm, which can easily be measured by the market (as in the Volkswagen example discussed above), identity harm is non-economic and subjective by nature, which makes it difficult to measure in practice. Further complicating the picture are two additional factors: first, that identity harm is “intimately connected to the injury experienced by a third party—a fellow human being or the planet, as a result of poor (or outright bad) corporate sustainability practices,” and second, that the amount of harm suffered is “not necessarily correlated to the dollar amount paid for the offending product.” Therefore, when it comes to measuring identity harm, the economic harm suffered by the consumer is but a poor proxy (at best) for estimating such damages. Indeed, it is conceivable (perhaps even likely) that a consumer may experience more identity harm upon learning that the $1.30 she spent on a chocolate bar helped support a system of child slave labor than she would have experienced upon learning that the $25,000 car she purchased polluted the environment.
The difficultly in measuring this type of harm, of course, makes it no less real, although it does pose some practical problems. How can we measure the victim’s harm if it is subjective by nature? What if the victim is faking his or her harm? These concerns, though real, are far from fatal. Courts have dealt with these types of problems before, and have developed a number of tools for measuring non-economic harm in a whole host of circumstances, ranging from pain and suffering to dignitary harms to emotional distress to harm to one’s reputation. The problem of measuring identity harm, though challenging, is no different. For instance, Professor Dadush cleverly proposes that the identity harm suffered by “Dieselgate” victims might best be captured not by the diminished resale value of their cars, but by “the lost greenness” of their purchases. This harm, in turn, could be measured by looking at how many miles each car owner drove, “calculating the above-what-was advertised and the above-what-was legally-permitted-in-their-state emissions,” and then attaching a price to these additional emissions, which “could then be used as the benchmark for damages that would eventually be placed into a climate mitigation fund.” (P. 57.)
Indeed, Professor Dadush makes a persuasive case that courts are already identifying and measuring such harm, albeit in a poorly-conceptualized, haphazard manner (my words, not hers). To show this, Professor Dadush engages in a thoughtful discussion of several recent cases in which courts have struggled with this concept. Although she concedes that some courts, for dubious reasons, have refused to allow actions for such harms to proceed (see her discussion of the Chocolate cases (pp. 31, 33)), other courts have been more receptive to such claims (see her discussions of Kaksy v. Nike and the “Dieselgate” victims, both of which resulted in settlements that recognized and remedied such harm, although only “collateral[ly] and incidental[ly]”), a trend that seems well-positioned to grow in the future (see her fascinating discussion of Nemet v. Volkswagen Grp. Of Am., Inc., a case currently pending in the Northern District of California filed by plaintiffs who sold their polluting VWs before the scandal broke, thereby suffering only indirect, non-economic losses.) As courts and litigants continue to struggle with this rather new but important concept, they will find Professor Dadush’s thoughtful conceptualization and analysis of identity harm to be indispensable. I know I have.
Constitutional tort remedies, like their common law counterparts, are presumed to deter future violations. But the inference of deterrence depends, of course, on a number of sub-inferences that may not hold. For example, deterrence may not obtain if the officer is indemnified and therefore does not feel the personal sting of a money judgment. In a recent article, Professor Joanna Schwartz showed that officer indemnity is, in fact, nearly universal. But maybe deterrence might still obtain because the police department, which has to foot the bill of the indemnification agreement, will push its officers to obey the law. In another article, however, Professor Schwartz showed that this might not happen because most departments carry liability insurance and the cost of indemnification will often simply disappear into a budget line item for insurance. If officers are indemnified, and departments are insured against any loss, how will constitutional tort actions have any deterrent force? Schwartz suggested at the end of her article that one avenue for deterrence might be found within the operation of the insurance agreements themselves and that further study was needed.
Professor John Rappaport’s fantastic new article, How Private Insurers Regulate Public Police, fills that need, and does so splendidly. To study an issue like this, one must dive deep into the insurance industry itself, and that is exactly what Rappaport did. His article is based on “interviews with over thirty insurance industry representatives, civil rights litigators, municipal attorneys, police chiefs, consultants and more.” There is so much to the article that any summary will fail to do it justice, but briefly, Rappaport charts a chain of incentives that works as follows: police departments have an incentive to obtain liability insurance because it reduces risk. Insurance companies, in turn, have an incentive to reduce claims, thus increasing their profits. To reduce claims, insurance companies often encourage (or even require) education, training, accreditation, and other conditions that tend to improve officer compliance with the law, thus reducing claims. Departments have an incentive to follow insurance companies’ guidance on these matters not just because they need and want liability insurance, but also because doing so may reduce the cost of premiums and deductibles.
Rappaport is careful not to claim that insurance certainly reduces police misconduct, for that claim would require much more than the qualitative research he presents. Moreover, Charles Epp has collected data that casts some doubt on the role of insurance in pushing police reform (though, as Rappaport notes, Epp’s data is now nearly two decades old and did not focus on misconduct itself, but rather best practices). Nonetheless, Rappaport’s study leaves little doubt that insurance plays a significant role in how departments handle officer training and personnel decisions. The inference of deterrence—to one degree or another—is thus reasonable in most cases.
What is especially attractive about deterrence-via-insurance is that, according to Rappaport’s research, insurance companies may actually be better situated than police departments at avoiding future violations. This is because insurance companies are able to aggregate data from across jurisdictions and are able to better balance the cost of a specific violation against the cost of preventive measures. Insurance companies’ capacities in this regard start to make them look like a government agency, which naturally brings up the question of why an insurance company, rather than the government itself, is regulating the police.
Government has its own problems, however. Agencies, Rappaport notes, are often led by political appointees (or at least the politically minded) and thus must contend with complicated political concerns, such as the interests of police unions, periodic elections, and legislators who control the agency’s funding. This is not to say, of course, that private insurance is always superior. Insurers are necessarily driven by a profit motive and will be far less concerned with constitutional violations that do not lead to high-dollar judgments. Racial bias, for example, is an enormous problem in policing (much as in life generally) but rarely plays a role in high value cases.
In sum, Rappaport’s article brings the potential deterrent force of constitutional tort actions into clearer focus: The availability of a civil rights action gives rise to a demand for liability insurance. Firms in the resulting insurance market naturally seek ways to increase profits, one of which is to lower claims. And one way to lower claims is to demand better education, training, and other reforms by the insured. The article does not prove that the deterrent force always applies, and Rappaport does not claim otherwise. But for those who might contend that civil rights actions do not deter misconduct, the article offers an insightful and eminently reasonable account how they might (and in many instances, likely do) deter misconduct.