) difficulty of detection or in bringing claim) benefit to defendant may outweigh damages recovered by plaintiff, particularly where risks of being held liable are low(28416) have ultimate power(28417) benefit from wrongdoingc. Conduct out-of-state. A state may not consider conduct in other states in determining how much to punish unless that conduct has a “nexus” to conduct in the state. Gore; State Farm (See p. 765) Is this limit based on substantive due process and/or on concern for federalism?d. Court has not been clear about the role of wealth. (See p. 767: second to last sentence before Part C.)a. Constitutional? If so, states must use de novo. Most states have taken this view.b. Supervisory role of Supreme Court as to federal appellate courts?PUNITDAMAG.13TORTS OUTLINE – HUBBARDTOPIC: PUNITIVE DAMAGESA. Introduction -- Policy Perspectives1. Purpose/reasons FOR allowing punitive damagesa. Accomplish purposes of tort law and punishment(1) Increased deterrence of number and severity of injuriesabove level achieved by compensatory damages alone. (See B-8-a-(1)-(c) below) Questions raised by this reason:(a) Why do we need increase? (See n. 7, p, 757 (discussing problems of underenforcement of tort claims and thus need to impose additional costs on defendant)) (See 2-d-(1) below)(b) Will this result in “excess” safety expenditures? (See2-a-(2) below)(c) Will there be increase in deterrence if insurance pays? (See 2-d-(2) below)(2) Fairness and retribution(a) Concepts of just deserts and proportionality(b) Vindication of rightsb. Provide “full” compensation by providing payment for attorneys, the “hassle” of litigation, etc. (See 2-e below) Questions raised by this reason include the following: Why are we only concerned with full compensation in certain cases? Should not we always want wrongdoers to pay the full costs (including administrative costs likeattorney fees) of injuries so that these costs are internalized? Is it because very bad wrongdoers should pay full compensation, including attorney fees? If so, why not just provide for attorney fees? c. “Private attorneys general.” Provide an incentive for private persons to help enforce the law. This incentive is arguably necessary because of weaknesses in other regulatory schemes -- e.g., lack of necessary funding (See 2-b below)12. Arguments AGAINST allowing punitive damages (See concurring opinion in Taylor at pp. 753–754) a. Punitive award results in overcompensation/windfall to plaintiff, and this is(1) unfair, and/or(2) may cause inefficiently high level of safety costs (See 1-a above)b. Punishment is not appropriate for a civil case (Overlaps with c below)(1) If criminal prosecutions are also potentially involved, whydo we need punitive damages? Should we distinguish between actual prosecution and potential? What if the criminal/regulatory penalties are small?(2) If a person breaches a safety statute, should punitive damages (or at least a possible jury award of punitive damages) always be allowed?c. Punitive award distorts procedure and rules of relevance -- e.g., wealth of defendant becomes relevant. Responses include:(1) Standard of proof (See 4-c-(1) and B-3-a below)(2) Bifurcated trial (See 4-c-(2) and B-3-b below)d. Any increase in deterrence is, at best, marginal, particularly given (1) compensatory damages (2) insurance (What if punitives are not covered by insurance?) (See E below)(3) potential criminal penalties (See 1-c above)(4) unpredictability of jury behaviore. “Full compensation” argument overused--i.e., also used for justifying intangibles and collateral benefits rule3. Statistics on awards (n. 8, p. 758)4. Approaches to limiting or barring recovery (“Tort Reform”) 2a. Total Barb. Partial bar/limits(1) Cap on dollar amount(2) Ratio of actuals to punitives (See Note to B-1 belowconcerning ratio for treble damages)(3) Payment to public treasury (absolute, above a dollar amount, or a percentage based on dollar amount)(4) Exceptions common – e.g., for intentional tortsc. Procedural (see B-3 below)(1) Higher burden of proof(2) Bifurcated trialBseparate proceeding after actual damages determinedB. Doctrine: Determining whether a punitive award will be granted and determining amount1. Discretionary grant: Where facts are sufficient to support an award, the trier of fact B i.e., juryBdetermines:a. If punitive damages will be awarded, andb. The amount of punitive damages (See p. 750)[Note: Treble damages under statute are, in effect, nondiscretionary, mandatory punitive awards with a ratio of 2:1. Computation of treble damages: actual + (2 x actual) = treble]32. Type of misconduct necessary for any punitive awarda. Generally not allowed for mere negligenceb. Recklessness, etc. Punitives generally allowed where wrongdoing “greater” than mere negligence. What types of misconduct are covered? (See p. 750; Taylor at p. 751) Consider role of the following:(1) Nature of injury(2) Amount of injury(3) Disparity between risk and safety costs(4) “Consciousness” of risk and/or of negligent nature of risk(5) Rhetorical tests -- e.g., “malice”, “willful”, “wanton” [Review earlier discussion of recklessness as an exception to common law bar for contributory negligence.]c. Intentional Torts. Punitive damages are generally allowed for intentional torts, but the award is discretionary.d. Strict liability in tort (SLT). Generally allowed if plaintiff shows both: (1) claim for SLT; and (2) wrongful conduct necessary to justify punitive award (See “b” above). Approach may depend on jurisdiction and on nature of SLT scheme. 3. Special procedural rules in many jurisdictions (see A-2-c above)a. Burden of proof often higher -- e.g., must show by clear and convincing evidence (see n. 4, p. 755)b. Bifurcated trial - - i.e., second, separate “trial” on punitive award4. Comparative fault schemes. Will punitive award be reduced to reflect plaintiff's percentage of fault? Generally, jurisdictions (including South Carolina) that have considered this issue say “no” because goals of punitivedamages are so different from goals of compensatory damages. (see n. 9, p. 758) 5. “Derivative actions” (punitives barred in some jurisdictions)6. Death of tortfeasorBjurisdictions vary (n. 11, p. 759)47. Joint and several liability is not applicable because of need for individualized determination of: (1) whether to grant award; and (2) if so, amount of