Damages (Student Notes)

Remedies

Two separate legal inquiries in Tort Law:

​ Liability – is the defendant liable?

​ Damages – what is it that the defendant owes?

Remedy: consequences of liability

Remedies include…

• Compensatory damages: seek to restore the P into the position they were in before the injury, look at P
• Punitive damages: seek to punish and deter; look at D

Torts system is primarily about compensatory damages.

Nominal damages & declaratory judgment: Won’t be covered much (at all) – not all cases result in money transferring. Sometimes plaintiffs seek vindication of their rights, but nature of tort law makes this difficult/impossible.

Equitable relief: When court orders party to do or not do something. Harder to administer. Only available when damages won’t suffice.

Single judgement rule:

• General rule in American legal system
  • When we are going to assign damages, we only do it once
  • If the jury finds the defendant liable and assigns damages, then that is the end of the case. There will be no additional future litigation based on the plaintiff’s condition.

Compensatory Damages

The objective: To restore the P to the state they were in before the harm caused by the P

2 Types of Compensatory Damages:

Pecuniary (Economic): economic damages – things easily translated into $$

Nonpecuniary (Noneconomic): emotional/physical pain and suffering – not easily calculable. (i) pain and suffering and (ii) loss of enjoyment. Calculating economic loss and pain and suffering will always have some degree of arbitrariness.

Seffert v. Los Angeles Transit Lines

“Suffering by Bus” (Ca. SC 1961)

Procedure:

The jury awarded Seffert all of her claimed damages, totaling $187,903.75. The trial court denied L.A. Transit’s motion for a new trial based on its claim that these damages are excessive as a matter of law. L.A. Transit appealed.

Issue:

Whether the damages ($187,903.75) assigned by the Jury were excessive as a matter of law

Facts:

• Plaintiff was properly entering defendants bus when the doors closed on her catching her right hand and left foot. The bus started driving dragging her and then threw her to the pavement.
• Plaintiffs injuries were serious, painful, disabling, and permanent. Medical care is expected for the remainder of the plaintiffs life

Holding:

Trial court affirmed. Not excessive.

Reasoning:

Rule: Damages are excessive if it shocks the conscience and suggests passion, prejudice or corruption on the part of the jury.

There is substantial evidence to support the estimates of the awarded damages

Holmes v. Southern Cal. Edison Co.:“The powers and duties of the trial judge in ruling on a motion for a new trial and of an appellate court on an appeal from a judgment are very different when the question of an excessive award of damages arise. The trial judge sits as a thirteenth juror with the power to weigh the evidence and judge the credibility of the witnesses…”

Duty of the appellate court is to uphold the jury and trial judge whenever possible. Judge sits as 13th juror (recurring notion that CoA’s Deference to TC, and TC’s def to Jury is key)

While the court can consider past cases, each case must be decided on its own facts and circumstances.

Court of Appeal believes the nonpecuniary damages assigned here reasonably reflect the Plaintiff’s pain, suffering, humiliation, and anxiety (which were caused by Defendant).

Dissent Reasoning:

(1) consistency and (2) arbitrariness

• Consistency: Treating like cases in like ways: The damages in this case are excessive because it is an outlier among other precedent cases (re personal injury)
• Arbitrariness: Pain and suffering should not be quantified to some arbitrary economic number (i.e., ratio argument, award for pain and suffering should be proportional to a reasonable economic amount)

McDougald v. Garber

“The Comatose Sufferer” (NY App. 1989)

Procedure:

In an award for malpractice, the jury awarded Plaintiff $9,650,102.00. This included $1 million for conscious pain and suffering and a separate award of $3.5 million for loss of the pleasures and pursuits of life. The balances of the damages were for pecuniary damages, lost earnings and the cost of custodial and nursing care. Plaintiff’s husband was awarded $1.5 million for the loss of his wife’s services.

The Trial Judge reduced the total award to $4,796,728.00 by striking the entire award for future nursing care and by reducing the separate awards for conscious pain and suffering and loss of the pleasures and pursuits of life to a single award of $2,000,000.00. The husband’s award was left in tact. The Appellate Division affirmed. Defendants appealed the amount of the damage award. Defendant’s liability is unchallenged.

Issues:

1. Whether some degree of cognitive awareness is a prerequisite to recover for loss of enjoyment of life
2. Whether a jury should be instructed to consider and award damages for loss of enjoyment of life separately for damages for pain and suffering

Facts:

Plaintiff underwent a Caesarian section and tubal ligation. She was thirty-years old at the time of this procedure. Garber (Defendant) performed the surgery. Armengol (Defendant) and Kulkarni (Defendant) provided anesthesia. During the surgery, Plaintiff suffered oxygen deprivation, resulting in severe brain damage, which left her in a permanent comatose condition.

Holding:

1. Loss of enjoyment requires cognitive awareness.

2. Pain and suffering and loss of enjoyment are not distinct issues

Reasoning:

Nonpecuniary damages stand on less certain ground than pecuniary damages.

Damages for loss of enjoyment of life to a person who lacks awareness of this loss does not serve a compensatory purpose. Cognitive awareness is a prerequisite to recovery for loss of enjoyment of life.

Traditionally, in this State and elsewhere, this aspect of suffering has not been treated as a separate category of damages; instead, the plaintiff’s inability to enjoy life to its fullest has been considered one type of suffering to be factored into a general award for nonpecuniary damages, commonly known as pain and suffering. Separating it is nontraditional. It would only be supported if it would bring more accuracy.

Dissent:

The rule that the majority adopted is an arbitrary one.

Fundamentally unsound and unfair to deny recovery to those who are completely without cognitive capacity while permitting it for those with a mere spark of awareness.

The compensatory nature of a monetary award for loss of enjoyment of life is not altered or rendered punitive by the fact that the unaware injured plaintiff cannot experience the pleasure of having it.

We can think of pain and suffering and loss of enjoyment are separate.

It’s not about punishing the defendant. It’s still about restoring loss.

Difference between experiencing pain and having a loss

Valuing Black Lives

A Constitutional Challenge to the Use of Race-Based Tables In Calculating Damages

• Damages that are significantly lower for black victims than for white victims. Creates incentive for potential tortfeasors to allocate risk disproportionately to minority communities

Introduction

• In tort actions both plaintiffs and defendants rely on experts to help courts calculate damages
• Black/Hispanic will receive less compensation for lost potential than a white boy with same injuries
• Incentive for companies to disproportionately allocate risks to minority communities in order minimize potential tort damages in the future
• Use of race based tables in the calculation of tort damages remains both standard and largely unnoticed

1. How Race Based Tables are Used

• Wage data is critical to calculating a victims lost future earning
  • Plaintiff does not have an earnings record (children, young adults who have not started their career) Experts rely on the Bureau of Labor Statistics
• Duration of work- life expectancy since U.S. has no retirement age
  • Tables provide the starting point for experts determinations of work-life expectancy
• Life expectancy data in turn is critical for calculating a plaintiffs medical expenses/pain and suffering damages
  • Starting point is the U.S. Life Tables
  • Statistics for each gender and certain racial categories
• Race based tables creates public/private incentive to allocate risk to racial minority communities
  • Higher risk projects to minority neighborhoods— ex. Of the truck drivers over 55 and inexperienced
• Use of such tables counters society’s commitment to dismantle its legacy of racial discrimination

Argument in favor

• Accuracy
• Compensatory damages are about what it is, not what is should be

Critiques

• Creates harmful incentives for the potential tortfeasors
  • Risky behavior within communities that will have lower compensatory damages
• Assumes the future= Past
  • Historically looking backward and projecting that forward
  • Presupposes that society will not change in the future to be a more equitable society
• Ignores expressive function of law

Doyle’s own take

• We can make predictions we compare a person to a bigger group
• Instead, every factor of that person would have to be considered
• Ex. When removing things like race for consideration the systemic problem of racialization will exist
• Removing explicitly consideration does not eliminate
• Compensatory damages is conservative in the fact that it looks backwards. Does not look forward

Punitive Damages

BMW v. Gore

“Punitive Damages and Due Process” ( SCOTUS 1996)

Procedure:

Complaint –> Trial –> Trial judge denied BMW’s post-trial motion and held that the $4M award was not excessive –> Appeal –> Alabama Supreme Court affirmed (but reduced damages from $4M to $2M) –> USSC granted cert.

Issue:

Whether a $2 million punitive damage award to the purchaser of one of these cars violates the Due Process Clause of the 14th amendment?

Can’t deprive person of life, liberty, property without due process…

Facts:

In 1990, Gore (plaintiff) purchased a black BMW car from an Alabama franchise of BMW of North America (defendant). After driving the car for nine months with no problems, Gore took the car into an independent detailer to embellish the car’s paint. The detailer noticed that the car appeared to have been repainted.

At trial, BMW acknowledged that it adopted a nationwide disclosure policy in 1983 concerning cars damaged in the course of manufacture or transportation. Since the cost of repainting Gore’s car was less than 3% of its retail value, it was repainted and sold to him as new.

Holding:

Excessive and violation of DP

Reasoning:

Rule: 14th Amendment: No state shall deprive any person of life. liberty, or property, without due process of law

3 Guideposts for Assessing the Reasonableness of Punitive Damages:

1. Degree of Reprehensibility: Exemplary damages imposed on a D should reflect “the enormity of the offense”. Punitive damages may not be “grossly out of proportion to the severity of the offense.
2. Ratio: There should be a reasonable relationship between the punitive damages award and the harm likely to result form the D’s conduct, as well as the harm that has actually occurred.
3. Comparison with civil or criminal penalties: Sign of excessiveness could be provided by comparing the punitive damages award and the civil or criminal penalties that could be imposed for comparable misconduct.

Due Process: Notice + Opportunity to be heard (able to present evidence, provide testimony, etc.)

Due Process Concerns Present In This Case:

Majority:

• Jurisdiction
  • State sovereignty and comity:
    • State X cannot impose economic sanctions on violators of its laws in order to change tortfeasor’s lawful conduct in State Y
    • If you consider the scope of Alabama’s interest in punishment and deterrence (in other states), it is clear that this award of $2M in damages is grossly excessive
• Fair Notice
  • Constitutional jurisprudence dictates that a person receive fair notice of: (a) the conduct that will subject him to punishment, and (b) the severity of the penalty that a state may impose. Court says that BMW did not receive adequate notice of the magnitude of Alabama’s
• Proportionality
  • Reasonable punitive damages award should reflect degree of reprehensibility of defendant’s conduct (i.e., enormity of his offense)

Concurrence:

• Arbitrary coercion

Reasoning:

1. None of the aggravating factors associated with particularly reprehensible conduct is present. The harm BMW inflicted on Dr. Gore was purely economic in nature. Conduct which is sufficiently reprehensible to give rise to tort liability does not establish the high degree of culpability that warrants a substantial punitive damages award.
2. $2 million in punitive damages is 500 times the amount of his actual harm as determined by the jury. No suggestion that Dr. Gore or any other BMW purchaser was treated with any additional potential harm by BMW’s nondisclosure policy
3. In this case the $2 million economic sanction imposed on BMW is substantially greater than the statutory fines available in Alabama and elsewhere for similar malfeasance.

Dissent (Scalia):

Scalia at his finest - “Since the constitution does not make that concern any of our business, the court’s activities in this area are an unjustified incursion into the province of state governments.”

Further argument does not believe that SCOTUS should not rule on individual cases (like in this case). SCOTUS argued to to not be well equipped to answer individual cases.

Dissent (Ginsburg):

SCOTUS’ competency is not about error correction in individual cases… about thorny issues of law that MUST be settled across cases… Federal district and appellate courses CANNOT hear these cases now

State Farm v. Campbell:

“More on Punitive Damages and Due Process” (SCOTUS 2003)

Procedure:

A jury found that Campbell was one hundred percent at fault, and a judgment was returned for $185,849. At first, State Farm refused to cover the excess liability of $135,849 over the Campbells’ policy limit of $50,000. However, the Campbells sought independent counsel to appeal the judgment against them and bring a bad faith action against State Farm. The Campbells agreed to be represented by Slusher and Ospital’s lawyers and to pay ninety percent of any verdict received to Slusher and Ospital’s estate. In 1989, the Utah Supreme Court denied Campbell’s appeal in the wrongful death and tort actions. State Farm then paid the entire judgment, including the amounts in excess of the policy limits. However, the Campbells still filed a complaint against State Farm alleging bad faith, fraud, and intentional infliction of emotional distress.

The jury awarded the Campbells $2.6 million in compensatory damages and $145 million in punitive damages, which the trial court reduced to $1 million and $25 million, respectively. Both parties appealed, and the Utah Supreme Court reinstated the $145 million punitive damages award. The United States Supreme Court granted certiorari.

Issue:

Same as BMW: 14thA Due Process concern over excessive punitive damages. Whether, in the circumstances we shall recount, an award of $145 million in punitive damages, where full compensatory damages are $1 million, is excessive and in violation of the Due Process Clause of the Fourteenth Amendment to the Constitution of the United States.

Facts:

In 1981, Campbell (plaintiff) was driving with his wife in Utah and attempted to pass six vans traveling ahead of them on a two-lane highway. Todd Ospital was driving a small car approaching them from the opposite direction. To avoid a head-on collision with Campbell, Ospital swerved into the shoulder. However, he lost control of his car and collided with a vehicle driven by Robert Slusher. Ospital was killed and Slusher was rendered permanently disabled. The Campbells were not injured. In a later wrongful death and tort action, Campbell insisted he was not at fault. Even after investigations pointed to the fact that Campbell’s recklessness caused the crash, his insurance company, State Farm Mutual Automobile Insurance Co. (defendant), decided to contest liability and declined offers by Slusher and Ospital’s estate to settle the claims for the policy limit of $50,000. Additionally, State Farm ignored the advice of its own investigators and took the case to trial, assuring the Campbells that their assets were safe, they were not liable, and State Farm would represent their interests.

Holding:

Awards of punitive damages by state courts that exceed a single-digit ratio between punitive damages and compensatory damages are usually “grossly excessive” and violate the Due Process Clause of the Fourteenth Amendment. The punitive award of $145 million, therefore, was neither reasonable nor proportionate to the wrong committed, and it was an irrational and arbitrary deprivation of the property of the defendant.

Reasoning:

Rule: The Due Process Clause of the Fourteenth Amendment prohibits the imposition of grossly excessive or arbitrary punishments on a tortfeasor.

Reprehensibility is the most important guidepost.

Uses the same guideposts from BMW v. Gore

“While we do not suggest there was error in awarding punitive damages based upon State Farm’s conduct toward the Campbells, a more modest punishment for this reprehensible conduct could have satisfied the State’s legitimate objectives, and the Utah courts should have gone no further.”

You can still bring in out of state conduct IF (1) it has a nexus to the P’s harm. It has to be used to show culpability in the present case; and (2) the jury should be instructed to not take it account into the punitive damages award

Single-digit multipliers are more likely to comport with due process, while still achieving the State’s goals of deterrence and retribution, than awards with ratios in range of 500 to 1.

Much of the distress was caused by the outrage and humiliation the Campbells suffered at the actions of their insurer; and it is a major role of punitive damages to condemn such conduct. Compensatory damages, however, already contain this punitive element.

The most relevant civil sanction under Utah state law for the wrong done to the Campbells appears to be a $10,000 fine for an act of fraud, 65 P. 3d, at 1154, an amount dwarfed by the $145 million punitive damages award. Court erred in bridging about a broad fraudulent scheme.

Dissent (Thomas, J.):

The Constitution does not constrain the size of punitive damages awards.

Dissent (Scalia, J.):

The Due Process Clause provides no substantive protections against excessive awards of punitive damages. The punitive damages jurisprudence resulting from BMW v. Gore is incapable of being properly applied to future decisions and thus there is no reason to give the case stare decisis effect.

Dissent (Ginsburg, J.):

The state legislature (rather than the judiciary) should regulate a state court’s punitive damages awards.

Mathias v. Accor Economy Lodging, Inc.

“Punishing the Bedbug Hotel” (7th Cir. 2003)

Procedure:

The jury awarded Burl and Desiree $5,000 in compensatory damages and $186,000 in punitive damages. Motel 6 appealed.

Federal Court is applying Illinois state law, not federal law.

This Court is bound by the decisions made in BMW and State Farm.

Issue:

Same as BMW and State Farm: 14thA Due Process concern over excessive punitive damages.

Facts:

• Desiree Mathias and her brother Burl, (collectively plaintiffs) checked into a Motel 6 owned and operated by Accor Economy Lodging, Inc. (Motel 6) (defendant). During their stay, Desiree complained of being bitten by bedbugs.
• Burl and Desiree filed suit in federal district court against Motel 6 alleging it knew of the bedbug problem and had ignored it, amounting to “willful and wanton conduct.”
• At trial, evidence showed that the motel’s exterminating service discovered the bedbugs in 1998 and offered to spray each room for a total of $500. The motel refused and, instead, transferred guests to a different room when they complained of the bedbugs. On other occasions, Motel 6 told guests that the insects were not bedbugs, but rather were ticks.
• The jury awarded Burl and Desiree $5,000 in compensatory damages and $186,000 in punitive damages. Motel 6 appealed.

Holding:

Not excessive, constitutional

Reasoning:

Sanctions should be based on the wrong done rather than on the status of the D; a person is punished for what he does, not for who he is.

The punitive damages principle (the punishment should fit the crime) is modified when the probability of detection is very low or the crime is potentially lucrative.

Discusses… (1) Proportionality; (2) Notice; and (3) The Action without regard to the Actor

Punitive damages needed because…

Comp Damages are difficult to determine in the case of acts that inflict largely dignitary harms

Punitive damages provide a substitute for violent retaliation against wrongful injury

To limit the plaintiff to compensatory damages would enable the defendant to commit the offensive act with impunity provided that he was willing to pay, and again there would be a danger that his act would incite a breach of the peace by his victim

The award of punitive damages in this case thus serves the additional purpose of limiting the defendant’s ability to profit from its fraud by escaping detection and (private) prosecution.

·This is something different: SOCIETAL framing for Tort law… looking to how system of tort law functions