Thanks for the thoughtful comments, David. Let me address the way I see the general boundary between private and public ordering in today's edition, then tomorrow perhaps I will indicate why the Philip Morris case was an excellent candidate to establish that boundary.
[NB These thoughts replicate to some extent a much more extensive discussion in Engage, the Federalist Society's academic journal. That article can be found here (scroll to page 118).]
Wrongful behavior without damages creates no corrective justice requirement. Driving home while drunk is negligent, and exposes others on the road to undue danger. It is good, I think, that DUI is a crime and that the state sanctions misbehavior with fines and/or imprisonment. So, if a drunk driver makes it home without hitting anyone, he has no tort liability toward anyone. Note that he may have committed a crime � but that is a matter for public ordering, with all the protections provided when the power of the state is involved (constitutional protection against self-incrimination, double jeopardy rule, strong presumption of innocence). The drunk who makes it home safe owes compensation to no one, because his conduct, though wrongful, did not harm anyone. It is the precise conjunction of wrongfulness and harm caused thereby that creates the tort obligation. Typically, that tort obligation consists of compensation, of righting the wrong and making good the loss - no more, no less. Compensation, moreover, has to be full. This is a definitional requirement of corrective justice, and a fundamental proposition of the common law of tort. Thus a man who negligently burns down a house worth $50,000 is liable in tort to pay $50,000 to make the home-owner whole. If the house and its contents were worth $1 million dollars, then he is liable in tort to pay $1 million to make the home-owner whole. This is not because tort favors the rich, but because tort equally respects poor and rich. All must be returned to their former state - that far but no further - when they are wrongfully harmed. Punitive damages do not fit the scheme of tort law because, by definition, punitive damages are overcompensatory. Nevertheless, in one superficial and one real form, punitive damages were present at the conception of tort law. Both of these forms can be usefully summarized here:
Superficial - In medieval days criminal and tort trials were held at the same time. For what we today call intentional torts, such as battery and trespass, there was at the same time a crime committed and a tort suffered, and both of these were adjudicated in the same judicial proceeding. So, a battery may have caused $10 in harm, payable to the plaintiff, but in the days before police forces and criminal tribunals the plaintiff could also pursue the equivalent of a criminal fine. He was in a sense the private attorney general, prosecuting the criminal case, and the fine went into his coffers. Today, though, we have county proscecutors, and fines are collected solely in a criminal setting. Those fines are subject to cherished American constitutional protections such as:
-Double jeopardy prohibition of more than one fine for the same offense;
-5th amendment protection against self-incrimination;
-8th amendment protection against excessive fines.
A tort trial offers none of those protections (compulsory discovery is self-incrimination, one tort committed against many people leads to many lawsuits, etc.). So in this superficial form, punitive damages are an anachronism with no place in tort today, having been replaced by public ordering via criminal law with all its apparatus.
Concrete - Punitives were granted as symbolic damages when there was deliberate wrongdoing but de minimis damages. If A slandered B, but B could not prove that she had lost any business because of the slander, A might nonetheless be condemned to pay B $1. If A deliberately and flagrantly trespassed on B�s land, but didn�t trample any of B�s crops, B could still sue A for nominal, symbolic damages. The damages in this case were symbolic � they recognized that one party was in the right, had been wronged by the other party, and won the suit. Suits like this might be filed both to vindicate one�s self and one�s rights, and because a �loser-pays rule� (in effect
outside America) means that the tortfeasor would have to pay his victim�s lawyer�s costs. It would not cost much to vindicate one�s rights in this way. Thus "punitives" classically were either disguised criminal fines (before the state criminal apparatus was organized), or small symbolic sums meant to vindicate inconsequential violations of a plaintiff�s rights. Since criminal fines require constitutional protections, all that should logically remain are the small symbolic vindication sums.
The survival of large punitive awards is a product of confusion between private and public ordering. That is why four states� supreme courts (Louisiana, Nebraska, Washington and Massachusetts) have declared that their common law of tort does not permit punitive damages today. A fifth state (New Hampshire) has abolished punitives by statute. Any state in the union could abolish punitive damages if it wished. Many states, like Virginia, allow punitive damages for intentional torts and gross negligence, but have a statutory cap on punitive damages. Other states have no limitation on punitives at all. Yet in all states punitive damages were not really a problem, in that they were mostly symbolic until the great torts explosion of the 1980s. Up to 1976, the highest punitive damages award in the entire country was $250,000, a sobering observation in light of recent billion-dollar judgments.
I've likely bored readers enough. David, perhaps in tomorrow's edition we can sketch the way the Supremes dealt with punitives from Pacific Mutual v Haslip through State Farm v Campbell. Then on Friday we can get into the nitty gritty of the Williams.