Over the past five years, lawyers have increasingly sought to have juries award punitive damages to their clients in product liability cases. The Supreme Court of the United States has expressed concerns that punitive damages have "run wild. " In California alone, juries awarded $1.6 billion in punitive damages between 1990 and 1994. In one county in Texas, lawyers in nearly one—half of all civil cases ask for punitive damages.
Punitive damage awards can be made in addition to many other payments that a claimant may receive—including payments for medical costs, for loss of past and future income, for "pain and suffering, " and payments for "fear of future harm. " Some states even allow payment for so—called hedonistic losses, that is, deprivation of future pleasure.
While five states prohibit any award of punitive damages—New Hampshire and Louisiana by statute and Massachusetts, Nebraska and Washington by common law—many observers believe that, under certain limited conditions, granting punitive damages can have merit, especially if there is a reasonable standard to define the conditions warranting their award and an appropriate cap on the amount.
The concept advanced for adding punitive damages awards to all the other remedies is that the defendant is found by the jury to have caused damage that should be punished further to ensure that "a lesson has been learned. " However, the current practice of allowing them to be awarded over and over again to different plaintiffs against the same defendant for essentially the same issue seems to defy any logic. That is, if the point of the punishment is to deter future behavior with a massive award to "warn the defendant, " can there be any conceivable logic to continue to "punish and warn " the same defendant over and over again in future cases for the same past act?
Those who favor allowing multiple awards of punitive damages for the same set of events argue that, since each jury may be aware of only the facts of its own case, effective punishment may need multiple awards; that allowing only one punitive damage award will allow companies to avoid paying a just recompense by paying an earlier, lower award; that common law has permitted multiple punitive damages and that they therefore reflect the popular will.
Opponents of allowing the imposition of multiple punitive damage awards can easily counter all of these (appropriate legal measures can avoid the first two problems; common law did not initially have as wide an application as it does now, etc.). In 1995, a representative group of forty—three large U.S. corporations—the deep—pocket targets of trial lawyers—reported that in the past five years a total of $4.4 billion was involved in settlements driven by punitive damages. One company alone suffered $2 billion in punitive damages.
Extrapolate that to the growing number of companies, large and small, involved as defendants in punitive damages trials, and you get some idea of the scope of the problem. Punitive damages effects are hardly harmless, infrequent incidents as asserted so often by trial lawyers.
The real damage caused by multiple punitive damages is that the U.S. public has been hit with a "hidden litigation tax. " The costs of the multiple punitive damages lottery are passed on to consumers in higher prices or unavailability of useful products. A number of proposals to stop the awarding of multiple punitive damages have been made, but most of them are unwieldy and impractical in either state or federal courts. The Supreme Court has so far elected not to hear a case that might settle the issue. The most practical answer available is federal legislation.
Legal reform has become something of a mantra for some activist groups in this country. If Congress takes serious notice of the clamor and begins debating potential remedies, the author of the passage would probably support most strongly a federal law that:[A] requires every state to prohibit awards of punitive damages.
[B] sets a cap on the amount that can be awarded for punitive damages in a single case.
[C] forbids the award of punitive damages for an act that has already earned punitive damages.
[D] limits the number of times a particular corporation can be sued.
The author's argument would tend to be more psychologically persuasive if it were generally known that the author is:[A] a successful plaintiff lawyer who specializes in product liability cases.
[B] a chief executive officer of a major pharmaceutical corporation.
[C] a former member of the jury in a civil court proceeding.
[D] a columnist who regularly covers legal affairs.
Proponents of punitive damages argue that the threat of punitive damages makes the introduction of unsafe products financially risky for corporations. The author of the passage would most likely respond to this by pointing out that:[A] the amounts involved in punitive damages are minor in a corporation's eyes.
[B] any losses incurred by taking this supposed risk are passed along to the consumer.
[C] very few unsafe products manage to make it to the marketplace.
[D] the threat of punitive damages has never stopped a corporation from marketing an item.
A RAND study that covered the years 1960—1984 came to the conclusion that punitive damages are seldom awarded and that judicial review prevented excessive awards. What effect does this information have on the argument made in the passage?[A] It would strongly support the argument.
[B] It would support the argument somewhat.
[C] It would neither support nor weaken the argument.
[D] It would substantially weaken the argument.
In arguing that "effective punishment may need multiple awards " (5th paragraph) since each jury may be aware of only the facts of its own case, which of the following assumptions do advocates of multiple awards make?[A] III only
[B] I and II
[C] II and III
[D] I, II and III
Suppose a survey shows that over sixty percent of Americans think that granting multiple punitive damages awards serves as a deterrent of future corporate misbehavior. How is this information relevant to the passage?[A] It strengthens the claim that punitive damages ensure that corporations learn their lesson.
[B] It weakens the claim that most Americans are opposed to multiple damage awards.
[C] It weakens the claim that using punishment to deter future behavior is illogical.
[D] It strengthens the claim that many observers believe punitive damages can have merit.