Surprisingly Punitive Damages

Think first of the classic problem of redundant punitive damages: A defendant has caused a mass tort. Plaintiff 1 sues, winning punitive damages based on the overall reprehensibility of that original act. Plaintiff 2 also sues—and also wins punitive damages on the same grounds. So do Plaintiff 3, Plaintiff 4, and so forth.

Next, consider a more subtle problem: Many statutes set the minimum award per claim at a super-compensatory level, based on the assumption that private suits may need extra inducement. But when enforcement turns out to be more vigorous than was assumed—most famously, when thousands or millions of claims are brought at once—then the damages in even a single case can stack up to surprisingly punishing effect.

These problems share a conceptual feature that I analyze here: The damages in each context can be seen as encompassing two distinct components—a “variable” portion that properly varies with the number of claims, and a “fixed” portion that should be awarded only once. The crucial error that leads to surprisingly punitive damages is repeatedly awarding not only the variable but also the fixed component of damages, in cases with multiple claims.

One natural solution for neutralizing such redundancy is to allow courts to run concurrently the fixed component of such repeated awards.  This paper explores how a “concurrent damages” approach might be applied to variations of each problem; addresses its pros, cons, and complications; and explores how it relates to other procedural devices, including preclusion and aggregation.

Concurrent Damages

In areas as diverse as copyright, pollution, consumer protection, and electronic privacy, statutory damages have become a familiar form of civil remedy. Yet judges are discovering that these formulaic awards can swing by orders of magnitude for arbitrary reasons—resulting in windfalls for some but little relief for others—due to the rigidly linear way in which the awards stack up, count by count. The irony is that too much structure, rather than too little, is what generates such capricious outcomes.

This Article proposes a solution: allow courts to run damages concurrently. As with concurrent criminal sentencing, the judge would recognize every act of violation, and yet group the nominal counts so that the effective penalties do not stack up arbitrarily. This simple option enables judges to tailor the structure of damages to match more closely how the harms actually add up (“Should the copyright damages accumulate per song, per album, per artist, or per playlist—in this case?”). Moreover, it can displace the troubling fudges—such as fictional awards—that some courts use when bound by the rigidity of statutory damages. Creating a concurrent damages option may thus make possible not only more accurate and consistent compensation but also clearer, truer signals for future actors and future courts.