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Punitive Damages by Numbers: Exxon Shipping Co. v. Baker

Joni Hersch
Vanderbilt University Law School; Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - College of Arts and Science - Department of Economics

W. Kip Viscusi
Vanderbilt University - Law School; National Bureau of Economic Research (NBER); Vanderbilt University - Department of Economics; Vanderbilt University - Owen Graduate School of Management

January 7, 2009

Vanderbilt Law and Economics Research Paper No. 09-04

Abstract:
The U.S. Supreme Court decision in Exxon Shipping Co. v. Baker is a landmark that establishes an upper bound ratio of punitive damages to compensatory damages of 1:1 for maritime cases, with potential implications for other types of cases as well. This article critiques the Court's reliance on the median ratio of punitive to compensatory damages in samples of verdicts to set an upper bound for punitive damages awards. Our critique of the approach draws on the properties of statistical distributions and a new analysis of cases with punitive damages awards. The Court's conclusion that a 1:1 ratio establishes a fair upper bound lacks a sound scientific basis.

Keywords: punitive damages, blockbuster, punitive award, exxon, exxon shipping co. v. baker

JEL Classifications: K13

Working Paper Series

Date posted: January 14, 2009 ; Last revised: January 14, 2009

Suggested Citation

Hersch, Joni and Viscusi, W. Kip, Punitive Damages by Numbers: Exxon Shipping Co. v. Baker (January 7, 2009). Vanderbilt Law and Economics Research Paper No. 09-04. Available at SSRN: http://ssrn.com/abstract=1327045

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Contact Information

Joni Hersch (Contact Author) Vanderbilt University Law School ( email ) 131 21st Avenue South Nashville, TN 37203-1181 United States 615-343-7717 (Phone) 615-322-6631 (Fax) HOME PAGE: http://law.vanderbilt.edu/go/phdlawecon
Vanderbilt University - Owen Graduate School of Management ( email ) 401 21st Avenue South Nashville, TN 37203 United States
Vanderbilt University - College of Arts and Science - Department of Economics ( email ) Box 1819 Station B Nashville, TN 37235 United States
W. Kip Viscusi Vanderbilt University - Law School ( email ) 131 21st Avenue South Nashville, TN 37203-1181 United States 615-343-7715 (Phone) 615-322-5953 (Fax) HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm
National Bureau of Economic Research (NBER) 1050 Massachusetts Avenue Cambridge, MA 02138 United States
Vanderbilt University - Department of Economics ( email ) Box 1819 Station B Nashville, TN 37235 United States (615) 343-7715 (Phone) (615) 343-5953 (Fax) HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm
Vanderbilt University - Owen Graduate School of Management ( email ) 401 21st Avenue South Nashville, TN 37203 United States (615) 343-7715 (Phone) (615) 343-5953 (Fax) HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm