Punitive Damages by Numbers: Exxon Shipping Co. v. Baker
Vanderbilt University - Law School; Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - College of Arts and Science - Department of Economics; Institute for the Study of Labor (IZA)
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; Vanderbilt University - Strategy and Business Economics
January 7, 2009
Vanderbilt Law and Economics Research Paper No. 09-04
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.
Number of Pages in PDF File: 31
Keywords: punitive damages, blockbuster, punitive award, exxon, exxon shipping co. v. baker
JEL Classification: K13
Date posted: January 14, 2009
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