Damage Awards in Perspective: Behind the Headline-Grabbing Awards in Exxon Valdez and Engle

Abstract:     
This article suggests that increases in awards in one area of law should not be evaluated in isolation from all other areas of law. Comparing the time trend in awards in federal torts and products liability cases with the trend in federal contracts cases yields a useful perspective on increases in damages awards in torts and products liability cases. For example, the finding that contract awards have risen faster than tort awards has important implications for the source of torts awards increases.

The article then tries to put two headline-grabbing punitive awards in perspective. By showing the relation between the Exxon Valdez punitive award and the mass of punitive awards, it suggests that the Exxon award, though headline-grabbing because of its size, fits in the larger, sober mass of awards. The article suggests that the Ninth Circuit's opinion in Exxon Valdez incorrectly quantified the harm against which the punitive award should be measured. The largest punitive award, that against the tobacco industry in Engle, can best be understood against the background of the tobacco industry's national settlement of actions brought by the state attorneys general.

Keywords: punitive damages, juries, torts, tobacco

JEL Classification: K13, K41, K42

Accepted Paper Series