31 Pages Posted: 14 Jan 2009
Date Written: January 7, 2009
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 Classification: K13
Suggested Citation: 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: https://ssrn.com/abstract=1327045 or http://dx.doi.org/10.2139/ssrn.1327045