Exporting Tort Awards

Posted: 14 Oct 2000

See all articles by Eric Helland

Eric Helland

Claremont McKenna College - Robert Day School of Economics and Finance; RAND

Alexander T. Tabarrok

George Mason University - Department of Economics

Abstract

State governments tend to discriminate against out-of-state residents. States that attract a lot of tourists, for example, tend to rely more heavily than other states on hotel, food, and other taxes that fall primarily on out-of-state visitors. The authors examine whether tax exporting also occurs in the state courts. In most court cases, the plaintiff sues in the state in which he or she lives, but defendants are often corporations headquartered out-of-state. If tort awards are exported, therefore, one would expect to see larger awards, all else equal, against out-of-state defendants than against in-state defendants. The authors adduce evidence that in states that select their judges through partisan elections the courts are significantly biased against out-of-state defendants. The problem is not just out-of-control judges and greedy lawyers. When tort law puts almost no limit on punitive awards or on the absurdity of claimed harms is it any surprise that lawyers and judges can use the system to pillage defendants? By limiting awards to scientifically proven compensatory damages the electoral system might become a less significant determinant of awards.

Suggested Citation

Helland, Eric A. and Tabarrok, Alexander T., Exporting Tort Awards. Regulation, Vol. 23, No. 2, 2000. Available at SSRN: https://ssrn.com/abstract=235871

Eric A. Helland (Contact Author)

Claremont McKenna College - Robert Day School of Economics and Finance ( email )

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RAND ( email )

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Alexander T. Tabarrok

George Mason University - Department of Economics ( email )

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