The BP Oil Spill Settlements, Classwide Punitive Damages, and Societal Deterrence

31 Pages Posted: 9 Apr 2016 Last revised: 29 Apr 2016

Date Written: April 2016

Abstract

The BP oil spill litigation and subsequent settlements provide an opportunity to explore a novel societal economic deterrence rationale for classwide supra-compensatory damages. Judge Jack Weinstein was a pioneer in the field of punitive damages class certification. In In re Simon II, he certified a nationwide punitive-damages-only class in a multijurisdiction, multidefendant tobacco lawsuit. Using Judge Weinstein’s innovations in In re Simon II as an analytical lens, the Article evaluates the future prospects for classwide punitive damages claims.

Specifically, the Article considers how private litigants might adopt a societal damages approach in negotiating and achieving class action settlements. Class action settlements readily accommodate the “public law” dimension of societal damages, as demonstrated by the classwide punitive damages settlement with BP’s co-defendant Halliburton. Indeed, on closer inspection, even the BP compensatory damages class settlement has a surrounding aura of societal damages. For even that ostensibly purely compensatory arrangement included an unusual (and mostly overlooked) feature: a provision for supra-compensatory multipliers applicable to certain claimants. This Article advances the new idea that these supra-compensatory multipliers are a form of classwide societal damages embedded within the settlement, and, in turn, a potential blueprint for nascent punitive damages classes of the future.

Keywords: punitive damages; classwide damages; class action; settlement; BP Oil; societal damages

JEL Classification: K13; K41

Suggested Citation

Sharkey, Catherine M., The BP Oil Spill Settlements, Classwide Punitive Damages, and Societal Deterrence (April 2016). DePaul Law Review, Vol. 64, 2015, NYU Law and Economics Research Paper No. 16-16, Available at SSRN: https://ssrn.com/abstract=2759970

Catherine M. Sharkey (Contact Author)

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States
212-998-6729 (Phone)

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