Punitive Damage Class Actions and the Baseline of Tort

Abstract

This article will appear as part of a symposium on issues sparked by the landmark multibillion-dollar punitive damage award against the tobacco industry in Engle v. R.J. Reynolds Tobacco Co. The article addresses recent calls for settlements of mandatory class actions as a way to resolve liability for punitive damages in whole categories of mass tort litigation. Focusing upon the nature of punitive damages within the institutional regime of the tort system, the article contends that such settlements are not, and should not be, legally viable. In support, the article derives from first principles a conception of the justification for, and parameters of, the mandatory "limited fund" class action under Rule 23(b)(1)(B).

The article goes on to argue that the recent opt-out class settlement in the fen-phen litigation offers a legally superior way to build upon the insight that resolution of punitive damage liability may serve as a catalyst for defense concessions as to compensation. The reasons for the apparent lack of pursuit of such a settlement structure in the tobacco litigation are complex but appear to stem, in substantial part, from rivalries between would-be counsel for a mandatory punitive damage class and their more trial-oriented competitors within the plaintiffs' bar.

JEL Classification: K