Kansas Law Review, Forthcoming
Loyola Law School, Los Angeles Legal Studies Research Paper No. 2017-36
40 Pages Posted: 20 Sep 2017
Date Written: September 18, 2017
This article is the first to explore the use of statutory damage rules, both state and federal, across different fields of law. For the most part, such rules appear to fall into four general categories: (1) rules for the protection of intellectual property, (2) business regulatory rules, now more commonly known as consumer or labor protection rules, (3) rules governing the protection or dissemination of information, and (4) civil rights rules. Legislatures, courts, and commentators have offered three broad categories of justification for statutes of this kind: (1) remedial, (2) punitive, and (3) procedural. Quintessentially, it is asserted that damages in the area subject to legislation, although real, are hard to prove; statutory damages are set so as approximate likely actual damages without requiring proof of such damages. It is also sometimes asserted that, for whatever reasons, ordinary common law damage rules are inadequate in particular contexts. Secondly, statutory damages deter and punish. And thirdly, they alter litigation procedures and incentives to litigate that might otherwise pertain.
Three common problems arise. First, unless special care is taken in drafting the statute, statutory damage awards are inherently ambiguous: it is almost always impossible to determine what part of a lump-sum award should be treated as an approximation of actual damages and what part as a substitute for the criminal law. Second, when combined with class certification, statutory damage awards often threaten results viewed by many as outrageous. Third, because they are not anchored to actual damages, even statutory damages awarded in individual cases can seem ridiculously large; it is unclear whether such awards are subject to constitutional limitations and, if so, which. The article proposes possible solutions to each of these problems.
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