Punitive damages rare, independent study shows.
The study by two Cornell University professors and the National Center for State Courts comes on the heels of a contentious onslaught of legislative "tort reform" initiatives in recent years. The study also coincides with the release of a 5-4 U.S. Supreme Court decision that, for the first time, rejected a punitive damages award as being "grossly excessive." In BMW v. Gore, the Court reversed a $2 million punitive award against the car maker, which had failed to disclose that the finish on a new car was damaged and then repainted. (116 S. Ct. 1589 (1996); Punitive Damages Ruling in BMW v. Gore to Have Limited Effect, TRIAL, July 1996, at 12.)
The authors of the Cornell study conclude that public commotion over punitive damages awards is simply that-a lot of noise.
"Some of the gravest concerns about punitive damages, their unpredictability, and lack of relationship to compensatory damages, are less warranted than is commonly believed," the authors write. (Theodore Eisenberg et al., The Predictability of Punitive Damages, presented at the University of Chicago Law School, June 13-14,1996.)
"Products liability and medical malpractice are among the least likely classes of cases to result in punitive damages awards," the authors write. Business cases are the most likely to involve punitive damages.
"The study shows that the jury system in America is working," said ATLA President Howard Twiggs. "Business lobbyists and the insurance industry have no justification, other than corporate greed, for continuing to push measures in Congress and state legislatures that would restrict the role of jurors in making punitive damages awards."
The authors roundly dismiss critics' contentions that punitive damages awards have gotten out of hand-especially in relation to the amount of compensatory damages awarded.
Although their research shows that the $2 million award in the Gore case was "off the charts," the authors say punitive awards are imposed in fewer than 10 percent of all jury trials in which plaintiffs prevail.
The Cornell study shows that where compensatory damages were $10,000, punitive damages averaged $10,860; where compensatory damages were $100,000, punitive damages averaged $65,720; and where compensatory damages were $1 million, punitive damages averaged $397,810.
The argument that punitive damages awards "are randomly plucked out of the air and bear no relation to compensatory damages, can be firmly rejected," the study says.
Publicity over high punitive awards appears to flow logically from the media's desire to print "man bites dog" stories. "The punitive damages cases emphasized in the media are newsworthy precisely because they are so rare," the authors write.
The study was funded by a grant from the U.S. Justice Department. Data were collected by the National Center for State Courts. The center examined the results of 6,000 state court trials that occurred between July 1991 and June 1992 in 45 of the most populous U.S. counties.
The study says punitive damages are awarded in 6 percent of cases nationally. A breakdown of statistics, however, shows that San Francisco jurors awarded punitives in 26.6 percent of their cases. In Fulton County, which includes Atlanta, jurors awarded punitives 25.8 percent of the time, and 22.5 percent of the time in Dallas County, Texas.
Interestingly, "tort reform" proponents claim that the largest punitive damages awards come from rural, not urban, areas.