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| Issues: Civil Litigation
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Litigation Statistics (last updated April 19, 2003) (back to top)
Anyone can file a civil lawsuit for any reason, but it's much harder to win one. People often complain about our open legal system, but they may not understand that there's a lot more going on than what the media reports and critics lambast.
The legal system already has many ways of getting rid of bad cases. Maybe 3 percent of civil cases ever make it to trial, with federal district courts regularly throwing out roughly 80 percent of the cases terminated each year. If the plaintiffs do make it to trial, they generally win as often as they lose and they get punitive damages in only about 3 percent of the cases they do manage to win; moreover, these punitive-damage awards are often capped or reduced on appeal.
Here are some statistics on civil litigation :
- The number and rate of civil-case filings (and tort filings) have actually gone down in recent years, but the number of class-action lawsuits does seem to have increased.
The rate of civil case filings is now higher than it was a few decades ago, but it has declined somewhat in recent years. The National Center for State Courts reported in 2001 that civil filings increased more than 20 percent overall from 1984 to 2000, but that the number and rate of filings per 100,000 people peaked in 1991 and have gone down since then. In particular, tort filings in 30 states decreased 10 percent from 1991 to 2000, and product-liability filings in 8 states dropped 20 percent from 1996 to 2000.
The federal courts have seen similar declines in recent years. According to statistics from the Administrative Office of the U.S. Courts, civil case filings declined in the federal courts by 5 percent from 1997 to 2001, with a 22 percent decline in personal-injury filings, an 8 percent decline in prisoner petitions, a 7 percent decline in civil-rights cases, and a 4 percent decline in contracts cases.
However, anecdotal evidence does suggest that plaintiffs are bringing more class actions against companies than before. Class actions are a device that allows groups of plaintiffs to bring lawsuits that would not be cost-efficient for a single plaintiff to bring, but they have also been criticized for putting undue pressure on defendants.
- The vast majority of cases (97%) never make it to trial. Federal judges regularly throw out 80 percent of the cases that get terminated, and parties settle about 16 percent.
Most civil cases never make it to trial. The Bureau of Justice Statistics estimated in 1995 that about 97 percent of cases are terminated before a trial, with about 75 percent of tort cases in the largest counties' state courts being settled or withdrawn pre-trial. Recent federal court statistics back this up. Of the roughly 250,000 cases terminated in the 12-month period ending March 31, 2002, courts threw out about 82 percent before trial, the parties apparently settled or withdrew about 16 percent on their own, and only 2 percent made it to trial.
- Overall, plaintiffs win about half of all tort trials. However, plaintiffs do appear to be more likely to win certain kinds of cases in certain jurisdictions (Mississippi in particular has earned an infamous reputation for big tort-case verdicts against companies).
According to the Bureau of Justice Statistics' survey of 1996 cases, plaintiffs won more often with judges (57% of the time) than with juries (48%). Plaintiffs were more likely to win automobile accident, intentional tort, and asbestos cases, and were less likely to win medical malpractice and slander/libel cases.
- Punitive damages are actually rare in the largest jurisdictions, resulting in about 3 percent of the cases where plaintiffs win at trial.
According to the Bureau of Justice Statistics' survey of 1996 cases, plaintiffs won punitive damages in about 3 percent of tort trials in the nation's 75 largest counties, with the median award being $38,000. Plaintiffs were more likely to win punitive damages in product liability, intentional tort, and slander/libel cases.
- Punitive damages are capped in many states and are often reduced on appeal.
The United States Supreme Court has held that there must be a "reasonable relationship" between the level of punitive damages awarded and the actual harm suffered, and it has thus rejected punitive-damage awards where the award was more than 100 times the amount of actual damages (see BMW v. Gore, Campbell v. State Farm). Following this lead, judges regularly reduce awards immediately after a trial and on appeal. Moreover, at least 15 states have laws capping the amount of punitive damages based on set dollar amounts or in relation to the level of actual harm.
Some statistics from the BJS 1996 survey
| Kind of lawsuit
| # of cases that went to trial
| # of trials where plaintiffs won (% of trials)
| # of trials where plaintiffs won money
| # of trials where plaintiffs won punitive damages (% of wins)
| Median amount of damages when awarded
| Median amount of punitive damages when awarded
|
| Torts
| 10,278
| 4,944 (48%)
| 4,879
| 162 (3%)
| $31,000
| $38,000
|
| Product Liability (not including asbestos)
| 238
| 88 (37%)
| 82
| 11 (13%)
| $177,000
| $462,000
|
| Asbestos Product Liability
| 183
| 96 (52%)
| 81
| 3 (3%)
| $309,000
| $1,100,000
|
| Medical Malpractice
| 1,201
| 280 (23%)
| 272
| 3 (1%)
| $286,000
| $2,500,000
|
| Automobile
| 4,994
| 2,871 (57%)
| 2,853
| 20 (1%)
| $18,000
| $25,000
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Sources: The National Center for State Courts, Examining the Work of State Courts, 2001, is on-line here. Bureau of Justice Statistics, Tort Trials and Verdicts in Large Counties, 1996 (August 2000), is on-line here. Bureau of Justice Statistics, Tort Cases in Large Counties (April 1995), is on-line here. Statistical data by the Administrative Office of the United States Courts is available on-line here.
Punitive Damages (last updated May 26, 2003) (back to top)
There has been a lot of criticism of punitive damages in recent years, but some of it is unfairly based on extreme cases rather than the more typical situation. In fact, juries actually do not award punitive damages in the vast majority of trials, large verdicts that make headlines are often reduced on appeal, and some states have adopted measures that limit punitive damages or allocate part of a punitive-damage award to the state rather than to the individual plaintiff.
Moreover, the point of punitive damages is to punish defendants for unlawful behavior and to deter repetition of such behavior. Punitive-damage awards must be large enough to actually be such a deterrent, though overly-large awards can discourage defendants from acting in socially-beneficial ways and thus hurt society more than they help.
Punitive damages are just one component of the damages that a plaintiff can be awarded in a successful lawsuit. Compensatory damages, which are the other major component of damages and include pain and suffering, medical expenses, and lost earnings, are designed to return the plaintiff in the position that he or she would have been if not for the injury; money obviously cannot fully make up for non-economic damages but is treated as the best-possible substitute available under the law.
Juries rarely award punitive damages
According to the Bureau of Justice Statistics' survey of 1996 cases, plaintiffs won punitive damages in about 3 percent of tort trials in the nation's 75 largest counties, with the median award being $38,000. Plaintiffs were more likely to win punitive damages in product liability (12.5% of cases, with median award of $462,000), intentional tort (24.0% of cases, with median award of $16,000), and slander/libel cases (17.0% of cases, with median award of $15,000). Plaintiffs were less likely to win medical malpractice cases (1.1% of cases), but tended to win much bigger awards when they did.
The BJS study also found that judges were slightly more likely to award punitive damages than juries, but that may have something to do with the kinds of cases that tend to go before judges or juries.
Punitive damages are often reduced on appeal
The United States Supreme Court has held that there must be a "reasonable relationship" between the level of punitive damages awarded and the actual harm suffered, and it has thus rejected punitive-damage awards where the award was more than 100 times the amount of actual damages (see BMW v. Gore, Campbell v. State Farm). Following this lead, judges regularly reduce awards immediately after a trial and on appeal.
In fact, many of the shockingly-large judgments reported in recent years were later reduced on appeal. The 1994 McDonald's coffee case resulted in a $3 million judgment, but it was quickly reduced to $640,000 and settled for even less. The $5.5 million verdict in 1997 against ABC News for its undercover reporting of the Food Lion grocery stores was reduced to just two dollars by an appellate court in 1999. And the $5.3 billion verdict in 1994 against Exxon for the Valdez oil spill was thrown out by an appellate court in 2001, with the final amount still not decided.
Punitive damages are statutorily capped in many states
Moreover, at least a quarter of the states have laws capping the amount of punitive damages based on set dollar amounts or in relation to the level of actual harm.
- Alaska (generally greater of 3 times compensatory damages or $500,000). Punitive damages may not exceed the greater of three times the compensatory damages awarded or $500,000. If conduct was motivated by financial gain and defendant had actual knowledge of the unlawful conduct's consequences, damages can go up to the greater of four times compensatory damages, four times the expected amount of financial gain resulting from conduct, or $7 million. See Alaska Statute 09.17.020(f-g).
- Colorado (jury can impose maximum punitive damages equal to compensatory damages, but court can increase to 3 times compensatory damages). See Colorado Statute 13-21-102(1).
- Florida (generally greater of 3 times compensatory damages or $500,000). Caps punitive damages unless the defendant had a "specific intent" to harm the claimant and did so. Punitive damages may not exceed the greater of three times the compensatory damages or $500,000 in most circumstances, and may not exceed the greater of four times the compensatory damages or $2 million if the defendant's actions were motivated by ":unreasonable financial gain" and if the defendant actually knew about the dangerous nature of its actions. See Florida Statute 768.73(1). Punitive damages in cases involving nursing homes have greater maximum caps. See Florida Statute 400.4298(1) and (2).
- Georgia (maximum of $250,000). See Georgia Unannotated Code 51-12-5.1.
- Indiana (greater of 3 times compensatory damages or $50,000). See Indianan Statute 34-51-3-5.
- Kansas (lesser of $5 million or the defendant's greatest annual gross income from the prior five years). See Kansas Statute No. 60-3702.
- Nevada (generally greater of $300,000 or three times compensatory damages). See Nevada Statute 42.005 (on-line here).
- New Jersey (greater of 5 times compensatory damages or $350,000). See New Jersey Statute 2A:15-5.14.
- North Dakota (greater of two times compensatory damages or $250,000). See N.D. Century Code 32-03.2-11(4) (on-line here).
- Oklahoma (generally greater of $100,000 or actual damages). If defendant acted with reckless disregard, punitive damages capped at greater of $100,000 or actual damages. If defendant acted intentionally and maliciously, punitive damages capped at greater of $500,00, twice actual damages, or the benefit accruing to the defendant from unlawful conduct. See Okla Stat. 23-9.1(B)-(D).
- Texas (greater of $200,000 or (two times the compensatory damages plus non-economic damages up to $750,000). No cap on punitive damages for certain acts that would be felonies, such as murder. See Texas Statute 41.008.
- Virginia (maximum of $350,000). Jury not to be told of limitation in advance. See § 8.01-38.1.
- Some states do not allow punitive damages at all. Michigan, Nebraska, New Hampshire, Washington do not allow punitive damages at all, though Michigan and New Hampshire can include punitive component in compensatory damage award.
Plaintiffs share punitive-damage awards with the state in several states
Would you think punitive damages a problem if the money was really just to send a message and did not go to individual plaintiffs? What if a plaintiff just got the money to compensate him or her for her injuries (pain and suffering, lost wages, medical expenses, other damages) and the state got most or all of the punitive damages to help other victims? Would you still have a problem with punitive-damage awards in that case?
Several states recognize that punitive damages are imposed primarily to help society as a whole by deterring future injuries, not to reward a particular plaintiff who happens to bring a lawsuit, and thus allocate part of a punitive-damage award to a state fund. Such laws arguably reduce the incentive for bringing lawsuits and help ensure that only valid lawsuits are brought.
- Alaska (50% to state). Half of any punitive damages awarded to the plaintiff goes to the state's general fund. Unclear how attorneys' fees are considered. See Alaska Statute 09.17.020(j).
- Indiana (75% to state). 75 percent of any punitive damages (before attorneys' fees) brought by a private plaintiff goes to the state's violent crime victims compensation fund. See Indiana Code 45-51-3-6 (on-line here).
- Iowa (75% to state). At least 75 percent of punitive damages (after costs such as attorneys' fees) in all cases where the tortfeasor did not direct his or her conduct specifically towards the plaintiff go to the Iowa Civil Reparations Trust Fund, which is used solely to fund indigent civil-litigation programs and insurance-assistance programs. See Iowa Code 668A.1, Revere Transducers Inc. v. Deere & Co. (Iowa Supreme Court, No. 177/00-0167) (December 19, 2001). The state awarded more $80,000 in May 2000 to legal-service and medication programs using such funds (see press release here).
- Missouri (50% to state). Half of any punitive damages (after attorneys' fees) in all cases (except for those claiming improper health care) goes to the state. The state uses 74% of its share for the Tort Victims' Compensation Fund, which is run by the Division of Workers' Compensation to help people who are injured but cannot recover their full damages from those who injured them. The state uses the other 24 percent for the "Legal Services for Low-Income People Fund," which is distributed to legal-service organizations helping low-income people. Attorneys can collect fees based on the final award of punitive damages, and not merely on the part going to the plaintiff. See Missouri Revised Statute 537.675 and 537.678, and the Missouri Department of Labor and Industrial Relations' Division of Workers' Compensation (on-line here.
- Oregon (60% to state). 60 percent of any punitive damages (before attorneys' fees) goes to the state's Criminal Injuries Compensation Account, run by the Department of Justice Crime Victim's Assistance Section. Plaintiffs and plaintiffs' attorneys share the remaining 40 percent, with plaintiffs' attorneys getting no more than half of the 40-percent share. See Oregon Statute 18.540(1). Upheld by Oregon Supreme Court, en banc, in DeMendoz v. Huffman, 51 P.3d 1232 (Or. 2002).
- Utah (50% above $20,000 to state). Half of any punitive damages in excess of $20,000 (after attorneys' fees) go to the state's general fund. See Utah 78-18-1.
- Other States
- Florida (50% to state in some cases). Half of any punitive damages in cases involving nursing homes go to the state's Quality of Long-Term Care Facility Improvement Trust Fund. Attorneys can collect fees based on the final award of punitive damages, and not merely on the part going to the plaintiff. See Florida Statute Title XXIX, Chapter 400.4298.
- Georgia (75% to state). 75 percent of any punitive damages (after attorneys' fees) in a product-liability action goes to the state's treasury. See Georgia Unannotated Code 51-12-5.1(e)(2). Upheld by Supreme Court of Georgia in State v. Moseley, 436 S.E.2d 632 (Ga. 1993) and Mack Trucks, Inc. v. Conkle, 436 S.E.2d 635 (Ga. 1993).
- Illinois (at court's discretion). The trial court has discretion to apportion the entire punitive damage award between the plaintiff, the plaintiff's attorney, and the state's Department of Human Services. The amount awarded to the plaintiff's attorney shall be "reasonable" and shall not exceed the amount set in the contract. See 735 Illinois Consolidated Statute 5/2-1207.
Many of these laws have survived constitutional challenges. However, the Colorado Supreme Court did rule in 1991 that plaintiffs had a property right in their punitive-damage award and thus ruled that a state law allocating 33 percent of the award once collected to the state was an unconstitutional taking. See Kirk v. Denver Pub. Co., 818 P.2d 262 (Colo. 1991). The United States Supreme Court has not ruled definitively on the matter.
Sources: I conducted surveys of state laws regarding punitive-damage caps and allocations in April 2003. Sonja Larsen, Validity, construction, and application of statutes requiring that percentage of punitive damages awards be paid directly to state or court-administered fund, 16 A.L.R.5th 129 (1993). The National Center for State Courts, Examining the Work of State Courts, 2001, is on-line here. Bureau of Justice Statistics, Tort Trials and Verdicts in Large Counties, 1996 (August 2000), is on-line here. Bureau of Justice Statistics, Tort Cases in Large Counties (April 1995), is on-line here. Statistical data by the Administrative Office of the United States Courts is available on-line here.
Alien Tort Claims Act (last updated December 12, 2002) (back to top)
A 1789 law that was little-used for almost 200 years but gained new force in the 1980s and 1990s has made federal courts in the United States a venue for lawsuits over wrongs committed around the world. But while such lawsuits often attract publicity and can result in large judgments, few plaintiffs have successfully collected their judgments since U.S. law does not limit sovereign immunity or make provisions for collecting such judgments from foreign states.
The Alien Tort Claims Act of 1789, 28 U.S.C. 1350, grants jurisdiction in federal court over "any civil action by an alien for a tort only, committed in violation of the law of nations or by a treaty in the United States." The Second Circuit Court of Appeals (covering New York, Connecticut and Vermont) held in the 1980 case Filartiga v. Pena-Irala, 630 F.2d 876, that this previously little-known provision enabled Paraguayan citizens to bring a lawsuit against a former Paraguayan official for torture in a United States federal court, and this reading was subsequently reified and even broadened by Congress with the Torture Victim Prevention Act of 1991.
According to cases subsequently decided by the Second Circuit, plaintiffs can use the Alien Tort Claims Act to bring torture claims when perpetrated by government officials acting "under the color of official authority," and by private parties if their "conduct is undertaken under the color of state authority or violates a norm of international law that is recognized as extending to the conduct of private parties." Plaintiffs must still comply with other requirements in bringing lawsuits, and thus must, among other things, serve defendants while they are present in the United States.
Sources: Wiwa v. Royal Dutch Petroleum Co. (2d Cir. 2000), available on-line here. Anne-Marie Slaughter and David L. Bosco, Alternative Justice, an essay on-line here.
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