The attempt to tax punitive damage awards was a good faith effort that hasn't worked out. You may be singing a different tune when some random jury hands out $50 million to somebody who was injured and a corporation was tangentially involved.

Anyway, back to the drawing board for budget ideas. How about preventing illegal immigrants from accessing public services? The savings in schools alone should measure in the billions. After that, there are probably still some social programs that can be cut.

KEVIN DRUM: But it sells well with the rubes, doesn't it?

(My emphasis) I see you're still reading Somerby. Perhaps you saw his remarks about Halperin today. Unlike you, he didn't note what someone else said without commenting himself. Unlike you, he wasn't afraid to call him the "well-trained boy" he is.

Incidentally, it occured to me after I posted why California collected literally zero: Punitive damages are typically awarded against a big corporation. Big corporations can be sued anywhere (venue generally isn't an obstacle, and jurisdiction certainly isn't either). Therefore, people are probably making a rational choice to sue in a jurisdiction that doesn't hav ethe tax in uestion. The problem isn't that california has the law; the problem is that everywhere else does not.

And looking at only the biggest counties is a meaningless metric. As noted, venue can be chosen anywhere. There are many small counties in Texas that are infamous for huge damage awards. The entire system needs to be looked at; conveniently, the author doesn't address those statistics.

AMERICAN HAWK: There are many small counties in Texas that are infamous for huge damage awards.

Virtually all of Texas' 254 counties are small. If 10% (25) of them were infamous for huge damage awards, I think we could call that a "few," not "many."

But let's ignore the base of 254 and take the most strained definitions of the descriptors "few," "several" and "many."

Few=3
Several=4
Many=5

Point us to the evidence which shows that 5 Texas counties "are infamous for huge damage awards."

Instead of spouting off on conventional right wing "wisdom," Buzzard, why not do some actual research and regale us with some facts? You know, like the book in question.

Good points AH, but I have another reason why the 75% tax on all punitive damages returned so little money. As Arthur Laffer taught us with his Laffer curve, raising tax causes a decline in revenue. For a similar reason, taxing punitive damages caused a decline in punitive damages awarded becauses plaintiffs were no longer willing to give a lot of money to expensive lawyers to sue for the punitive damages. So taxing the punitive damages at the high rate was a good idea because it caused less punitive damages which is a good thing because businesses no longer have to worry about ambulance chasers extorting money from them with false claims.

Conservatives, "Oops we were wrong again, but that doesn't mean we're aren't always right."

...So taxing the punitive damages at the high rate was a good idea because it caused less punitive damages which is a good thing because businesses no longer have to worry about ambulance chasers extorting money from them with false claims.

Posted by: Al on October 26, 2006 at 2:43 AM | PERMALINK

Wow!! So taxes are good! Wow! Right! OK!

Al,you are THE non-secuitor!

As usual, the conservative spout the eternal Stalinist rejoinder:

"I was right to be wrong, and you were wrong to be right."

...As with all good book authors these days, she's created a blog to help promote the book....

—Kevin Drum 1:57 AM Permalink | Trackbacks | Comments (8)

Good grief! Why! You NEED to have a blog to promote the book? But all you well read people would not promote if a good book was out there?

Wow!And I thought you all were switched on!

Kevin, the Asiatic spam is getting really bad - Can't you block those IP addresses?

On topic - This notion of "out of control" civil lawsuits is a fiction created by the right-wing to punish trial lawyers, a group that votes overwhelmingly Democratic. [Probably because you have to be smart to be a trial lawyer.] I read not long ago that over half of civil lawsuits were businesses suing other businesses. Not aggrieved citizens clogging up the court dockets by suing the noble American businessman or woman. Sounds like we need to punish American businesses for being so litigious, not trial lawyers.

Gay scary brown Muslim illegal alien terrorist welfare queens!

-N-A-N-C-Y- -P-E-L-O-S-I-

-N-A-N-C-Y- -P-E-L-O-S-I-

-N-A-N-C-Y- -P-E-L-O-S-I-

Gay scary brown Muslim illegal alien terrorist welfare queens!

-N-A-N-C-Y- -P-E-L-O-S-I-

-N-A-N-C-Y- -P-E-L-O-S-I-

-N-A-N-C-Y- -P-E-L-O-S-I-

"It sells well with the rubes."

That seems to sum up the overriding rational behind much of the work of our legislators across the country.

It also sums up the reason our media herd promotes some story or another.

Now that I think of it, the phrase pretty much reflects the sermons of fundamentalist preachers across the land.

All of them seem to be hucksters in search of something to sell the rubes.

I don't blame the hucksters. I blame us rubes. Don't you think it is time we figured out we don't need to be distracted by bright shiny objects.

Congress, I forgot Congress. Most of the time they appear to be hucksters looking for and finding something to sell the rubes. We could close that institution down nine months each year and improve the quality of legislation proposed and passed.

Yes the tort system is out of control, but we must remember who gets the administration's ear. It's out of control for those who have to pay the rare mega-awards, not for the even rarer party that has been torted enough to warant one.

I'm glad to see that Ms. Mencimer is no longer writing fiction.

If the name is "blocking the courthouse door" it's sound like book about how Bush wants people not to be able to sue at all.

I really don't know way conservatives don't move to Mexico, it already got the goverment that Republicans want, the corruption is already in place.

God, we have some dumbass trolls on this blog. Do they all have lobotomies and go to stupid school first? Then they are awarded their GOP Troll diploma, written in ransom-note block letters and signed in crayon.

"huge awards handed out by juries"

Sorry pal, but the huge awards "handed" out by juries rarely reach the plaintiffs and their lawyers. They are reduced, often drastically, by judges to a mere glimmer of the original amount awarded.

The insurance industry and the right wing love to keep the "huge awards" numbers before the public's eye. It is sort of like a newspaper's large type headline blaring "MegaCorp must pay 60 Gazillion for coffee spill" - Then, later, on Page 27, in the lower right corner, is a small type blip that says "Plaintiff's award cut by 59.995 Gazillions"
Plaintiff's attornies can, and usually do, wait for years for any, if any, financial reward. MegaCorps vast attorney network is reimbursed on a regular basis.

Remember, trial lawyers = BAD
Corporate trial lawyers such as Ken Starr, who represented GM and the tobacco industry = GOOD
especially if he goes on to waste mega bucks on a witch hunt.

AH wrote:

conveniently, the author doesn't address those statistics

That is such a dizzyingly funny line that it deserves a special award. It refers to nothing and yet it has such a wounded tone... it's like a Zen koan for Republicanism.

American Hawk: It was pointed out during the last tort deform debate that more people freeze to death in Texas (average 19) in any given year than there are awards of punitive damages. Also, almost all punitive damage cases involve a situation where where the defendant either assaulted the plaintiff or the defendant was a drunk driver. The new Republican motto: Making courtrooms safe for criminals!

Punitive damages are a windfall to the plaintiff and should go to the state--this is a penalty, afterall. This doesn't really seem to be conservative v. liberal issue as the issue isn't whether these damages should be paid, but who gets the money.

I wasn't using the Seventh Amendment anyway.

Meanwhile in other news:

AP via NYTimes

Diller Takes the Prize for Highest Paid

But one recent study that looked at a broader universe of companies estimated his total compensation last year at $295 million, while another recent survey — using a different calculation — figured he was paid $85 million.

Exxon Reports $10.49 Billion Profit in Quarter

NEW YORK (AP) -- Oil industry behemoth Exxon Mobil (NYSE:XOM) Corp. said Thursday its third-quarter earnings rose to $10.49 billion, the second-largest quarterly profit ever recorded by a publicly traded U.S. company.

>Break

The world's biggest public oil company said its net income amounted to $1.77 per share for the July-September period, up from $9.92 billion, or $1.58 per share, a year ago.

Justin - are you arguing that a non-party to a civil suit should be directly enriched by that suit?

I really don't know way conservatives don't move to Mexico, it already got the goverment that Republicans want, the corruption is already in place.

En español, lo dice "PRI" por "Republican Party" en ingles.

I really don't know way conservatives don't move to Mexico, it already got the goverment that Republicans want, the corruption is already in place.

Unfortunately for them, so are the crony networks.

Punitive damages are typically awarded against a big corporation.

Actually, no. One of the reasons they are so small, typically, is that they are usually not awarded against big corporations. The very few large punitive damage awards may be usually against big corporations, but that's a different issue.

Big corporations can be sued anywhere (venue generally isn't an obstacle, and jurisdiction certainly isn't either).

This is both true and false; a big corporation actively doing business throughout the country can mabye be sued (successfully) anywhere in the country, before you consider the specific thing for which they are being sued. Venue and jurisdiction do become issues when you consider concrete cases. A large California corporation may be subject to suit in Texas in some vague general sense, but not likely for, say, a case brought by a California plaintiff based on conduct and an injury that occurred in California.

Okay, so much for punitive awards not being a financial problem in excessive legal action.

Now, can we take a look at the myriad other costs involved in lawsuits? Like lawyers' fees, court costs, and productive time lost in people having to defend themselves from frivolous lawsuits?

I don't see law firms going broke on these things. However much money actually ends up in awards, it must still be enough to have lawyers slavering after these cases all over the country.

Sorry, American Hawk, you need to get your facts straight. In Texas, you can't just go sue happy in any county you want. We have very strict venue rules here and the overwhelming number of cases are filed in Harris (Houston), Dallas, and Bexar (San Antonio) counties. When there is a large punitive damage award, and by large, I mean anything over one million, you can expect the trial judge, if not the appeals courts, to lower it.

Now, can we take a look at the myriad other costs involved in lawsuits? Like lawyers' fees, court costs, and productive time lost in people having to defend themselves from frivolous lawsuits?

If you want to argue that we should do something about that, shouldn't you first show some evidence to establish that there are, in fact, substantial numbers of "frivolous lawsuits" for some reasonable definition of "frivolous", and that the costs associated with these genuinely frivolous lawsuits are not well handled by existing remedies that exist for various abuses of the legal system?

Big corporations can be sued anywhere (venue generally isn't an obstacle, and jurisdiction certainly isn't either).

Like others have said, this is not true. Even when a defendant is a big corporation that does business throughout the world, plaintiffs are still limited as to where they can bring suit. Venue and jurisdiction can be complicated, but it's safe to assume that in most cases, your forum choices where businesses are concerned are limited to (a) the state of defendant's incorporation; (b) the state of defendant's headquarters; (c) the state where the defendant engaged in the conduct that caused the injury; and (d) the state where the injury occurred. On top of that, simply being able to bring suit in a particular state doesn't mean that the law of that particular state is going to apply to your claim. Where more than one state has a relationship to the parties and the events at issue, courts will apply the law of the state that has the greatest interest (evaluated in terms of contacts with the conduct and the parties) in regulating the parties' behavior.

Many state legislators justify placing limits on punitive and compensatory damage awards by arguing that these so-called "protections" will encourage big businesses to set up their operations in their state. There's plenty of proof, however, that the potential exposure to damage awards has little effect on where businesses decide to set up shop. The best example is Boeing's recent relocation of its headquarters from Seattle, Washington to Chicago, Illinois. Washington doesn't even allow punitive damages, and Seattle was famously protective of Boeing. Illinois, on the other hand, has great law for plaintiffs on both compensatory and punitive damages. Plus, Chicago's courts are legendarily plaintiff-friendly. To make it even more interesting, Boeing turned down the option of relocating to Houston, where Boeing would have had the benefit of GWB's vaunted tort reform measures.

Interesting, eh?

I should have added that under most circumstances, the issue of whether a corporation can be subjected to punitive damages is going to be decided under the law of the state where the corporation is headquartered or where the state has its main business operations.

"God, we have some dumbass trolls on this blog. Do they all have lobotomies and go to stupid school first?"

That's the very nature of a troll -- the ability to say really stupid things to rile up the intended audience. Sadly, the trick is almost universally successful. People simply cannot stop themselves from responding to these idiotic posts.

Neither Al nor American Hawk are genuine conservative commenters. They are either trolls or parodies of trolls and when you respond to them, you are giving them exactly what they want.

keptsimple said:

Justin - are you arguing that a non-party to a civil suit should be directly enriched by that suit?

Yes. Punitive damages are more like a fine and shouldn't be paid to the plaintiff (they are not compensating the plaintiff for damages).

One thing I think that it would be healthy for liberals to get over is the belief that corporations are just big cash machines, and that any law suit against a corporation is OK because Exxon is very profitable, or something. Anti-corporate lawsuit rhetoric will never win an election (at least now for the foreseeable future).

Also, I don't think anyone would argue that strike suits (suits that don't necessarily have merit, but a corp will settle to avoid legal fees) are fairly prevelant and real, but the overall cost is impossible to determine, and companies will of course tend to exaggerate the negative effects of those suits.

Kevin!!

When you say, "it sells well with the rubes, doesn't it" it makes we want to hoooowwwlllll!!!!

If you want to argue that we should do something about that, shouldn't you first show some evidence to establish that there are, in fact, substantial numbers of "frivolous lawsuits" for some reasonable definition of "frivolous", and that the costs associated with these genuinely frivolous lawsuits are not well handled by existing remedies that exist for various abuses of the legal system?

This would take another study, but I'm suspicious that almost every study I've seen that claims liability suits are not a problem only mention the award amounts, and nothing else.

If you go online,and look up the web pages of liability attorneys, they seem to tell a whole different story, bragging about huge awards in many cases. Of course, it would take a lot of research to find out which of these suits are "frivolous" and which are not. Who judges? Certainly no attorney would ever define any of his own actions that way.

I know the tort industry is not going broke. Far from it. So where's all the money coming from?

The thing that gets me about law suits are CLASS ACTION SUITS.

I just got something in the mail from a class action suit against Verizon. As best I can figure out, they will give me $15 off my bill if I sign up for an additional two years.

Maybe I am misreading the legalese but it seems to me that Verizon would love to pay me MORE than $15 if I signed up for an additional 2 years.

I am guessing that Verizon must have done something wrong, the lawyers got paid a lot and Verizon gave absolutely nothing to the customers who were hurt by whatever it is that Verizon did wrong.

I don't know how to change the law but it seems to me that members of the class should actually receive something of value. If the people in the class do not receive anything of value then can't the company at fault pay money to a charity or to the government as a fine? Putting together those claim forms must have made someone rich and there is ZERO redemming social value to whatever it is that Verizon is being forced to offer.

I'm sorry, but absolutely no topio concerning the legal system should be considered unless it first can be shown upfront that lawyers are directly and materially adversely impacted economically.

Corrollary: it is illegitimate for lawyers themselves to participate in discussions concerning the legal system. Their direct financial interest disqualifies them.

Qualification: in matters concerning medical malpractice, not only lawyers but also doctors should not be heard because doctors are even more overly compensated and afflicted by financial self-interest than are lawyers.

The problem with doing a study on what "frivolous" lawsuits cost is that the real cost (as mentioned above) is in attorneys fees etc. and in paying an out of court settlement (which would be cheaper than going to court). No company wants to disclose this info for obvious reasons, and the settlement (I think) is often subject to a confidentiality agreement.

AH: Anyway, back to the drawing board for budget ideas. How about preventing illegal immigrants from accessing public services? The savings in schools alone should measure in the billions. After that, there are probably still some social programs that can be cut.

Great Idea! When I started a new job the other month, I had to prove my citizenship, despite the fact that I was hired away from another firm of national note and that I am a white male from Connecticut. DHS assumes that I am not a citizen until I can prove that I am. So I'm with you Hawkie, no public services unless you can prove your citizenship. Show up at an emergency room? passport please. no papers, no treatment. Get stopped for speeding? no passport? you are assumed to be an undocumented immigrant until you can PROVE you have the right to be here. Out for a jog? better carry those papers, you might be stopped at anytime to prove you 'belong' here.

I love this! Papers, please. now, where have I heard this before?

oh wait, you only meant that assumption to apply to brown people, right? or those that talk funny?

I know the tort industry is not going broke. Far from it. So where's all the money coming from?

Legitimate cases, perhaps? If you want to argue that there is something that needs to be fixed, you ought to make a more convincing case that something is broken than "law firms that try tort cases remain in business".

Yeah, yeah, it might take some work to do that. But if your not willing to do the work to show that there is a problem, why should we be willing to listen to what you have to say about what we should do to fix the supposed problem?

It sure must be frustrating to live in a state full of such morons.

Thank God I live in Texas!

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