Cite as: 517 U. S. 559 (1996)
Breyer, J., concurring
harm caused. See, e. g., S. Shavell, Economic Analysis of Accident Law 162 (1987) ("If liability equals losses caused multiplied by . . . the inverse of the probability of suit, injurers will act optimally under liability rules despite the chance that they will escape suit"); Cooter, Punitive Damages for Deterrence: When and How Much, 40 Ala. L. Rev. 1143, 1146-1148 (1989). My understanding of the intuitive essence of some of those theories, which I put in crude form (leaving out various qualifications), is that they could permit juries to calculate punitive damages by making a rough estimate of global harm, dividing that estimate by a similarly rough estimate of the number of successful lawsuits that would likely be brought, and adding generous attorney's fees and other costs. Smaller damages would not sufficiently discourage firms from engaging in the harmful conduct, while larger damages would "over-deter" by leading potential defendants to spend more to prevent the activity that causes the economic harm, say, through employee training, than the cost of the harm itself. See Galligan, Augmented Awards: The Efficient Evolution of Punitive Damages, 51 La. L. Rev. 3, 17-20, 28-30 (1990). Larger damages might also "double count" by including in the punitive damages award some of the compensatory, or punitive, damages that subsequent plaintiffs would also recover.
The record before us, however, contains nothing suggesting that the Alabama Supreme Court, when determining the allowable award, applied any "economic" theory that might explain the $2 million recovery. Cf. Browning-Ferris, supra, at 300 (noting that the Constitution "does not incorporate the views of the Law and Economics School," nor does it " 'require the States to subscribe to any particular economic theory' ") (O'Connor, J., concurring in part and dissenting in part) (quoting CTS Corp. v. Dynamics Corp. of America, 481 U. S. 69, 92 (1987)). And courts properly tend to judge the rationality of judicial actions in terms of the reasons that were given, and the facts that were before the court, cf. TXO,
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