Managing Punitive Damages: A Role for Mandatory ‘Limited Generosity’ Classes and Anti-Suit Injunctions?

Abstract

In this Article, I consider whether “limited generosity” classes may be used to determine a defendant's entire liability for punitive damages arising from a defined course of conduct. The goals of such a class action would include adequately punishing and deterring the defendant, keeping the defendant’s liability within state-mandated and constitutional limits, and facilitating equitable distribution of the damages among injured plaintiffs. The Article describes the legal limits on punitive damages liability that states have established and that the Supreme Court has held substantive due process to impose, and then carefully examines whether such limits constitute a predicate for mandatory class certification under Rule 23(b)(1)(B) of the Federal Rules and analogous state rules. I consider, in particular, the implications of the Supreme Court’s 1999 decision in Ortiz v. Fibreboard Corp. for such punitive damages classes. In the final section of the Article, I consider the obstacles to issuance of anti-suit injunctions that could prevent mandatory punitive damages classes from being undermined by parallel pursuit of such damages in separate actions brought by class members.

Keywords: Class Actions, Punitive Damages, Injunctions, Federal Rules of Civil Procedure

JEL Classification: K10, K40