Torts - Cases, Principles, and Institutions Fifth Edition, 2016a

Witt & Tani, TCPI 4. Negligence Standard
3. Mass torts? If the bellwether strategy violates the parties’ due process rights, what is to
be done in mass torts cases? As U.S. District Judge Jack Weinstein observed in Schwab v. Philip
Morris U.S.A., Inc., 449 F. Supp. 2d 992 (E.D.N.Y. 2006):
In mass fraud cases with hundreds of thousands or millions of injured the cost of
one-on-one procedures is insuperable and unsuitable for either a jury or a bench trial.
The consequence of requiring individual proof from each smoker would be to allow
a def0endant which has injured millions of people and caused billions of dollars in
damages to escape almost all liability.
Does excluding bellwether trials mean that the resolution of these cases will inevitably happen in
settlements outside of the courtroom—settlements in which the party not holding the cash will be
at a decided disadvantage?
G. Negligence Puzzles
We end our initial treatment of the negligence standard with three puzzles in the law of
negligence:
1. Should Wealth Matter?
Should the defendant’s wealth matter in setting the reasonable care standard in a
negligence case? Won’t wealthy actors often be able to go ahead with risky behavior, confident
that the damages suffered by others will have little effect on their own relative wealth? Professors
Ken Abraham and John Jeffrey argue the contrary. Wealth, they insist, should not matter if we
want to achieve optimal deterrence:
[T]he defendant’s wealth is irrelevant to deterrence. . . . Deterrence theory is based
on the (usually and to one or another extent plausible) assumption that actors weigh
the expected costs and benefits of their future actions. Specifically, a potentially
liable defendant will compare the benefits it will derive from an action that risks
tort liability against the discounted present expected value of the liability that will
be imposed if the risk occurs. Whether a defendant is wealthy or poor, this costbenefit
calculation is the same. If, as is likely, a wealthy defendant derives no
greater benefit from a given action than a poor defendant, then both will be equally
deterred (or equally undeterred) by the threat of tort liability. A defendant’s existing
assets do not increase the expected value of a given future action. Therefore they
do not require any adjustment in the level of sanction needed to offset that expected
value. The defendant’s wealth or lack of it is thus irrelevant to the deterrence of
socially undesirable conduct, and evidence on the subject is inadmissible in the
typical tort action claiming compensatory damages.
Kenneth Abraham & John Jeffries, Jr., Punitive Damages and the Rule of Law: The Role of
Defendant’s Wealth, 18 J. LEGAL STUD. 415, 417 (1989).
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