In The Punitive Damages Calculus: The Differential Incidence of State Punitive Damages Reforms, Benjamin McMichael & Kip Viscusi (Vanderbilt) exploit two discrete data sets--one broad, general national sample of state civil litigation and one discrete sample of "blockbuster" civil cases which involved punitive damages awards in excess of $100M--and find that state punitive damages cap reforms influence these two streams of civil litigation differently. The paper's key findings are described below.
“This paper explores the role of punitive damages caps and other punitive damages reforms on awards using a two-part model of the judge/jury decision to award punitive damages. The punitive damages calculus involves both discrete and continuous decisions. An adjudicator must decide whether to award punitive damages as well as the amount to award. We examine the effect of state punitive damages reforms using two different data sets—the Civil Justice Survey of State Courts (CJSSC) data, which provides a broad national sample of state courts, and a sample of blockbuster punitive damages awards of at least $100 million. The most salient state punitive damages reforms—damages caps—have quite different impacts in these two samples. For the CJSSC sample, we find that punitive damages caps effectively reduce the amount of punitive damages awarded at trial by about 60% but have no statistically significant effect on the adjudicator’s decision to award punitive damages. For the blockbuster award sample, punitive damages caps lead to a decrease in the number of blockbuster awards. Thus, caps reduce the number of awards that cross the blockbuster threshold of $100 million. However, conditional on crossing that threshold, we find that caps have no statistically significant effect on blockbuster punitive damages awards.”