The Corner

Re: Punitive Damages

From a reader:

I am an attorney in California, and I represent management in employment disputes. The reason that you should not like Governor Schwartzenegger’s 75% tax on punitive damages is two-fold:

1. In those states that have such a tax, courts have been less likely to reduce exorbitant punitive damage awards from run-a-mok juries. Could it be that judges see such a tax as a wonderful way of filling the state coffers, which in turn will hopefully increase budgets for state courts and salaries for court officials (like judges)? Ummmmm, could be . . . .

2. Also, note that such taxes usually come with a “lawyers eat first” provision. Thus, the lawyers take their cut and then the rest is awarded to the state. This is why businesses oppose this tax but the trial lawyers see no problem with it. Sort of contradicts your concern that punitive damages are paid to attorneys, eh?

No names please . . . .

Jonah Goldberg, a senior editor of National Review and the author of Suicide of the West, holds the Asness Chair in Applied Liberty at the American Enterprise Institute.

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