Each and every day in almost each and every courthouse in the United States, we lie to juries. We look them right in the eye and play act. We lead them to believe that a defendant in a civil case is on the hook for whatever damages are awarded in a civil case. We lie because we know that the defendant himself won't ante up; his insurance company will.
We say justice requires this white lie. The fear is that if we did not tell it, verdicts would skyrocket. Juries would pick the deep pockets actually paying the judgments.
In cases arising under 42 U.S.C. Section 1983 this lie arguably has grave social consequences. We permit muncipalities and insurance companies to underwrite damages for the violation of core constitutional rights, even of punitive damages. The very purpose of punitive damages is frustrated in such a case. How is anyone ever deterred from misconduct if they never feel the consequences?
Consider the strange case of Lee v. Edwards, 101 F.3d 805 (2d.Cir.1996), a case of mine that haunts me still.
My client was arrested after colliding with a parked car. He'd been drinking. The arresting officer clocked my client with a nightstick, claiming the force was necessary as the officer had been assaulted. My client, a corrections officer, was charged with a serious felony, assault on a police officer.
The police officer lied, and witnesses said so. We sued for malicious prosecution, and asked for punitive damages.
At trial, the defendant's lawyer stipulated to municipal indemnification for damages. Why? I was trying to put on evidence that the city would pay for the damages, and that the cop had no exposure whatsoever. If a defendant has a right to put on evidence of his assets to keep damages down, why didn't a plaintiff have the right to say otherwise? Armed with the stipulation, I got to argue deep pockets.
The stipulation cost my adversary plenty. Theu jury assessed nominal damages of $1 and punitive damages of $200,000. A remitittur motion was denied and off we went to the Second Circuit.
The Circuit remitted to $75,000. Why? Two hundred thousand was too much for a cop; they don't make that much. But the officer put on no evidence of net worth. There was nothing in the record about whether he had money in the bank or not. I still believe the decision was lawless.
Needless to say, I have never had someone stipulate to indemnification again.
Plaintiffs lawyers don't do enough in discovery to determine whether damages will be indemnified. Just the other day, I spoke to someone who has the right idea: She is doing discovery of a city's policy and practice of paying damages in 1983 claims. Why? She intends to bring a Monell claim contending that the practice of underwriting wrongdoing encourages future torts. That seems to me an intelligent way to proceed, but I suspect it will be torpedoed along the way by a judiciary eager to endorse the lie that keeps from jurors the facts about who really pays for police misconduct.
I would take issue with your contention that permitting municipalities and insurance companies to underwrite damages for violation of constitutional rights frustrates the purpose of punitive damages in that deterrence is impossible (disclaimer, I'm a law student, not in practice, this isn't an objection supported empirically, but logically).
If an insurance company is on the hook for large punitive damages, I would think that at the very least the insured's policy costs would rise, though it's possible the insurance company would simply drop coverage. Either way, future coverage would be either expensive or impossible to obtain--a pretty big deterrent.
As for municipalities, a police officer, for example, who costs the city one hundred or two hundred thousand dollars, especially on a regular basis, would be too expensive to keep employed. The city would therefore have strong incentive to discipline an officer incurring those damages and dismiss him if the conduct continues, and other municipalities should be justifiably leery of hiring someone who comes with expensive constitutional violations, shouldn't they?
Just a thought, please tell me if I'm wrong on empirical grounds (that municipalities just consider these kinds of payouts costs of keeping a police force, say) or if there are other incentives at work here that I'm missing.
Posted by: Ivan | October 25, 2005 at 07:53 AM