The world loves a success story, but perhaps it relishes in a calculated downfall even more. Referred to by the Germans as “Schadenfreude,” there is significant literature to back up the existence of deep-seated emotional pleasure in watching an enemy’s downfall (Van Dijk & Ouwerkerk, 2014). One such way to engage this dark part of the human psyche is to “make someone pay” via punitive monetary damage. Critics of the practice have repeatedly supported punitive damages as a sort of legalized form of revenge, but how far is too far? In the case State Farm v. Campbell (2003), a 6-3 United States Supreme Court ruled that any punitive damages above a single ratio risked the violation of due process rights and unjust deprivation of property. In line with the Supreme Court’s decision, multiple states have enforced laws capping the maximum amount of punitive damages able to be awarded by a jury, citing the notion that juries are unfit to give out just punitive monetary damages. In denying modern juries the discretion to hold corporations liable in the amount they see fit, the Campbell decision lessens the punitive nature of the damages in question, allowing wealthy corporations the chance to escape punishment for malpractice while punishing individuals faced with the fallout.

When discussing the difficulties in limiting the amount of punitive damages a jury can award, the controversial ExxonMobil oil spill of 1989 comes to mind. After spilling 11 million gallons of crude oil into Alaska’s Prince William Sound and causing one the worst environmental disasters in recent human history, ExxonMobil faced a class action lawsuit that ended in a jury ordering ExxonMobil to pay five billion dollars in punitive damages (Exxon Shipping Co. v. Baker, 2008). After months of intense court battle citing social and legal scholarship, the case made its way up to the Supreme Court of the United States, which decided in a 5-3 decision that rather than the initial $5 billion awarded by the jury, unclear maritime law constituted a punitive monetary cap of only $500 million, a measly chunk of ExxonMobil’s modern net worth of over $400 billion (Liptak, 2008). In decisions such as O’Gilvie v. United States (1996), the Supreme Court established the precedent of the existence of punitive damages as private fines meant to “punish and deter reprehensible conduct.” Given ExxonMobil’s lengthy backlog of over 5,000 documented oil spills since 2005, it is safe to assume that the measly 500 million dollar fine in punitive damages did little to punish or deter future malpractice from the oil giant (Statistica). Thus, failing to meet the punitive purpose of monetary damages encourages future corporate malpractice and environmental damage.

One of the main reasons for the creation of state statutes aimed at capping punitive damages is the protection of defendant rights from “frivolous” lawsuits. In other words, lawsuits are filed by individuals with ulterior motives rather than just compensation. A famous case often cited by proponents of the existence of frivolous lawsuits is the infamous Liebeck v. McDonald Corporation (1994) case, in which an elderly woman obtained third-degree burns and received $480,000 in punitive damages. Often tossed aside as a prime example of an opportunistic customer, there is a failure to mention the severity of the McDonald’s corporation’s malicious malpractice in keeping the hot coffee sold at over 180 degrees Fahrenheit, a temperature causing severe burns in two to seven seconds. The agreement from the United States District Court for the District of New Mexico resulted in McDonald’s having to pay Lieback and implement a new company policy to sell coffee at a temperature that is more fit for human consumption. Disregarding cases such as Liebeck v. McDonald Corporation as malicious cash grabs invalidates the permanent damage endured to citizens by the company’s malpractice and effectively allows them to get away with similar crimes in the future.

 Despite the harm in viewing punitive damage cases yielding a high monetary amount as “frivolous,” many states, such as Texas, have since passed legislation aimed at capping punitive damage compensation in the name of protecting economic interests. House Bill 4, known as the Tort Reform Bill of 2003, used the reasoning of protecting corporations from frivolous lawsuits, explicitly targeting the ability of individuals to seek high punitive damages in medical malpractice cases. After the passage of the bill, the amount of medical malpractice payouts has decreased by 22%, restricting lawyers’ ability to earn money on such cases and thus reducing their likelihood of taking a medical malpractice case (Roser, 2012). In decreasing the punitive damage payout for medical malpractice cases, the Texas legislature actively discourages individuals from obtaining justice for any personal injury they received, instead rewarding healthcare companies for documented malpractice. Despite the numerous legal and practical issues the allowance of punitive damage caps in state statutes entails, and given the Supreme Court’s denial of a writ of certiorari in Johnson & Johnson v. Ingham (2020), it is unlikely that the long-standing precedent enforcing punitive damage caps will be overturned anytime soon. Together, a general fear of “legalized revenge” that violates a defendant’s due process and an environment that refuses to force the hand of corporations when faced with malpractice lawsuits has kept statutes like those in Texas largely on the books. Thus allowing the fear of lingering legal “Schadenfreude” to stay hidden for the time being.