What are Tort Awards Really Like? The Untold Story from the State Courts*

The popular press frequently reports exorbitant money damage awards by juries. These stories cause paroxysms in the business community because juries are viewed as favoring plaintiffs over corporations. A growing body of literature has examined aspects of this complex issue, but within a limited framework. Prior studies, which are based on data from the early 1980s or before, tend to focus on federal court cases, primarily product liability and medical malpractice torts, only jury verdicts, and single jurisdictions when state courts are included. The objective of this article is to contribute to the literature by examining all tort cases reaching either a bench or a jury trial verdict during a sample period in 1989 in twenty-seven general jurisdiction trial courts. Research is organized around three basic questions. What do torts look like? Do particular types of plaintiffs/defendants gain a higher percent of favorable verdicts? When plaintiffs are awarded money damages, what is the importance of litigant status, while controlling for other factors, in influencing the size of the awards? The article begins by describing the landscape of torts - the typical configurations of the contending litigants, the composition of torts by area of law, the types of trials, verdict patterns, and the average size of awards. Basic contours of the landscape reflect the elemental facts that individuals generally are plaintiffs in these cases and the opposite tendency of corporations, insurance companies, and governments to appear as defendants. Next a model is outlined and tested to determine how strongly different possible determinants shape the size of tort awards in the twenty-seven state trial courts. Does the size of the award depend on the configuration of the parties after taking into account the type of tort, the type of trial, the length of disposition time, and the state in which the court is located? The results indicate that the group of variables representing the various pairing of litigants accounts for most of the explained variation in award size. These findings support the notion that the status of the litigants is an important factor in influencing awards. Because the variables representing some of the individual states are also significant, the evidence also suggests no single, uniform pattern applies across all the courts. Instead, the state context shapes the basic parameters of plaintiff and defendant success.     

Utilization of Employment Tax Credits: An Analysis of the Empowerment Zone Wage Tax Credit

This paper provides estimates of utilization for the Empowerment Zone (EZ) wage tax credit, a subsidy claimed by employers who operate in and hire residents of federally designated areas experiencing economic distress. The EZ credit is currently the largest employer‐based wage tax credit in the federal tax code in terms of dollars claimed, with almost $250 million claimed in 2002. I show that about 6.4 percent (and at least 3.5 percent) of the working age population was claimed under the EZ wage credit in 1999. In addition, I estimate that 24.2 percent (and at least 13.1 percent) of those employed inside of the target area were claimed for the credit. I create these national estimates of use with information on credit dollars claimed from the Internal Revenue Service and population data on the eligible population from the census. These measures of tax credit use are an alternative to the use rate of firms that are presented in the existing literature, and reveal how effective the credit is at reaching residents of the target area.