Volume 2011, No. 3

Articles

The Disappearing Opt-Out Right in Punitive-Damages Class Actions

Richard Frankel

One of the most pressing issues in punitive-damages law today is how to protect defendants from multiple punitive-damages awards for a single course of conduct, while still ensuring that wronged plaintiffs can recover punitive damages. Numerous commentators have proposed non-optout class actions for punitive damages as the best solution to the multiplepunishment

problem because they subject defendants to a single collectivepunitive- damages award that can be distributed equitably across all injured plaintiffs. This Article takes a contrary view. It argues that mandatory classes improperly deprive class plaintiffs of their right to opt out and pursue their own individual claims while allowing defendants to selfservingly cap their punitive-damages liability at an artificially low level that thwarts the punishment and deterrence purposes of punitive damages.

First, this Article explains that because the Supreme Court has held that an individual plaintiff can collect punitive damages only for harm done to that plaintiff, allowing plaintiffs to opt out and pursue their own claims creates no risk of imposing duplicative punishment on defendants. Second, this Article suggests that mandatory classes are particularly inappropriate for class-action settlements because settlements are not punitive in nature. In a class settlement, parties have incentives to manipulate the settlement fund’s allocation of punitive damages in ways that bear no connection to wrongdoing or punishment, and that allow defendants to significantly reduce their punitive-damages exposure. Instead, preserving class members’ right to opt out best protects plaintiff autonomy and helps ensure that defendants pay an appropriate amount of punitive damages.

Shaming Trademark Bullies

Leah Chan Grinvald

In September 2009, Hansen Beverage Company sent Rock Art Brewery a letter demanding that Rock Art cease and desist its use of “VERMONSTER” as a trademark for beer. Hansen is a multi-million dollar beverage corporation and Rock Art Brewery is a small brewing company owned by a husband-and-wife team based in Vermont. Hansen’s gravamen was that Rock Art’s “VERMONSTER” beer allegedly infringed on Hansen’s “MONSTER ENERGY” trademarks.

Instead of capitulating, Rock Art Brewery fought back, taking to the virtual streets of the Internet and galvanizing public sentiment against Hansen. The end result was an amicable settlement agreement that allowed Rock Art to continue its use of “VERMONSTER” as it had before.

Rock Art’s success highlights a growing phenomenon in trademark law: the use of shaming by small businesses and individuals to defend themselves against a trademark bully. To date, most scholarly work on curtailing the over-enforcement of trademarks has been focused on legal means, such as developing stronger defenses to infringement. While this is important and meaningful work, focusing on purely legal means may not assist small businesses or individuals who have no access to legal resources in the first instance. The goal of this Article is to complement the work being done by these scholars and suggest that shaming can be an effective, pre-litigation tool to combat trademark bullies. Since shaming is currently not guaranteed to be effective or available to all small businesses and individuals, this Article suggests a number of legal reforms that could be undertaken in order to maximize the availability of shaming, as well as assist in effective shaming.


Commentary

Utter Confusion: Why “Utter Disregard for Human Life” Should Be Replaced with an Objective Analysis of the Defendant’s Activity

Hannah B. Schieber

Whether a criminal defendant acts with “utter disregard for human life” alone distinguishes first from second degree reckless crimes in Wisconsin. Though Wisconsin adopted this type of language over one hundred fifty years ago, neither the legislature nor the courts can adequately explain or apply it. Attempts by Wisconsin appellate courts to address the vagueness of “utter disregard” have resulted in arbitrary distinctions

that do not accurately reflect differing levels of moral culpability. Swerving immediately before a hit-and-run does not demonstrate “utter disregard,” shaking a baby then calling 911 does. This type of precedent does little to remedy the confusion. Defendants do not have adequate notice of the charge against them and are left with the unconstitutional burden of having to disprove “utter disregard.” Prosecutors may use the vagueness to their advantage and charge aggravated recklessness in many cases, but are then placed in the uncomfortable position of having to prove something without fully understanding what it is they have to prove. Trial judges, entrusted with the responsibility of explaining the law to the jury, cannot fulfill their role. Wisconsin juries are then asked to evaluate whether the facts of various cases reflect “utter disregard,” without any clear direction as to what “utter disregard” requires.

The Wisconsin legislature must therefore abandon “utter disregard” and codify the proposed objective examination of the defendant’s reckless activity. The Objective Activity Test asks jurors to analyze whether the defendant engaged in an activity which, viewed objectively under the circumstances, has no purpose outside of threatening or causing harm to others. By shifting the focus away from whether the defendant’s activity reflects a certain mindset and on to the nature of the activity itself, the Objective Activity Test will better accomplish the legislature’s goal of providing heightened punishment for those offenders whose behavior was particularly reprehensible while remaining consistent with existing precedent. The use of “utter disregard” plagues the Wisconsin criminal justice system, and the legislature must take action.