Calculating Remittiturs

This note reviews several methods proposed for calculating the amount of an appropriate remittitur using a sample of “comparable” cases. It recommends a simple quantile estimate. A remittitur is a post-trial procedure that may arise after a plaintiff has established liability and is awarded damages by the jury. Under U.S. law, the defendant may move for a new trial, or, in the alternative, a reduction in the award, called a remittitur, on the grounds that the damages awarded by the jury are excessive. If the judge grants defendant’s motion for a remittitur, the plaintiff is given the choice between a new trial and a reduced damage award set by the judge. What criteria should be used to decide whether a remittitur should be imposed, and how much should it be? In 1986, the New York Legislature mandated that a remittitur be granted when the jury’s award “deviates materially from what would be reasonable compensation.” In 1997, Judge Weinstein addressed the issue of how to make this phrase operational, in the case of Geressy vs. Digital Equipment Corporation. Briefly, Patricia Geressy sued the Digital Equipment Corporation (DEC) on the grounds that she was not warned that the DEC computer keyboard she used could cause repetitive stress injuries. The remittitur issue in the case concerned the jury award of $3,490,000 for pain and suffering. Judge Weinstein’s method involves three steps: 1. He identifies 27 cases he regards as comparable to Geressy’s. 2. He decides that the 95 percentile of the distribution is the appropriate point in the distribution to take as the upper limit of permissible awards. Leonard J. Savage University Professor of Statistics and Social Sciences, Emeritus, at Carnegie Mellon University. This note is in honor of Professor Joseph Gastwirth. CPLR §5501 (c) 980 F. Supp. 640 Her case was returned for a new trial anyway because of newly discovered evidence suggesting that her injury may have predated her computer usage.