Adam S. Zimmerman

The Corrective Justice State

Abstract Prosecutors, federal agencies, state attorneys general, and other officers in the executive branch often shape national policy through large monetary settlements with corporations. But the debate over this kind of “regulation by deal” has changed dramatically over the past decade. Although commentators once questioned whether such settlements made for good policy or exceeded officials’ legal authority, today’s headlines instead raise questions long associated with private justice: How do state actors appropriately compensate direct victims of the gulf coast oil spill? Is the National Mortgage Foreclosure Settlement sufficiently limited to paying only those homeowners with the most “deserving” losses? The growing commitment of public resources to collecting victim compensation from corporate wrongdoers characterizes what I call a “Corrective Justice State.” Corrective justice, a concept ordinarily associated with the private law of torts, contracts, or property, differs from traditional public law approaches to compensation in three ways. Corrective justice (1) repairs discrete injuries between identifiable parties, rather than curing diffuse social harm; (2) uses wrongdoers’ funds to restore individual losses, rather than public funds to improve public welfare; and (3) favors retrospective sanctions of specific wrongdoers over prospective regulation. Increasingly, public officials justify massive settlements with the rhetoric of corrective justice to bolster new, creative applications of executive power. But that same corrective justice philosophy may poorly serve those who depend on the modern administrative state for effective regulation and compensation. To the extent the Corrective Justice State relies on discretionary settlement decisions to regulate corporate behavior, it may forgo prospective solutions among broad constituencies, with traditional democratic checks from courts and legislatures. And despite their lip-service to corrective justice—where state actors trumpet payouts financed by corporate wrongdoers for the benefit of a “deserving” class of victims—public officials often lack information required to serve parties’ specific interests in corrective justice. Government actors need to move beyond corrective justice principles to address our collective concerns. State actors may continue to pursue corrective justice when they broker large compensatory settlements, so long as they adopt more procedural safeguards for the victims they purport to serve—including more participation and judicial review. But, to address collective and diffuse problems, those same safeguards should be relaxed to account for (1) value of individual claims, (2) the diversity of interests and relief, and (3) the extent to which state action forecloses private litigation.