Policing Corporate Conduct Toward Minority Communities: An Insurance Law Perspective on the Use of Race in Calculating Tort Damages

Courts commonly use U.S. Department of Labor actuarial tables, which explicitly take into account the race of the tort victim, to determine average national wage, work-life expectancy, and life expectancy. This practice has led to wide discrepancies between average damage awards for minority plaintiffs compared to white plaintiffs even if both plaintiffs are similarly situated. While recent legal scholarship criticizes the use of race-based tables and addresses the Equal Protection and incentive concerns such tables present, few courts have deviated from the explicit use of race in determining tort damages. Though the use of demographic features, such as race, to predict future lost earnings is viewed as a way to calculate more accurate damage awards, a closer look at the effects of race-based tables shows the practice does more harm than good. Specifically, this Note considers the intersection of corporate liability insurance and tort law and how race-based tables affect the deterrence and oversight objectives of the relationship. The first Part of this Note provides an overview of how insurance and tort law work together, as well as the recognized issues with the use of race-based tables. The second Part focuses on how race-based damage awards inhibit deterrence of corporate tortious misconduct by not allowing insurance providers to accurately price premiums. Further, race-based damage awards also prevent insurance providers from adequately policing corporations and mandating certain precautions, which leads to an increased likelihood of tortious harm. The final Part proposes that state legislatures rectify the negative consequences race-based tables create by outlawing the use of race-based tables and establishing a minimum damage award using blended actuarial tables.