Money can buy happiness... right?

If you follow legal news, you may have heard of Snyder v. Phelps, a recent Supreme Court case evaluating the extent to which the First Amendment protects anti-gay protesting at a soldier’s funeral. The solider was Matthew Snyder, a homosexual and enlisted Marine who died in combat in Iraq. Several members of a church decided to picket at his funeral, holding placards with homophobic messages such as “God Hates F--gs”. The Snyder family sued for intentional infliction of emotional distress and was awarded $10.9 million in compensatory and punitive damages.

Which brings me to the topic of today’s post: Money damages for emotional harm. The Snyder family was awarded millions of dollars for their emotional harm though it’s unlikely any amount of money could completely alleviate their suffering. Which makes me wonder, if money is such an imperfect remedy for emotional injuries, why do courts award it? Economic losses are easily compensated with dollars: If you break my $300 window, it makes sense that you should pay me $300. But emotional harm is subjective and intangible, so what purpose do money damages serve?

As a preliminary matter, it may help to consider what courts are trying to achieve by awarding money damages for economic injuries.

If you break my window and are forced to pay me $300, you will probably avoid whatever activity got you into the mess to begin with. So one purpose of money damages is deterrence. In the Snyder case, the millions the church had to pay out would almost certainly deter them from future funeral-crashing. But deterrence probably isn’t the sole purpose of money damages. If the goal was simply to deter, the victim doesn’t have to receive anything – the money paid out could go to the government and still discourage the wrongdoer. So why would most of us balk at the idea of leaving the victim with nothing?

Going back to the window example, your actions made me worse off by $300 – the value of the window – so it seemed fair that I should receive $300 to ‘undo’ the harm. The damages ‘seemed fair’ because, whether born or bred, many of us believe that the person who creates a mess should clean it up. Is such quid pro quo justice at work in the Snyder case? It seems likely. The family suffered a tremendous emotional injury and perhaps money damages were an attempt to use an economic boost to offset those emotional losses. At first thought, this seems strange. I can exchange an economic good – money – to compensate for an economic harm – a broken window – but how can an economic good compensate for an emotional harm? Can money really buy happiness, or at least mend a broken spirit?

While there’s no Happiness Boutique selling doses of glee (besides Steam, of course), money still provides a tremendous boost of opportunity to those who have it. A new iPad or a Disney vacation package won’t give you everlasting joy, but you’ll likely experience at least a momentary boost of happiness. So by awarding the Snyder family money damages, we may implicitly be thinking “we don’t know what to buy to restore your peace of mind, but maybe you do”. The hope is that the victim is better suited to know what goods or services can mitigate their suffering. Perhaps the Snyder family will use their millions to fund gay rights organizations, healing themselves by helping other families avoid such emotional harm. Whatever they spend the money on, they’re more likely to know what works.

Another purpose of money damages could be punishment. Rather than trying to undo the harm to the victim, we could try to “level the playing field” by injuring the wrongdoer. An eye for an eye. Paying me $300 after you’ve broken my window ensures that you suffer the same economic loss I suffered. And if money can buy happiness, making the church pay in the Snyder case is a way of making the church members worse off. Justifying money damages as a form of punishment is still problematic, however. We’re back to the deterrence problem: If you just want to punish the wrongdoer, the victim doesn’t have to receive anything – the money could go to the government. In addition, punishment isn’t a great way of leveling the playing field because it only deals with the victim and the wrongdoer: what about their positions relative to the rest of the world? So it’s unlikely punishment is the sole motivation behind money damages.

It’s likely that all three of these purposes of money damages – deterrence, punishment and compensation – are present to different degrees in all emotional injury cases. But from what I’ve discussed, it seems that compensation is the easiest to justify – both to the courts and to ourselves.