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.

First, I briefly describe the current approach to determining private-entity liability and explains how courts often rely on analogy as their interpretive method. Second, I examine three recent Supreme Court decisions in Section 1983 or Bivens cases – two involving private defendants and one involving governmental defendants – and shows how the Court’s focus on analogy in each case leads to unsound or misguided results. Third, I offer some hypotheses about why courts tend to use analogy in the private-entity context. Finally, I suggest that courts should limit their focus on analogy and offers an alternative framework for assessing private-entity liability.

This article examines differences regarding how private entities and government entities behave and contends that those differences justify imposing respondeat superior liability on private § 1983 defendants even if public § 1983 defendants remain exempt. Initially, the Supreme Court’s rationale for exempting municipalities from respondeat superior liability was particular to public entities and does not justify exempting private parties from respondeat superior liability. More importantly, as a policy matter, the fact that profit-motivated private entities may be both more responsive than electorally-accountable public entities to tort liability incentives and less responsive to other non-financial constraints on behavior suggests that respondeat superior may be better suited for deterring private misconduct than public misconduct. Imposing respondeat superior liability on private parties therefore can help ensure that when private parties agree to perform important public functions, they will not diminish important constitutional values.