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Q&A

The Cost of Police Misconduct Litigation

What don’t we know about holding police accountable?

That critical question was at the core of virtual gatherings convened by Arnold Ventures under the leadership of Jennifer Doleac, Associate Professor of Economics and Director for the Justice Tech Lab at Texas A&M University. At a December 4th roundtable meeting, Joanna Schwartz, a professor of law at the UCLA School of Law, presented her paper on police accountability. Titled Allocating the Costs of Police Misconduct Litigation: Available Evidence and a Research Agenda, Schwartz’s paper explores the intersection of law enforcement, agency budgets, and civil rights protections, probing the nuance of key issues around police reform.

Arnold Ventures spoke with her about the topic and her ideas for improving police accountability. The interview was edited for length and readability.

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Arnold Ventures

What were the top-line findings from your paper and what did you see as most illustrative in your research?

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Joanna Schwartz

The paper thinks about the ways in which settlements and judgments in police misconduct lawsuits are budgeted for and paid.

Even if you bring a case and you're successful in winning money through a settlement or judgment, the ability of that win to actually compensate the person whose rights have been violated — and potentially deter future misconduct — depends on whether the person is going to be paid anything and what impact those payments have on local governments’ finances, and also more generally, their practices. So the first important insight is simply to recognize that the way these dollars are budgeted for and paid is a really important part of the police accountability picture.

In my paper I suggest that you want to have a system in which payments do achieve both goals of compensation and deterrence: For compensation, you need to make sure that people whose rights have been violated are actually paid. For deterrence, you need to make sure those dollars have some sort of financial or other impact on officer behavior and department behavior.

I find, in looking at local government practices, that neither goal is reliably being met.

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Arnold Ventures

Would it be better if officers were responsible for obtaining insurance, and so any strikes against them would simply raise those officers’ premiums, and make it prohibitively expensive if there's been too much misconduct to continue being insured?

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Joanna Schwartz

An example I describe in the paper, which was a proposal made in Minneapolis, was that the city would pay for insurance for the officers instead of individual officers having their own insurance policies. But each officer’s rate could be determined by their risk. There would be a base premium level, and when an officer engaged in riskier behavior, then their premium would increase.

The idea that Minneapolis community members suggested was that Minneapolis pay the base premium and then the officer themselves has to pay if there is an increased risk. So the officer would not have to pay anything if they don't do anything risky. But if they did something risky, then they would have to pay whatever the increase is in the premium that results from their risky conduct.

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Arnold Ventures

The roundtable discussion and your paper raised Senate Bill 217 in Colorado as an example of a better arrangement. Could you articulate what that has accomplished so far, even though it's only been a number of months since the legislation was enacted?

Well, we don’t yet know how it’s working on the ground. That’s an area where additional research and data would be very important to have. But the structure of the bill is very promising.

It allows people to sue under state law for constitutional violations and doesn't allow qualified immunity as a defense, which is not directly what my paper is about. On the budgeting and payment side, the bill provides that if a local government finds an officer has acted in bad faith, the officer can be required to contribute $25,000 or 5% of the settlement or judgment — whichever is less. And the city will pay the remainder, unless the officer can't afford to pay it, in which case the city will pay everything. The only exception to that requirement to indemnify the officer is if he or she has been criminally convicted of a crime related to the case.

I think that arrangement does a number of valuable things related to compensation and deterrence. First, it does not allow for strategic use of the threat of denying indemnification [a tactic used to attempt to persuade a plaintiff to accept a settlement out of fear that the local government will refuse to indemnify the officer and thus limit the plaintiff’s ability to recover damages] because there's a pretty bright line rule there that officers will be indemnified unless they've been criminally convicted. This aspect of the statute also creates a financial sanction for an officer. It is a relatively modest one, that an officer would presumably be able to pay. And if an officer can't pay, the compensatory goals are still going to be met because the city will cover the difference.

It is also worth noting that the financial sanction for the officer is not an automatic sanction. It only comes into play if the local government decides that the officer acted in bad faith. This means that officers will not be penalized if their departments do not think they have acted in bad faith. This requirement also makes sure that the department is making an assessment about the officer's behavior based on the information that's revealed in the lawsuit. That's an important thing that departments should be doing to try to learn from these cases. So there's a lot that the bill does that I think is really exciting, but we need to find out how this bill is impacting operations in Colorado and we don't have that data yet.

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Arnold Ventures

Now, regarding indemnification — that's something ordinary people are probably not so familiar with. Could you provide more insights on the concept?

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Joanna Schwartz

“Indemnification” is a word that's unfamiliar, but I think it is an idea that's really familiar — if you're employed by someone and you do something that causes another person harm while you're doing your job, that your employer will pay for a lawyer for you and will pay a settlement or judgment that's entered against you.

So if you worked for Amazon, if you drove an Amazon truck, and your truck hit another car and caused damage to that car … I don't think that anyone would expect that Amazon employee, that truck driver, would themselves be paying the settlement or judgment in that case. They were driving an Amazon truck. They were doing Amazon’s work. And assuming they weren't drunk or driving recklessly while they were driving their truck, I think people would assume that Amazon would be paying those bills for the lawyer and for a settlement in the case.

That's what an indemnification agreement is: If you're doing your job, you're acting in what's called “the course and scope of employment.” And they exist all over the place, not just in government, with employers and employees who are doing work that can result in a lawsuit. They're very, very common.

The thing that makes Colorado’s statute unique is that there are usually exceptions to indemnification — for willful or malicious conduct, or bad-faith conduct. Usually what that means is that the employer won't pay anything, that the officer or the employee has to pay for their own lawyer and for the entirety of a settlement or judgment entered against them. The Colorado statute says that if an officer acted in bad faith, they're going to be required to pay a portion of a settlement or judgment to the victim. They’re still going to be indemnified by the government for the rest.

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Arnold Ventures

Are there other key parts of your paper worth highlighting — where we’re either going in the right direction or the wrong direction?

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Joanna Schwartz

Yes. This is a moment where state and local governments around the country are thinking about how to address policing and police misconduct. There is a time to reconsider lots of things. There's going to be an ongoing, very passionate debate about whether officers and departments should suffer financial sanctions, and whether those financial sanctions are going to be harmful or helpful as a society. Local governments should be learning what they can from these lawsuits when they're brought, and the resolutions in these cases. I'm especially hopeful that those kinds of changes might be made.

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Arnold Ventures

Relative to where we stood in the middle of the summer, when protests were at their apex and when this issue was really at the forefront of our collective consciousness in the United States — do you think that the moment of opportunity is as significant now as it was then?

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Joanna Schwartz

The time during the summer was one of tremendous, unmatched attention to these issues. That began a number of conversations and legislative action that is still continuing to roll out. Some of the public passion died away. But this kind of change can move slowly. I hope that there remains the same willingness to take action. You can't make these changes in an instant and it takes some time for them to develop and be passed, and then to see what effects they have. And unfortunately, if we don't pay attention and don't really try to address the root problems that we are facing with policing, then we're going to have another tragedy happen that's recorded and shown to all of us around the country and the world. And we'll be back in this conversation again. So I'm hopeful that we take this moment of opportunity to think in big ways, even as the fervor of the summer has somewhat passed.

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