Category Archives: Commercial Litigation

August 31, 2017

Good Faith and Fair Dealing: Bring It Down from the Clouds

By Dr. Ken Broda-Bahm:

GFFD Img

In a recent mock trial, the jurors deliberated on the meaning of the duty of good faith and fair dealing. The conversation went something like this:

Juror 1: They clearly met the contract. I mean, look at the language. 

Juror 2: Yeah, but did they treat the Plaintiff the way you would have wanted to be treated? 

Juror 1: No, I don’t think it was totally fair…but that isn’t the question. It’s about the law, not fairness. 

Juror 2: Not just about the law. Look at this, ‘good faith and fair dealing.’ The other claims are about the law and the contracts and such, but this claim is about fairness. 

Juror 3: So, if we feel that the Defendant met all their legal duties, but we still just have a bad feeling about how they acted, then this is the claim we can go for, ‘good faith and fair dealing?’ 

Juror 1: That’s right. If they’re not ethical in your opinion, then they violated good faith. 

Of course, that is a pretty expansive and legally inappropriate view of good faith and fair dealing. But, unfortunately for some defendants, it is also a very common view. In contrast to the other more concrete claims, this one seems subjective and focused on fairness rather than the law. When jurors are armed with just a casual understanding of the concept, they can end up translating it into an amorphous claim, unmoored from law or contract, that just boils down to an injunction for the defendant to ‘be good.’ To prevent that from simply becoming a catch-all category for juror unease, this post shares a few thoughts on bringing that concept down from the clouds and tying it, despite the name, back to the law and the contract.   Continue reading

January 21, 2013

Don’t Pull the Plug on the American Civil Jury Just Yet

By Dr. Ken Broda-Bahm: 

4881836245_1a2691cf36

There is a body lying on the pavement. It is still twitching a bit, but fading fast. “This was no accident,” says the hard-boiled detective, “this was an attempt at premeditated murder…and it just might succeed.” If instead of “body” we’re referring to the American civil jury, and instead of “hard-boiled detective” we’re referring to a new article in the Yale Law Journal, then the scenario is roughly the same. The analysis, from Yale legal history professor John H. Langbein (2012), notes the dramatic decline in civil trials (now down to two percent of all case conclusions in federal courts and less than one percent in state courts), and ties that trend to a movement from a pleadings-based system in which facts were resolved in trial, to a discovery-based system in which facts are resolved not before trial, but largely without trial. This, Langbein argues, is a consequence of the 1938 Federal Rules of Civil Procedure and the civil jury is fading by design, if not by intent, because the reforms have largely worked. In other words, the American jury didn’t fall, it was pushed.

While these rumors of the civil jury’s impending death may not be greatly exaggerated, they may yet be premature. This is particularly true if we are focusing on the role of popular judgement at a level that is somewhat broader than the formal jury as we have historically conceived it. By expanding our focus a bit in order to account for the potential jury, the expanding use of the mock jury, as well as potential new models such as California’s expedited jury, there is still the chance that the legal vox populi might live to play a role in the future.

The Late Great Civil Jury? 

For fans of the American jury system as well as those who work within it, Professor Langbein’s article is a sobering read. Like many other commentators, he notes the sharp and accelerating decline in jury trials, noting that “we have gone from a world in which trials, typically jury trials, were routine, to a world in which trials have become ‘vanishingly rare.'” Unlike other commentators, however, he doesn’t link that decline primarily to the increasing costs of litigation or to the case management orientation of judges. Instead, he views the trend in more systemic terms. Noting that prior to the Federal Rules, trial was often the only way to accurately discover the facts of the case, he argues that the Rules have largely replaced “discovery by trial” with “discovery instead of trial.” While the focus is on what is called “pretrial procedure,” in practice, Langbein notes that it really amounts – in more than 49 cases out of 50 cases, to “nontrial procedure” instead. Based on a review by two Omaha attorneys (Domina & Jorde, 2010), “trial, and particularly trial by jury, is the least-used dispute resolution methodology in America.” Even as the Federal Rules have formally preserved the right to a trial, they’ve also created the conditions in which litigants find it unnecessary and often counter-productive to exercise their right to a trial. Citing Emerson’s ‘build a better mousetrap’ adage, Professor Langbein concludes “The Federal Rules built a better mousetrap: a civil procedure centered on pretrial discovery. Litigants no longer go to trial because they no longer need to.”

Even as every legal organization imaginable has created committees and task forces aiming to save the American jury, the systemic factors that Professor Langbein documents seem destined to persist. That doesn’t, of course, mean that the civil jury will soon, or even eventually, go away. Trials will continue, but those that make the cut are likely to become more and more unusual: cases that are higher stakes and cases that carry some kind of atypical barrier that has made settlement difficult or impossible. And as the matters that go to trial become less representative of cases overall, they’re also less able to serve as examples for the preponderance of disputes that are bound for settlement.

So, that raises a practical question for the great majority of cases that settle out of court: What is the benchmark? The case will settle based on something, and hopefully it is neither an arbitrary point between demand and offer, nor the equally arbitrary point at which the parties simply reach exhaustion. Facing the decline of the conventional civil jury, a future for popular adjudication may lie in finding innovative ways to create that benchmark.

A Continuing Role for Popular Adjudication

Even for those cases that will involve no ultimate jury, there is still a role to be played by the broader notion of public judgment.

1. The Potential Jury as Benchmark

Relatively few cases involve an actual jury, but a far larger proportion still involve the role of a potential jury. This includes all cases in which one side or both are preserving their right to a jury as an option. Like a silent party to the negotiations between the plaintiffs and defendants, the perception of what a jury in the venue would do if it heard the case exerts a strong pull on strategic positioning, case assessment, and settlement offers. The diminishing supply of actual comparison verdicts coming out of the courts provides a reason for attorneys to turn to specialists, and consultants are likely to increasingly fill that role.

2. The Mock Jury as Test

Particularly when dealing with larger or more complex cases, it has become the “standard of care” for a mock trial to be conducted prior to settlement, providing an opportunity for specific assessment to serve instead of subjective judgment. Using three or more juries composed of randomly-recruited citizens from the venue, a mock trial  exercise provides a foundation for case risk assessment and often for a settlement offer.  Frequently when a project concludes, the mock jurors will ask, “Is it possible for you to let us know what happens when the real jury hears it?” The correct answer is always, “No, we aren’t going to contact you again,” but what I often want to say is, “In all likelihood, you were the real jury…or at least as real a jury as this case will ever see.” And, if you think about it, that isn’t necessarily a bad thing: Whether the state calls in actual jurors or we recruit mock jurors, the case still gets its day in ‘court,’ of sorts, and still benefits from the leveling influence of popular judgment.

3. The Expedited Jury as Reality

One example of the actual court system appearing to draw inspiration from the mock trial method is California’s relatively recent experiment with a simplified and shortened format designed to preserve the option of a formal jury for a class of cases.  In 2010, the state legislature passed the California Expedited Jury Trials Act, creating an option that parties could enter into through mutual agreement: A one-day trial with stipulated exhibits and evidence, no appeal or post-trial motions, a jury of 8 citizens with no alternates, and a binding result subject to a high-low agreement. While the model has, up to this point, been used mostly with lower value cases like automobile accidents, the early responses to the method have been quite positive. Users participating in a recent survey (Cheng, 2012) “were very satisfied with their experience, and lauded it for its ability to reduce time and monetary costs for their clients and themselves.” There is no reason that this model or something similar couldn’t be applied to larger cases, and also no reason that mediators shouldn’t simply adopt the approach as part of a private dispute resolution process. As we’ve suggested before, if what is preventing an early settlement is the existence of differing perceptions of what an actual jury would do, why not bring in a mock jury in order to serve as that additional source of information or reality check for the parties and the mediator?

Back in the intensive care ward, the patient – the American civil jury – still isn’t looking so good. The formal role played by average American citizens in resolving civil disputes, unique among countries, definitely had a good run. But now it seems to be swiftly shifting into another role, focusing on fewer and less typical cases, as well as alternate avenues of influence. As the broader dispute resolution system adapts, it appears cautiously possible that a meaningful role for popular judgment will survive.

 ____________________

Other Posts on the Role of the Jury: 

____________________

Cheng, Y. (2012). A Law and Economics Approach to the California Expedited Jury Trials Act. Legal Studies Honors Thesis. University of California, Berkeley. http://legalstudies.berkeley.edu/files/2012/06/Cecilia-Cheng-Sp12.pdf

Domina, D. A. & Jorde, B. E. (2010). Trial: The Real Alternative Dispute Resolution Method. Voir Dire, Fall/Winter. http://www.dominalaw.com

Langbein, J. H. (2012). The Disappearance of Civil Trial in the United States. 122 Yale Law Journal 522. http://yalelawjournal.org/the-yale-law-journal/article/the-disappearance-of-civil-trial-in-the-united-states/

Photo Credit: RembergMedialimages, Flickr Creative Commons

February 13, 2012

Don’t Say Nothing: The Limitations of “No Comment” as a Litigation Crisis Strategy

By Dr. Ken Broda-Bahm:

No Comment 2
A Google search on the phrase “no comment” appearing in recent news yields thousands of hits — various individuals and organizations responding in time-honored fashion to some sort of crisis.  Recently, for example, after CNN Analyst Roland Martin had his finger too close to the Tweet button during the Super Bowl and broadcast a homophobic response to David Beckham’s underwear advertisements, the network responded to mounting cricitism and petitions with “no comment” for several days before ultimately suspending Martin.  While careful decisions can require delay, the problem in a sustained “no comment” approach is that the silence fuels doubt and uncertainty while allowing the other side of the story to hold the floor uninterrupted.  Given that you can’t “not communicate,” your silence is inevitably interpreted in a variety of ways, most of them quite negative.  Continue reading

January 19, 2011

Keep Your International Arbitration out of the Tower of Babel

By: Dr. Ken Broda-Bahm –

Old Globe

Broda_Bahm_Ken_88_120

So, a retired Brazilian judge, two American litigators, and three German engineers walk into a bar…  Okay, so it wasn’t a bar, it was an international arbitration, but the potential for miscommunication is just as great as the joke intro would imply.  This one took place in Sao Paulo, Brazil and it was preceded by a two-day mock arbitration that I facilitated in order to help our litigation team prepare the best arbitration case possible.  Any case that makes it to arbitration or trial faces its fair share of hurdles.  The need to teach, to leverage the best law, to overcome case weaknesses, to maximize strengths, and to wrap it all up in a convincing message, all adds up to a pretty tall order.  But, add to that the barriers of language and cultural difference, and the tall order becomes venti.

As legal disputes inevitably become more international in nature, arbitration emerges as one of the more critical ways to solve disputes that transcend borders.  As international arbitration increases, however, we can expect an increase in the challenges in just getting the message across.  In appreciating these challenges, consider a few things.  Continue reading

January 3, 2011

Learn from Christine O’Donnell’s Possible ‘Witch Trial’: Be Cautious in the Court of Public Opinion

By: Dr. Ken Broda-Bahm – 

Enchanted Toad
Broda_Bahm_Ken_88_120

When Christine O’Donnell, the Tea Party favorite who won the Republican nomination for a Delaware Senate seat before losing in November’s general election, received word of an U.S. Attorney’s Office investigation and possible charges stemming from misuse of about $20,000 in campaign funds to pay her personal expenses, she immediately took to the airwaves.  On a variety of network and cable news shows, she unequivocally denied the charges and went further to call the investigation “thug tactics,” and a politically motivated attempt to settle scores by enemies on the right and the left.  She does everything but call the investigation a “witch hunt”…but that is understandable since this is the same candidate whose troubled campaign was torpedoed when video surfaced showing a younger O’Donnell appearing on Real Time With Bill Maher claiming that she had “dabbled in witchcraft” and had to respond with a campaign advertisement beginning with the unforgettable declaration that “I am not a witch.”    Continue reading

July 9, 2010

Don’t (Always) Waste a Strike on the Crazy Juror

by: Dr. Kevin Boully

Boully_Kevin_88_120 They show up in nearly every jury panel.  An unexpectedly flamboyant or oddly eccentric juror who offers too much (irrelevant!) information at the drop of a hat, responds to your oral voir dire question about lawsuits against corporations by telling you about his third cousin Simon’s run-in with a cantankerous Big Box store employee in Akron, Ohio.  “That store is a spacestation for dictators!”

 

He looks like a wildcard and he’s given you reason to fear he may be opposed to your case.  You hate the risk of leaving him on the panel for simple fear of what he may say and do in deliberations, but you also expect the quiet female juror in the corner may have it out for your corporate defense client.  What can you tell your client if the oddball commandeers the jury?  Shouldn’t you have seen it coming?  You use your last peremptory strike on “Kramer,” allowing the high risk female juror to sneak into the jury room and help decide the fate of your case.  A few insights help inform this either/or jury selection choice in the future.  Continue reading

June 21, 2010

Take It From Rep. Joe Barton: Don’t Be A ‘Friend Of The Devil’

by: Dr. Ken Broda-Bahm

Ken_107 tight Here is a litigation lesson from the world of politics.  The Vice President, along with many other Americans, described it as ‘incredibly insensitive, outrageous, and astounding,’ but last Thursday, in the U.S. House of Representatives, Texas Congressman Joe Barton was facing BP CEO:

“I’m ashamed of what happened in the White House yesterday.  I think it is a tragedy of the first proportion that a private corporation can be subjected to what I would characterize as a shakedown — in this case a $20 billion shakedown.  … I’m not speaking for anybody else, but I apologize.”

Hours later, Representative Barton was taking back that statement in order to deal with the ensuing uproar from both Democratic and Republican circles.  

I apologize for using the term ‘shakedown’ with regard to yesterday’s actions at the White House in my opening statement this morning, and I retract my apology to BP.

What we see here is an unsuccessful attempt by Rep. Barton to reframe the issues.  On the 59th day of the continuing Deep Horizon oil spill, and two days after President Obama’s oval office speech asking BP to set up a $20 billion dollar fund in order to deal with the consequences of the oil spill, the Congressman seemed to sense a chance to focus the public’s attention on something other than the flowing oil, suffering wildlife, and spoiled beaches.  The President’s demand was unprecedented, and on the heels of an unpopular health care reform law and in the run up to a climate bill being successfully framed as an “energy tax,” the public might have seemed primed to accept Barton’s characterization of the fund request as yet another example of an outrageous power grab by the Democratic President.  Continue reading

June 13, 2010

Bifurcation: Not Always a Corporate Defendant’s Best-Friend

By: Dr. Shelley Spiecker

 

Spiecker_88_120 Yesterday I received a call from a client seeking argument strategies for a punitive damages presentation in a bifurcated personal injury lawsuit.  After discussing argument approaches, I shared with him what I consider to be the single most important piece of advice for any attorney defending a company in a bifurcated trial today – educate jurors at the outset of the trial that the case is bifurcated and that they will deliberate on punitive damages should their initial verdict trigger the punitive phase.

True, research confirms that bifurcation makes it less likely jurors will find against a defendant on liability[1] and causation.   However, when jurors deliberate punitive damages in bifurcated trials in which they are unaware during the compensatory phase that they will be given the opportunity to award punitive damages, they augment the amount they award in compensatories[2], are more likely to award punitives when that phase comes, and their punitive damage awards are higher compared to when they are aware of the potential for a punitive phase[3]. 

  Continue reading

June 8, 2010

Say Your Sorries and Settle Already

 

By: Dr. Kevin Boully


Boully_Kevin_88_120 What can corporate defendants and their executives learn about effective dispute resolution from Major League Baseball’s most blogged-about umpire?
[1] 

 

 

Last week, Major League Baseball umpire Jim Joyce made the wrong call on the would-be final out in the ninth and final inning of the Detroit Tigers victory over the Cleveland Indians.  No big deal under most circumstances, but in this game the errant call killed what should have been a perfect game by the Tigers pitcher – one of the rarest feats in baseball history.  Yet,  it was how Joyce handled the mistake that immediately struck viewers like me and serves as a lesson to anyone accused of wrongdoing – or facing an uphill battle in litigation.   

  Continue reading

March 3, 2010

Shiny Loafers or Muddy Boots? Find a Witness With Boots on the Ground

by: Dr. Kevin Boully


Boully_Kevin_88_120“I mean honestly, I think that some of the most convincing witnesses were the ones that were actually there.”
  [Male juror in his mid-20’s]

 

Many commercial litigators assume an upper-level manager’s ability to handle sticky questions, describe company policies and profess company values should be useful to jurors’ evaluation of the company and the behavior at issue.  Probably the most important witness, right?  I mean, these manager-types are high achievers, decisive managers, and confident communicators – a perfect fit for the role of company rep and star witness.  They’ll take the stand early on, deliver the key messages with a sparkly grin, and slam the door on your opponent’s case.  Right?  Make these assumptions at your client’s (and your own) peril.  Continue reading

Related Posts Plugin for WordPress, Blogger...