Large Jury Verdicts – What Does the Recent Uptick Mean and Why Has it Seemingly Not Continued Since 2012?
October 28, 2014 |
By Frank L. Murray
Recently, large jury verdicts appear to many commentators to have experienced an “uptick.” Experienced predominantly in the medical malpractice area, the rise of what experts refer to as “blockbuster verdicts” has been detectable. Dating back to U.S. Department of Justice studies published in the mid-nineties, the underlying statistical matrix of jury verdicts in courts such as Maricopa County Superior Court has actually not changed much. “Over a year-long period ending June 30, 1992, juries in State general jurisdiction courts in the Nation’s 75 largest counties decided an estimated 12,000 tort, contract, and real property rights cases….Plaintiffs won 52% of the cases and juries awarded these plaintiffs $2.7 billion in damages, of which 10% were punitive damages. The average time from the filing of the complaint to the jury verdict was 2.5 years.”
The “uptick” in jury awards is almost certainly aided by the fact that at least 28 states permit civil juries of less than 12 members and verdicts that are non-unanimous. Arizona permits each of these streamlining measures. The study included 145 jury verdicts in Maricopa County of which 63% were decided for the plaintiffs. The largest of these was $7.5mm and only 3.3% of the verdicts produced damages of $1mm or more.
Only 1.2% of defendants won their lawsuits in front of a jury through a counterclaim in the over 12,000 lawsuits analyzed nationally. Almost none of these lawsuits gave rise to a jury verdict on a counterclaim of over $1mm. The Author’s curiosity was stimulated when, as lead counsel, he received an Arizona State Bar Award for the largest Counterclaim jury verdict in Arizona – $6.2 million – the fifth largest verdict overall. This award, which I never even knew existed, confirms the academic interest of the Bar in this phenomenon. But the verdicts seem to have fallen a bit since then, as the Bar’s awarded verdicts in 2013 were, as a group, lower. Even plaintiff’s verdicts of $1mm or more on their affirmative claims were realized in the data on only 459 cases nationally, or 3.8% of the cases. Businesses (53%) and government agencies (29%) were the targets in over ¾ of the $1mm –plus cases.
Attempts to Rein-in the Awards
As a part of the historic efforts to control large jury awards, usually stemming from anecdotal stories of some out-sized verdict in a particular case, the tort reform movement has produced a broad band of measures meant to confine jury verdicts. Limitations on punitive damages, reductions in statutes of limitations, limits on non-economic damages, proportionate liability, and other efforts to control the size of verdicts through only slightly indirect means appear to have not eliminated the “blockbuster” or even the “large” verdict. So what produces them in spite of the policies of “tort reform?”
Anchoring and Adjusting
One of the most robust findings in the literature of damages is that, in response to uncertainty and conflicts in testimony, including damages experts, jurors engage in finding a number they like from the testimony in a trial, or the arguments, or on their own – and they incrementally adjust the number to arrive at a final amount that they champion in their negotiations. Thus this anchoring number is absolutely crucial to the final verdict in litigation before a jury. Tversky and Kohneman, in “Judgment Under Uncertainty: Heuristics and Biases,” 185 SCI 1124, (1974) write of an experiment on volunteers that involved spinning a roulette wheel that was rigged to land on a low or a high number. After spinning the wheel, people were asked to estimate the number of African nations in the U. N. people who got the rigged high number gave, in the aggregate, noticeably higher numbers than those who spun the lower numbers. Thus, perhaps, the support in the literature for aggressively establishing an early “anchor number” that is an optimistic goal for a claimholder asking a jury to award him his claim.
“Groupthink” has been used to describe another psychological mechanism that describes that tendency of group members to act in a more extreme way than the individuals would act alone. This phenomenon can produce outsized results where issues such as punitive damages rear their heads and “sending a message” becomes an issue for the jury to consider. Groupthink could be playing a role in the larger verdicts.
Changes in the law in class actions and antitrust cases have made it more difficult for plaintiffs to get by a Motion to Dismiss. This, in turn, has caused the defendants in such cases and their corporate counsel to become more willing to go to trial and take a chance on reversal of any adverse verdict on appeal, according to the attorneys on the Dow Chemical case, the $1.2 billion price-fixing case in 2013. Such a willingness to “throw the dice” has crept into intellectual property, class action and lender liability cases.
Others comment that the proliferation of court coverage on television and in other media has left jurors much more seasoned with respect to large jury awards and their assumptions about who will receive them and who will pay them. We have live trial coverage, staged, scripted “reality” courtrooms, and consensual arbitration proceedings disguised to look like actual courtroom cases being litigated. We have Judge Judy, Judge Mathis, Judge Joe Brown, Judge Mills Lane, Curtis Court, Divorce Court, Judge Hatchett, People’s Court, Judge Milian, Judge Maria Lopez, Judge David Young, Judge Penny, Judge Karen, Judge Jeanine Pirro and Swift Justice With Jackie Glass. Throw in the scripted productions like America’s Court With Judge Ross, We the People With Gloria Allred and Justice For All With Judge Christina Perez, and you have a steady source of seasoned case resolutions that will take the rough edge off any juror performing jury service and flavor that juror’s deliberations. Jurors could even be expected to share these television “experiences” – real or not, giving them touchstones in common. As society continues to “shrink” in this fashion, it is becoming evident that jury verdicts may not.
Frank Murray has been practicing law in Arizona for over forty years and he continues to practice in the field of commercial litigation and fraud-related theory at the law office of Stoops, Denious, Wilson & Murray. He can be reached at (602) 795-1157.
1. “The Rise of Sky-high Jury Awards”, Alicia Gallegas, amednews.com, 1/15/2014.
2. A “blockbuster verdict” is $100 mm or more; whereas, a “large verdict”, in the literature, is $1mm or more.
3. “Civil Jury Cases and Verdicts in Large Counties,” DeFrances, Smith, Longen, Ostrum, Rottman and Goerdt, National Center for State Courts, U. S. Bureau of Justice Statistics Special Report, July 1995.
4. “The psychology of asking a jury for a jury award,” Sonia Chopra, www.plaintiffmagazine.com, March, 2013.
5. “How Juries Determine Damage Awards”, Dorothy K. Kagehiro, PHD, Robert D. Minick.,PHD, For the Defense, July 2002.