Should Complex Corporate Litigation Trials be Left to the Juries?

I.  Introduction

     Corporate litigation disputes are becoming
more complex as new issues arise addressing questions on statistical
and/or probabilistic facts, expert testimonies, and other intricacies
of the business world. This trend in litigation poses a new issue to
the courts, and, more specifically to the juries. With these issues
becoming more complicated, one can only wonder if lay jurors are able
to understand the disputes, judicial instructions, and are capable of
applying the facts to the law.


 
   Juries in their earliest form consisted of committees of qualified
persons in the community who provided assistance on facts or issues in
dispute. [1] By this time, these "jurors not only knew the litigants,
[but] they also knew something about the dispute." [2] Jurors were able
to conduct their own investigations among those who they believed had
knowledge of the facts. [3] "Today, however, any knowledge of the
dispute or familiarity with the litigants is cause for
disqualification." [4] The trial by jury in civil cases was introduced
into the constitution in 1791 as part of the Seventh Amendment which
states, "[i]n suits at common law, where the value in controversy shall
exceed twenty dollars, the right of trial by jury shall be preserved,
and no fact tried by a jury, shall be otherwise reexamined in any Court
of the United States, than according to the rules of the common law."
[5] This Amendment is further supplemented by Rule 38(a) of the Federal
Rules of Civil Procedure, which provides "[t]he right of trial by jury
as declared by the Seventh Amendment to the Constitution or given by a
statute of the United States shall be preserved to the parties
inviolate." [6]


     There has been much debate over whether the Seventh Amendment
should allow a "complexity exception" in intricate business disputes.
This exception would allow the judge to take the reigns from the jury
and become not only the finder of law, but the finder of fact.
Arguments for this exception assert that juries are "unqualified to
participate in lengthy and complex suits both because of the size of
the action and the jury's lack of experience in an area requiring great
intellectual effort."[7] As illustrated in In re Japanese Electronic Products Antitrust Litigation,
the constitution does not necessitate a jury trial in an antitrust
action if the issues are too complex for the jury to decide in a proper
manner.[8] However, when the dispute deals with complexity in the
business realm, the Ninth Circuit has held that "in a securities fraud
case that there is no complexity exception to the Seventh Amendment
right to jury trial in a civil case." [9] The Second Circuit further
supported this rationale and has "remarked that it is doubtful that a
jury will comprehend such technical issues as scienter and reliance,
but the court has declined to recognize a complexity exception to the
jury trial right in a securities fraud case." [10]


     The issue of whether the complexity of a matter should turn the
role of the jury to a judge has never specifically reached the confines
of the Supreme Court floor. Nonetheless, shades of the question can be
found in cases questioning the overall right to a jury trial in civil
actions. In Ross v. Bernhard, the Supreme Court entered
judgment on whether the Seventh Amendment guarantees the right to a
jury trial in stockholders' derivative actions. [11] The majority
reversed the Court of Appeals decision, holding that the right to a
jury trial attaches to issues "in derivative action[s] brought by
stockholders of corporation, right to jury trial attaches to those
issues as to which corporation, if it had been suing in its own right,
would have been entitled to a jury." [12] However, in a footnote, the
"Supreme Court indicated that ‘the practical abilities and limitations
of juries may affect the right to a trial by jury in civil cases."
[13]. The Supreme Court failed to determine whether this language
implied support for "a Seventh Amendment exception to the right to a
jury trial in complex civil cases." [14]


     The Supreme Court has seemed to tip-toe around the idea of
abolishing jury trial in complex civil cases. However, the question
remains whether a judge, who is better versed in the law and the
application thereof, is more suited to determine the outcome in complex
litigation cases? Many theorists argue that the jury trial is the prime
source of unreasonable delay in complex litigation. Franklin Strier
argues in his book, Reconstructing Justice: An agenda for Trial Reform,
that juries have a difficult time recalling testimony and "making
decisions based on statistical or probative information." [15]. Streir
further claims that "juries do not understand judicial instruction and
have an inability to apply the facts to the law." [16] Under this
rationale, it is disputed that lay jurors do not understand the law in
these settings and that judges, who are more experienced, are better
able to resolve difficult factual issues. [17] Nevertheless, advocates
for the other side argue that time is a small price to pay to avoid the
bias that the judicial system may infer. [18] Coinciding with this
principle, theorists suggest that "[j]urors also work to shield judges
from politics because judges cannot be held responsible for jurors'
decisions, and the presence of jury trial reduces incentives to "buy"
or otherwise pressure judges. [19]


     Other theorists have discussed a co-mingling of the judge and
jury dichotomy when implementing this exception. If it is the judicial
downfall that judges cannot reasonably represent the 'jury of your
peers', and that jurors cannot understand the complexities of these
complex litigation disputes, then why not propose a hybrid approach in
which a professional jury is used. Similar to a medical panel, which is
composed of doctors in the particular field, that provides assistance
in determining whether a physician was negligent in a malpractice
cases; these theories have suggested a professional jury composed of
competent members of the business/legal community that would adequately
represent a cross hatching of the business community. As a result, the
parties would not incur unnecessary costs associated with the time
needed to explain the complex factual scenarios and cases could be run
more efficiently.


     It is important to note that another issue is inextricably
intertwined with the "complicity exception." There is a question as to
what would be the determining factors as to what would be considered a
"complex" dispute. Richard Lempert, a professor at the University of
Michigan Law School, "suggested three important dimensions that might
be used to define complexity: trial length, voluminous evidence, and
complex legal standards." [20] The Court in In re Japanese Electronic Products Antitrust Litigation
stated that "[a] suit is too complex for a jury when circumstances
render the jury unable to decide in a proper manner." [21] However,
other considerations to take into account can be the technicality of
evidence, quantity of evidence, and density of the law. [22] One
suggestion to alleviate this dilemma is to establish a totality of the
circumstances test; where a judge would consider the factors mentioned
above and determine whether a reasonable juror would find the issues to
be complex.


     It is questionable whether juries are capable of understanding
certain complex corporate legal issues sufficiently. It is evident that
corporate litigation disputes are becoming more convoluted with expert
testimonies, longer trials, and an overall abundance of facts and
issues. It only seems necessary that a change occur. Whether it is
allowing a "complexity" exception, where the judge takes control (as
seen in intellectual property cases), or resorting to a professional
panel (as seen in medical malpractice cases), a restructuring seems
proper.  In both cases, it appears the appropriate remedy is to allow
for a more sophisticated and knowledgeable finder of fact where complex
litigation is involved.


[1] Gross Samuel, Lempart, Richard & Liebman James, A Modern
Approach to Evidence 495 (West Publishing Company, 2000) (1983).


[2] Hon. Hugh H. Bownes, Should Trial by Jury Be Eliminated in Complex Cases?, available at:
http://www.fplc.edu/risk/vol1/winter/bownes.htm.


[3] Gross, supra note 1.


[4] Bownes, supra note 2.


[5] U.S. Const. Amend. 7.


[6] Federal Rules of Civil Procedure Rule 38(a).


[7] 54 A.L.R. Fed. 733.


[8] In Re Japanese Electronics Products Antitrust Litigation, 631 F.2d 1069 (3rd Cir. 1980).


[9] AMJUR SECURITIES § 1054


[10] Id.


[11] Ross v. Bernhard, 396 U.S. 531 (1970).


[12] Id.


[13] Stephan Landsman, Nobody’s Perfect, Nev. L.J. 468, 479 (Spring 2007), See Ross v. Bernard, 396 U.S. 531, 538 n.10 (1970).


[14] Neil Vidmar, The Performance of the American Civil Jury: An Empirical Perspective, Ariz. L. Rev. 849 (Fall 1998).


[15] Id.


[16] Landsman, supra note 13.


[17] Richard Lempert, The Internationalization of Lay Legal Decision-Making: Jury Resurgence and Jury Research,
Cornell Int'l L. J. 477 (2007).


[18] Id.


[19] Id. at 480.


[20] Vidmar, supra note 14 at 850.


[21] In Re Japanese, supra note 8.


[22] Neil Vidmar, The Performance of the American Civil Jury: An Empirical Perspective,
Ariz. L. Rev. 849, 850 (1998).