Should Complex Corporate Litigation Trials be Left to the Juries?

     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, (Spring 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 (Fall 1998).