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How Has a Down-Economy Affected Juror Verdicts?

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How Has a Down-Economy Affected Juror Verdicts?

Cynthia G. Veneciano, Ph.D

In a down economy will juries downsize their awards?  As Americans learn to think before they spend, are jurors applying lessons of economic frugality in deliberation room discussions?  The verdict is not in yet, but juror feedback indicates some hope for defendants facing big judgments. 

Americans have taken to heart the advice to restrain spending.  Retail spending has plummeted in recent months, and the little spending that is done is carefully weighed.  “Value” is the new “Black.”  But how does our new found frugality affect a jury when it goes to fill in the blank line that starts with a dollar sign?  Anecdotally we are learning that jurors are more thoughtful than ever when awarding damages.

High Stakes Litigation is experiencing careful scrutiny in the jury room.  The “but for” damage scenarios are causing jurors to take pause.  In a future that looks so bleak, will defendants’ practices cause significant damage to plaintiffs’ business, or will the economy strike first?  “There are no guarantees” is chanted in deliberation discussions everywhere.  The new challenge among plaintiff damage experts is how to credibly claim annual double-digit returns in times of scarce consumer confidence.  Jurors believe high returns are a thing of the past and their verdicts are indicative of these lowered expectations.

Tort cases against struggling and nearly defunct defendant corporations are a double –edged sword.  On the one hand, penalties for corporate irresponsibility are easily levied against manufacturers that operate neither safe nor profitable businesses.  And yet, it is still difficult for some juries to levy big awards against an industry that relies on our tax dollars to remain viable.

In eminent domain matters, jurors are thinking twice about how much land bought on speculation is worth today.  How long will future development need to stay on hold?  Don’t we have too many single family houses on the market?  Why build more housing tracts?  These are a few of the considerations that jurors have in mind, when addressing compensation and damages.

This is all good news for defendant corporations.  But beware; there is a lot of hostility in our current economic climate that is waiting to be directed toward “Corporate America” generally and financial institutions in particular.  People are outraged by big bonuses and bail outs.  They look for justice.  A big award against a corporation that is perceived as being guilty of contributing to our economic downturn is sweet revenge.  Defendants would be well advised to scrutinize perspective jurors carefully, before deciding they are safe.

A severe down economy casts a wide net.  Layoffs reach more than the working class; middle and upper-middle class professionals are also affected.  The ubiquitous pain and anger makes identifying dangerous jurors more challenging than ever.  Angry jurors may be underemployed, frequent job changers, or family members of a recently laid-off professional.  For a variety of reasons, they may not disclose their anger toward Corporate America during voir dire.  They sit in silence until the time comes to judge the facts.  In the deliberation room, deep-seated bias against large corporations is unleashed.  Identifying the new angry juror is an important initial step to any successful defense.

American psyches are hurting more than American checkbooks, so any defense should be positive.  Jurors want to hear an uplifting message.  Tycoons like Martha Stewart and Mayor Bloomberg recognize the power of the positive message.  These moguls have joined the bandwagon of clever marketers to tell audiences (and a jury is an audience) that they started as “small businesses in tough economic times too.”

The positive message is a powerful tool in developing a winning strategy.  A positive and effective message is a simple as, “We started as a small business and we have struggled through adversity and tough times.”  In a few simple words, it educates the jury about “Who” the corporation is – the first building block of credibility.  It connects with the jury – “If I can do it, so can you.”  It humanizes the defendant, “We were no different than you when we started.”  And most importantly it offers hope.

It is important to remain positive, regardless of the harsh realities.  Jurors are appalled when the defense resorts to threats that “people will be fired” if a big award is levied.  If job elimination is a possible outcome, then let the jurors arrive at that conclusion themselves, “Would punishing the defendant ultimately hurt their workers?”  Jurors understand that big businesses sometimes struggle and jurors are more likely to empathize if they can see the pain without the threats.

When presenting Company history to the jury skip the awards and accolades it has received for technology and innovation and focus on the human factor.  The defendant corporation that has not downsized its staff will earn big points from the jury.  Jurors also respect a company that has long-term retention and little turn-over among its employees.  But the focus should be on the middle and lower level employees and not on the executives.  Jurors do not identify with executives.  The image among many jurors of big corporation is that they overly compensate their senior executives and lay-off the lower level employees, like themselves.

Big corporations as plaintiffs are a whole different species.  Jurors are dubious of big corporations asking for money under most conditions.  Big corporation bail-outs are omnipresent and the scorecard as to which companies have been bailed-out and which have not is hard to follow if you are a layperson.  “Haven’t we already bailed out Corporate America enough?” and “Aren’t they the reason we are in this mess?” are questions often heard in voir dire and post-trial interviews.  In most situations, it is best not to assume that the jury knows about the company, even if it is a big corporation with worldwide prominence.  Inform and educate.

Jurors still recall the era of Enron.  Today AIG, Citibank, GM and other “bailout” firms carry the stigma that hung over Enron.  In the midst of recession and unprecedented government bail-outs for big corporations, the current financial situation has only served to elevate jurors’ mistrust of Corporate America.  Lawyers need to take note of these concerns and allay them by educating jurors on the specific circumstances and history of the client, within the greater context of the litigation.  The message should be positive and inspire optimism and trust.

In summary, here are some considerations:

Anger toward Corporate America is on the rise;
The classic plaintiff juror (lower-middle class, not college educated and unsophisticated, etc.) is still willing to aware large damages;
There is a new breed of angry jurors who hold strong anti-corporation bias; more importantly the new angry juror is stealthy and not easily identified;
Because of big corporation bail-outs, the stigma once only attributed to Enron has extended to AIG, Citibank, GM and other “bailout” firms;

The David vs. Goliath scenario is as dangerous as ever for big corporate defendants;

In matters involving a big corporation against another big corporation jury apathy is increasing, while damage awards are decreasing in amount;
Financial institutions, private equity funds, and asset managers are being held to a higher standard and a greater legal burden;
It is tougher than ever for big corporations suing individuals or smaller companies to garner jury sympathy and/or win big awards;
A hostile defense is not advisable; be forceful, but not mean-spirited; and
Jurors expect big corporations to value their employees; Jurors will punish companies who exhibit disregard for their workers.

About Cynthia Veneciano

 
 

 


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