THE USE OF NON-BINDING SUMMARY JURY TRIALS AS A NECESSARY SETTLEMENT TOOL
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1 THE USE OF NON-BINDING SUMMARY JURY TRIALS AS A NECESSARY SETTLEMENT TOOL Judge John McClellan Marshall Presiding Judge 14th District Court Dallas County, Texas Talmage Boston Winstead Sechrest & Minick 5400 Renaissance Tower Dallas, Texas Judge Harvey G. Brown Presiding Judge 152nd District Court Harris County, Texas August 1, st Annual Advanced Civil Trial Course State Bar of Texas September/October/November 1998 A
2 THE USE OF NON-BINDING SUMMARY JURY TRIALS AS A NECESSARY SETTLEMENT TOOL By Judge John McClellan Marshall Talmage Boston Judge Harvey G. Brown I. ADR in Texas Under the Status Quo A. Mainly Mediation. Chapter 154 of the Texas Civil Practice & Remedies Code currently provides for a variety of ADR techniques, but until December 1996, the only one consistently used in both state and federal courts was mediation. Thus, until recently, if a case reached impasse in mediation and the parties could not settle the case on their own, the only dispute resolution option available thereafter was to roll the dice at trial. B. Summary Jury Trials in Texas State Courts -- The Movement 1. Dallas a. Beginning in December 1996 (see Dallas Morning News editorial of December 29, 1996 attached as Exhibit A ), state courts in Dallas started using non-binding summary jury trials ( SJTs ) on an ongoing basis as an alternative ADR technique. At last count, since that time, eight Dallas District Judges have conducted SJTs (Judge John Marshall, Bill Rhea, Sally Montgomery, Ann Ashby, Gary Hall, David Godbey, Martin Richter, and Jay Patterson), and most of these eight judges have done more than one. b. Beginning in the Spring of 1997, and in each subsequent semester, the course on ADR taught at SMU Law School introduced the SJT as an ADR alternative to law students. c. Beginning in July 1997, the SJT video produced by the Dallas Bar Association s Business Litigation Section was distributed to all district judges in Texas largest cities, as well as to any district judge in any other counties who requested a copy. d. SJTs made the front page of the Dallas Morning News on December 17 and again on December 28, 1997, in connection with the settlement of the Kaiser Permanente case (copies of these articles are attached as Exhibit B ). On December 30, 1997, the Dallas Morning News editorial page endorsed the use of SJTs as a needed and common -1-
3 sensical way to improve the efficiency of overburdened courts (copy of editorial attached as Exhibit C ). e. In July 1998, the Dallas County Alternative Dispute Resolution office began a pilot program, endorsed and utilized already by at least four Dallas District Judges, involving court-ordered one-half day SJTs in small soft tissue injury cases (see Dallas Bar Association Headnotes article attached as Exhibit D ). 2. Houston Four current judges and one former judge in Harris County have used summary jury trials as an ADR alternative (see Judge Brown s SJT Order attached as Exhibit E ). The judges have found that SJTs help the parties evaluate their cases, and more often than not lead to settlements. The attorneys in Harris County, however, have had very limited experience with SJTs and often object to the procedure or require convincing of its utility. The jurors have been very supportive of SJTs. The Harris County judges have found that one day SJTs may not give the parties an adequate amount of time to present their cases. If the parties do not feel they have an adequate opportunity to present their cases, they do not give sufficient credence to the jury verdict. Therefore, a number of cases have been given two or three days to present their evidence. The judges have also experimented with having the mediator attend the trial and discussing the case with the jury after the verdict. One judge uses the SJT only if the liability facts are particularly strong and the damages are uncertain or if the parties will agree that they will not increase the demand or reduce the offer after the SJT. C. SJTs in Texas Federal Courts. In the Northern District of Texas, in the last year, Judge Joe Fish has ordered cases into SJTs. D. Why SJTs Are Needed: The Limits Of Mediation. 1. Anyone can take the course in "mediator training", and upon completing the course has thereby satisfied all the requirements necessary to become a mediator. He or she can then pursue judicial appointments for mediation assignments. -2-
4 2. Many mediators simply are not capable of doing "the ten best things a mediator can do" from the litigator's perspective (see Exhibit "F" authored by Austin trial specialist Bob Gibbins). In particular, regardless of how good a student the person is during the "mediation training" sessions, many mediators lack the wherewithal to forcefully "disclose to the parties and their attorneys the weaknesses or problems of each side's case" (Item No. 7 on Gibbins' list), and to "maintain strength and assertiveness toward an attorney or party who is obviously out of line or unreasonable in his or her demand or offer" (Item No. 10 on Gibbins' list). 3. Particularly in recent years, impasse in mediation has occurred more frequently because the parties and their counsel have drawn a line in their settlement negotiations, betting the case on their prediction of the final jury result which is significantly different from their adversary's prediction on the jury. 4. By reason of items 1, 2, and 3 above, the trial bar has become increasingly cynical toward mediation and even toward the whole concept of ADR, since mediation and ADR are perceived as being synonymous because of mediation's being the only ADR technique utilized in Texas currently. II. Why SJTs are Preferable to Mock Trials Performed With the Assistance of Litigation Support Companies A. Mock trials are often conducted whereby one party to the case uses a private company which is in the business of hiring mock jurors and then staging and critiquing mock trials. B. Typically, mock trials put on by a private company are very expensive to conduct. C. There is always some question whether the mock jurors chosen in these proceedings are good representatives of the type jurors who are typically called up from the Dallas County Jury Pool. D. In mock trials, the lawyer for the party paying for the private company's services usually chooses his law partner to play the role of opposing counsel, and then gives his law partner ideas as to what he anticipates opposing counsel will argue at the real trial. Certainly, there is always the concern that what the lawyer thinks his adversary will argue at trial is not consistent with what his adversary, in fact, will argue at the trial. -3-
5 III. The Procedure for a Non-Binding Summary Jury Trial A. Confidentiality. Per the attached Dallas Morning News articles (Exhibits A, B, and C ), there has been media criticism of having SJTs conducted in a confidential manner. The question of maintaining the confidentiality of SJTs has not yet been addressed by a Texas court. The only appellate court which has faced the issue is the Sixth Circuit, which in two cert. denied opinions, has held that the proceedings are confidential. In re the Cincinnati Enquirer, 94 F.3d 198 (6th Cir. 1996), cert. denied, 117 S.Ct (1997); Cincinnati Gas and Elec. Co. v. General Elec. Co., 854 F.2d 900 (6th Cir. 1988), cert. denied, 489 U.S. 1033, 109 S.Ct. 1171, 103 L.Ed.2d 229 (1989). B. Flexible Procedures. The procedure for a SJT can be adapted to the circumstances of any particular case. The final procedures for the SJT can be established by the judge at the pretrial conference, at which time motions in limine can be ruled upon which will govern not only the proceedings in the final actual trial but also in the SJT. See Exhibit "G" (attached hereto) reflecting the procedure proposed by the Civil Justice Reform Act Advisory Committee, a local committee made up of federal judges (Judges Buchmeyer and Fitzwater), a federal magistrate (Magistrate Boyle), and approximately fifteen prominent trial lawyers who practice in the Northern District of Texas. See Exhibit H (attached hereto) reflecting the SJT procedures used in connection with the Dallas County Alternative Dispute Resolution office pilot project (see I.B.5. of this outline). C. The Proper Case and Time for the SJT. Per the attached Exhibit "G" (on p. 2), there are logical considerations for a court and the parties to evaluate in determining whether a case is appropriate for an SJT. The Civil Justice Reform Act Advisory Committee suggests the following factors which should guide the decision as to whether an SJT should take place: 1. The case is likely to consume several days of trial time. 2. The amount in controversy is sufficiently large to justify an extra day in Court and additional preparation time. 3. The Court has previously ruled on all dispositive motions. 4. Discovery is complete. 5. The case has been mediated at least once and all parties are willing to state that the case will not or is very unlikely to settle. 6. A Pretrial Order has been entered. -4-
6 7. The case is set for trial within 15 to 30 days after the summary jury trial. D. Judge Thomas Lambros, who created the SJT in 1980 while he was then a Federal District Judge in the Northern District of Ohio, (and who presided over more SJT's than any other judge in this country, and has written extensively on the subject), suggests that the presiding judge should preside over the SJT for the reasons set forth below: It is best if the judge who will try the case conducts the summary jury trial because, through presiding over the SJT, the judge will obtain a thorough understanding of the issues presented by the case and the strengths and weaknesses of each parties' position. The judge's participation in the SJT will also facilitate an open and frank discussion of the evidence during post-sjt settlement negotiations. Because the jury remains the ultimate trier of fact, the outcome of a subsequent trial probably will not be affected by the participation of the judge who presided over the SJT. Indeed, the quality of the actual jury trial may be improved because the judge will have become intimately acquainted with the legal issues posed by the case. Lambros, The Summary Jury -- An Alternative Method of Resolving Disputes, 79 JUDICATURE 286, 288 (Feb. - Mar. 1986) E. If no one has paid a jury fee in the case, the parties could agree that it is prudent to have a non-binding, non-jury summary trial which would be presided over by a mutually agreeable visiting judge and not by the presiding judge who would actually try the non-jury case if it does not settle after the summary trial. F. In federal court, the district judges could have federal magistrates preside over SJTs and if the case does not settle, then the federal district judge could preside over the final trial. IV. The Need for Non-Binding Summary Jury Trials in Texas A. It has been used with success in other parts of the country (see Section V of this outline which begins on p. 7). B. There are always congested trial dockets in both state and federal courts in Texas' large urban areas. Mediation has helped reduce the congestion but it has not eliminated it. C. Using real Dallas County Jury Pool jurors for a non-binding SJT is the best indicator of what a real Dallas County Jury Pool juror is likely to do at the real trial. -5-
7 D. The process is inexpensive (i.e., typically takes only one full day) and does not involve the parties' having to compensate the jurors or pay for the use of the judge or courtroom. E. There is no down side. 1. Parties get the chance to better organize the presentation of their case by making a summarized "dry run". 2. Parties get a much clearer perception of how their adversary, in fact, will present his or her case -- but neither side has to shoot its silver bullets unless it chooses to. 3. The parties get from the SJT what they cannot get from mediation -- jury feedback both in the form of the non-binding verdict and by the matters covered in the open forum discussion with jurors which follows the rendering of the non-binding verdict. 4. The SJT gives the parties the feeling that they have had their "day in court" which many people believe they have to have in order to feel good about the resolution of the dispute. 5. The process saves money for the government. a. Dallas County Numbers - a six day jury trial costs taxpayers approximately $7,000 in court expenses. b. Federal Court - In the case of McKay v. Ashland Oil, Inc., 120 F.R.D. 43, 49 (E.D.Ky. 1988), Judge Bertelsman stated: In my own experience, summary jury trials have netted me a savings in time of about 60 days and I have only used the procedure five times. It settled two of these cases that were set for 30 day trials. It is true that I cannot prove scientifically that the cases would not have settled anyway but my experience tells me they would not. I do know that but for my making summary jury trials mandatory in these cases, they would not have occurred. I know also that the attorney who objected to the first summary jury trial he was required to participate in is now the biggest local fan of the procedure. In the case at bar, I am gambling a five day summary jury trial against a six week real trial. Six to one is pretty good odds. -6-
8 6. Jurors like SJTs a lot because (I) the process is obviously much shorter than an actual trial, (ii) the jurors get to give real (outspoken) feedback to the lawyers and parties, and (iii) summary evidence presentations are less boring. 7. Assuming that the SJT process results in a settlement before the final actual trial, it saves significant money for the parties. Statistical evidence reflects that typically 40% of litigation costs result from the actual trial itself The SJT process does not change the rights of the parties involved. V. Statistical Information Available on the Use of Non-Binding Summary Jury Trials A. The use of SJTs frequently leads to settlements 1. Statistics from in the Northern District of Ohio (where Judge Lambros presided) Total cases assigned to SJT 150 Cases assigned to SJT but settled prior to SJT 62 Total SJT's conducted 89 Cases settled after SJT 73 SJT cases that went to trial 4 SJT cases that settled during trial 1 Post-SJT cases still in settlement negotiations 8 T. LAMBROS, THE SUMMARY JURY TRIAL AND OTHER ALTERNATIVE METHODS OF DISPUTE RESOLUTION, A REPORT TO THE JUDICIAL CONFERENCE OF THE UNITED STATES COMMITTEE ON THE OPERATION OF THE JURY SYSTEM 17 (JAN. 1984, REVISED AUGUST 1986) 2. Additional Northern District of Ohio information comes from a study for the time period 1990 through early According to Judge Lambros, 131 cases were assigned to SJT during that time period, and those cases were then compared to each of the cases in the database that were of a similar subject matter and that had been pending at least as long as the SJT case had been at the time of the assignment for SJT. Over 82% of the SJT cases were resolved more quickly than the average of comparable cases that were not assigned to 1 See generally J. Kakalik & R. Ross, Costs of the Civil Justice System: Court Expenditures for Various Types of Civil Cases (RAND Corp. R-2985-ICJ. 1983): J. Kakalik & A. Robyn, Costs of the Civil Justice System: Court Expenditures for Processing Tort Cases (RAND Corp. R-2888-ICJ. 1982). -7-
9 the SJT. On average, assigning a case to SJT reduced the time a case remained pending by 337 days (or about 11 months). Lambros, The Summary Jury Trial, 77 JUDICATURE 6, 8 (July-August 1993). 3. In the Western District of Oklahoma, 187 cases were referred to summary jury trial between early 1983 and December Of those, 70 settled before the SJT was conducted. Of the remaining 117 cases which did go through the SJT, 79 settled prior to trial. Donovan Leisure ADR Practice Book (Cum.Supp. 1992). 4. In the Federal Court in the Western District of Michigan, almost 70 summary jury trials have been held since Of these cases, 75% settled before the SJT; of the remainder, all but two settled before trial. Id. B. SJT verdicts are consistent with the regular binding verdicts which come down after the completion of the final actual trials. 1. Ann E. Woodley, an Associate Professor of Law at the University of Akron School of Law conducted a Judicial Survey, and asked the judges whether they thought an SJT was a reliable indicator of what the actual trial verdict would be. An overwhelming majority of the responding judges stated that it was generally reliable. Of the 30 judges surveyed, 21 said that the SJT verdicts were reliable, five said no and four others were unsure or did not have enough experience to reach a definitive conclusion. Woodley, Saving the Summary Jury Trial, 1995 J. Disp. Resol 313, 229 n Judge Lambros' analysis on the subject is consistent with Professor Woodley's study: "Those cases which did not settle after the SJT and ultimately were tried reflected verdicts remarkably consistent with the findings of the SJT trial. With very few exceptions, liability findings of the SJT jury were exactly duplicated by the full trial juries. Of even more interest is the similarity in the amounts of the awards the two juries determined to be appropriate in those cases in which liability was found to exist. These ranged from very large, extremely complex cases in which the SJT jury awarded a sum of $27,000,000 and the full trial jury awarded $25,000,000 to a straightforward relatively uncomplicated personal injury case in which the SJT jury awarded $2,500,000 and the full jury awarded $2,200,000. These amounts were awarded in cases in which the defendants were not only certain that no liability would be found but that -8-
10 if it were found, that the damages awarded would be extremely minimal. Both defendants might have gleaned difficulties with their positions after the SJT had they better considered the consistency with which the SJT mirrors full jury verdicts. Donovan, Leisure ADR Practice Book, 373, 380 (J.H. Wilkinson, ed., 1990). 3. A federal magistrate in Nebraska also agrees with Woodley's survey, and distributes an SJT information sheet to the lawyers in cases in which he presides over SJTs. He states on the information sheet that "accuracy of the result" is one of the main advantages of the process and states, "in those cases which have not settled following an SJT but have instead gone to a real trial, the actual verdicts following days of testimony are remarkably similar to the verdicts of the summary juries." Woodley, 1995, J. Disp.Resol. 213, n.78. VI. Authorization for Use A. Federal Court -- Northern District of Texas 1. Section III of the Civil Justice Expense and Delay Reduction Plan instituted by the judges in the Northern District of Texas, effective July 1, 1993, endorses ADR programs and in particular "recognizes the following ADR methods: mediation, mini-trial, and summary jury trial. A judge may approve the ADR method the parties suggest or any other method the judge believes is suited to the litigation." Thus, federal judges in the Northern District of Texas are empowered to order cases into non-binding summary jury trials as a method of ADR. In the Northern District of Texas, the Civil Justice Reform Act Advisory Committee (described previously herein) in 1997 finalized the procedures for the use of SJT in the Northern District of Texas, which procedures are attached as Exhibit "G". The judges in the Northern District of Texas subsequently determined that the procedures would not be adopted across the board, but rather would be utilized on a case-by-case basis whenever a judge orders an SJT. 2. As of 1989, at least 65 federal judges had ordered cases into SJT throughout the country. Handler, Legal Times 25 (Week of June 5, 1989). 3. The use of SJTs as an ADR technique is consistent with the provisions of Federal Rule of Civil Procedure 16 which, among other things, provides that -9-
11 B. State Court at any pretrial conference under the Rule, the court may take appropriate action with respect to (9) Settlement and the use of special procedures to assist in resolving the dispute when authorized by statute or local rule;... and (16) Such other matters as may facilitate the just, speedy, and inexpensive disposition of the action. Under Section of the Texas Civil Practice & Remedy Code, (a copy of which is attached as Exhibit "C"), summary jury trials are permitted in Texas state courts as an ADR technique, but under the current statute they are to be used only as "a form for early case evaluation and development of realistic settlement negotiations." Thus, the current Texas statute needs to be amended to be consistent with all of the summary jury trial statistical research and treatises to the effect that the best time to utilize the SJT is when (I) the case is very close to trial and after essentially all discovery is complete, (ii) all summary judgment issues have been resolved one way or the other, and (iii) the case has been through at least one failed mediation. G:\ALLPDP\ARTICLES\8ADCIVIL\WPFORMAT\BOSTON.A July 27, :
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