Article | RemediesAn Empirical Study of the Enforcement of Liquidated Damages Clauses in California and New Yorkby Luca […]
Litigation
In the courtroom environment, oral presentations are becoming increasingly supplemented and replaced by advancing digital technologies that provide legal practitioners with effective demonstrative capabilities. Improvements in the field of virtual reality (“VR”) are facilitating the creation of immersive environments in which a user’s senses and perceptions of the physical world can be completely replaced with virtual renderings. As courts, lawyers, and experts continue to grapple with evidentiary questions of admissibility posed by evolving technologies in the field of computer-generated evidence (“CGE”), issues posed by the introduction of immersive virtual environments (“IVEs”) into the courtroom have, until recently, remained a largely theoretical discussion.
Though the widespread use of IVEs at trial has not yet occurred, research into the practical applications of these VR technologies in the courtroom is ongoing, with several studies having successfully integrated IVEs into mock scenarios. For example, in 2002, the Courtroom 21 Project (run by William & Mary Law School and the National Center for State Courts) hosted a lab trial in which a witness used an IVE. The issue in the case was whether a patient’s death was the result of the design of a cholesterol-removing stent or a surgeon’s error in implanting it upside down.
Forum shopping is problematic because it may lead to forum selling. For diverse motives, including prestige, local benefits, or re-election, some judges want to hear more cases. When plaintiffs have wide choice of forum, such judges have incentives to make the law more pro-plaintiff because plaintiffs choose the court. While only a few judges may be motivated to attract more cases, their actions can have large effects because their courts will attract a disproportionate share of cases. For example, judges in the Eastern District of Texas have attracted patent plaintiffs to their district by distorting the rules and practices relating to case assignment, joinder, discovery, transfer, and summary judgment. As a result of these efforts, more than a quarter of all patent infringement suits were filed in the Eastern District of Texas in 2014. Consideration of forum selling helps justify constitutional constraints on personal jurisdiction. Without constitutional limits on jurisdiction, some courts are likely to be biased in favor of plaintiffs in order to attract litigation. This Article explores forum selling through five case studies: patent litigation in the Eastern District of Texas and elsewhere; class actions and mass torts in “magnet jurisdictions” such as Madison County, Illinois; bankruptcy and the District of Delaware; ICANN domain name arbitration; and common law judging in early modern England.
In her recent article, Professor Rhonda Wasserman argues that class action settlements that distribute funds cy pres raise a very serious risk of prejudice to absent class members. The problem, she asserts, is the temptation for class counsel to sell out the interests of absent class members in exchange for a discounted settlement for the defendant and a generous fee for class counsel. To illustrate her concern, she cites the $9.5 million settlement in Lane v. Facebook, Inc. that directed approximately $6.5 million to a nascent charity that was controlled—at least partially—by the defendant, $3 million to class counsel and nothing to the three million absent class members. Professor Wasserman argues that courts cannot have a laissez faire attitude toward protecting absent class members and she proposes a number of procedural reforms to ensure that cy pres distributions are only used when absolutely necessary. While her proposals are likely to provoke increased judicial scrutiny of cy pres distributions, the article stops short of addressing the principal question: when, if ever, is a settlement that distributes funds cy pres “fair, reasonable and adequate” to the absent class members?
Monies reserved to settle class action lawsuits often go unclaimed because absent class members cannot be identified or notified or because the paperwork required is too onerous. Rather than allow the unclaimed funds to revert to the defendant or escheat to the state, courts are experimenting with cy pres distributions—they award the funds to charities whose work ostensibly serves the interests of the class “as nearly as possible.”
Although laudable in theory, cy pres distributions raise a host of problems in practice. They often stray far from the “next best use,” sometimes benefitting the defendant more than the class. Class counsel often lacks a personal financial interest in maximizing direct payments to class members because the fee is just as large if the money is paid cy pres to charity. And if the judge has discretion to select the charitable recipient of the unclaimed funds, she may select her alma mater or another favored charity, thereby creating an appearance of impropriety.
The above quotes from two of the primary players in the for-profit college industry highlight the industry’s polarizing and divisive regulatory issues. This industry has seen unprecedented growth in recent years, increasing enrollment by 225% from 1998-2008. In fact, for-profit colleges received $32 billion in federal grants and loans from 2009-2010. This number accounted for about 25% of all federal student aid distributed despite the industry enrolling only 10-13% of all college students (about 2.4 million students). The prominence and growth of for-profit colleges is highlighted by one for-profit college’s recent entry into a Division I athletic conference.
However, recent reports of fraudulent and deceptive recruiting, and high student default rates have plagued the industry, culminating in the release of a negative Senate report by the Health, Education, Labor, and Pensions Committee (“HELP Report”). One such report was an undercover U.S. Government Accountability Office (“GAO”) report of fifteen for-profit colleges that found that each school made questionable or deceptive recruiting statements. Additionally, the HELP Report found that the average tuition at for-profit colleges exceeds that of their respective public school counterparts (for certificate programs, associate’s degrees, and bachelor’s degrees). For example, a bachelor’s degree in business administration at the for-profit Alta College in Colorado costs $80,466 compared to $60,704 at the University of Colorado Boulder.” Moreover, the Education Department recently released the three-year cohort default rate from 2009, measured by the percentage of student borrowers who entered repayment and defaulted within the past three years for a given school. The three-year default rate was 22.7% in the for-profit college sector compared to only 11% in public colleges and 7.5% for nonprofit private colleges.
Most lawsuits settle, but some settle later than they should. Too many compromises occur only after protracted discovery and expensive motion practice. Sometimes the delay precludes settlement altogether. Why does this happen? Several possibilities—such as the alleged greed of lawyers paid on an hourly basis—have been suggested, but they are insufficient to explain why so many cases do not settle until the eve of trial. We offer a novel account of the phenomenon of settling on the courthouse steps that is based upon empirical research concerning judgment and choice. Several cognitive illusions—the framing effect, the confirmation bias, nonconsequentialist reasoning, and the sunk-cost fallacy—produce intuitions in lawyers that can induce them to postpone serious settlement negotiations or to reject settlement proposals that should be accepted. Lawyers’ tendency to rely excessively on intuition exacerbate the impact of those cognitive illusions. The experiments presented in this Article indicate that the vulnerability of experienced lawyers to these cognitive errors can prolong litigation.
In this Article we build on neuroscience evidence to model belief formation and study decisionmaking by judges and juries. We show that physiological constraints generate posterior beliefs with properties that are qualitatively different from traditional Bayesian theory. In particular, decisionmakers will tend to reinforce their prior beliefs and to hold posteriors influenced by their preferences. We study the implications of the theory for decisions rendered by judges and juries. We show that early cases in judges’ careers may affect their decisions later on, and that early evidence produced in a trial may matter more than late evidence. In the case of juries, we show that the well-known polarization effect is a direct consequence of physiological constraints. It is more likely to be observed when information is mixed, as behavioral evidence suggests, and when prior beliefs and preferences are initially more divergent across jurors.
This Article provides one of the first critical looks at the interface between the values of the sustainable food movement and its rising use of litigation. In particular, it focuses on two growing areas of food sustainability litigation–challenges to Concentrated Animal Feeding Operations (“CAFOs”) and challenges to the use of genetically modified organisms (“GMOs”) in the food system–chosen because they involve growing sectors of U.S. agriculture over which members of the sustainable food movement have raised significant concerns.
One understudied area of the formative period of antitrust and of Standard Oil’s conduct during this period is in the use and nature of antitrust private claims against Standard Oil. In contemporary antitrust, the ratio of private to government brought cases is ten to one. In contrast, one hundred years ago government cases constituted nearly all antitrust cases, and many of such cases were state cases. On the hundredth anniversary of the Standard Oil decision, the present Article uses a discussion of the antitrust private actions against Standard Oil prior to the company’s court-ordered break up in 1911 as a starting point for a broader discussion about the interaction between public and private rights of action in antitrust in the modern era. Traditionally, government will bring antitrust cases to offset competitive distortions in the market either because private plaintiffs do not bring the right kinds of antitrust cases or because private actors lack the resources of government to bring good cases. This Article suggests circumstances in which government not only does not correct but also actually creates the market distortion by bringing a nonmeritorious case that aids the firm’s competitors rather than a case that helps consumers. In identifying this behavior, this Article combines two strands of literature–the strategic use of antitrust by private actors on the one hand and a public choice based economic theory of regulation on the other.