X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
For a sizeable segment of the population, the corporate scandals of recent years confirmed all of their worst expectations about large corporations. The scandals reinforced long-standing and basic doubts about the honesty and integrity of businesses while confirming their rapacity. It is not surprising, for example, that in the wake of the Enron scandal, the Pew Center reported that basic attitudes toward corporations had not changed. See “Views of Business and Regulation Unchanged by Enron, Reduce Tax Cut to Pay for Guns and Butter,” Feb. 21, 2002 (available at http://peoplepress.org/reports/print.php3?PageID=349). Expectations of businesses, especially on the issues of honesty and trustworthiness, were already low. The scandals merely confirmed what many believed all along and did not fundamentally change attitudes toward corporations. Attitudes and opinions are heavily influenced by expectations. When little is expected of someone, no one is surprised when that person fails to perform. By contrast, when performance is much better or much worse than expected, expectations are violated, for better or for worse, with corresponding changes in attitudes and opinions. What do jurors expect? The attitudes and opinions that jurors have about business corporations frame the expectations that jurors bring with them to the courtroom. These attitudes and opinions create presumptions that govern jurors’ expectations about how corporations are likely to act. For example, research demonstrates that about half of all jurors entering the courtroom doubt the honesty of large corporations. For these jurors, doubts about the honesty of large corporations create a presumption of dishonesty and impose a corresponding burden of proof on corporations. Trial research allows litigators to discover the attitudes and opinions that jurors bring with them to the courtroom about business corporations, and the research enables trial teams to gain a better insight into the kinds of presumptions jurors are likely to impose on businesses. Public opinion about corporations remains profoundly ambivalent. While many say that corporations are basically greedy, dishonest and untrustworthy, favorable opinion of corporations generally runs ahead of unfavorable opinion by a ratio of four to one. And in the Pew survey cited above, 76% agreed with the statement: “The strength of this country today is most based on the success of American business.” The public believes that corporations exercise enormous influence and power and that their actions touch the lives of everyone. The issue for most jurors is whether corporations exercise that power wisely. CapAnalysis LLC has collected information about how potential jurors view large corporations in venues across the United States. From that research, a consistent picture emerges of the expectations that jury-eligible participants have of business corporations. The data (and national surveys) show that people perceive a large gap between the way they believe businesses act and the way they believe businesses ought to act. For example, respondents were asked to identify the highest priority of business corporations from the following list of options: making a profit and protecting the interests of shareholders; protecting the jobs and salaries of executives; protecting the jobs and wages of employees; being a good corporate citizen and investing in the community; and looking after the needs of customers. They were then asked to name what they thought should be the highest priority of corporations. The table accompanying this article illustrates the findings of that research question. The results indicate a considerable gap between the goals people believe businesses pursue and the goals people believe businesses should pursue. Lack of basic trust Jurors are skeptical of corporations because they believe that businesses don’t share the goals and priorities of the public. Instead, jurors believe that corporations pursue narrow and selfish agendas, seeking to enrich executives and shareholders at the expense of the broader public interest. In the research, about half of all respondents agreed that large corporations deceive the public; about three-fourths said that corporate insiders enrich themselves at the expense of shareholders and the public; and between 50% and 60% said that large businesses engage in sharp practices to make a profit. More than 80% said that lying, cheating and fraud happen some or most of the time in business transactions. Only about half of respondents agreed that most business corporations are honest, and less than half say they are trustworthy. By contrast, nearly 70% described large corporations as “greedy.” People see the gains for corporate America coming at the expense of ordinary citizens. In the CapAnalysis research, about three-fourths of respondents agreed with the statement: “In spite of what some people say, the situation of the average person is getting worse, not better.” Likewise, more than three-fourths agreed with the statement: “The rich get richer and the poor get poorer.” In a recent Harris poll, 87% agreed with the statement: “Top company managers have become rich at the expense of ordinary workers.” Harris Poll No. 55, Oct. 18, 2002 (available at www.harrisinteractive.com/harris_poll/index.asp?PID=334 ). In the same poll, more than 50% agreed with the statement: “When businesses are allowed to make as much money as they can, workers and the poor are bound to get less.” In other words, most jurors don’t believe that corporate profits will trickle down to them. Instead, people believe that large corporations use their wealth to consolidate power and influence, to eliminate rivals and to insulate themselves from competition. In research conducted by the Pew Center (cited above), about three-fourths of respondents agreed that “too much power is concentrated in the hands of a few large corporations.” In the CapAnalysis research, respondents believe that corporations use their power to block competition. More than three-fourths said that “Big Business uses its size and power to compete unfairly.” Likewise, only one-fourth agreed that small companies have a fair chance to succeed against larger companies. That’s why about two-thirds of respondents agreed that government regulation of business is necessary to prevent industry from becoming too powerful. Rebutting negative images Just as the law creates presumptions that govern the burden of proof in the courtroom, jurors’ attitudes and opinions about corporations create presumptions about how corporations act. See, for example, Chaim Perelman, The Realm of Rhetoric, 24-26 and passim (University of Notre Dame Press, 1982). The presumptions that jurors bring with them to the courtroom create evidentiary burdens no less real than those imposed by the law. Based on CapAnalysis’ research, there are five key presumptions about corporations that jurors bring to the courtroom. First, jurors believe that big corporations know more about the issues at the core of the lawsuit than government regulators, independent scientists or the public. This presumption arises out of the perception that corporations are growing larger, wealthier and more powerful. One of the corollaries of size, wealth and power is a mastery of knowledge and information. Consistently in CapAnalysis’ research, jurors credit large corporations with greater knowledge and more information on the core issues than any other actor. And so, for example, in lawsuits dealing with hazardous products or toxic substances, most respondents believe that the corporation that produced or used the substance knew of its hazards. In patent cases, jurors are likely to infer that a corporation charged with infringement copied a competitor’s patent and did so willfully. Prior corporate knowledge Second, jurors believe that large corporations knew about the facts at the core of the lawsuit well before anyone else. Hence, not only do jurors believe that corporations know more, they believe they knew this information earlier than anyone else. Likewise, jurors are likely to ascribe the knowledge of any member of a corporation to the entire corporation. In the minds of most jurors, corporations are omniscient. Jurors are likely to infer that a corporation that used a hazardous substance later regulated by the Environmental Protection Agency (EPA) knew of the hazards of a substance well before the EPA issued its regulations. Third, jurors believe that large corporations aren’t telling all they know. Most respondents are skeptical about the truthfulness and trustworthiness of corporations. That’s why the charge of document destruction is an especially potent weapon in any lawsuit against a corporation. Gaps in the record, missing or shredded documents or a failure of memory are likely to be seen as efforts to conceal the truth from jurors. Jurors often use these gaps or omissions in the record to excuse any failure of proof on the part of parties bringing a lawsuit against a large corporation. Jurors reason that missing or shredded records represent the smoking gun that could have proved the plaintiffs’ case. Beyond the call of legal duty Fourth, jurors believe that large corporations should do more than the law requires. It is often not enough for a corporation to adhere to the letter of the law. Jurors expect corporations to anticipate problems and to act to prevent them, creating a standard that no corporation can meet. One of the most striking illustrations of this presumption is provided by antitrust cases. Time and again in the CapAnalysis research, a substantial segment of the jury pool, approaching 50% or higher, expected large corporations to help smaller competitors to succeed. For example, in research on antitrust cases, three-fourths agreed that “laws should protect smaller companies from their larger competitors.” More than 50% agreed that “larger companies should help smaller companies to succeed.” Two-thirds agreed that “consumers benefit when strict rules prevent one company from getting too far ahead of its rivals.” As a practical matter, in evaluating the antitrust evidence, many jurors will look past the instructions of law to the basic issue of fairness. These jurors expect large corporations to forgo the competitive advantages they have amassed over the years. They believe that competition should be handicapped like a horse race, with larger corporations forced to bear the burden of more restrictive regulations on competitive behavior. These jurors believe that either self-restraint or government regulations should prevent large corporations from trading on their wealth, power, size or expertise. And, contrary to the requirements of the antitrust laws, many jurors expect corporations either to ease up on smaller rivals or to take steps to help smaller competitors to prosper. The same principle operates in contract, environmental and personal injury cases. In the case of a contract dispute, jurors are likely to require the large corporation to observe not just the letter, but the spirit of the contract. In an environmental case, jurors are likely to expect the corporation to act in advance of regulations to forestall harm to the environment, and they are likely to require that the corporation do more to prevent or limit emissions than the law requires. Fifth, jurors hold large corporations to a higher standard than they hold themselves. Acts that would be excusable if committed by an ordinary person will sometimes be judged harshly if committed by a corporation. And so, jurors who would not spend an additional dollar for an improvement that would increase the safety of a product will nevertheless expect a corporation to make the investment in safety, even if the corporation cannot recover the cost of the investment and even if the investment places the corporation at a competitive disadvantage. High burden of proof Taken together, these presumptions mean that corporations may face a considerable burden of proof when they enter the courtroom. These presumptions do not mean that the result of any lawsuit against a large corporation is foreordained; these presumptions, like all presumptions, can be overcome by evidence and argument. And the strength of a presumption may vary from venue to venue, depending on the specific experiences and attitudes of jurors in that venue. One of the most useful aspects of trial research is the ability to discover the extent to which these and other presumptions are embedded in the jury pool so that strategies can be devised to meet and overcome the presumptions at trial. Charles Kauffman is senior vice president of The CapAnalysis Group, an affilate of Washington’s Howrey Simon Arnold & White.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.